44682 Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 82235 

(December 7, 2017), 82 FR 58668 (December 13, 

2017) (order approving the Fourth Amendment to 

the OLPP); 81893 (October 18, 2017), 82 FR 49249 

(‘‘OLPP Notice’’). 

4 Id. 

5 In addition to the Exchange, the ‘‘Participant 

Exchanges’’ are: Chicago Board Options Exchange, 

Incorporated (now known as Cboe Exchange, Inc.), 

on behalf of the BATS Exchange, Inc. (now known 

as Cboe BZX Exchange, Inc.); C2 Exchange, 

Incorporated (now known as Cboe C2 Exchange, 

Inc.); EDGX Exchange, Inc. (now known as Cboe 

EDGX Exchange, Inc.); Miami International 

Securities Exchange, LLC; MIAX PEARL, LLC; 

Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, 

LLC; Nasdaq MRX, LLC; Nasdaq Options Market, 

LLC; Nasdaq PHLX, LLC; NYSE Arca, Inc.; and 

NYSE American, LLC. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83960; File No. SR–BOX– 

2018–28] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend BOX Rules 

5050 and 5070 

August 27, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on August 

15, 2018, BOX Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

BOX Rule Rules 5050 (Series of Options 

Contracts Open for Trading) and 5070 

(Long-term Options Contracts) to 

conform to the recently approved 

changes to the Options Listing 

Procedures Plan (‘‘OLPP’’).3 The text of 

the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s internet website at http://

boxoptions.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

Sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

Rules 5050 (Series of Options Contracts 

Open for Trading) and 5070 (Long-term 

Options Contracts) to conform to the 

recently approved changes to the 

Options Listing Procedures Plan 

(‘‘OLPP’’).4

The Exchange, which is one of the 

Participant Exchanges to the OLPP, 

currently has rules that are designed to 

incorporate the requirements of the 

OLPP.5 All Participant Exchanges have 

similar such (essentially uniform) rules 

to ensure consistency and compliance 

with the OLPP. The Exchange proposes 

to modify such rules to reflect the recent 

updates as described below. 

Addition of Long-Term Equity Options 

(‘‘LEAPS’’) 

First, the OLPP has been amended to 

change the earliest date on which new 

January LEAPS on equity options, 

options on Exchange Traded Funds 

(‘‘ETF’’), or options on Trust Issued 

Receipts (‘‘TIR’’) may be added to a 

single date (from three separate 

months). As noted in the OLPP Notice, 

in the past there were operational 

concerns related to adding new January 

LEAPs series for all options classes on 

which LEAPs were listed on a single 

trading day. And, the addition of new 

series in a pre-electronic trading 

environment was a manual process. To 

accommodate this, the addition of new 

January LEAPs series was spread across 

three months (September, October, and 

November). Today, however, these 

operational concerns related to January 

LEAPs have been alleviated as new 

series can be added in bulk 

electronically. The Plan Participants, 

including the Exchange, believe that 

moving the addition of new January 

LEAPs series to no earlier than the 

Monday prior to the September 

expiration would reduce marketplace 

confusion about available January 

LEAPs series. Where previously January 

LEAPs series for options classes on the 

February or March expiration cycles 

would not have been available as early 

as January LEAPs series for options 

classes on the January expiration cycle, 

under the proposed change, all January 

LEAPs series will be available 

concurrently. 

Accordingly, to conform to this 

change, the Exchange proposes to 

modify Rule 5070(c) to reflect that new 

January LEAPS series on equity options 

classes, options on ETFs, or options on 

TIRs, may not be added on a currently 

listed and traded option class earlier 

than the Monday prior to the September 

expiration (which is 28 months before 

the expiration). 

Addition of Equity, ETF, and TIR 

Option Series After Regular Trading 

Hours 

Second, the OLPP has been amended 

to allow equity, ETF, and TIR option 

series to be added based on trading after 

regular trading hours (i.e., after-market). 

As noted in the OLPP Notice, the prior 

version of the OLPP did not allow for 

option series to be added based on 

trading following regular trading hours. 

As such, the Exchange Participants were 

unable to add new option series that 

may result from trading following 

regular trading hours until the next 

morning, depending on the range of 

prices in pre-market trading, which is 

significant because events that occur 

after regular trading hours, such as 

earnings releases, often have an 

important impact on the price of an 

underlying security. In addition, there 

are operational difficulties for market 

participants throughout the industry 

adding series after system startup. To 

avoid the potential burden that would 

result from the inability to add series as 

a result of trading following regular 

trading hours, the OLPP was amended 

to allow an additional category by 

which the price of an underlying 

security may be measured. Specifically, 

to conform to the amended OLPP, the 

Exchange proposes to add to Rule 

5050(b)(1) to provide that ‘‘for option 

series to be added based on trading 

following regular trading hours,’’ the 

price of the underlying security is 

measured by ‘‘the most recent share 

price reported by all national securities 

exchanges between 4:15 p.m. and 6:00 

p.m. Eastern Time.’’ 

Technical Changes 

The Exchange proposes to modify 

Rule 5070(b) to delete now obsolete 

operational language, which dates back 

to when LEAPs were first adopted. The 

language in question provides that: 


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Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Notices 44683 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 8 15 U.S.C. 78s(b)(3)(A)(iii). 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6)(iii). 

13See OLPP Notice, supra note 3. 

14For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

After a new long-term options contract 

series is listed, such series will be opened for 

trading either when there is buying or selling 

interest, or forty (40) minutes prior to the 

close, whichever occurs first. No quotations 

will be posted for such options series until 

they are opened for trading. 

The Exchange proposes to delete this 

language because when this language 

was adopted LEAPs were not opened for 

trading until late in the trading day 

unless there was buying or selling 

interest. Today, however, technological 

improvements allow the Exchange to 

open all LEAP series at the same time 

as all other series in an option class. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),6 in general, and Section 6(b)(5) 

of the Act,7 in particular, in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest. 

In particular, the proposed rule 

change, which conforms to the recently 

adopted provisions of the OLPP, as 

amended, allows the Exchange to 

continue to list extended far term option 

series that have been viewed as 

beneficial to traders, investors and 

public customers. Accordingly, the 

Exchange believes that the proposal is 

consistent with the Act because it will 

allow the Exchange to list all January, 

2021 expiration series on the Monday 

prior to the September, 2018 expiration. 

Moreover, this change would simplify 

the process for adding new January 

LEAP options series and reduce 

potential for investor confusion because 

all new January LEAP options would be 

made available beginning at the same 

time, consistent with the amended 

OLPP. The Exchange notes that this 

proposal does not propose any new 

provisions that have not already been 

approved by the Commission in the 

amended OLPP, but instead maintains 

series listing rules that conform to the 

amended OLPP. 

The proposal to permit series to be 

added based on after-market trading is 

designed to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanisms of a free and 

open market and a national market 

system, by allowing the Exchange to 

make series available for trading with 

reduced operational difficulties. The 

Exchange notes that this proposed 

change, which is consistent with the 

amended OLPP should provide market 

participants with earlier notice 

regarding what options series will be 

available for trading the following day, 

and should help to enhance investors’ 

ability to plan their options trading. 

The Exchange also believes that the 

proposed technical changes, including 

deleting obsolete language and 

reorganizing and consolidating the rule, 

promote just and equitable principles of 

trade, foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

and remove impediments to and perfect 

the mechanism of a free and open 

market and a national market system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. Specifically, 

the Exchange believes that by 

conforming Exchange rules to the 

amended OLPP, the Exchange would 

promote regulatory clarity and 

consistency, thereby reducing burdens 

on the marketplace and facilitating 

investor protection. The Exchange 

believes that adopting rules, which it 

anticipates will likewise be adopted by 

Participant Exchanges, would allow for 

continued competition between 

Exchange market participants trading 

similar products as their counterparts 

on other exchanges, while at the same 

time allowing the Exchange to continue 

to compete for order flow with other 

exchanges in option issues. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 8 and Rule 

19b–4(f)(6) thereunder.9 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder.10

A proposed rule change filed under 

Rule 19b–4(f)(6) 11 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),12 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission notes that the 

Exchange’s proposal would conform the 

Exchange’s rules to the amended OLPP, 

which the Commission previously 

approved.13 Accordingly, the 

Commission believes that the proposal 

raises no new or novel regulatory issues 

and waiver of the 30-day operative 

delay is consistent with the protection 

of investors and the public interest. The 

Commission therefore waives the 30-day 

operative delay and designates the 

proposed rule change to be operative 

upon filing.14

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 


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44684 Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Notices 

15 15 U.S.C. 78s(b)(2)(B). 

16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Historically, market participants needed to 

manually adjust pricing models when a new longterm options contract series was added, which was 

time-consuming and created pricing risk. Market 

participants’ systems are able to incorporate series 

added intraday in an automatic, and thus more 

timely, manner. Therefore, any previous operational 

concerns related to the historic manual process 

have been alleviated. 

4See Rule 19.6(a)–(c) and 29.11(c). 

5 15 U.S.C. 78f(b). 

6 15 U.S.C. 78f(b)(5). 

under Section 19(b)(2)(B) 15 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BOX–2018–28 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BOX–2018–28. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change. Persons 

submitting comments are cautioned that 

we do not redact or edit personal 

identifying information from comment 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BOX– 

2018–28 and should be submitted on or 

before September 21, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–18894 Filed 8–30–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83958; File No. SR– 

CboeEDGX–2018–039] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Delete 

Obsolete Language Regarding the 

Timing of Listing Long-Term Options 

Series 

August 27, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on August 

24, 2018, Cboe EDGX Exchange, Inc. 

(the ‘‘Exchange’’ or ‘‘EDGX’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

Rules 19.8 and 29.11. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposed rule 

change is to amend Rules 19.8 and 29.11 

to delete now obsolete operational 

language, which dates back to when 

long-term options contracts were first 

adopted. This language provides that 

when a new equity or index long-term 

options contract series, as applicable, is 

listed, such series will be opened for 

trading either when there is buying or 

selling interest, or 40 minutes prior to 

the close, whichever occurs first. No 

quotations will be posted for such 

option series until they are opened for 

trading. The Exchange proposes to 

delete this language because when this 

language was adopted, long-term 

options contracts were not opened for 

trading until late in the trading day 

unless there was buying or selling 

interest. Today, however, technological 

improvements 3 allow the Exchange to 

open all long-term options contract 

series at the same time as all other series 

in an option class.4

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.5 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 6 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 


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