Document ID: SEC-2019-0856-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe BZX Exchange, Inc.
Posted Date: 2019-06-17T04:00Z

[Federal Register Volume 84, Number 116 (Monday, June 17, 2019)]
[Notices]
[Pages 28120-28122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12660]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86086; File No. SR-CboeBZX-2019-052]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Allow 
the Exchange To Determine the Availability of Order Types and Times-in-
Force

June 11, 2019.
    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 June 3, 2019, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Exchange filed the proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).

---------------------------------------------------------------------------

[[Page 28121]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX Options'') 
proposes to allow the Exchange to determine the availability of order 
types and times-in-force. The text of the proposed rule change is 
provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, 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 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 Exchange proposes to amend Rule 21.1 to provide that the 
Exchange may determine which order types and times-in-force are 
available on a class or system basis. This proposed change is based on 
corresponding Rule 21.1 of the Exchange's affiliated exchange, Cboe 
EDGX Exchange, Inc. (``EDGX Options'').\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 85797 (May 7, 2019), 
84 FR 20920 (May 13, 2019) (Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change Relating to Amend the 
Exchange's Opening Process and add a Global Trading Hours Session 
for XSP Options) (SR-CboeEDGX-2019-027).
---------------------------------------------------------------------------

    Current Rule 21.1(d) defines an order type on the Exchange as the 
unique processing prescribed for designated orders, subject to 
restrictions within the rules. Current Rule 21.1(f) defines time-in-
force as the period of time that the System will hold an order, subject 
to the restrictions within the rules.
    The Exchange now proposes to amend Rules 21.1(d) and 21.1(f) to add 
that unless otherwise specified in the Rules or the context indicates 
otherwise, the Exchange will determine which order types and time-in-
force, respectively, are available on a class or system basis. The 
purpose of this rule change is to provide the Exchange with appropriate 
flexibility to address different trading characteristics, market 
models, and investor base of each class. This provision is consistent 
with Rules 21.1(d) and 21.1(f) of EDGX Options, as well as the rules of 
the Exchange's other affiliated exchanges, Cboe C2 Exchange, Inc. 
(``C2'') Rule 6.10(a) and Cboe Exchange, Inc. (``Cboe Options'') Rule 
6.53, each of which provides these exchanges with the same flexibility. 
Overall, the Exchange believes that providing the same rules across the 
Exchange and its affiliates regarding the availability of certain order 
types and times-in-force will reduce confusion for BZX Options Members 
that participate across the multiple affiliated exchanges, particularly 
during the fourth quarter of 2019 when Cboe Options will migrate its 
technology to the same trading platform used by the Exchange, EDGX 
Options, and C2.
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.\6\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ 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 the 
Section 6(b)(5) \8\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ Id.
---------------------------------------------------------------------------

    The proposed rule change to provide the Exchange with the 
flexibility to determine the availability of order types and times-in-
force on a class and system basis will remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system by allowing the Exchange to address the specific characteristics 
of different classes and different market conditions. The Exchange 
believes that this serves to protect investors by ensuring that the 
appropriate order types and times-in-force are tailored to the 
different class characteristics and by mitigating risks associated with 
changing market conditions.
    The Exchange also believes that providing consistency between the 
Exchange rules and that of its affiliates removes impediments to and 
perfects the mechanism of a free and open market and promotes just and 
equitable principles of trade, as well as fosters cooperation and 
coordination with persons engaged in facilitating transactions in 
securities. The proposed rule change provides the Exchange with the 
same flexibility currently provided for within its affiliates' rules. 
The Exchange believes that this consistency promotes participants' 
understanding of the rules across the multiple affiliated exchanges and 
promotes a fair and orderly national options market system. The 
Exchange also notes that the proposed change is reasonable and does not 
affect investor protection because the proposed change does not present 
any novel or unique issues, as it has previously been filed with the 
Commission.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe the proposed rule change will impose any burden on intramarket 
competition, as the proposed rule change will apply in the same manner 
to all order types and/or times-in-force, as the Exchange determines, 
from all Members. The Exchange does not believe the proposed rule 
change will impose any burden on intermarket competition because the 
proposed change provides the Exchange with substantially the same 
flexibility as the rules of other exchanges.\9\ Therefore, the Exchange 
believes that the proposed rule change will allow it to make 
determinations regarding availability of orders that will enable it to 
remain competitive as markets and market conditions evolve.
---------------------------------------------------------------------------

    \9\ See EDGX Options Rule 21.1(d) and (f); C2 Rule 6.10(a); and 
Cboe Options Rule 6.53. See also Miami International Securities 
Exchange, LLC (``MIAX'') Rule 516.

---------------------------------------------------------------------------

[[Page 28122]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing 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 for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 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.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the 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 will institute proceedings 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-CboeBZX-2019-052 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-CboeBZX-2019-052. 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 10:00 a.m. and 
3:00 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-CboeBZX-2019-052 and should be submitted 
on or before July 8, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-12660 Filed 6-14-19; 8:45 am]
BILLING CODE 8011-01-P