[Federal Register Volume 83, Number 66 (Thursday, April 5, 2018)]
[Notices]
[Pages 14685-14689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06915]



[[Page 14685]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82974; File No. SR-CBOE-2018-021]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Amending 
Rules Regarding Market-Maker Quoting Obligations

March 30, 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 March 27, 2018, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe 
Options'') filed with the Securities and Exchange Commission (the 
``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend rules regarding Market-Maker quoting 
obligations. (additions are italicized; deletions are [bracketed])
* * * * *

Cboe Exchange, Inc.

Rules

* * * * *

Rule 1.1. Definitions

    (a)-(bbb) (No change).

Continuous Electronic Quotes

    (ccc) With respect to a Market-Maker who is obligated to provide 
continuous electronic quotes on the Hybrid Trading System (``Hybrid 
Market-Maker''), the Hybrid Market-Maker shall be deemed to have 
provided ``continuous electronic quotes'' if the Hybrid Market-Maker 
provides electronic two-sided quotes for 90% of the time that the 
Hybrid Market-Maker is required to provide electronic quotes in an 
appointed option class on a given trading day during the applicable 
trading session. Compliance with this quoting obligation applies to 
all of a Hybrid Market-Maker's appointed classes collectively (with 
respect to each Market-Maker type as the Hybrid Market-Maker is 
approved to act). The Exchange will determine compliance by a Hybrid 
Market-Maker with this quoting obligation on a monthly basis. 
However, determining compliance with this obligation on a monthly 
basis does not relieve a Hybrid Market-Maker from meeting this 
obligation on a daily basis, nor does it prohibit the Exchange from 
taking disciplinary action against a Hybrid Market-Maker for failing 
to meet this obligation each trading day. Hybrid Market-Maker 
continuous electronic quoting obligations may be satisfied by 
Market-Makers either individually or collectively with Market-Makers 
of the same TPH organization.
    If a technical failure or limitation of a system of the Exchange 
prevents the Hybrid Market-Maker from maintaining, or prevents the 
Hybrid Market-Maker from communicating to the Exchange, timely and 
accurate electronic quotes in a class, the duration of such failure 
shall not be considered in determining whether the Hybrid Market-
Maker has satisfied the 90% quoting standard with respect to that 
option class. The Exchange may consider other exceptions to this 
continuous electronic quote obligation based on demonstrated legal 
or regulatory requirements or other mitigating circumstances.
    (ddd)-(cccc) (No change).

. . . Interpretations and Policies:
.01-.06 (No change).
* * * * *

Rule 8.7. Obligations of Market-Makers

    (a)-(c) (No change).
    (d) Market-Making Obligations in Applicable Hybrid Classes
    The following obligations in this paragraph (d) are only 
applicable to Market-Makers trading classes on the Cboe Options 
Hybrid System and only in those Hybrid classes. Unless otherwise 
provided in this Rule, Market-Makers trading classes on the Hybrid 
System remain subject to all obligations imposed by Cboe Options 
Rule 8.7. To the extent another obligation contained elsewhere in 
Rule 8.7 is inconsistent with an obligation contained in paragraph 
(d) of Rule 8.7 with respect to a class trading on Hybrid, this 
paragraph (d) shall govern trading in the Hybrid class.
    For Regular Trading Hours, these requirements are applicable on 
a per class basis, except as set forth in paragraph (ii)(B) below, 
depending upon the percentage of volume a Market-Maker transacts in 
an appointed class during Regular Trading Hours electronically 
versus in open outcry. With respect to making this determination, 
the Exchange will monitor a Market-Maker's trading activity in each 
appointed class during Regular Trading Hours every calendar quarter 
to determine whether it exceeds the threshold established in 
paragraph (d)(i). If a Market-Maker exceeds the threshold 
established below, the obligations contained in (d)(ii) will be 
effective the next calendar quarter.
    For a period of ninety (90) days commencing immediately after a 
class begins trading on the Hybrid system, the provisions of 
paragraph (d)(i) shall govern trading in that class.
    (i) (No change).
    (ii) Market-Maker Trades More Than 20% Contract Volume in an 
Appointed Class Electronically:
    If a Market-Maker on the Cboe Options Hybrid System transacts 
more than 20% of the Market-Maker's contract volume electronically 
in an appointed Hybrid class during Regular Trading Hours during any 
calendar quarter, commencing the next calendar quarter the Market-
Maker will be subject to the following quoting obligations in that 
class for as long as the Market-Maker maintains an appointment in 
that class:
    (A) (No change).
    (B) Continuous Electronic Quoting Obligation: A Market-Maker 
will be required to maintain continuous electronic quotes (as 
defined in Rule 1.1(ccc)) in 60% of the non-adjusted option series 
of the Market-Maker's appointed classes that have a time to 
expiration of less than nine months. Compliance with this quoting 
obligation applies to all of a Market-Maker's appointed classes 
collectively (for which it must maintain continuous electronic 
quotes pursuant to this paragraph (ii)(B)). The Exchange will 
determine compliance by a Market-Maker with this quoting obligation 
on a monthly basis. However, determining compliance with this 
quoting obligation on a monthly basis does not relieve a Market-
Maker from meeting this obligation on a daily basis, nor does it 
prohibit the Exchange from taking disciplinary action against a 
Market-Maker for failing to meet this obligation each trading day. 
The initial size of a Market-Maker's quote must be for the minimum 
number of contracts determined by the Exchange on a class by class 
basis, which minimum shall be at least one contract. This obligation 
does not apply to intra-day add-on series on the day during which 
such series are added for trading. Market-Maker continuous 
electronic quoting obligations may be satisfied by Market-Makers 
either individually or collectively with Market-Makers of the same 
TPH organization.
    (C) (No change).
    (iii)-(iv) (No change).

. . . Interpretations and Policies:
.01-.12 (No change).
* * * * *

Rule 8.13. Preferred Market-Maker Program

    (a)-(c) (No change).
    (d) Quoting Obligations: The Preferred Market-Maker must comply 
with the quoting obligations applicable to its Market-Maker type 
under Exchange rules and must provide continuous electronic quotes 
(as defined in Rule 1.1(ccc)) in at least the lesser of 99% of the 
non-adjusted option series that have a time to expiration of less 
than nine months or 100% of the non-adjusted option series that have 
a time to expiration of less than nine months minus one call-put 
pair, with the term ``call-put pair'' referring to one call and one 
put that cover the same underlying instrument and have the same 
expiration date and exercise price. This obligation does not apply 
to intra-day add-on series on the day during which such series are 
added for trading. Compliance with this quoting obligation applies 
to all of a Preferred Market-Maker's classes for which it receives 
Preferred Market-Maker orders collectively. The Exchange will 
determine compliance by a Preferred Market-Maker with this quoting 
obligation on a monthly basis. However, determining compliance with 
this obligation on a monthly basis does not relieve a Preferred 
Market-Maker from meeting this quoting obligation on a daily basis, 
nor does it prohibit the Exchange from taking

[[Page 14686]]

disciplinary action against a Preferred Market-Maker for failing to 
meet this obligation each trading day. Preferred Market-Maker 
continuous electronic quoting obligations may be satisfied by 
Preferred Market-Makers either individually or collectively with 
Preferred Market-Makers of the same TPH organization.

. . . Interpretations and Policies:
.01-.03 (No change).
* * * * *

Rule 8.15. Lead Market-Makers

    (a) (No change).
    (b) LMM Obligations: Each LMM must fulfill all the obligations 
of a Market-Maker under the Rules and satisfy each of the following 
requirements:
    (i) provide continuous electronic quotes (as defined in Rule 1.1 
(ccc)) in at least the lesser of 99% of the non-adjusted option 
series or 100% of the non-adjusted option series minus one call-put 
pair, with the term ``call-put pair'' referring to one call and one 
put that cover the same underlying instrument and have the same 
expiration date and exercise price. This obligation does not apply 
to intra-day add-on series on the day during which such series are 
added for trading. Compliance with this quoting obligation applies 
to all of an LMM's appointed classes on each platform collectively. 
The Exchange will determine compliance by an LMM with this quoting 
obligation on a monthly basis. However, determining compliance with 
this obligation on a monthly basis does not relieve an LMM from 
meeting this obligation on a daily basis, nor does it prohibit the 
Exchange from taking disciplinary action against an LMM for failing 
to meet this obligation each trading day. In option classes in which 
both an On-Floor LMM and an Off-Floor DPM or Off-Floor LMM have been 
appointed, the On-Floor LMM will not be obligated to comply with 
this paragraph (b)(i) and instead will be obligated to comply with 
the obligations of Market-Makers in Rule 8.7(d). [. ]In an option 
class in which the Exchange appointed an On-Floor LMM that has open-
outcry obligations only, that On-Floor LMM will not be obligated to 
comply with this paragraph (b)(i) and instead will be obligated to 
comply with the obligations of Market-Makers in Rule 8.7(d) and have 
a designee in the class's crowd on the trading floor for the entire 
trading day (except for a de minimis amount of time). Lead Market-
Maker continuous electronic quoting obligations may be satisfied by 
Lead Market-Makers either individually or collectively with Lead 
Market-Makers of the same TPH organization;
    (ii)-(viii) (No change).
    (c)-(d) (No change).

. . . Interpretations and Policies:
.01-.04 (No change).
* * * * *

Rule 8.85. DPM Obligations

    (a) Dealer Transactions. Each DPM must fulfill all of the 
obligations of a Market-Maker under the Rules, and must satisfy each 
of the following requirements in respect of each of the securities 
allocated to the DPM. To the extent that there is any inconsistency 
between the specific obligations of a DPM set forth in subparagraphs 
(a)(i) through (a)(xi) of this Rule and the general obligations of a 
Market-Maker under the Rules, subparagraphs (a)(i) through (a)(xi) 
of this Rule will govern. Each DPM must:
    (i) provide continuous electronic quotes (as defined in Rule 
1.1(ccc)) in at least the lesser of 99% of the non-adjusted option 
series or 100% of the non-adjusted option series minus one call-put 
pair, with the term ``call-put pair'' referring to one call and one 
put that cover the same underlying instrument and have the same 
expiration date and exercise price, and assure that its disseminated 
market quotations are accurate. This obligation does not apply to 
intra-day add-on series on the day during which such series are 
added for trading. Compliance with this quoting obligation applies 
to all of a DPM's allocated classes collectively. The Exchange will 
determine compliance by a DPM with this quoting obligation on a 
monthly basis. However, determining compliance with this obligation 
on a monthly basis does not relieve a DPM from meeting this 
obligation on a daily basis, nor does it prohibit the Exchange from 
taking disciplinary action against DPM for failing to meet this 
obligation each trading day. DPM continuous electronic quoting 
obligations may be satisfied by DPM either individually or 
collectively with DPM Market-Makers of the same TPH organization;
    (ii)-(x) (No change).
    (b)-(e) (No change).

. . .Interpretations and Policies:
.01-.02 (No change).
* * * * *
    The text of the proposed rule change is also available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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, and B 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
    Cboe Options Rules 8.7(d)(ii)(B), 8.13(d), 8.15(b)(i), and 
8.85(a)(i) set forth continuous electronic quoting obligations of 
Market-Makers, Preferred Market-Makers (``PMMs''), Lead Market-Makers 
(``LMMs''), and Designated Primary Market-Makers (``DPMs''), 
respectively. Additionally, Rule 1.1(ccc) defines continuous electronic 
quotes as that term is used in those rules. Rule 8.1 defines a Market-
Maker as an individual Trading Permit Holder or a TPH organization that 
is registered with the Exchange for the purpose of making transactions 
as a dealer-specialist on the Exchange in accordance with the 
provisions of Chapter VIII of the Rules. PMMs, LMMs, and DPMs are types 
of Market-Makers.
    Historically, Cboe Options has interpreted the term ``Market-
Maker'' with respect to continuous quoting obligations to apply on an 
individual basis. This interpretation is consistent with the previous 
definition of Market-Maker--Cboe Options Rule 8.1 previously defined a 
Market-Maker as an individual member or nominee of a member 
organization.\3\
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    \3\ See Securities Exchange Act Release No. 57615 (April 3, 
2008), 73 FR 19537 (April 10, 2008) (SR-CBOE-2008-120) (order 
approving proposed rule change relating to Market-Makers and Remote 
Market-Makers, which rule change amended the definition of Market-
Maker in Rule 8.1 to include member (which are now known as Trading 
Permit Holders) organizations).
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    After the Exchange amended its rules to state a Market-Maker may 
also be a TPH organization, it continued its interpretation of the term 
``Market-Maker'' as referring to an individual Market-Maker with 
respect to continuous quoting obligations. This is implied by Rule 8.7, 
Interpretation and Policy .03(B)(i), which states the in-person 
requirements for Market-Makers in Hybrid 3.0 classes set forth in 
paragraph (B) may be satisfied by Market-Makers individually or 
collectively with the Market-Makers of the same TPH organization. In 
the filing in which the Exchange proposed to adopt that provision, the 
Exchange indicated it was proposing that provision in response to the 
Exchange's expansion of the definition of Market-Maker to include TPH 
organizations.\4\ This implies the Exchange previously interpreted 
Market-Maker consistent with the previous definition, which was an 
individual. Limiting that provision to the in-person requirements for 
Market-Makers in Hybrid 3.0 classes also indicates the Exchange's 
intention to only interpret Market-Maker as an individual or TPH 
organization for the purposes of those in-person obligations, but not 
change its interpretation of the term Market-Maker with respect to 
other

[[Page 14687]]

obligations. As a result, the Exchange has continued to interpret the 
term Market-Maker with respect to continuous quoting obligations to 
mean an individual, despite the change to the definition of Market-
Maker.
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    \4\ See Securities Exchange Act Release No. 57996 (June 20, 
2008), 73 FR 36937 (June 30, 2008) (SR-CBOE-2008-59) (proposed rule 
change to adopt Rule 8.7, Interpretation and Policy .03(B)(i)).
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    Cboe Options proposes to modify its interpretation of the term 
``Market-Maker'' with respect to Market-Maker continuous electronic 
quoting obligations and instead interpret the term Market-Maker in a 
manner consistent with its definition, which includes both individuals 
and TPH organizations. Specifically, the proposed rule change amends 
the above-referenced rules regarding continuous electronic quoting 
obligations to state Market-Maker (or PMM, LMM, or DPM, as applicable) 
continuous electronic quoting obligations may be satisfied by Market-
Makers either individually or collectively with Market-Makers of the 
same TPH organization. The Exchange believes it is reasonable to 
interpret the term Market-Maker with respect to continuous electronic 
quoting in this manner, as that is consistent with the current 
definition. The proposed interpretation is consistent with the current 
structure of TPH organizations registered as Market-Makers (as 
currently all individual Market-Makers are affiliated with a TPH 
organization, and thus TPH organizations are ultimately responsible for 
those Market-Makers) and will ensure a more consistent application of 
the definition of Market-Maker within the Cboe Rules.
    Additionally, the proposed interpretation provides Market-Makers 
with flexibility to quote in their appointed classes in a manner 
consistent with their business operations, particularly in classes with 
a large number of series. For example, the Exchange intends to convert 
trading of SPX options from the Hybrid 3.0 trading platform to the 
Hybrid trading system. There are currently over 7,000 series within the 
SPX option group trading on the Hybrid 3.0 platform, on which Market-
Makers may not stream electronic quotes. Upon conversion of SPX to 
Hybrid, Market-Makers will be able to select electronic appointments in 
this group and stream electronic quotes, subject to continuous 
electronic quoting obligations in Rule 8.7(d). Given the large number 
of SPX series, the Exchange understands a Market-Maker firm may decide 
to have individuals associated with the firm submit SPX quotes in 
different series using different acronyms. On an aggregate basis, the 
quotes submitted through those various acronyms would satisfy the 
firm's electronic quoting obligations. For example, a Market-Maker firm 
has acronyms ABC, DEF, and GHI registered for three individuals 
associated with that firm. The firm's plan is for these individuals to 
stream quotes in class XYZ as follows: ABC will quote in the near three 
month series (months one through three), DEF will quote in the middle 
three month series (months four through six), and GHI will quote in the 
far three month series (months seven through nine).\5\ Assume each 
acronym submits electronic quotes in 300 series for 90% of the trading 
day, which combines for 900 series out of 1,000 total series listed for 
trading in class XYZ (i.e., 90% of series) for the Market-Maker firm. 
On an aggregate basis, this satisfies the firm's obligation to quote in 
at least 60% of series for 90% of the trading day.
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    \5\ Rule 8.7(d)(ii) requires continuous electronic quotes in the 
series with expirations no further than nine months.
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    Modifying the interpretation of the term Market-Maker to apply on a 
firm basis with respect to continuous electronic quoting obligations is 
also consistent with rules of other exchanges. For example, under the 
rules of Cboe-affiliated options exchanges Cboe BZX Exchange, Inc. 
(``BZX Options'') and Cboe EDGX Exchange, Inc. (``EDGX Options''), a 
Market-Maker by definition may only be an entity,\6\ and thus the rules 
with respect to continuous electronic quoting obligations apply on a 
firm basis. Additionally, Cboe-affiliated options exchange Cboe C2 
Exchange, Inc. has historically only had trading firms registered as 
Market-Makers, and thus has interpreted the term Market-Maker to mean 
Trading Permit Holder organization.\7\ Cboe Options is modifying its 
interpretation of the term Market-Maker with respect to continuous 
electronic quoting obligations to mean TPH organization where 
applicable to provide greater harmonization between the rules of the 
Cboe-affiliated Exchanges and simplify the regulatory requirements of 
Market-Makers subject to Market-Maker continuous electronic quoting 
obligations across multiple Cboe-affiliated Exchanges. Additionally, as 
noted above, the Exchange's current in-person quoting requirements may 
be satisfied by Market-Makers individually or collectively with Market-
Makers of the same TPH organization.
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    \6\ See BZX and EDGX Rules 16.1(a)(38) (defining ``Options 
Member'' as a firm, or organization registered with the Exchange 
pursuant to Chapter XVII of EDGX rules, for purposes of 
participating in EDGX Options as an ``Options Order Entry Firm'' or 
``Options Market-Maker'') and (37) (defining ``Options Market 
Maker'' as an Options Member, which may only be a firm, registered 
with the Exchange for the purpose of making markets in options 
contracts traded on the Exchange and that is vested with the rights 
and responsibilities specified in Chapter XXII of the EDGX rules); 
see also BZX and EDGX Rules 22.2 (stating that Options Members 
(which may only be firms) may register as Market Makers) and 22.5 
(describing obligations of Market-Makers, which may only be firms by 
virtue of the definitions of Market-Maker and Options Member).
    \7\ Various Trading Permit Holders have also informed the 
Exchange that other options exchanges similarly interpret their 
continuous electronic quoting rules to apply on a firm basis rather 
than individual basis.
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    While the proposed rule change is a modification of a current 
interpretation to Exchange rules, the Exchange proposes to include the 
interpretation in the applicable rules to provide clarity to Market-
Makers regarding their obligations.
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.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ 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) \10\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
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    In particular, the proposed interpretation is consistent with the 
current definition of Market-Maker, which provides a Market-Maker may 
be an individual or a TPH organization. The proposed interpretation is 
also consistent with the current structure of TPH organizations 
registered as Market-Makers (as all individual Market-Makers are 
currently associated with TPH organizations) and will ensure a more 
consistent application of the definition of Market-Maker within the 
Cboe Rules.
    The Exchange does not propose to modify continuous electronic 
quoting

[[Page 14688]]

obligations, and does not believe the proposed modification to the 
interpretation of the term Market-Maker in those rules will diminish 
Market-Makers' obligations to provide continuous electronic quotes in a 
significant percentage of series for a significant part of the trading 
day. Rather, the proposed interpretation provides Market-Makers with 
flexibility to quote in their appointed classes in a manner consistent 
with their business operations, particularly in classes with a large 
number of series. The Exchange believes this may benefit efficiency of 
Market-Makers' quoting operations in those classes, as they can manage 
their quoting operations as they deem appropriate based on the nature 
of their businesses. The Exchange does not believe this proposed 
interpretation would reduce liquidity, because to the extent continuous 
quoting obligations may be satisfied collectively among Market-Makers 
associated with a TPH organization, the TPH organization would have to 
take into account the quotes of all associated Market-Makers when 
determining whether it is satisfying its continuous electronic quoting 
obligations.
    The proposed interpretation removes impediments to and perfects the 
mechanisms of a free and open market and national market system, 
because other exchanges (e.g. BZX and EDGX) interpret the term Market-
Maker to mean a member organization with respect to continuous quoting 
obligations. Cboe Options is modifying its interpretation of the term 
Market-Maker with respect to continuous electronic quoting obligations 
to mean THP organization where applicable in order to provide greater 
harmonization between the rules of the Cboe-affiliated Exchanges and 
simplify the regulatory requirements of Market-Makers subject to 
Market-Maker continuous electronic quoting obligations across multiple 
Cboe-affiliated Exchanges. Additionally, as noted above, the proposed 
interpretation is consistent with the Exchange's current in-person 
quoting requirements, which may be satisfied by Market-Makers 
individually or collectively with Market-Makers of the same TPH 
organization.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Cboe Options 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 proposed rule change 
will not impose any burden on intramarket competition, because the 
modified interpretation will apply in the same manner to all Market-
Makers subject to continuous electronic quoting obligations and is 
consistent with the current definition of Market-Maker. The Exchange 
does not propose to modify continuous electronic quoting obligations, 
and does not believe the proposed modification to the interpretation of 
the term Market-Maker in those rules will diminish Market-Makers' 
obligations to provide continuous electronic quotes in a significant 
percentage of series for a significant part of the trading day, and 
thus does not impact the balance of Market-Maker obligations and 
benefits. Rather, the proposed interpretation provides Market-Makers 
with flexibility to quote in their appointed classes in a manner 
consistent with their business operations, particularly in classes with 
a large number of series. The Exchange believes this may benefit 
efficiency of Market-Makers' quoting operations, particularly in those 
classes, as they can manage their quoting operations as they deem 
appropriate based on the nature of their businesses.
    The proposed rule change regarding the interpretation of the term 
Market-Maker will not impose any burden on intermarket competition, 
because the modified interpretation of the term Market-Maker to mean 
TPH organization where applicable is consistent with that of other 
options exchanges, as noted above. Cboe Options is modifying its 
interpretation of the term Market-Maker with respect to continuous 
electronic quoting obligations to mean TPH organization where 
applicable in order to provide greater harmonization between the rules 
of the Cboe-affiliated Exchanges and simplify the regulatory 
requirements of Market-Makers subject to Market-Maker continuous 
electronic quoting obligations across multiple Cboe-affiliated 
Exchanges. Additionally, the proposed interpretation is consistent with 
the Exchange's in-person quoting requirements.

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) \11\ of the Act and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
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 the 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the 
Commission to 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. As discussed 
above, the Exchange notes that its proposal is consistent with rules of 
other exchanges.\15\ Because the proposal does not raise any new or 
novel issues, the Commission believes that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest. Therefore, the Commission hereby waives the operative delay 
and designates the proposal operative upon filing.\16\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ See supra note 6 and accompanying text.
    \16\ For 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).
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule 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:

[[Page 14689]]

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CBOE-2018-021 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-CBOE-2018-021. 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-CBOE-2018-021 and should be submitted on 
or before April 26, 2018.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Eduardo Aleman,
Assistant Secretary.
[FR Doc. 2018-06915 Filed 4-4-18; 8:45 am]
 BILLING CODE 8011-01-P


