[Federal Register Volume 83, Number 158 (Wednesday, August 15, 2018)]
[Notices]
[Pages 40599-40601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17490]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83809; File No. SR-CboeBZX-2018-057)]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Exchange Rule 1.5, Definitions, Exchange Rule 14.6, Obligations for 
Companies Listed on the Exchange, and Exchange Rule 14.11, Other 
Securities

August 9, 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 1, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') 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 Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend Rule 1.5(c), which defines 
the After Hours Trading Session, to allow trading until 8:00 p.m. ET.
    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

[[Page 40600]]

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 Exchange offers four distinct trading sessions where the 
Exchange accepts orders for potential execution: (1) The ``Early 
Trading Session,'' which begins at 7:00 a.m. Eastern Time (``ET'') and 
continues until 8:00 a.m. ET,\5\ (2) the ``Pre-Opening Session,'' which 
begins at 8:00 a.m. ET and continues until 9:30 a.m. ET,\6\ (3) 
``Regular Trading Hours,'' which begin at 9:30 a.m. ET and continue 
until 4:00 p.m. ET,\7\ and (4) the ``After Hours Trading Session,'' 
which begins at 4:00 p.m. ET and continues until 5:00 p.m. ET.\8\ 
Users\9\ may designate when their orders are eligible for execution by 
selecting their desired Time-in-Force instruction.\10\
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    \5\ ``Early Trading Session'' means the time between 7:00 a.m. 
and 8:00 a.m. ET. See Rule 1.5(ee).
    \6\ ``Pre-Opening Session'' means the time between 8:00 a.m. and 
9:30 a.m. ET. See Rule 1.5(r).
    \7\ ``Regular Trading Hours'' means the time between 9:30 a.m. 
and 4:00 p.m. ET. See Rule 1.5(w).
    \8\ ``After Hours Trading Session'' means the time between 4:00 
p.m. and 5:00 p.m. ET. See Rule 1.5(c).
    \9\ ``User'' means any Member or Sponsored Participant who is 
authorized to obtain access to the System pursuant to Rule 11.3. See 
Rule 1.5(cc).
    \10\ See Rule 11.9(b).
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    The purpose of the proposed rule change is to amend Rule 1.5(c), 
which defines the After Hours Trading Session, to allow trading until 
8:00 p.m. ET, consistent with the hours currently available on the 
Exchange's affiliates Cboe EDGX Exchange, Inc. (``EDGX'') and Cboe EDGA 
Exchange, Inc. (``EDGA'').\11\ The After Hours Trading Session will 
continue to begin after Regular Trading Hours end at 4:00 p.m. ET but 
instead of ending at 5:00 p.m. ET, as is the case today, will now be 
available until 8:00 p.m. ET similar to the EGDX and EDGA markets. Rule 
11.1(a), which was inadvertently modified in November 2014 to include 
an 8:00 p.m. ET cutoff for entering orders as part of a proposed rule 
change to accept orders beginning at 6:00 a.m. ET,\12\ will not be 
amended by this proposed rule change as the Exchange will now accept 
orders until 8:00 p.m. ET as described in that rule.
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    \11\ See EDGX and EDGA Rule 1.5(r), which both define ``Post-
Closing Session'' as the time between 4:00 p.m. and 8:00 p.m. ET.
    \12\ See Securities Exchange Act Release No. 73745 (December 4, 
2014), 79 FR 73359 (December 10, 2014) (SR-BATS-2014-062).
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    The Exchange's affiliate, Cboe BYX Exchange, Inc. (``BYX''), is 
also filing to extend its trading hours to 8:00 p.m. ET.\13\ The 
proposed rule change will therefore promote a consistent experience for 
market participants across all four equities markets operated by Cboe 
Global Markets, Inc. Orders entered for participation in the After 
Hours Trading Session will continue to be handled in the same manner as 
today, with the exception that the Exchange will now accept those 
orders until 8:00 p.m. ET, thereby providing additional time for market 
participants to source liquidity outside of Regular Trading Hours. The 
Exchange therefore believes that amending Rule 1.5(c) to extend the 
Exchange's trading hours will be benefit investors that will now be 
able to trade on the Exchange later in the day.
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    \13\ See SR-CboeBYX-2018-013 (pending publication).
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    A number of other Exchange rules related to listings also 
specifically reference the time that the Exchange is open for trading 
(i.e., until 5:00 p.m. ET today). The Exchange therefore proposes to 
update references to the Exchange's hours of operation in those rules 
in connection with the changes to extend the After Hours Trading 
Session to 8:00 p.m. ET. Specifically, the Exchange proposes to amend 
the following rules to reference the proposed 8:00 p.m. ET end of 
trading: (1) Interpretations and Policies .01 and .02 to Rule 14.6, 
which provide the timing for notifying the Exchange of certain public 
disclosures to be made during Exchange market hours; (2) Rule 
14.11(b)(7),(c)(7) which provide that the Exchange may designate 
Portfolio Depository Receipts or Index Fund Shares, respectively, for 
trading during the pre-market and post-market sessions offered on the 
Exchange; (3) Rule 14.11(f)(2)(B), which provides that transactions in 
Trust Issued Receipts may be effected until 5:00 p.m. ET each business 
day; and (4) Rule 14.11(j)(2), which provides that the Exchange must 
distribute an information circular for UTP Derivative Securities that, 
among other things, includes information about the risks of trading 
during the Exchange's various trading sessions.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \14\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \15\ in particular, in that it is designed 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. Specifically, the Exchange 
believes that the proposed rule change will benefit market participants 
by providing additional opportunities to transact on the Exchange later 
in the trading day.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
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    As explained in the purpose section of this proposed rule change, 
the Exchange currently accepts orders in its After Hours Trading 
Session until 5:00 p.m. ET, while two of its affiliated exchanges 
(i.e., EDGX and EDGA) currently have a Post-Closing Session that ends 
at 8:00 p.m. ET.\16\ The Exchange believes that market participants 
would benefit from a longer After Hours Trading Session on the Exchange 
too, and is therefore proposing to extend its After Hours Trading 
Session to the same time as its affiliated markets. The Exchange 
believes that this change will provide additional opportunities for 
firms to source liquidity for their orders on the Exchange. 
Furthermore, the proposed rule change will ensure that Members have a 
similar experience when trading on all four Cboe equities markets. For 
the reasons set forth above, the Exchange believes the proposal removes 
impediments to and perfects the mechanism of a free and open market and 
a national market system, and, in general, protects investors and the 
public interest.
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    \16\ See supra note 11.
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    In addition, the Exchange believes that the proposed changes to its 
listing rules are consistent with the Act because these changes update 
those rules with references to the proposed 8:00 p.m. ET time that the 
Exchange would accept orders in the After Hours Trading Session. No 
further substantive changes to those rules are proposed. The Exchange 
believes that it is appropriate to update all rules that specifically 
reference the Exchange's hours of operation so that the rules properly 
reflect the changes to the After Hours Trading Session being 
implemented in this proposed rule change.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. The 
Exchange does not believe that the

[[Page 40601]]

proposed rule change would have any significant impact on inter-market 
competition as the Exchange's affiliated exchanges already allow after 
hours trading until 8:00 p.m. ET, and other markets are free to provide 
similar trading hours. Furthermore, the Exchange does not believe that 
the proposed rule change would have any significant impact on intra-
market competition as all Members would be able to enter orders later 
in the day due to the extended After Hours Trading Session.

(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 written 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) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 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 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 under Rule 19b-4(f)(6) \19\ normally 
does not become operative for 30 days after the date of its filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\20\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requests 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. The Exchange 
represents that waiver of the 30-day operative delay will allow the 
Exchange to immediately provide a venue for market participants to 
source liquidity until 8:00 p.m. ET, similar to the operation of other 
exchanges. Because the proposed rules previously have been approved by 
the Commission for, and are substantively identical to those of, 
another listing exchange, the Commission believes does not believe that 
the proposal raises any novel or unique regulatory issues.\21\ 
Therefore, the Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest. The Commission hereby waives the 30-day operative delay and 
designates the proposed rule change operative upon filing.\22\
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    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ See supra note 11.
    \22\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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 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 proposal 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 [email protected]. Please include 
File Number SR-CboeBZX-2018-057 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-2018-057. 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 such filing will also 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-2018-057 and should be submitted 
on or before September 5, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17490 Filed 8-14-18; 8:45 am]
 BILLING CODE 8011-01-P


