
[Federal Register Volume 84, Number 39 (Wednesday, February 27, 2019)]
[Notices]
[Pages 6445-6450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03332]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85169; File No. SR-CBOE-2019-012]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To Amend its Fees Schedule

February 21, 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 February 11, 2019, 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, 
II, and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend its fees schedule. 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://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

[[Page 6446]]

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 make a number of changes to its Fees 
Schedule, effective February 1, 2019.\3\
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed fee changes on 
February 1, 2019 (SR-CBOE-2019-009). On business date February 4, 
2019, the Exchange withdrew that filing and submitted SR-CBOE-2019-
010. On business date February 11, 2019, the Exchange withdrew that 
filing and submitted this filing.
---------------------------------------------------------------------------

Volume Incentive Program
    The Exchange first proposes to amend the Volume Incentive Program 
(``VIP''). By way of background, under VIP, the Exchange credits each 
Trading Permit Holder (``TPH'') the per contract amount set forth in 
the VIP table for Public Customer orders (``C'' origin code) 
transmitted by that TPH (with certain exceptions) which is executed 
electronically on the Exchange, provided the TPH meets certain volume 
thresholds in a month.\4\ The Exchange proposes to amend the volume 
thresholds for Tiers 4 and 5. The proposed change is as follows:
---------------------------------------------------------------------------

    \4\ See Cboe Options Fees Schedule, Volume Incentive Program.

------------------------------------------------------------------------
                                     Percentage Thresholds of National
                                     Customer Volume in All Underlying
                                    Symbols Excluding Underlying Symbol
                                    List A, Sector Indexes, DJX, MXEA,
              Tier                     MXEF, MNX, NDX, XSP and XSPAM
                                                 (Monthly)
                                 ---------------------------------------
                                        Current            Proposed
------------------------------------------------------------------------
1...............................  0.00%-0.75%.......  No change.
2...............................  Above 0.75% to      No change.
                                   2.00%.
3...............................  Above 2.00% to      No change.
                                   3.00%.
4...............................  Above 3.00% to      Above 3.00% to
                                   4.00%.              3.75%.
5...............................  Above 4.00%.......  Above 3.75%.
------------------------------------------------------------------------

    The purpose of these changes is to adjust for current volume trends 
while maintaining an incremental incentive for TPHs to strive for the 
highest tier level.
RUT Transaction Fee
    The Exchange next proposes to increase the transaction fee for 
Market-Maker orders in RUT options. Currently, the Exchange charges 
$0.20 per contract for Market-Makers' RUT orders. The Exchange proposes 
to increase the transaction rate to $0.30 per contract. The Exchange 
notes the proposed rate change is less than the amount assessed for 
similar transactions on another Exchange and is also similar to Market-
Maker fees assessed for other proprietary products.\5\
---------------------------------------------------------------------------

    \5\ See Cboe BZX Fees Schedule. See also Cboe Options Fees 
Schedule, SPX Liquidity Provider Sliding Scale.
---------------------------------------------------------------------------

ETF and ETN Options Transaction Fee
    The Exchange proposes to amend the fees for electronic Customer 
orders (origin code ``C'') for ETF and ETN options. Currently the 
Exchange waives transaction fees for (1) all customer orders executed 
in open outcry or AIM, and (2) customer electronic executions of 249 
contracts or less in ETF and ETN options in Penny and Non-Penny 
classes. The Exchange proposes to amend the transaction fee for 
Customer electronic executions in ETF and ETN options such that it will 
waive the transaction fees for all Customer electronic executions that 
add liquidity (i.e., ``Maker'' transactions). The Exchange will charge 
$0.18 per contract on all Customer electronic executions if the 
original order size is 100 contracts or greater and if it removes 
liquidity (i.e., ``Taker'' transactions) in ETF and ETN options.
    The Exchange also proposes to amend Footnote 9 to make 
corresponding changes to the footnote text regarding the proposed 
change described above and also explicitly make clear what transactions 
the Exchange would consider to be Maker (and therefore have no fees 
assessed) and Taker (and therefore be assessed $0.18 per contract, if 
equal to or greater than 100 contracts). Particularly, the Exchange 
proposes to provide that the Taker fee applies to electronic volume 
only, but is not applied to the following: (i) Trades on the open and 
(ii) QCC orders. The Taker fees would apply to the following volume: 
(i) Volume resulting from a Customer's orders and/or quotes removing 
other market participants' resting orders and/or quotes and (ii) volume 
resulting from a Customer's primary orders in (i) unpaired auctions 
(i.e., Hybrid Agency Liaison (``HAL'') and HAL on the Open (``HALO'')) 
and (ii) Complex Order Auction (COA)). The Maker fee waiver would apply 
to the following volume: (i) Volume resulting from executions against a 
Customer's resting orders and/or quotes and (ii) volume resulting from 
a Customer's responses to auctions (i.e., HAL, HALO and COA responses). 
The Exchange notes it similarly has clarified what volume is considered 
Taker versus Maker in Footnote 44 of the Fees Schedule which relates to 
the Liquidity Provider Sliding Scale Adjustment Table.\6\
---------------------------------------------------------------------------

    \6\ See Cboe Options Fees Schedule, Footnote 44.
---------------------------------------------------------------------------

SPXW Priority Surcharge
    The Exchange proposes to amend the Customer Priority Surcharge for 
SPXW (``SPXW Surcharge''). Currently, the Exchange assesses a SPXW 
Surcharge of $0.10 per contract for Customer orders in SPXW that are 
executed electronically (with some exceptions).\7\ The Exchange 
proposes to extend the SPXW Surcharge to all market participants other 
than Market-Makers, which aligns its applicability to the same market 
participants as the SPX Hybrid Execution Surcharge.
---------------------------------------------------------------------------

    \7\ See Cboe Options Fees Schedule, Footnote 31.
---------------------------------------------------------------------------

    In connection with the proposed change, and in order to make the 
Fees Schedule easier to read, the Exchange proposes to relocate the 
SPXW Surcharge to its own line item grouped together with the SPX 
Hybrid Execution Surcharge and rename the SPX Hybrid Execution 
Surcharge, such that both

[[Page 6447]]

surcharges will be grouped together as the ``Execution Surcharge'' (one 
for SPX and one for SPXW). The Exchange also proposes to (i) update 
Footnote 31 of the Fees Schedule, which is currently appended to the 
SPXW Surcharge, to eliminate references to the SPXW Customer Priority 
Surcharge and (ii) in its place, append Footnote 21 to the SPXW 
surcharge (and add references to ``SPXW Execution Surcharge'' in 
Footnote 21). The Exchange also proposes to amend Footnote 21 to 
eliminate the second and third surcharge exemptions listed relating to 
Market-Maker transactions. Particularly, Footnote 21 provides, among 
other things, that the SPX Execution Surcharge will not apply to (i) 
executions by Market-Makers against orders in the complex order auction 
(COA) and Simple Auction Liaison (SAL) systems in their appointed 
classes and (ii) executions by Market-Makers against orders in the 
electronic book, Hybrid Agency Liaison (HAL) and the complex order book 
in their appointed classes. The Exchange notes that since neither the 
SPX Execution Surcharge nor SPXW Execution Surcharge, even as amended, 
apply to Market-Maker orders, this language is moot and obsolete. The 
Exchange therefore proposes to eliminate it from the Fees Schedule to 
avoid confusion. The Exchange notes that the remaining two exemptions 
set forth under Footnote 21 of the Fees Schedule currently apply to 
both the SPX and SPXW Execution Surcharges.
Supplemental VIX Total Firm Discount
    The Exchange next proposes to eliminate its Supplemental VIX Total 
Firm Volume Discount (``Supplemental VIX Discount''). The Supplemental 
VIX Discount allows VIX options transaction fees for Clearing TPHs' 
(including its Non-TPH Affiliates) proprietary orders to be discounted 
provided a Clearing TPH reaches certain VIX firm volume percentage 
thresholds during a calendar month. The Exchange no longer wishes to 
offer the Supplement VIX Discount program and therefore proposes to 
eliminate it from its Fees Schedule.
Trading Permits Sliding Scale Program
    The Exchange proposes to amend its Market Maker and Floor Broker 
Trading Permit Sliding Scale Programs (``TP Sliding Scales''). The TP 
Sliding Scales allow Market Makers and Floor Brokers to pay reduced 
rates for their Trading Permits if they commit in advance to a specific 
tier that includes a minimum number of eligible Market Maker and Floor 
Broker Trading Permits, respectively, for each calendar year. The 
Exchange notes that in October 2019, it is migrating the current Cboe 
Options trading platform onto new technology and in connection with 
such migration, is anticipating a new Trading Permit structure. As 
such, the Exchange proposes to provide that any commitment to Trading 
Permits under the TP Sliding Scales shall be in place through September 
2019, instead of the calendar year, and proposes to update Footnotes 24 
and 25 accordingly.
Facility Fees
    The Exchange next proposes to amend certain facility fees. First, 
the Exchange proposes to increase fees for access badges. Currently, 
the Exchange charges $120 per Floor Manager Badge and $60 per Clerk 
Badge. The Exchange proposes to increase the Floor Manager Badge to 
$130 per badge and the Clerk Badge to $70 per badge. The Exchange notes 
these fees have not been raised in several years. The Exchange also 
proposes to eliminate the following Badge-related fees which are 
assessed per occurrence: Badge Issuance, Replacement Badge, Unreturned 
Security Access Badge, Temporary Badge--Non Trading Permit Holder, 
Temporary Badge--Trading Permit Holder, and Unreturned Temporary Badge.
    The Exchange is also proposing to eliminate the fees relating to 
coat room services, as such service will be eliminated as of February 
1, 2019. Particularly, the $25 per month for Coat Room Checking and $15 
per Occurrence for Lost or Damaged Trading Jackets fees will be 
eliminated.
VIX and Sector License Index Surcharge
    The Exchange proposes to extend the current waiver of the VIX and 
Sector Index License Surcharge of $0.10 per contract for Clearing 
Trading Permit Holder Proprietary (``Firm'') (origin codes ``F'' or 
``L'') VIX and Sector Index orders that have a premium of $0.10 or 
lower and have series with an expiration of seven (7) calendar days or 
less. The Exchange adopted the current waiver to reduce transaction 
costs on expiring, low-priced VIX options as well as Sector Index 
options, which the Exchange believed would encourage Firms to seek to 
close and/or roll over such positions, including facilitating customers 
to do so, in order to free up capital and encourage additional trading. 
The Exchange had proposed to waive the surcharge through December 31, 
2018, at which time the Exchange had stated that it would evaluate 
whether the waiver has in fact prompted Firms to close and roll over 
these positions as intended. The Exchange believes the waiver 
encourages Firms to do so and as such, proposes to renew the waiver of 
the surcharge through June 30, 2019, at which time the Exchange will 
again reevaluate whether the waiver has continued to prompt Firms to 
close and roll over these positions. Accordingly, the Exchange proposes 
to delete the reference to the current waiver period of December 31, 
2018 from the Fees Schedule and replace it with June 30, 2019.
Global Trading Hour Fees
    In order to promote and encourage trading during the Global Trading 
Hours (``GTH'') session, the Exchange previously waived GTH Trading 
Permit and Bandwidth Packet fees for one (1) of each initial Trading 
Permits and one (1) of each initial Bandwidth Packet, per affiliated 
TPH. The Exchange notes that waiver expired December 31, 2018. The 
Exchange also waived fees through December 31, 2018 for a CMI and FIX 
login ID if the CMI and/or FIX login ID is related to a waived GTH 
Trading Permit and/or waived Bandwidth packet. In order to continue to 
promote trading during GTH, the Exchange wishes to renew these waivers 
through June 30, 2019.
RLG, RLV, RUI, AWDE, FTEM, FXTM and UKXM Transaction Fees
    In order to promote and encourage trading of seven FTSE Russell 
Index products (i.e., Russell 1000 Growth Index (``RLG''), Russell 1000 
Value Index (``RLV''), Russell 1000 Index (``RUI''), FTSE Developed 
Europe Index (``AWDE''), FTSE Emerging Markets Index (``FTEM''), China 
50 Index ``(FXTM'') and FTSE 100 Index (``UKXM'')), the Exchange had 
waived all transaction fees (including the Floor Brokerage Fee, Index 
License Surcharge and CFLEX Surcharge Fee) for each of these products. 
This waiver expired December 31, 2018. To continue promoting the 
trading of these options classes, the Exchange proposes to renew the 
fee waiver through June 30, 2019.
UKXM DPM Payment
    The Exchange previously offered a compensation plan to the 
Designated Primary Market-Maker(s) (``DPM(s)'') appointed in UKXM to 
offset its DPM costs. Specifically, the Fees Schedule provides that 
DPM(s) appointed for an entire month in UKXM will receive a payment of 
$5,000 per month, through December 31, 2018. The Exchange proposes to 
renew the compensation plan through June 30, 2019 to continue to 
incentivize the DPM(s) to continue to serve as a DPM in this product.

[[Page 6448]]

Footnote 42 References
    The Exchange lastly proposes to delete all appended references to 
Footnote 42. The Exchange notes that effective, July 2, 2018, the 
Exchange eliminated the FLEX Asian & Cliquet FLEX Trader Incentive 
Program, which program was described in Footnote 42 of the Fees 
Schedule.\8\ Although, the program was eliminated (along with the 
contents of Footnote 42), the Exchange inadvertently omitted to delete 
appended references to Footnote 42 in the Fees Schedule. The Exchange 
proposes to correct that oversight and delete such references, which 
will avoid potential confusion.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 83587 (July 3, 
2018), 83 FR 31810 (July 9, 2018) (SR-CBOE-2018-051).
---------------------------------------------------------------------------

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.\9\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \10\ 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 
Section 6(b)(4) of the Act,\11\ which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Trading Permit Holders and other persons using 
its facilities.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    First, the Exchange believes adjusting the VIP volume thresholds 
for Tiers 4 and 5 is reasonable because it adjusts for the current 
volume trends and makes it slightly easier for TPHs to meet the 
qualifying criteria to achieve the highest tier, Tier 5. The Exchange 
also notes that the credits offered under VIP are not changing. Rather, 
the rebalance of tiers still allows the Exchange to maintain an 
incremental incentive for TPHs to strive for the highest tier level, 
which provides increasingly higher credits. The Exchange believes it is 
equitable and not unfairly discriminatory because the proposed changes 
to the qualifying volume thresholds apply to all TPHs uniformly.
    The Exchange believes increasing the fee for Market-Maker 
executions in RUT is reasonable because the proposed rate change is 
less than the amount assessed for similar transactions on another 
Exchange and is also similar to Market-Maker fees assessed for other 
proprietary products.\12\ The Exchange believes that this proposed 
change is also equitable and not unfairly discriminatory because the 
proposed changes will apply equally to all Market-Makers uniformly.
---------------------------------------------------------------------------

    \12\ See Cboe BZX Fees Schedule. See also Cboe Options Fees 
Schedule, SPX Liquidity Provider Sliding Scale.
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change to waive fees for 
Customer electronic executions in ETF and ETN options that add 
liquidity, but assess $0.18 per contract for such executions that 
remove liquidity and are of an order size of 100 contracts or greater, 
is reasonable because Customers will pay nothing for these executions 
where they add liquidity and will be paying the same rate as is 
currently provided for under the fees schedule (i.e., $0.18 per 
contract) when they remove liquidity. The Exchange believes the 
proposed rule change is equitable and not unfairly discriminatory 
because the proposed rule change applies to all Customers equally. 
Additionally, the proposed rule change is designed to encourage posted 
liquidity to the Exchange. Particularly, the Exchange believes it's 
equitable and not unfairly discriminatory to assess this fee for orders 
that remove liquidity and not orders that add liquidity because the 
Exchange wants to encourage market participation and price improvement. 
The Exchange believes the proposed updates to Footnote 9 provide 
clarity in the Fees Schedule and alleviates potential confusion as to 
what volume would be considered ``Taker'' vs ``Maker'' for purposes of 
this fee. The alleviation of confusion 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.
    The Exchange believes extending the applicability of the SPXW 
Execution Surcharge to all market participants other than Market-Makers 
is reasonable as it aligns the applicability of the surcharge to the 
same market participants subject to the SPX Hybrid Execution Surcharge 
and because the surcharge amount is not changing. The Exchange believes 
it's equitable and not unfairly discriminatory to apply the SPXW 
Execution Surcharge to all market participants other than Market-Makers 
because Market-Makers, unlike other market participants, take on a 
number of obligations, including quoting obligations, that other market 
participants do not have. The Exchange believes the proposed updates to 
Footnotes 21 and 31 in connection with the proposed SPXW Execution 
Surcharge change provides clarity in the Fees Schedule and alleviates 
potential confusion, thereby removing impediments to and perfecting the 
mechanism of a free and open market and a national market system, and, 
in general, protecting investors and the public interest.
    The Exchange believes it's reasonable to eliminate the Supplemental 
VIX Discount because it is not required to provide such a discount. 
Additionally, the Exchange notes that Clearing TPHs have other 
opportunities to obtain a discount on VIX executions, such as via the 
Cboe Proprietary Product Sliding Scale programs. The Exchange believes 
it's equitable and not unfairly discriminatory because it applies 
uniformly to all Clearing TPHs.
    The Exchange believes amending the TP Sliding Scales to provide 
that any commitment to Trading Permits under the TP Sliding Scales 
shall be in place through September 2019, instead of the calendar year, 
is reasonable because the discounted Trading Permit rates and tier 
levels are not changing. The Exchange believes this proposed rule 
change is reasonable, equitable and not unfairly discriminatory 
because, as discussed above, the Exchange anticipates modifying the 
current Trading Permit structure upon the migration of its trading 
system in October 2019. The Exchange notes that through September 2019, 
Floor Brokers and Market-Makers are still eligible to take advantage of 
these sliding scale programs, which offer discounts on Trading Permits. 
Additionally, the proposed rule change applies to all Markets-Makers 
and Floor Brokers uniformly.
    The Exchange believes the proposed rule change to eliminate per 
occurrence badge issuance fees and coat room services fees are 
reasonable as TPHs will no longer be subject to these fees. 
Additionally, with respect to the coat room service fees, the Exchange 
notes such services will be eliminated as of February 1, 2019. 
Additionally, the proposed elimination applies to all TPHs. The 
Exchange believes the proposed increases to the Floor Manager and Clerk 
Badge fees are reasonable

[[Page 6449]]

because they are a moderate increase, these fees have not been 
increased in several years, and other badge-related fees are being 
eliminated. Additionally the proposed fee increases applies to all TPHs 
who need to avail themselves of these badges.
    The Exchange believes it's appropriate to continue to waive the VIX 
and Sector Index License Surcharge for Clearing Trading Permit Holder 
Proprietary Sector Index and VIX orders that have a premium of $0.10 or 
lower and have series with an expiration of 7 calendar days or less 
because the Exchange wants to continue encouraging Firms to roll and 
close over these positions. Particularly, the Exchange believes it's 
reasonable to waive the entire $0.10 per contract surcharge because 
without the waiver of the surcharge, firms are less likely to engage in 
these transactions, as opposed to other VIX and Sector Index 
transactions, due to the associated transaction costs. The Exchange 
believes it's equitable and not unfairly discriminatory to limit the 
waiver to Clearing Trading Permit Holder Proprietary orders because 
they contribute capital to facilitate the execution of Sector Index 
customer orders and VIX customer orders with a premium of $0.10 or 
lower and series with an expiration of 7 calendar days or less. 
Finally, the Exchange believes it's reasonable, equitable and not 
unfairly discriminatory to provide that the surcharge will be waived 
through June 30, 2019, as it gives the Exchange additional time to 
evaluate if the waiver is continuing to have the desired effect of 
encouraging these transactions.
    The Exchange believes renewing the waiver of GTH Trading Permit and 
Bandwidth Packet fees for one of each type of Trading Permit and 
Bandwidth Packet, per affiliated TPH through June 30, 2019 is 
reasonable, equitable and not unfairly discriminatory, because those 
respective fees would be waived in their entirety, which promotes and 
encourages trading during the GTH session and applies to all GTH TPHs. 
The Exchange believes it's also reasonable, equitable and not unfairly 
discriminatory to waive fees for Login IDs related to waived Trading 
Permits and/or Bandwidth Packets in order to promote and encourage 
ongoing participation in GTH and also applies to all GTH TPHs.
    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory to renew the waiver of all transaction fees for RLG, 
RLV, RUI, AWDE, FTEM, FXTM and UKXM transactions, including the Floor 
Brokerage fee, the License Index Surcharge and CFLEX Surcharge Fee, 
because the respective fees are being waived in their entirety, which 
promotes and encourages trading of these products which are still 
relatively new and applies to all TPHs.
    The Exchange believes that it is reasonable, equitable and not 
unfairly discriminatory to renew the compensation plan to the DPM 
appointed in UKXM to continue to offset its ongoing DPM costs and 
continue to incentivize the DPM to continue to serve as a DPM in this 
product.
    Lastly, the Exchange believes eliminating references to Footnote 42 
(which footnote does not currently contain any language and is 
obsolete) alleviates potential confusion. The alleviation of confusion 
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.

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

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition that are not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe that the proposed rule change will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because, while different fees 
and rebates are assessed to different market participants in some 
circumstances, these different market participants have different 
obligations and different circumstances. For example, Clearing TPHs 
have clearing obligations that other market participants do not have. 
Market-Makers have quoting obligations that other market participants 
do not have. There is also a history in the options markets of 
providing preferential treatment to customers, as they often do not 
have as sophisticated trading operations and systems as other market 
participants, which often makes other market participants prefer to 
trade with customers. Further, the Exchange fees and rebates, both 
current and those proposed to be changed, are intended to encourage 
market participants to bring increased volume to the Exchange (which 
benefits all market participants), while still covering Exchange costs 
(including those associated with the upgrading and maintenance of 
Exchange systems).
    The Exchange does not believe that the proposed rule changes will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed changes are intended to promote competition and better improve 
the Exchange's competitive position and make Cboe Options a more 
attractive marketplace in order to encourage market participants to 
bring increased volume to the Exchange (while still covering costs as 
necessary). Further, the proposed changes only affect trading on the 
Exchange. To the extent that the proposed changes make Cboe Options a 
more attractive marketplace for market participants at other exchanges, 
such market participants are welcome to become Cboe Options market 
participants.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \13\ and paragraph (f) of Rule 19b-4 \14\ 
thereunder. 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-CBOE-2019-012 on the subject line.

[[Page 6450]]

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-2019-012. 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-2019-012 and should be submitted on 
or before March 20, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03332 Filed 2-26-19; 8:45 am]
 BILLING CODE 8011-01-P


