[Federal Register Volume 84, Number 235 (Friday, December 6, 2019)]
[Notices]
[Pages 66938-66943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26308]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87646; File No. SR-C2-2019-025]


Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Updating 
Various C2 Rules and Chapters To Reflect Changes to the Cboe Options 
Rulebook

December 2, 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 November 20, 2019, Cboe C2 Exchange, Inc. (the ``Exchange'' or 
``C2'') 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 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.
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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)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe C2 Exchange, Inc. (the ``Exchange'' or ``C2'') proposes to 
update various C2 Rules and Chapters to reflect

[[Page 66939]]

changes to the Cboe Options rulebook that became effective upon the 
October 7, 2019 migration of the Cboe Options' trading platform to the 
same system used by the Cboe Affiliated Exchanges (as defined below), 
including C2. 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/options/regulation/rule_filings/ctwo/), 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
    In 2016, the Exchange's parent company, Cboe Global Markets, Inc. 
(formerly named CBOE Holdings, Inc.) (``Cboe Global''), which is also 
the parent company of Cboe C2 Exchange, Inc. (``C2''), acquired Cboe 
EDGA Exchange, Inc. (``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX'' or 
``EDGX Options''), Cboe BZX Exchange, Inc. (``BZX'' or ``BZX 
Options''), and Cboe BYX Exchange, Inc. (``BYX'' and, together with 
Cboe Options, C2, EDGX, EDGA, and BZX, the ``Cboe Affiliated 
Exchanges''). On October 7, 2019, Cboe Options migrated its trading 
platform to the same system used by the Cboe Affiliated Exchanges. In 
connection with this technology migration, Cboe Options updated and 
reorganized its rulebook, which became effective upon the technology 
migration.
    The Exchange now proposes to reorganize various Chapters in its 
Rulebook that incorporate Cboe Options chapters by reference in order 
to correspond to the post-migration structure of the Cboe Options 
rulebook. The proposed rule change also updates cross-references to 
Cboe Options rules and chapters that have been relocated in the Cboe 
Options post-migration rulebook. It also proposes to delete certain 
Chapters that incorporate by reference Cboe Option's chapters that are 
no longer holistically in the Cboe Options rulebook as a result of the 
reorganization of the rules under such chapters to various other Cboe 
Options rules and chapters. The proposed rule change moves and, where 
applicable, removes the rules as follows:

------------------------------------------------------------------------
          Proposed Chapter                   Current Rule/Chapter
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Chapter 3, Section B TPH             Chapter 9 Doing Business with the
 Registration 5                       Public
Incorporates by reference certain    Incorporates by reference certain
 Cboe Options rules under Cboe        rules under former Cboe Options
 Options Chapter 3, Section B         Chapter 9 (former Cboe Options
 (rules formerly under Cboe Options   Rules 9.1, 9.2, 9.3, 9.3A, 9.4,
 Chapter 9).6                         9.5, 9.6).
Rule 3.30.                           Rule 3.4.
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Chapter 4, Section A Equity and ETP  Chapter 5 Securities Dealt In
 Options
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 4, Section A         Cboe Options Chapter 5; and
 (former Cboe Options Chapter 5); 7
 and
Chapter 4, Section B Index Options   Chapter 24 Index Options
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 4, Section B         Cboe Options Chapter 24 (except
 (rules regarding index options       for former Rules 24.6, 24.7,
 listing under former Cboe Options    24.13, 24.15, 24.19, 24.20, and
 Chapter 24).8                        24.21).
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Chapter 5 Business Conduct 9         Chapter 4 Business Conduct
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 8 (comprised of      Cboe Options Chapter 4; and
 former Cboe Options Chapter 4, as   Chapter 24 Index Options
 well as rules regarding position    Incorporates by reference former
 limits and exercise limits for       Cboe Options Chapter 24.
 index options under former Cboe
 Chapter 24).10
------------------------------------------------------------------------
Chapter 6, Section F Exercises and   Chapter 11 Exercises and Deliveries
 Deliveries
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 6, Section B         Cboe Options Chapter 11
 (former Cboe Options Chapter 11,    Chapter 24 Index Options
 as well as former Cboe Options      Incorporates by reference former
 Rule 24.18).                         Cboe Options Chapter 24.
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Chapter 7, Section A General         Chapter 15 Records, Reports, and
                                      Audits
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 7, Section A         Cboe Options Chapter 15.
 (former Cboe Options Chapter 15);
 and
Chapter 7, Section B Consolidated    Chapter 6, Section F Consolidated
 Audit Trail (CAT)                    Audit Trail (CAT)
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 7, Section B         Cboe Options Chapter 6, Section F.
 (which was former Cboe Options
 Chapter 6, Section F (Consolidated
 Audit Trail (CAT)).11
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Chapter 9 Doing Business with the    Chapter 9 Doing Business with the
 Public                               Public
Removes Rule 3.19, which is          Incorporates by reference certain
 identical to Cboe Options Rule       rules under Cboe Options Chapter 9
 9.20, and incorporates by            (Rules 9.7 through 9.25).
 reference Cboe Options Rule 9.20
 (which becomes incorporated by
 reference under the umbrella of
 the overall incorporation by
 reference of Cboe Options Chapter
 9).12
------------------------------------------------------------------------
Chapter 10 Margin Requirements       Chapter 12 Margins
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 10 (former Cboe      Cboe Options Chapter 12.
 Options Chapter 12).13
------------------------------------------------------------------------
Chapter 11 Net Capital Requirements  Chapter 13 Net Capital Requirements

[[Page 66940]]

 
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 11 (former Cboe      Cboe Options Chapter 13.
 Options Chapter 13).14
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Chapter 12 Summary Suspension        Chapter 16 Summary Suspension
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 12 (former Cboe      Cboe Options Chapter 16.
 Options Chapter 16), and as a
 result deletes current C2 Chapter
 16.15
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Chapter 13 Discipline                Chapter 17 Discipline
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 13 (former Cboe      Cboe Options Chapter 17.
 Options Chapter 17), and as a
 result deletes current C2 Chapter
 17.16
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Chapter 14 Arbitration               Chapter 18 Arbitration
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 14 (former Cboe      Cboe Options Chapter 18.
 Options Chapter 18), and as a
 result deletes current C2 Chapter
 18.17
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Chapter 15 Hearings and Review       Chapter 19 Hearings and Review
Incorporates by reference Cboe       Incorporates by reference former
 Options Chapter 15 (former Cboe      Cboe Options Chapter 19.
 Options Chapter 19), and as a
 result deletes current C2 Chapter
 19.18
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To be deleted                        Chapter 10 Closing Transactions
------------------------------------------------------------------------
To be deleted                        Chapter 24 Index Options
------------------------------------------------------------------------

    The majority of the proposed changes are of a non-substantive 
nature and will not amend the relocated rules other than to update 
their Chapter numbers, make cross-reference changes, update or remove 
references to certain terms that have been updated or removed within 
the Cboe Options rules (e.g. ``Department of Compliance'', ``Department 
of Financial and Sales Practice Compliance'', and ``Department of 
Member Firm Regulation'' were all updated to the ``Exchange'' in Cboe 
Options rules, reference to the Floor is not found in any Cboe Options 
rules that remain in Cboe Options Chapter 9, and the terms 
``Constitution'' and ``membership are not found in Cboe Options Chapter 
15 (Hearing and Review)) and update headings in order to correspond to 
the structure of the Cboe Options post-migration Rulebook. The Exchange 
notes it also updates cross-references to Cboe Options rules in C2 Rule 
6.1 and in C2 Chapter 6, Section E, and removes the language under C2 
Rule 1.3 that makes an exception for the applicability of Eastern Time 
in Cboe Options rules because the Cboe Options post-migration Rulebook 
was amended to also state all times in Eastern Time.\19\
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    \5\ The proposed rule change also adds a Section A (TPH 
Qualifications) heading to C2 Rules currently in Chapter 3, which is 
consistent with the section structure in Cboe Options Chapter 3.
    \6\ The filing to reorganize Cboe Options Chapter 9 and move 
rules to Cboe Options Chapter 3, Section B did not make any 
substantive changes to the rules. See Securities and Exchange Act 
Release No. 87229 (October 4, 2019), 84 FR 54704 (October 10, 2019) 
(SR-CBOE-2019-088).
    \7\ The filing to relocate former Cboe Options Chapter 5 to Cboe 
Options Chapter 4, Section A did not make any substantive changes to 
the rules. See Securities and Exchange Act Release No. 87272 
(October 10, 2019) (SR-CBOE-2019-090).
    \8\ The filing to relocate rules regarding the listing of index 
options under former Cboe Options Chapter 24 to Cboe Options Chapter 
4, Section B did not make any substantive changes to the rules. See 
Securities Exchange Act Release No. 87337 (October 17, 2019), 84 FR 
56879 (October 23, 2019) (SR-CBOE-2019-092).
    \9\ The Exchange notes that proposed C2 Chapter 5 incorporates 
by reference Cboe Options Chapter 8, as current C2 Chapter 8 is 
already comprised of C2 Market-Maker Rules.
    \10\ The filing to relocate former Cboe Options Chapter 4, as 
well as rules regarding position limits and exercise limits for 
index options under former Cboe Chapter 24, to Cboe Options Chapter 
8 did not make any substantive changes to the rules. See Securities 
Exchange Act Release No. 87224 (October 4, 2019), 84 FR 54652 
(October 10, 2019) (SR-CBOE-2019-081).
    \11\ The filing to relocate former Cboe Options Chapter 15, as 
well as former Cboe Options Chapter 6, Section F, to Cboe Options 
Chapter 7, Sections A and B, did not make any substantive changes to 
the rules. See Securities Exchange Act Release No. 87216 (October 3, 
2019), 84 FR 54231 (October 9, 2019) (SR-CBOE-2019-073).
    \12\ See supra note 5.
    \13\ The filing to relocate former Cboe Options Chapter 12 to 
Cboe Options Chapter 10 did not make any substantive changes to the 
rules. See Securities Exchange Act Release No. 87189 (October 1, 
2019), 84 FR 53520 (October 7, 2019) (SR-CBOE-2019-069).
    \14\ The filing to relocate former Cboe Options Chapter 13 to 
Cboe Options Chapter 11 did not make any substantive changes to the 
rules. See Securities Exchange Act Release No. 87188 (October 1, 
2019), 84 FR 53480 (October 7, 2019) (SR-CBOE-2019-066).
    \15\ The filing to relocate former Cboe Options Chapter 16 to 
Cboe Options Chapter 12 did not make any substantive changes to the 
rules. See Securities Exchange Act Release No. 87227 (October 4, 
2019), 84 FR 54700 (October 10, 2019) (SR-CBOE-2019-067).
    \16\ The filing to relocate former Cboe Options Chapter 17 to 
Cboe Options Chapter 13 did not make any substantive changes to the 
rules. See Securities Exchange Act Release No. 87210 (October 3, 
2019), 84 FR 54190 (October 9, 2019) (SR-CBOE-2019-068).
    \17\ The filing to relocate former Cboe Options Chapter 18 to 
Cboe Options Chapter 14 did not make any substantive changes to the 
rules. See Securities Exchange Act Release No. 87183 (October 1, 
2019), 84 FR 53548 (October 7, 2019) (SR-CBOE-2019-065).
    \18\ The filing to relocate former Cboe Options Chapter 19 to 
Cboe Options Chapter 15 did not make any substantive changes to the 
rules. See Securities Exchange Act Release No. 87187 (October 1, 
2019), 84 FR 53487 (October 7, 2019) (SR-CBOE-2019-072).
    \19\ See Cboe Options Rule 1.6.
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    As stated in the table above, the proposed rule change also 
incorporates Cboe Options Rule 9.20, which governs customer disclosures 
during Global Trading Hours, into C2 Chapter 9 by reference to Cboe 
Options Chapter 9. Current Rule 3.19 is identical to Cboe Options Rule 
9.20. Therefore, the proposed rule change essentially just relocates 
current Rule 3.19 to Rule 9.20 in order to include Cboe Options Rule 
9.20 in C2 Chapter 9's incorporation of Cboe Options Chapter 9 by 
reference, as it is within the same category of exchange rules 
otherwise incorporated into C2 Chapter 9 by reference to Cboe Options 
Chapter 9 (i.e. rule related to doing business with the public).
    The proposed changes to remove certain C2 Chapters are of a non-
substantive nature because they delete C2 Chapters that incorporate by 
reference certain Cboe Options chapters that are no longer applicable 
as a result of the reorganization of the Cboe Options rulebook. The 
proposed rule change removes current C2 Chapter 10 which incorporates 
(former) Cboe Options Chapter 10 by reference. The Exchange notes that 
prior to reorganization, Cboe Options Chapter 10 contained only three 
rules (Cboe Options Rules 10.1, 10.2, and 10.3). As a result of Cboe 
Option's reorganization, Cboe Options Rule 10.1 was relocated to

[[Page 66941]]

Cboe Options Rule 6.3(g), Cboe Options Rule 10.2 was relocated to Cboe 
Options Rule 12.6, and Cboe Options Rule 10.3 was relocated to Cboe 
Options Rule 8.18. The Exchange notes that proposed C2 Chapter 12 
incorporates Cboe Options Chapter 12 by reference, which now contains 
former Cboe Options Rule 10.2, and proposed C2 Chapter 5 incorporates 
Cboe Options Chapter 8 by reference, which now contains former Cboe 
Options Rule 10.3. Because the current C2 Rules do not incorporate Cboe 
Options Chapter 6 by reference, the proposed rule change simply adds 
the language, verbatim, from current Cboe Options Rule 6.3(g) (former 
Cboe Options Rule 10.1) to C2 Rule 6.27(b) (and updates the current 
rule text paragraph formatting and headings accordingly).
    Likewise, the proposed change removes current C2 Chapter 24 which 
incorporates (former) Cboe Options Chapter 24 by reference. As 
indicated in the table above, a majority of the Cboe Options rules 
under former Cboe Options Chapter 24 were relocated to Cboe Options 
Chapter 4, Section B and Chapter 8, and thus covered under proposed C2 
Chapters 4 and 5. The Exchange notes that former Cboe Options Rule 24.8 
(governing the meaning of premium bids and offers for index options) 
and former Cboe Options Rule 24.14 (governing limitation of liability 
of Reporting Authority for indexes underlying options) were not 
relocated into either of these Chapters, and instead incorporated into 
Cboe Options Rules 5.3(a) and 1.12, respectively. Because the current 
C2 Rules do not incorporate post-migration Cboe Options Chapter 5 or 
Chapter 1 by reference, like the proposed rule change described above, 
the proposed rule change simply updates the language under current C2 
Rule 6.3(a) to be consistent with the rule text under corresponding 
Cboe Options Rule 5.3(a), which now accounts for index options (from 
former Cboe Options Rule 24.8), and adds Rule 6.45, which is identical 
to the rule text under Cboe Options Rule 1.12 (former Cboe Options Rule 
24.14). The proposed rule change does not incorporate former Cboe 
Options Rule 24.8.01 (current Cboe Options Rule 5.85(e)) nor former 
Cboe Options Rule 24.22 (current Cboe Options Rule 5.92) because both 
rules are specific to trading on open outcry which is not applicable to 
C2. The proposed change also removes the language under current C2 
Chapter 24 which provides that Cboe Options Rules 24.6 (Days and Hours 
of Business); 24.7 (Trading Halts, Suspensions, or Primary Market 
Closure); 24.13 (Trading Rotations); 24.15 (Automatic Execution of 
Index Options); 24.19 (Multi-Class Broad-Based Index Option Spread 
Orders); 24.20 (SPX Combination Orders); and 24.21 (Index Crowd Space 
Dispute Resolution Procedures) do not apply to C2, because, as a result 
of the reorganization of the Cboe Options rulebook, each of these rules 
has either been deleted from the Cboe Options rulebook or relocated 
into another Cboe Options chapter that C2 does not incorporate by 
reference. The Exchange notes that the proposed rule changes described 
above do not make any substantive changes to the manner in which Cboe 
Options rules apply to C2.
    Additionally, as a result of the reorganization of the Cboe Options 
rulebook, rules in certain former chapters that the Exchange does not 
currently incorporate by reference, such as chapters that had governed 
types of options specific to trading on Cboe Options (i.e. Range, 
Binary, Corporate Debt Security, Government security, Credit, and 
interest rate options), and other specific Cboe Options rules that do 
not apply to C2 (i.e. former Cboe Options Rules 6.2.06, 8.9, 8.6, 6.55, 
and 6.22),\20\ were relocated to various Cboe Options chapters that C2 
currently does incorporate by reference. For example, former Cboe 
Options Rules 28.16, 21.30, and 23.15 (none of which does C2 currently 
incorporate by reference) regarding record maintenance, retention, and 
furnishing for Market-Makers in Corporate Debt Security Options, 
Government security options, and interest rate options, respectively, 
were relocated into certain provisions in Cboe Options Chapter 7 
(former Cboe Options Chapter 15, which C2 does incorporate by 
reference). Therefore, the proposed rule change makes explicit, where 
applicable, that Cboe Options rules regarding such options specific to 
trading on Cboe Options, as well as other specific Cboe Options rules 
not currently incorporated by reference into C2 Rules, continue to be 
inapplicable to C2.
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    \20\ Relocated to Cboe Options Rules 4.17, 7.6, 8.20, 8.21, and 
8.22, respectively. The Exchange also notes that proposed Chapter 5 
(current Chapter 4) updates the cross-reference from Cboe Options 
Rule 4.11, Interpretation and Policy .06, in the exclusion 
provision, to Cboe Options Rule 8.30.06.
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    The proposed rule change also updates certain rules under current 
C2 Rule 17.50 (proposed C2 Rule 13.15) to reflect recent changes to the 
corresponding Cboe Options rules.\21\ Rule filing SR-CBOE-2019-025 
amended Cboe Options Rule 13.15(g)(14) and (g)(19) \22\ under its Minor 
Rule Violation Plan (``MRVP'') by removing referrals to the Business 
Conduct Committee (``BCC''), and incorporating ``subsequent'' offenses 
under the fine schedules corresponding to the last monetary range 
listed under these rules. For example, instead of providing that 
subsequent offenses may result in referral to the BCC, Cboe Options 
Rule 13.15(g)(14) now provides that a first offense may result in a 
fine of $2,000 to $4,000, and subsequent offenses may result in a fine 
ranging from $4,000 to $5,000. The Exchange notes that it does not 
incorporate Cboe Options Rules 13.15(g)(14) or (g)(19) (i.e., current 
C2 Rules 17.50(g)(14) and (g)(19)) by reference, therefore, it now 
proposes to update these MRVP rules to be consistent with Cboe Options 
in its schedule of fines under proposed C2 Rules 13.15(g)(14) and 
(g)(19) (current C2 Rules 17.50(g)(14) and (g)(19)).
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    \21\ See Securities Exchange Act Release No. 85727 (April 26, 
2019), 84 FR 18878 (May 02, 2019) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change To Amend Chapter 17 of the 
Cboe Options Rules) (SR-CBOE-2019-025).
    \22\ The Exchange notes that at the time of this filing these 
rules were under Chapter 17 in the Cboe Options Rulebook, and have 
since been relocated to Chapter 13 as a result of the migration.
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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.\23\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \24\ 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) \25\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \23\ 15 U.S.C. 78f(b).
    \24\ 15 U.S.C. 78f(b)(5).
    \25\ Id.
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    As stated, the proposed rule change generally makes no substantive 
changes to the rules. The proposed rule change is merely intended to 
reorganize C2 Chapters and update their numbers,

[[Page 66942]]

cross-references, and headings, as well as remove C2 Chapters which 
reference Cboe Options chapters that are no longer applicable and/or 
are covered under other proposed C2 Chapters as a result of the Cboe 
Options rulebook restructuring, in order to correspond to the Cboe 
Options rulebook that was reorganized for the October 7, 2019 
technology migration. The proposed change also updates language in 
certain C2 Chapters that incorporate Cboe Options chapters by reference 
to exclude Cboe Options rules regarding specific types of options and 
other specific Cboe Options rules that are not applicable to trading on 
C2, but, as a result of the Cboe Options rulebook reorganization, had 
been relocated into Cboe Options chapters that C2 currently does 
incorporate by reference. Additionally, the proposed change adds rule 
text to the C2 Rules that is identical to certain Cboe Options rules 
formerly in Cboe Options Chapter 24, which the Exchange currently 
incorporates by reference, which were relocated to Cboe Options 
chapters not incorporated by reference. Therefore, the proposed rule 
change does not alter any of the current rules incorporated by 
reference, and the same rules currently applicable to Trading Permit 
Holders will apply to Trading Permit Holders upon effectiveness of this 
rule filing in the same manner, whether those rules are incorporated by 
reference to Cboe Options rules or included in C2's Rules. Instead, it 
is designed 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, by updating the organization 
and structure of the C2 Rulebook in order to align with the recently 
reorganized and restructured Cboe Options rulebook, making it easier to 
read and follow, thus allowing market participants better understand 
the rules of the Exchange, which will also result in less burdensome 
and more efficient regulatory compliance for market participants that 
are Trading Permit Holders of both Cboe Options and C2.
    Additionally, the Exchange notes that the removal of a referral to 
the BCC for subsequent offenses under the proposed MRVP Rules 
13.15(g)(14) and (g)(19) is substantively identical to the 
corresponding rules of Cboe Options, which have previously been filed 
with the Commission. As a result, the Exchange believes that the 
proposed change provides consistency between the rules and disciplinary 
process of the Exchange and its affiliate exchange, Cboe Options, which 
removes impediments to and perfects the mechanism of a free and open 
market and a national market system by making it easier for 
participants across the affiliated exchanges to understand and adhere 
to the disciplinary rules.

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 reiterates that 
the proposed rule change is being proposed as a result of the recent 
technology migration and the related reorganization of the Cboe Options 
rulebook, and not as a competitive filing. The Exchange does not 
believe that the proposed rule change will impose any burden on 
intramarket competition because it merely reorganizes and updates its 
Chapters and Rules that incorporate Cboe Options chapters and rules by 
reference to align with the reorganized, post-migration Cboe Options 
rulebook that became effective October 7, 2019. The same rules that 
apply to C2 Trading Permit Holders today will apply to C2 Trading 
Permit Holders in the same manner upon effectiveness of this rule 
filing. Likewise, the proposed rule change to the C2 MRVP is also not 
intended to address competitive issues and will not impose any burden 
on intramarket competition because it does not impact trading on the 
Exchange but, rather, is concerned only with facilitating easier 
understanding of and adherence to the disciplinary rules for 
participants across the Exchange and Cboe Options. The Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket competition because the proposed rules are substantively 
the same as the Exchange's current rules, and the proposed change to 
the MRVP is substantively the same as the Cboe Options MRVP, all of 
which have been previously filed with the Commission.

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 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 \26\ and Rule 19b-4(f)(6) thereunder.\27\
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    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \28\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \29\ 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. The Exchange 
believes that relocating and updating the C2 Chapters to align the C2 
Rulebook with the restructured, post-migration Cboe Options rulebook 
will help to avoid any potential confusion by providing investors with 
a C2 Rulebook that accurately incorporates Cboe Options rules and 
chapters by reference. The Commission believes the 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.\30\
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    \28\ 17 CFR 240.19b-4(f)(6).
    \29\ 17 CFR 240.19b-4(f)(6)(iii).
    \30\ 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 necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings 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,

[[Page 66943]]

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-C2-2019-025 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-C2-2019-025. 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-C2-2019-025 and should be submitted on 
or before December 27, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-26308 Filed 12-5-19; 8:45 am]
BILLING CODE 8011-01-P


