[Federal Register Volume 88, Number 86 (Thursday, May 4, 2023)]
[Notices]
[Pages 28639-28641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09447]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97404; File No. SR-CBOE-2023-021]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Cboe Options Rule 3.34

April 28, 2023.
    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 April 20, 2023, 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 substantially 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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend Cboe Options Rule 3.34. The text of the proposed rule change 
is provided in error 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.

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 proposed rule change amends Cboe Options Rule 3.34. 
Specifically, the Exchange proposes to amend Cboe Options Rule 3.34 to 
reinsert requirements related to filing of an electronic Uniform 
Termination Notice for Securities Industry Registration (``Form U5'').
    In 2021, following the approval of Financial Industry Regulatory 
Authority, Inc. (``FINRA'') rule changes, which, among other things, 
consolidated FINRA registration rules,\5\ the Exchange amended, 
reorganized, and enhanced its rules regarding registration, 
qualification examinations, and continuing education, in order to 
conform the Exchange's rules more closely to those of its affiliated 
exchanges and non-affiliated exchanges in the interest of uniformity 
and to facilitate compliance with membership, registration and 
qualification regulatory requirements by members of multiple 
exchanges.\6\
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    \5\ See Exchange Act Release No. 81098 (July 7, 2017), 82 FR 
32419 (July 13, 2017) (Order Approving File No. SR-FINRA-2017-007). 
See also FINRA Regulatory Notice 17-30 (SEC Approves Consolidated 
FINRA Registration Rules, Restructured Representative-Level 
Qualification Examinations and Changes to Continuing Education 
Requirements) (October 2017).
    \6\ See Exchange Act Release 34-91576 (April 15, 2021), 86 FR 
20760 (April 21, 2021) (SR-CBOE-2021-022).
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    As part of the rule change, the Exchange adopted new Cboe Options 
Rule 3.34, Electronic Filing Requirements for Uniform Forms, which, 
among other things, consolidated various Form U5 electronic filing 
requirements in a single location and also imposed certain new 
requirements. In consolidating the electronic filing requirements, the 
Exchange inadvertently removed requirements for the submission of Form 
U5 and related amendments, previously contained in Cboe Options Rule 
3.37. Specifically, Cboe Options Rule 3.37(b) previously contained a 
requirement that a Form U5 must be electronically submitted by a 
Trading Permit Holder (``TPH'') organization immediately following the 
date of termination of any registered person, but in no event later 
than 30 days following termination. Further, the Exchange inadvertently 
removed the requirement for a copy of the Form U5 to be provided 
concurrently to the person whose association has been terminated, also 
previously contained in Cboe Options Rule 3.37(b). Finally, the 
Exchange inadvertently removed the requirement, previously set forth in 
Cboe Options Rule 3.37(c), that a TPH submit an amendment to the Form 
U5 in the event that the TPH learns of facts or circumstances causing 
any information set forth in the Form U5 to become inaccurate or 
incomplete, and that such amendment shall be provided concurrently to 
the person whose association has been terminated no later than 30 days 
after the TPH learns of the facts or circumstances giving rise to the 
need for the amendment.
    The Exchange now proposes to amend Cboe Options Rule 3.34(e) to 
insert these provisions that were previously inadvertently deleted from 
Cboe Options Rule 3.37. Specifically, the Exchange proposes to amend 
Cboe Options Rule 3.34(e) to state that a Form U5 is required to be 
electronically submitted by a TPH organization immediately following 
the date of termination, but in no event later than 30 days following 
termination, and to state that a copy of the Form U4 [sic] shall be 
provided concurrently to the person whose association has been 
terminated. Further, the Exchange proposes to amend Cboe Options 
3.34(e) to state that a TPH shall submit an amendment to the Form U5, 
in the event that the TPH organization learns of facts or circumstances 
causing any information set forth in the Form U5 to become inaccurate 
or incomplete, and that such amendment shall be provided concurrently 
to the person whose association has been terminated no later than 30 
days after the TPH organization learns of the facts or circumstances 
giving rise to the need for the amendment.
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.\7\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
section 6(b)(5) \8\ 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,

[[Page 28640]]

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) \9\ requirement that the rules of an exchange not be designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
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    In particular, the Exchange believes the proposed rule change will 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, will protect 
investors and the public interest by correcting errors and clarifying 
text within the Cboe Options Rules. Specifically, by adding language 
that was inadvertently removed regarding requirements for Form U5 
submissions and amendments, the proposed rule change is designed to 
make the Rulebook more accurate and add clarity to the Cboe Options 
Rules, thereby mitigating any potential confusion for TPHs, 
particularly those who are also FINRA members. The Exchange believes 
the amendments reduce the possibility of a significant regulatory gap 
between Exchange and FINRA rules, providing more uniform standards 
across the securities industry. Further, the Exchange believes that the 
alignment of rules regarding Form U5 submissions and amendments 
immediately and expeditiously would serve to avoid potential confusion 
for those members registered at both the Exchange and FINRA, prevent 
unnecessary regulatory burdens, and promote the efficient 
administration of the rules.
    The proposed rule change will have no impact on trading on the 
Exchange. As the Exchange did not intend to delete these requirements 
and did not provide specific notice to TPHs of any changes specifically 
regarding such requirements following the inadvertent deletion, the 
Exchange believes the proposed clarifying rule amendments will not 
result in any practical changes to the Form U5 submission and amendment 
process from an Exchange or TPH standpoint. The proposed requirements 
are merely being added back to the Rulebook for purposes of clarity and 
accuracy.

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 proposed rule change 
merely reinserts language that was inadvertently removed regarding 
requirements for Form U5 submissions and related amendments. As the 
Exchange did not intend to delete these requirements and did not 
provide notice to TPHs of any changes specifically regarding such 
requirements following the inadvertent deletion, the Exchange believes 
the proposed clarifying rule amendments will not result in any 
practical changes to the Form U5 submission and amendment process from 
an Exchange or TPH standpoint. Further, other Self-Regulatory 
Organizations (``SROs''), including FINRA, have continued to maintain 
these requirements for the submission of Form U5 and related amendments 
in their rules.\10\
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    \10\ See FINRA By-Laws, Article V, Section 3.
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    The proposed rule change makes no substantive changes to the Cboe 
Options Rules, and thus will have no impact on trading on the Exchange. 
The proposed rule change is not intended to have any impact on 
competition.

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) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
pursuant to Rule 19b-4(f)(6)(iii), the Commission may 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 this proposed 
rule change may become operative immediately upon filing.\13\
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    \13\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its 
intent to file a proposed rule change under that subsection at least 
five business days prior to the date of filing, or such shorter time 
as designated by the Commission. 17 CFR 240.19b-4(f)(6)(iii). The 
Exchange has provided such notice.
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    Waiver of the 30-day operative delay would allow the Exchange to 
reinsert language that the Exchange states was inadvertently removed 
regarding requirements for Form U5 submissions and related amendments. 
As the Exchange states it did not intend to delete these requirements, 
did not provide notice to TPHs of any changes specifically regarding 
such requirements following the inadvertent deletion, and the other 
SROs, including FINRA, still have continued to maintain these 
requirements for the submission of Form U5 and related amendments in 
their rules, allowing a waiver will eliminating the regulatory gap 
between the FINRA and Exchange rules, providing more uniform standards 
across the securities industry, and helping to avoid confusion for 
registered persons of the Exchange that are also FINRA members. For 
this reason, the Commission believes that waiver of the 30-day 
operative delay for this proposal is consistent with the protection of 
investors and the public interest. Accordingly, the Commission hereby 
waives the 30-day operative delay and designates the proposal operative 
upon filing.\14\
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    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change'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, 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 (https://www.sec.gov/rules/sro.shtml); or

[[Page 28641]]

     Send an email to [email protected]. Please include 
File Number SR-CBOE-2023-021 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-2023-021. 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 (https://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. Do 
not include personal identifiable information in submissions; you 
should submit only information that you wish to make available 
publicly. We may redact in part or withhold entirely from publication 
submitted material that is obscene or subject to copyright protection. 
All submissions should refer to File Number SR-CBOE-2023-021 and should 
be submitted on or before May 25, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-09447 Filed 5-3-23; 8:45 am]
BILLING CODE 8011-01-P


