[Federal Register: June 14, 2006 (Volume 71, Number 114)]
[Notices]
[Page 34340-34341]
[DOCID:fr14jn06-78]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2006-0371; FRL-8062-8]

Pesticide Product; Registration Applications

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY:  This notice announces receipt of applications to register
pesticide products containing new active ingredients not included in
any previously registered products pursuant to the provisions of
section 3(c)(4) of the Federal Insecticide, Fungicide, and Rodenticide
Act (FIFRA), as amended.

DATES: Comments must be received on or before August 14, 2006.

ADDRESSES:  Submit your comments, identified by docket identification
(ID) number EPA-HQ-OPP-2006-0371, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.

Follow the on-line instructions for submitting comments.
     Mail: Office of Pesticide Programs (OPP) Regulatory Public
Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460-0001.
     Delivery: OPP Regulatory Public Docket (7502P),
Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South
Building); 2777 S. Crystal Drive, Arlington, VA. Deliveries are only
accepted during the Docket's normal hours of operation (8:30 a.m. to 4
p.m., Monday through Friday, excluding legal holidays). Special
arrangements should be made for deliveries of boxed information. The
docket telephone number is<PHONE_NUMBER>.
    Instructions: Direct your comments to docket ID number EPA-HQ-OPP-
2006-0371. EPA's policy is that all comments received will be included
in the docket without change and may be made available on-line at
http://www.regulations.gov, including any personal information

provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through regulations.gov or e-
mail. The Federal regulations.gov Web site is an ``anonymous access''
system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment. If you
send an e-mail comment directly to EPA without going through
regulations.gov, your e-mail address will be automatically captured and
included as part of the comment that is placed in the docket and made
available on the Internet. If you submit an electronic comment, EPA
recommends that you include your name and other contact information in
the body of your comment and with any disk or CD-ROM you submit. If EPA
cannot read your comment due to technical difficulties and cannot
contact you for clarification, EPA may not be able to consider your
comment. Electronic files should avoid the use of special characters,
any form of encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the docket index.
Although listed in the index, some information is not publicly
available, e.g., CBI or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available in the electronic docket at http://www.regulations.gov, or,

if only available in hard copy, at the OPP Regulatory Public Docket in
Rm. S-4400, One Potomac Yard (South Building), 2777 S. Crystal Drive,
Arlington, VA. The hours of operation for this Docket Facility are from
8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays.
The Docket telephone number is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT:  Tasha Gibbons, Biopesticides and
Pollution Prevention Division (7511P), Office of Pesticide Programs,
Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460-0001; telephone number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

 A. Does this Action Apply to Me?

     You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
Potentially affected entities may include, but are not limited to:
     Crop production (NAICS code 111).
     Animal production (NAICS code112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).
     This listing is not intended to be exhaustive, but rather provides
a guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this unit could also be
affected. The North American Industrial Classification System (NAICS)
codes have been provided to assist you and others in determining
whether this action might apply to certain entities. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed under FOR FURTHER INFORMATION
CONTACT.

B. What Should I Consider as I Prepare My Comments for EPA?

     1.  Submitting CBI. Do not submit this information to EPA through
regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as
CBI and then identify electronically within the disk or CD ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.

    2.  Tips for preparing your comments. When submitting comments,
remember to:
     i. Identify the document by docket ID number and other identifying
information (subject heading, Federal Register date and page number).
     ii. Follow directions. The Agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
     iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
     iv. Describe any assumptions and provide any technical information
and/or data that you used.
     v. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
     vi. Provide specific examples to illustrate your concerns and
suggest alternatives.
     vii. Explain your views as clearly as possible, avoiding the use
of profanity or personal threats.
     viii. Make sure to submit your comments by the comment period
deadline identified.

II. Registration Applications

    EPA received applications as follows to register pesticide products
containing active ingredients not included in any previously registered
products pursuant to the provision of section 3(c)(4) of FIFRA. Notice
of receipt of these applications does not imply a decision by the
Agency on the applications.

III. Products Containing Active Ingredients not Included in any
Previously Registered Products

    File Symbol: 82016-R. Applicant: EARTH-KIND, Inc.(Crane Creek
Gardens) 17 3rd Ave. SE Stanley, ND 58784 Product Name: Fresh Cab. Type
of product: biological rodent repellent Active ingredient: Balsam Fir
Oil at 2.0%. Proposed classification/Use: None. T. Gibbons.
    File Symbol: 82016-E. Applicant: EARTH-KIND, Inc. (Crane Creek
Gardens) 17 3rd Ave. SE Stanley, ND 58784. Product Name: Canadian
Wilderness Oil. Type of product: manufacturing use product Active
ingredient: Balsam Fir Oil at 10.0%. Proposed classification/Use: None.
T. Gibbons.

List of Subjects

     Environmental protection, Pesticides and pest.

    Dated: May 30, 2006.
Janet L. Andersen,
Director, Biopesticides and Pollution Prevention Division, Office of
Pesticide Programs.
[FR Doc. E6-8930 Filed 6-13-06; 8:45 am]

BILLING CODE 6560-50-S


[Federal Register Volume 84, Number 63 (Tuesday, April 2, 2019)]
[Notices]
[Pages 12646-12649]
[FR Doc No: 2019-06313]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85430; File No. SR-NYSEArca-2019-14]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to Certain Changes Regarding
Investments of the PGIM Ultra Short Bond ETF Under NYSE Arca Rule
8.600-E

March 27, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 13, 2019, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') 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 self-regulatory
organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes certain changes regarding investments of the
PGIM Ultra Short Bond ETF (the ``Fund''), a series of PGIM ETF Trust
(the ``Trust''), under NYSE Arca Rule 8.600-E (``Managed Fund
Shares''). The proposed change is available on the Exchange's website
at www.nyse.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 self-regulatory organization
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes certain changes, described below under
``Application of Generic Listing Requirements,'' regarding investments
of the Fund. The shares (``Shares'') of the Fund commenced trading on
the Exchange on April 10, 2018 pursuant to the generic listing
standards under Commentary .01 to NYSE Arca Rule 8.600-E (``Managed
Fund Shares'').\4\ The Commission has previously approved two proposed
rule changes regarding certain changes that would result in the
portfolio for the Fund not meeting all of the ``generic'' listing
requirements of Commentary .01 to NYSE Arca Rule 8.600-E applicable to
the listing of Managed Fund Shares.\5\
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    \4\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (the ``1940 Act'') organized
as an open-end investment company or similar entity that invests in
a portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Rule 5.2-E(j)(3),
seeks to provide investment results that correspond generally to the
price and yield performance of a specific foreign or domestic stock
index, fixed income securities index or combination thereof.
    \5\ See Securities Exchange Act Release Nos. 83319 (May 24,
2018), 83 FR 25097 (May 31, 2018) (SR-NYSEArca-2018-15), (Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1
Thereto, to Continue Listing and Trading Shares of the PGIM Ultra
Short Bond ETF under NYSE Arca Rule 8.600-E) (``First Prior
Order''); 84818 (December 13, 2018) (SR-NYSEArca-2018-75) (Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1
Thereto, Regarding the Listing and Trading of Shares of the PGIM
Ultra Short Bond ETF) (``Second Prior Order'' and, together with the
First Prior Order, the ``Prior Orders''). The First Prior Order
stated that the Fund's portfolio would meet all requirements of
Commentary .01 to NYSE Arca Rule 8.600-E except for those set forth
in Commentary .01(a)(1), Commentary .01(b)(4) and Commentary
.01(b)(5). The Second Prior Order stated that the Fund's portfolio
would not meet the requirements of Commentary .01(e) to NYSE Arca
Rule 8.600-E.
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    PGIM Investments LLC (the ``Adviser'') is the investment adviser
for the Fund. PGIM Fixed Income (the ``Subadviser''), a unit of PGIM,
Inc., is the subadviser to the Fund. The Adviser and the Subadviser are
indirect wholly-owned subsidiaries of Prudential Financial, Inc.\6\
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    \6\ The Trust is registered under the 1940 Act. On March 26,
2018, the Trust filed with the Commission Pre-Effective Amendment
No. 1 to the Trust's registration statement on Form N-1A under the
Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act
relating to the Fund (File Nos. 333-222469 and 811-23324)
(``Registration Statement''). The Trust will file an amendment to
the Registration Statement as necessary to conform to the
representations in this filing. The description of the operation of
the Trust and the Fund herein is based, in part, on the Registration
Statement. In addition, the Commission has issued an order granting
certain exemptive relief to the Trust under the 1940 Act. See
Investment Company Act Release No. 31095 (June 24, 2014) (File No.
812-14267).
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    As stated in the First Prior Order, the investment objective of the
Fund seeks to provide total return through a combination of current
income and capital appreciation, consistent with preservation of
capital. The Fund seeks to achieve its investment objective by
investing primarily in a portfolio of U.S. dollar denominated short-
term fixed, variable and floating rate debt instruments. Under normal
market conditions,\7\ the Fund invests at least 80% of its net assets
(plus any borrowings for investment purposes) in a portfolio of
financial instruments consisting of (i) the Principal Investment
Instruments (as defined in the First Prior Order) and (ii) derivatives
(as described in the Prior Orders) that (A) provide exposure to such
Principal Investment Instruments, or (B) are used to enhance returns,
manage portfolio duration, or manage the risk of securities price
fluctuations, as described in the Prior Orders.
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    \7\ The term ``normal market conditions'' is defined in NYSE
Arca Rule 8.600-E(c)(5).
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Application of Generic Listing Requirements

    The Exchange proposes that, in addition to the requirement approved
by the Commission in the First Prior Order that Private ABS/MBS (as
defined below) will, in the aggregate, not exceed more than 20% of the
total assets of the Fund,\8\ the Fund will not invest more than 20% of
the Fund's total assets in U.S. or foreign collateralized debt
obligations (``CDOs'').\9\ The Exchange also proposes that Private ABS/
MBS will not be required to comply with the requirements of Commentary
.01(b)(4) to NYSE Arca Rule 8.600-E.\10\
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    \8\ As described in the First Prior Order, among the Fund's
Principal Investment Instruments are asset-backed securities
(``ABS''), including mortgage-backed securities (``MBS''). The ABS
(including MBS) in which the Fund invests include both (i) ABS
(including MBS) issued by the U.S. Government, an agency of the U.S.
Government, or a government sponsored entity (``GSE'') and (ii) non-
U.S. Government, non-agency, non-GSE and other privately issued ABS
(including MBS) (``Private ABS/MBS'').
    \9\ For purposes of this filing, CDOs will not be deemed to be
ABS for purposes of the restriction on the Fund's holdings of
Private ABS/MBS. See note 9, infra.
    \10\ Commentary .01(b)(4) provides that component securities
that in the aggregate account for at least 90% of the fixed income
weight of the portfolio must be either: (a) From issuers that are
required to file reports pursuant to Sections 13 and 15(d) of the
Act; (b) from issuers that have a worldwide market value of its
outstanding common equity held by non-affiliates of $700 million or
more; (c) from issuers that have outstanding securities that are
notes, bonds debentures, or evidence of indebtedness having a total
remaining principal amount of at least $1 billion; (d) exempted
securities as defined in Section 3(a)(12) of the Act; or (e) from
issuers that are a government of a foreign country or a political
subdivision of a foreign country. In the First Prior Order, the
Commission approved an exception from Commentary .01(b)(4) to
provide that fixed income securities that do not meet any of the
criteria in Commentary .01(b)(4) will not exceed 10% of the total
assets of the Fund.
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    The Fund's investments currently comply with the generic
requirements set forth in Commentary .01 to Rule 8.600-E.
    The Exchange is submitting this proposed rule change because the
changes described in the preceding paragraph would not conform to the
Exchange's representations regarding the Fund's investments as stated
in the First Prior Order. In the First Prior Order, the Exchange stated
that the Fund will not comply with the requirement in Commentary
.01(b)(5) that investments in non-agency, non-government sponsored
entity and privately issued mortgage-related and other asset-backed
securities (i.e., Private ABS/MBS) not account, in the aggregate, for
more than 20% of the weight of the fixed income portion of the
portfolio, and, instead, that Private ABS/MBS, in the aggregate, may
not exceed more than 20% of the total assets of the Fund.\11\ As stated
above, the Exchange proposes to amend this representation regarding the
Fund's investments to provide that the Fund will not invest more than
20% of the Fund's total assets in Private ABS/MBS or more than 20% of
the Fund's total assets in U.S. or foreign CDOs.\12\ CDOs

would be excluded from the 20% limit on Private ABS/MBS but would be
subject to a separate limit of 20%, measured with respect to the total
assets of the Fund.\13\ The Exchange believes that this 20% limitation
will help the Fund maintain portfolio diversification and will reduce
manipulation risk.\14\ In addition, the Fund's investment in CDOs will
be subject to the Fund's liquidity procedures as adopted by the Board,
and the Adviser does not expect that investments in CDOs of up to 20%
of the total assets of the Fund will have any material impact on the
liquidity of the Fund's investments.
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    \11\ Commentary .01(b)(5) to NYSE Arca Rule 8.600-E provides
that non-agency, non-government sponsored entity and privately
issued mortgage-related and other asset-backed securities components
of a portfolio may not account, in the aggregate, for more than 20%
of the weight of the fixed income portion of the portfolio. In the
First Prior Order, the Commission approved an exception from
Commentary .01(b)(5) to permit the Fund's investments in Private
ABS/MBS to not exceed 20% of the total assets of the Fund.
    \12\ For purposes of this proposed rule change, CDOs are
excluded from the definition of ABS and, for purposes of this
proposed rule change only, are comprised exclusively of
collateralized loan obligations (``CLOs'') and collateralized bond
obligations (``CBOs''). CLOs are securities issued by a trust or
other special purpose entity that are collateralized by a pool of
loans by U.S. banks and participations in loans by U.S. banks that
are unsecured or secured by collateral other than real estate. CBOs
are securities issued by a trust or other special purpose entity
that are backed by a diversified pool of fixed income securities
issued by U.S. or foreign governmental entities or fixed income
securities issued by U.S. or corporate issuers. CDOs are
distinguishable from ABS because they are collateralized by bank
loans or by corporate or government fixed income securities and not
by consumer and other loans made by non-bank lenders, including
student loans.
    \13\ The Exchange notes that the Commission has approved a
proposed rule change permitting investments by an issue of Managed
Fund Shares to exclude CDOs from the 20% limit on Private ABS/MBS
but subject CDOs to a separate limit of 10%, measured with respect
to the total assets of the fund. See Securities Exchange Act Release
No. 84047 (September 6, 2018), 83 FR 46200 (September 12, 2018) (SR-
NASDAQ-2017-128) (Notice of Filing of Amendment No. 3 and Order
Granting Accelerated Approval of a Proposed Rule Change, as Modified
by Amendment No. 3, to List and Trade Shares of the Western Asset
Total Return ETF).
    \14\ The Exchange notes that the Commission has approved a
proposed rule change permitting an issue of Managed Fund Shares to
hold up to 30% of the weight of the fixed income securities portion
of the fund's portfolio to consist of non-agency, non-GSE and
privately-issued mortgage-related and other asset-backed securities.
See Securities Exchange Act Release No. 84826 (December 14, 2018),
83 FR 65386 (December 20, 2018) (SR-NYSEArca-2018-25) (Order
Approving a Proposed Rule Change, as Modified by Amendment No. 2,
Regarding the Continued Listing and Trading of Shares of the Natixis
Loomis Sayles Short Duration Income ETF)).
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    In addition, the First Prior Order stated that the Fund will not
comply with the requirement that securities that in aggregate account
for at least 90% of the fixed income weight of the portfolio meet one
of the criteria in Commentary .01(b)(4), and, instead, fixed income
securities that do not meet any of the criteria in Commentary .01(b)(4)
will not exceed 10% of the total assets of the Fund. As stated above,
the Exchange proposes to amend this representation to state that the
Private ABS/MBS, which will be limited to 20% of the Fund's total
assets, will not be required to comply with the criteria in Commentary
.01(b)(4)(a) through (e) to NYSE Arca Rule 8.600-E. Therefore, fixed
income securities that do not meet the criteria in Commentary .01(b)(4)
will not exceed 10% of the total assets of the Fund, excluding Private
ABS/MBS.\15\ CDOs also would not be subject to the criteria in
Commentary .01(b)(4)(a) through (e) but would be subject to a limit of
20%, measured with respect to the total assets of the Fund.
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    \15\ As noted above, CDOs would be excluded from the 20% limit
on Private ABS/MBS but would be subject to a separate limit of 20%,
measured with respect to the total assets of the Fund.
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    The Exchange notes that the Commission has previously approved the
listing of Managed Fund Shares with similar investment objectives and
strategies without imposing requirements that a certain percentage of
such funds' securities meet one of the criteria set forth in Commentary
.01(b)(4).\16\
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    \16\ See, e.g., Exchange Act Release Nos. 67894 (September 20,
2012) 77 FR 59227 (September 26, 2012) (SR-BATS-2012-033) (order
approving the listing and trading of shares of the iShares Short
Maturity Bond Fund); 70342 (September 6, 2013), 78 FR 56256
(September 12, 2013) (SR-NYSEArca-2013-71) (order approving the
listing and trading of shares of the SPDR SSgA Ultra Short Term Bond
ETF, SPDR SSgA Conservative Ultra Short Term Bond ETF and SPDR SSgA
Aggressive Ultra Short Term Bond ETF).
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    Deviations from the generic requirements are necessary for the Fund
to achieve its investment objective in a manner that is cost-effective
and that maximizes investors' returns. Further, the proposed
alternative requirements are narrowly tailored to allow the Fund to
achieve its investment objective in manner that is consistent with the
principles of Section 6(b)(5) of the Act. As a result, it is in the
public interest to approve listing and trading of Shares of the Fund on
the Exchange pursuant to the requirements set forth herein.
    In addition, the Fund's investment in Private ABS/MBS and CDOs will
be subject to the Fund's liquidity risk management program as approved
by the Fund's board of directors.\17\ The liquidity procedures
generally include public disclosure by the Fund of its liquidity and
redemption practices. The Fund's holdings in Private ABS/MBS and CDOs
would be encompassed within the Fund's liquidity risk management
program.
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    \17\ Rule 22e-4(b) under the 1940 Act requires, among other
things, that a fund ``adopt and implement a written liquidity risk
management program that is reasonably designed to assess and manage
its liquidity risk.'' The rule is ``designed to promote effective
liquidity risk management throughout the open-end investment company
industry, thereby reducing the risk that funds will be unable to
meet their redemption obligations and mitigating dilution of the
interests of fund shareholders.'' See Release Nos. 33-10233; IC-
32315; File No. S7-16-15 (October 13, 2016).
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    Except for the changes noted above, all other representations made
in the Prior Orders remain unchanged. All terms referenced but not
defined in this proposed rule change are defined in the Prior Orders.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) of the Act that an exchange have
rules that are designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
    As described above, deviations from the generic requirements of
Commentary .01(b) to Rule 8.600-E are necessary for the Fund to achieve
its investment objective in a manner that is cost-effective and that
maximizes investors' returns. Further, the proposed alternative
requirements are narrowly tailored to allow the Fund to achieve its
investment objective in manner that is consistent with the principles
of Section 6(b)(5) of the Act. As a result, it is in the public
interest to approve continued listing and trading of Shares of the Fund
on the Exchange pursuant to the requirements set forth herein.
    The Fund will not meet the requirement that at least 90% of the
fixed income weight of the Fund's portfolio meet one of the criteria in
Commentary .01(b)(4)(a) through (e) to Rule 8.600-E because some
Private ABS/MBS cannot satisfy the criteria in Commentary .01(b)(4)(a)
through (e). The Exchange proposes, in the alternative, to require that
Fund's investments in fixed income securities that do not meet the
criteria in Commentary .01(b)(4) will not exceed 10% of the total
assets of the Fund, excluding Private ABS/MBS.\18\ CDOs also would not
be subject to the criteria in Commentary .01(b)(4)(a) through (e) but
would be subject to a limit of 20% measured with respect to the total
assets of the Fund. The Exchange believes that this alternative
limitation is appropriate because the criteria in Commentary
.01(b)(4)(a) through (e) do not appear to be designed for structured
finance vehicles such as Private ABS/MBS, and the overall weight of
Private ABS/MBS held by the Fund will be limited to 20% of the total
assets of the Fund's portfolio, as described above.
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    \18\ See note 13, supra.
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    As discussed above, the Exchange proposes that CDOs will not be
deemed to be included in the definition of ABS for purposes of the
limitation in Commentary .01(b)(5) to NYSE Arca Rule 8.600-E and, as a
result, will not be subject to the restriction on aggregate holdings of
Private ABS/MBS. However, the Fund's holdings in CDOs will be limited
such that they do not account, in the aggregate, for more than 20% of
the total assets of the Fund. The Exchange believes that the 20% limit
on the Fund's holdings in CDOs will help to ensure that the Fund
maintains a

diversified portfolio and will mitigate the risk of manipulation. In
addition, the Fund's investment in CDOs will be subject to the Fund's
liquidity procedures as adopted by the Board,\19\ and the Adviser does
not expect that investments in CDOs of up to 20% of the total assets of
the Fund will have any material impact on the liquidity of the Fund's
investments.
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    \19\ See note 15, supra.
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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 purpose of the Act. The Exchange believes that
the proposed rule change will facilitate listing and trading of shares
of another actively managed ETF that principally holds fixed income
securities, and that will enhance competition among market
participants, to the benefit of investors and the marketplace.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
    A. By order approve or disapprove the proposed rule change, or
    B. institute proceedings to determine whether the proposed rule
change should be 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEArca-2019-14 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-NYSEArca-2019-14. 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-NYSEArca-2019-14 and should be submitted
on or before April 23, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-06313 Filed 4-1-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 238 (Wednesday, December 13, 2023)]
[Notices]
[Pages 86413-86417]
[FR Doc No: 2023-27262]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99113; File No. SR-CBOE-2023-065]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a
Low Priced Stock Strike Price Interval Program

December 7, 2023.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 4, 2023, Cboe Exchange, Inc. (``Exchange'') 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 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 adopt a Low Priced Stock Strike Price Interval Program. 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.

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 amend Rule 4.5. Miami International
Securities Exchange, LLC (``MIAX'') recently received approval to amend
its Rule 404 to implement a new strike interval program for stocks that
are priced less than $2.50 and have an average daily trading volume of
at least 1,000,000 shares per day for the 3 preceding calendar
months.\5\ At this time, the Exchange proposes to adopt rules
substantively identical to MIAX in proposed Rule 4.5, Interpretation
and Policy .20 and amend Rule 4.5(d) to harmonize the table within that
Rule to the proposed rule text.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 98917 (November 13,
2023), 88 FR 80361 (November 17, 2023) (SR-MIAX-2023-36) (Order
Approving a Proposed Rule Change To Amend Exchange Rule 404, Series
of Option Contracts Open for Trading).
---------------------------------------------------------------------------

    Currently, Rule 4.5 describes the process and procedures for
listing and trading series of options on the Exchange. Rule 4.5,
Interpretation and Policy .04 provides for a $2.50 Strike Price
Program, where the Exchange may select up to 60 option classes on
individual stocks for which the interval of strike prices will be $2.50
where the strike price is greater than $25 but less than $50.\6\ Rule
4.5, Interpretation and Policy .01 also provides for a $1 Strike Price
Interval Program, where the interval between strike prices of series of
options on individual stocks may be $1.00 or greater provided the
strike price is $50.00 or less, but not less than $1.00.\7\
Additionally, Rule 4.5, Interpretation and Policy .01 provides for a
``$0.50 Strike Program.'' The interval of strike prices of series of
options on individual stocks may be $0.50 or greater beginning at $0.50
where the strike price is $5.50 or less, but only for options classes
whose underlying security closed at or below $5.00 in its primary
market on the previous trading day and which have national average
daily volume that

equals or exceeds 1,000 contracts per day as determined by The Options
Clearing Corporation (``OCC'') during the preceding three calendar
months. The listing of $0.50 strike prices is limited to options
classes overlying no more than 20 individual stocks as specifically
designated by the Exchange. The Exchange may list $0.50 strike prices
on any other option classes if those classes are specifically
designated by other securities exchanges that employ a similar $0.50
Strike Program under their respective rules. A stock shall remain in
the $0.50 Strike Program until otherwise designated by the Exchange.\8\
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    \6\ See Rule 4.5, Interpretation and Policy .04.
    \7\ See Rule 4.5, Interpretation and Policy .01(a)(1).
    \8\ See Rule 4.5, Interpretation and Policy .01(b).
---------------------------------------------------------------------------

    The Exchange proposes to adopt a new strike interval program for
stocks that are not in the aforementioned $0.50 Strike Program (or the
Short Term Option Series Program) \9\ and that close below $2.50 and
have an average daily trading volume of at least 1,000,000 shares per
day for the three preceding calendar months. The $0.50 Strike Program
considers stocks that have a closing price at or below $5.00 whereas
the Exchange's proposal will consider stocks that have a closing price
below $2.50. Currently, there is a subset of stocks that are not
included in the $0.50 Strike Program as a result of the limitations of
that program which provides that the listing of $0.50 strike prices is
limited to option classes overlying no more than 20 individual stocks
as specifically designated by the Exchange and requires a national
average daily volume that equals or exceeds 1,000 contracts per day as
determined by OCC during the preceding three calendar months.\10\
Therefore, the Exchange is proposing to implement a new strike interval
program termed the ``Low Priced Stock Strike Price Interval Program.''
---------------------------------------------------------------------------

    \9\ Rule 4.5(d).
    \10\ See Rule 4.5, Interpretation and Policy .01(b).
---------------------------------------------------------------------------

    To be eligible for the inclusion in the Low Priced Stock Strike
Price Interval Program, an underlying stock must (1) close below $2.50
in its primary market on the previous trading day; and (2) have an
average daily trading volume of at least 1,000,000 shares per day for
the three preceding calendar months. The Exchange notes that there is
no limit to the number of classes that will be eligible for inclusion
in the proposed program, provided, of course, that the underlying
stocks satisfy both the price and average daily trading volume
requirements of the proposed program.
    The Exchange also proposes that after a stock is added to the Low
Priced Stock Strike Price Interval Program, the Exchange may list $0.50
strike price intervals from $0.50 up to $2.00.\11\ For the purpose of
adding strikes under the Low Priced Stock Strike Price Interval
Program, the ``price of the underlying stock'' is measured in the same
way as ``the price of the underlying security'' is measured as set
forth in the Options Listing Procedures Plan (``OLPP'') as reflected in
Rule 4.7.\12\ Further, no additional series in $0.50 intervals may be
listed if the underlying stock closes at or above $2.50 in its primary
market. Additional series in $0.50 intervals may not be added until the
underlying stock again closes below $2.50.
---------------------------------------------------------------------------

    \11\ While the Exchange may list new strikes on underlying
stocks that meet the eligibility requirements of the new program,
the Exchange will exercise its discretion and will not list strikes
on underlying stocks the Exchange believes are subject to imminent
delisting from their primary exchange.
    \12\ The Exchange notes this is the same methodology used in the
$1 Strike Price Interval Program. See Rule 4.5, Interpretation and
Policy .01(a)(1).
---------------------------------------------------------------------------

    The Exchange's proposal addresses a gap in strike coverage for low
priced stocks. The $0.50 Strike Program considers stocks that close
below $5.00 and limits the number of option classes listed to no more
than 20 individual stocks (provided that the open interest criteria is
also satisfied). Whereas, the Exchange's proposal has a narrower focus,
with respect to the underlying's stock price, and is targeted on those
stocks that close below $2.50 and does not limit the number of stocks
that may participate in the program (provided that the average daily
trading volume is also satisfied). The Exchange does not believe that
any market disruptions will be encountered with the addition of these
new strikes. The Exchange represents that it has the necessary capacity
and surveillance programs in place to support and properly monitor
trading in the proposed Low Priced Stock Strike Price Interval Program.
    The Exchange believes that the program's average daily trading
volume requirement of 1,000,000 shares is a reasonable threshold to
ensure adequate liquidity in eligible underlying stocks as it is
substantially greater than the thresholds used for listing options on
equities, American Depository Receipts (``ADRs''), and broad-based
indexes. Specifically, underlying securities with respect to which put
or call option contracts are approved for listing and trading on the
Exchange must meet certain criteria as determined by the Exchange. One
of those requirements is that trading volume (in all markets in which
the underlying security is traded) has been at least 2,400,000 shares
in the preceding 12 months.\13\ Rule 4.3, Interpretation and Policy .03
provides the criteria for listing options on ADRs if they meet certain
criteria and guidelines set forth in Rule 4.3. One of the requirements
is that the average daily trading volume for the security in the U.S.
markets over the three months preceding the selection of the ADR for
options trading is 100,000 or more shares.\14\ Finally, the Exchange
may trade options on a broad-based index pursuant to Rule 19b-4(e) of
the Securities Exchange Act of 1934 (the ``Act'') provided a number of
conditions are satisfied. One of those conditions is that each
component security that accounts for at least 1% of the weight of the
index has an average daily trading volume of at least 90,000 shares
during the last six-month period.\15\
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    \13\ See Rule 4.3, Interpretation and Policy .01(b)(1).
    \14\ See Rule 4.3, Interpretation and Policy .03(c)(2).
    \15\ See Rule 4.10(f)(7).
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to amend the table in Rule
4.5(d) to insert a new column to harmonize the Exchange's proposal to
the strike intervals for Short Term Options Series as described in Rule
4.5(d). The table in Rule 4.5(d)(6) is intended to limit the intervals
between strikes for multiply listed equity options within the Short
Term Options Series program that have an expiration date more than
twenty-one days from the listing date. Specifically, the table defines
the applicable strike intervals for options on underlying stocks given
the closing price on the primary market on the last day of the calendar
quarter, and a corresponding average daily volume of the total number
of options contracts traded in a given security for the applicable
calendar quarter divided by the number of trading days in the
applicable calendar quarter.\16\ However, the lowest share price column
is titled ``less than $25.'' The Exchange now proposes to insert a
column titled ``Less than $2.50'' and to set the strike interval at
$0.50 for each average daily volume tier represented in the table.
Also, the Exchange proposes to amend the heading of the column
currently titled ``Less than $25,'' to ``$2.50 to less than $25'' as a
result of the adoption of the new proposed column, ``Less than $2.50.''
The Exchange believes this

change will remove any potential conflict between the strike intervals
under the Short Term Options Series Program and those described herein
under the Exchange's proposal.
---------------------------------------------------------------------------

    \16\ See Securities Exchange Release Act No. 91456 (April 1,
2021), 86 FR 18090 (April 7, 2021) (SR-Cboe-2021-019) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Rule 4.5 (Series of Option Contracts Open for Trading) in
Connection With Limiting the Number of Strikes Listed for Short Term
Option Series Which Are Available for Quoting and Trading on the
Exchange).
---------------------------------------------------------------------------

    The Exchange recognizes that its proposal will introduce new
strikes in the marketplace and further acknowledges that there has been
significant effort to curb strike proliferation. For example, the
Exchange filed a proposal focused on the removal, and prevention of the
listing, of strikes which are extraneous and do not add value to the
marketplace (the ``Strike Interval Proposal'').\17\ The Strike Interval
Proposal was intended to remove repetitive and unnecessary strike
listings across the weekly expiries. Specifically, the Strike Interval
Proposal aimed to reduce the density of strike intervals that would be
listed in the later weeks, by creating limitations for intervals
between strikes which have an expiration date more than twenty-one days
from the listing date.\18\ The Strike Interval Proposal took into
account OCC customer-cleared volume, using it as an appropriate proxy
for demand. The Strike Interval Proposal was designed to maintain
strikes where there was customer demand and eliminate strikes where
there was not demand. At the time of its proposal, the Exchange
estimated that the Strike Interval Proposal would reduce the number of
listed strikes in the options market by approximately 81,000
strikes.\19\ The Exchange proposes to amend the table to define the
strike interval at $0.50 for underlying stocks with a share price of
less than $2.50. The Exchange believes this amendment will harmonize
the Exchange's proposal with the Strike Interval Proposal described
above.
---------------------------------------------------------------------------

    \17\ Id.
    \18\ Id.
    \19\ Id.
---------------------------------------------------------------------------

    The Exchange recognizes that its proposal will moderately increase
the total number of option series available on the Exchange. However,
the Exchange's proposal is designed to only add strikes where there is
investor demand \20\ which will improve market quality. Under the
requirements for the Low Priced Stock Strike Price Interval Program as
described herein, the Exchange determined that as of August 9, 2023,
106 symbols met the proposed criteria. Of those symbols, the Exchange
notes that 36 were in the $1 Strike Price Interval Program with $1.00
and $2.00 strikes listed. Under the Exchange's proposal, the $0.50 and
$1.50 strikes for these symbols would be added for the current
expiration terms. The remaining 70 symbols eligible under the proposal
would have $0.50, $1.00, $1.50 and $2.00 strikes added to their current
expiration terms. Therefore, the Exchange note that for the 106 symbols
eligible for the Low Priced Stock Strike Price Interval Program, a
total of approximately 3,250 options would be added. As of August 9,
2023, the Exchange listed 1,106,550 options, and therefore, the
additional options that would be listed under this proposal would
represent a relatively minor increase of 0.294% in the number of
options listed.
---------------------------------------------------------------------------

    \20\ See proposed Rule 4.5, Interpretation and Policy .20(a),
which requires that an underlying stock must (1) close below $2.50
in its primary market on the previous trading day; and (2) have an
average daily trading volume of at least 1,000,000 shares per day
for the three preceding calendar months.
---------------------------------------------------------------------------

    The Exchange does not believe that its proposal contravenes any
previous efforts to curtail unnecessary strikes. The Exchange's
proposal is targeted to only underlying stocks that close at less than
$2.50 and that also meet the average daily trading volume requirement.
Additionally, because the strike increment is $0.50 there are only a
total of four strikes that may be listed under the program ($0.50,
$1.00, $1.50, and $2.00) for an eligible underlying stock. Finally, if
an eligible underlying stock is in another program (e.g., the $0.50
Strike Program or the $1 Strike Price Interval Program) the number of
strikes that may be added is further reduced if there are pre-existing
strikes as part of another strike listing program. Therefore, the
Exchange does not believe that it will list any unnecessary or
repetitive strikes as part of its program, and that the strikes that
will be listed will improve market quality and satisfy investor demand.
    The Exchange further believes that the Options Price Reporting
Authority (``OPRA''), has the necessary systems capacity to handle any
additional messaging traffic associated with this proposed rule change.
The Exchange also believes that Trading Permit Holders (``TPHs'') will
not have a capacity issue as a result of the proposed rule change.
Finally, the Exchange believes that the additional options will serve
to increase liquidity, provide additional trading and hedging
opportunities for all market participants, and improve market quality.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of section 6(b) of the
Act.\21\ Specifically, the Exchange believes the proposed rule change
is consistent with the section 6(b)(5) \22\ 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) \23\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(5).
    \23\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes its proposal promotes just and
equitable principles of trade and removes impediments to and perfects
the mechanisms of a free and open market and a national market system
as the Exchange has identified a subset of stocks that are trading
under $2.50 and do not have meaningful strikes available. For example,
on August 9, 2023, symbol SOND closed at $0.50 and had open interest of
over 44,000 contracts and an average daily trading volume in the
underlying stock of over 1,900,000 shares for the three preceding
calendar months.\24\ Currently the lowest strike listed is for $2.50,
making the lowest strike 400% away from the closing stock price.
Another symbol, CTXR, closed at $0.92 on August 9, 2023, and had open
interest of 63,000 contracts and an average daily trading volume in the
underlying stock of over 1,900,000 shares for the three preceding
calendar months.\25\ Similarly, the lowest strike listed is for $2.50,
making the lowest strike more than 170% away from the closing stock
price. Currently, such products have no at-the-money options, as well
as no in-the-money calls or out-of-the-money puts. The Exchange's
proposal will provide additional strikes in $0.50 increments from $0.50
up to $2.00 to provide more meaningful trading and hedging
opportunities for this subset of stocks. Given the increased
granularity of strikes as proposed under the

Exchange's proposal out-of-the-money puts and in-the-money calls will
be created. The Exchange believes this will allow market participants
to tailor their investment and hedging needs more effectively.
---------------------------------------------------------------------------

    \24\ See Yahoo! Finance, https://finance.yahoo.com/quote/SOND/history?p=SOND (last visited August 10, 2023).
    \25\ Id.
---------------------------------------------------------------------------

    The Exchange believes its proposal promotes just and equitable
principles of trade and removes impediments to and perfects the
mechanisms of a free and open market and a national market system and,
in general, protects investors and the public interest by adding
strikes that improves market quality and satisfies investor demand. The
Exchange does not believe that the number of strikes that will be added
under the program will negatively impact the market. Additionally, the
proposal does not run counter to any previous efforts to curb strike
proliferation as those efforts focused on the removal and prevention of
extraneous strikes where there was no investor demand. The Exchange's
proposal requires the satisfaction of an average daily trading volume
threshold in addition to the underlying stock closing at a price below
$2.50 to be eligible for the program. The Exchange believes that the
average daily trading volume threshold of the program ensures that only
strikes with investor demand will be listed and fills a gap in strike
interval coverage as described above. Further, being that the strike
interval is $0.50, there are only a maximum of four strikes that may be
added ($0.50, $1.00, $1.50, and $2.00). Therefore, the Exchange does
not believe that its proposal will undermine any previous efforts to
eliminate repetitive and unnecessary strikes in any fashion.
    The Exchange believes that the proposed program's average daily
trading volume threshold promotes just and equitable principles of
trade and removes impediments to and perfects the mechanisms of a free
and open market and a national market system and, in general, protects
investors and the public interest as it is designed to permit only
those stocks with demonstrably high levels of trading activity to
participate in the program. The Exchange notes that the proposed
program's average daily trading volume requirement is substantially
greater than the average daily trading requirement currently in place
on the Exchange for options on equity underlyings,\26\ ADRs,\27\ and
broad-based indexes.\28\
---------------------------------------------------------------------------

    \26\ See supra note 13.
    \27\ See supra note 14.
    \28\ See supra note 15.
---------------------------------------------------------------------------

    The Exchange also believes the proposed rule change is consistent
with section 6(b)(1) of the Act,\29\ which provides that the Exchange
be organized and have the capacity to be able to carry out the purposes
of the Act and to enforce compliance by the Exchange's TPHs and persons
associated with its TPHs with the Act, the rules and regulations
thereunder, and the rules of the Exchange. The proposed rule change
allows the Exchange to respond to customer demand to provide meaningful
strikes for low priced stocks. The Exchange does not believe that the
proposed rule would create any capacity issue or negatively affect
market functionality. Additionally, the Exchange represents that it has
the necessary systems capacity to support the new options series and
handle additional messaging traffic associated with this proposed rule
change. The Exchange also believes that its TPHs will not experience
any capacity issues as a result of this proposal. In addition, the
Exchange represents that it believes that additional strikes for low
priced stocks will serve to increase liquidity available as well as
improve price efficiency by providing more trading opportunities for
all market participants. The Exchange believes that the proposed rule
change will benefit investors by giving them increased opportunities to
execute their investment and hedging decisions.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

    Finally, the Exchange believes its proposal is designed to prevent
fraudulent and manipulative acts and practices as options may only be
listed on underlyings that satisfy the listing requirements of the
Exchange as described in 4.3. Specifically, Rule 4.3(a) requires that
underlying securities for which put or call option contracts are
approved for listing and trading on the Exchange must meet the
following criteria: (1) the security must be duly registered (with the
Commission) and be an ``NMS stock'' (as defined in Rule 600 of
Regulation NMS under the Act); (2) the security shall be characterized
by a substantial number of outstanding shares that are widely held and
actively traded. Additionally, Rule 4.3, Interpretation and Policy
.01(a) provides that absent exceptional circumstances, an underlying
security will not be selected for options transactions unless: (1)
there are a minimum of 7,000,000 shares of the underlying security
which are owned by persons other than those required to report their
stock holdings under section 16(a) of the Act; (2) there are a minimum
of 2,000 holders of the underlying security; (3) the issuer is in
compliance with any applicable requirements of the Act; and (4) trading
volume (in all markets in which the underlying security is traded) has
been at least 2,400,000 shares in the preceding 12 months. The
Exchange's proposal does not impact the eligibility of an underlying
stock to have options listed on it, but rather addresses only the
listing of new additional option classes on an underlying listed on the
Exchange in accordance with the Exchange's listings rules. As such, the
Exchange believes that the listing requirements described in Rule 4.3
address potential concerns regarding possible manipulation.
Additionally, in conjunction with the proposed average daily volume
requirement described herein, the Exchange believes any possible market
manipulation is further mitigated.

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 does not
believe that its proposed rule change will impose any burden on
intramarket competition as the Rules of the Exchange apply equally to
all TPHs and all TPHs may trade the new proposed strikes if they so
choose. Specifically, the Exchange believes that investors and market
participants will significantly benefit from the availability of finer
strike price intervals for stocks priced below $2.50, which will allow
them to tailor their investment and hedging needs more effectively. The
Exchange's proposal is substantively identical to MIAX Interpretations
and Policies .11 and .12 to Rule 404.
    The Exchange does not believe that its proposed rule change will
impose any burden on intermarket competition, as nothing prevents other
options exchanges from proposing similar rules to list and trade
options on low priced stocks. Rather the Exchange believes that its
proposal will promote intermarket competition, as the Exchange's
proposal will result in additional opportunities for investors to
achieve their investment and trading objectives, to the benefit of
investors, market participants, and the marketplace in general.

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

    Pursuant to section 19(b)(3)(A) of the Act \30\ and Rule 19b-
4(f)(6) \31\ thereunder, the Exchange has designated this proposal as
one that effects a change that: (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.\32\
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 17 CFR 240.19b-4(f)(6).
    \32\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \33\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Commission
notes it has approved a proposed rule change substantially identical to
the one proposed by the Exchange.\34\ The proposed change raises no
novel legal or regulatory issues. Therefore, the Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\35\
---------------------------------------------------------------------------

    \33\ 17 CFR 240.19b-4(f)(6)(iii).
    \34\ See supra note 5.
    \35\ 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).
---------------------------------------------------------------------------

    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 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
     Send an email to [email protected]. Please include
file number
    SR-CBOE-2023-065 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-2023-065. 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
a.m. and 3 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-2023-065 and should be
submitted on or before January 3, 2024.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
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    \36\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27262 Filed 12-12-23; 8:45 am]
BILLING CODE 8011-01-P