[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Notices]
[Pages 30267-30282]
[FR Doc No: 2019-13541]

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SECURITIES AND EXCHANGE COMMISSION

[Release No 34-86173; File No. SR-CBOE-2019-027]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
and Move Certain Current Rules From the Exchange's Currently Effective
Rulebook to the Shell Structure for the Exchange's Rulebook That Will
Become Effective Upon the Migration of the Exchange's Trading Platform
to the Same System Used by the Cboe Affiliated Exchanges

June 20, 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 June 7, 2019, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I 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 amend and move certain current Rules from the Exchange's currently
effective Rulebook (``current Rulebook'') to the shell structure for
the Exchange's Rulebook that will become effective upon the migration
of the Exchange's trading platform to the same system used by the Cboe
Affiliated Exchanges (as defined below) (``shell Rulebook''). 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
    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''). The Cboe Affiliated Exchanges are working to align
certain system functionality, retaining only intended differences
between the Cboe Affiliated Exchanges, in the context of a technology
migration. Cboe Options intends to migrate its trading platform to the
same system used by the Cboe Affiliated Exchanges, which the Exchange
expects to complete on October 7, 2019. Cboe Options believes offering
similar functionality to the extent practicable will reduce potential
confusion for market participants.
    In connection with this technology migration, the Exchange has a
shell Rulebook that resides alongside its current Rulebook, which shell
Rulebook will contain the Rules that will be in place upon completion
of the Cboe Options technology migration.
Chapter 1
    The proposed rule change amends and moves the definitions of terms
used throughout the Rules contained in current Rule 1.1 in the current
Rulebook to proposed Rule 1.1 in the shell Rulebook. While there are no
substantive changes to the majority of defined terms in Rule 1.1 being
moved to the shell structure, the proposed rule change adds or amends
the following definitions:

----------------------------------------------------------------------------------------------------------------
                                                                          Corresponding Cboe
          Defined  term                Provision         Current Cboe          affiliated       Description of
                                                         options rule        exchange rule          change
----------------------------------------------------------------------------------------------------------------
ABBO............................  best bid(s) or      N/A...............  C2 Rule 1.1 and     Added to Rule 1.1.
                                   offer(s)                                EDGX Rule
                                   disseminated by                         21.20(a)(1).
                                   other Eligible
                                   Exchanges \5\ and
                                   calculated by the
                                   Exchange based on
                                   market
                                   information the
                                   Exchange receives
                                   from OPRA.
All Sessions class..............  options class the   N/A...............  C2 Rule 1.1 and     Adds defined term
                                   Exchange lists                          EDGX Rule 16.1.     for classes the
                                   for trading                                                 Exchange lists
                                   during RTH and                                              for trading
                                   GTH.                                                        during GTH and
                                                                                RTH.
Book or Simple Book.............  electronic book of  1.1...............  BZX Rule            Currently, there
                                   simple orders and                       16.1(a)(9), C2      is a separate
                                   quotes maintained                       Rule 1.1, and       book for each of
                                   by the System,                          EDGX Rule 16.1.     RTH and GTH, but
                                   which single book                                           following
                                   is used during                                              migration, there
                                   both the RTH and                                            will be a single
                                   GTH trading                                                 book used for
                                   sessions \6\.                                               both trading
                                                                                sessions, as
                                                                                discussed below;
                                                                                rules of Cboe
                                                                                Affiliated
                                                                                Exchanges have no
                                                                                reference to
                                                                                separate trading
                                                                                sessions, as
                                                                                there are no GTH
                                                                                on those
                                                                                exchanges.

Capacity........................  capacity in which   N/A...............  C2 Rule 1.1.......  Cboe Options
                                   a User submits an                                           currently refers
                                   order, which the                                            to capacity as
                                   User specifies by                                           origin code;
                                   applying the                                                current Cboe
                                   corresponding                                               Options origin
                                   code to the                                                 codes are in
                                   order, and                                                  Regulatory
                                   includes B                                                  Circular RG13-
                                   (account of a                                               038, and are the
                                   broker or dealer,                                           same as the
                                   including a                                                 proposed
                                   Foreign Broker-                                             Capacities,
                                   Dealer), C                                                  except the
                                   (Public Customer                                            proposed rule
                                   account), F (OCC                                            changes W to U
                                   clearing firm                                               (see
                                   proprietary                                                 specifications
                                   account), J                                                 \7\); proposed
                                   (joint back                                                 rule change
                                   office account),                                            deletes Y (orders
                                   L (non-Trading                                              for the account
                                   Permit Holder                                               of a specialist
                                   affiliate                                                   registered in the
                                   account), M                                                 underlying stock
                                   (Market-Maker                                               at the primary
                                   account), N                                                 exchange for
                                   (market-maker or                                            trading the
                                   specialist on                                               stock), which
                                   another options                                             will not be
                                   exchange), U                                                available
                                   (Professional                                               following
                                   account).                                                   migration \8\.
Cboe Trading....................  Cboe Trading,       N/A...............  BZX Rule 2.11, C2   Added to Rule 1.1.
                                   Inc., broker-                           Rule 1.1, and
                                   dealer affiliated                       EDGX Rule 2.11.
                                   with C2 and will
                                   serve as inbound
                                   and outbound
                                   router for C2, as
                                   discussed below.
EFID............................  Executing Firm ID.  N/A...............  C2 Rule 1.1 and     Added to Rule 1.1;
                                                                           EDGX Rule 21.1(k).  similar to the
                                                                                term acronym,
                                                                                which is used in
                                                                                current Cboe
                                                                                Options Rules;
                                                                                EFID is the term
                                                                                used in the
                                                                                technical
                                                                                specifications
                                                                                that will apply
                                                                                post-migration,
                                                                                and thus is more
                                                                                appropriate for
                                                                                the shell
                                                                                Rulebook; a firm
                                                                                may have multiple
                                                                                EFIDs.
Global Trading Hours or GTH.....  trading session     1.1 and 6.1.01      N/A...............  Added language to
                                   consisting of the   (proposed Rule                          clarify that GTH
                                   hours outside of    5.1).                                   refers to hours
                                   Regular Trading                                             during which
                                   Hours (``RTH'')                                             trading on the
                                   during which                                                Exchange may
                                   transactions in                                             occur outside of
                                   options may be                                              RTH.
                                   effected on the
                                   Exchange and are
                                   set forth in
                                   proposed Rule 5.1.
Index-Linked Security or ETN....  share traded on a   5.3.13............  N/A...............  Added to Rule 1.1.
                                   national
                                   securities
                                   exchange that is
                                   an NMS stock and
                                   represents
                                   ownership of a
                                   security that
                                   provides for
                                   payment at
                                   maturity as set
                                   forth in proposed
                                   Rule 4.3 (current
                                   Rule 5.3).
Market Close....................  time the Exchange   N/A (market close   BZX Rule 16.1, C2   Added to Rule 1.1;
                                   specifies for the   time set forth in   Rule 1.1, and       same as Cboe
                                   end of a trading    current Rule 6.1    EDGX Rule 16.1.     Affiliated
                                   session on the      (proposed Rule                          Exchanges' Rules,
                                   Exchange on that    5.1)).                                  except proposed
                                   trading day.                                                rule references
                                                                                the concept of a
                                                                                trading session,
                                                                                which does not
                                                                                exist on Cboe
                                                                                Affiliated
                                                                                Exchanges, as
                                                                                they do not have
                                                                                GTH.
Market-Maker....................  TPH registered      8.1...............  BZX Rule            Added to Rule 1.1.
                                   with the Exchange                       16.1(a)(37), C2
                                   pursuant to                             Rule 1.1, and
                                   proposed Rule                           EDGX Rule 16.1.
                                   3.52 (current
                                   Rule 8.1) for the
                                   purpose of making
                                   markets in option
                                   contracts traded
                                   on the Exchange
                                   and that has the
                                   rights and
                                   responsibilities
                                   set forth in
                                   proposed Chapter
                                   5, Section D
                                   (current Chapter
                                   VIII) of the
                                   Rules.
Market Open.....................  time the Exchange   N/A (market open    BZX Rule            Added to Rule 1.1;
                                   specifies for the   time set forth in   16.1(a)(35), C2     same as Cboe
                                   start of a          current rule 6.1    Rule 1.1, and       Affiliated
                                   trading session     (proposed Rule      EDGX Rule 16.1.     Exchanges' Rules,
                                   on the Exchange     5.1)).                                  except proposed
                                   on that trading                                             rule references
                                   day.                                                        the concept of a
                                                                                trading session,
                                                                                which does not
                                                                                exist on Cboe
                                                                                Affiliated
                                                                                Exchanges, as
                                                                                they do not have
                                                                                GTH.
Order Entry Firm/OEF............  Trading Permit      N/A...............  BZX Rule            Added to Rule 1.1.
                                   Holder registered                       16.1(a)(36), C2
                                   with the Exchange                       Rule 1.1, and
                                   pursuant to                             EDGX Rule 16.1.
                                   proposed Rule
                                   3.51 representing
                                   as agent Customer
                                   Orders on the
                                   Exchange and non-
                                   Market-Maker
                                   Trading Permit
                                   Holder conducting
                                   proprietary
                                   trading.
Protected Quotation.............  a Protected Bid or  6.80..............  BZX Rule            Added to Rule 1.1.
                                   Protected Offer,                        16.1(a)(47), C2
                                   as each of those                        Rule 1.1, and
                                   terms is defined                        EDGX Rule 16.1.
                                   in proposed Rule
                                   5.65 (current
                                   Rule 6.80).
Quote and Quotation.............  firm bid or offer   1.1...............  BZX Rule            Updated to reflect
                                   a Market-Maker                          16.1(a)(51), C2     the distinction
                                   (a) submits                             Rule 1.1, and       between
                                   electronically                          EDGX Rule 16.1.     electronic quotes
                                   (including to                                               and quotes in
                                   update any of its                                           open outcry
                                   previous quotes),                                           (consistent with
                                   which may be                                                current practice
                                   updated in block                                            and functionality
                                   quantities, or                                              on the Exchange).
                                   (b) represents
                                   for open outcry
                                   on the trading
                                   floor.
RTH Class.......................  options class the   N/A...............  C2 Rule 1.1, EDGX   ..................
                                   Exchange lists                          Rule 16.1.
                                   for trading
                                   during RTH only.
Size............................  number of           N/A...............  BZX Rule 21.1(e),   Added to Rule 1.1
                                   contracts up to                         C2 Rule 1.1, and    (consistent with
                                   999,999                                 EDGX Rule 21.1(e).  current Cboe
                                   associated with                                             Options system).
                                   an order or quote.

System..........................  the Exchange's      1.1...............  BZX Rule            Deleted reference
                                   hybrid trading                          16.1(a)(59), C2     from current
                                   platform that                           Rule 1.1, and       definition to
                                   integrates                              EDGX Rule 16.1.     Hybrid, as that
                                   electronic and                                              relates to the
                                   open outcry                                                 current
                                   trading of option                                           technology from
                                   contracts on the                                            which the Cboe
                                   Exchange, and                                               Options trading
                                   includes any                                                platform is being
                                   connectivity to                                             migrated.
                                   the foregoing
                                   trading platform
                                   that is
                                   administered by
                                   or on behalf of
                                   the Exchange,
                                   such as a
                                   communications
                                   hub \9\.
System Securities...............  options that        N/A...............  BZX Rule 21.1(b),   Added to Rule 1.1
                                   currently trade                         C2 Rule 1.1, and    (additional term
                                   on the Exchange                         EDGX Rule 21.1(b).  for options
                                   pursuant to                                                 listed for
                                   proposed Chapter                                            trading).
                                   4 (current
                                   Chapters 5 and
                                   24) in the shell
                                   Rulebook \10\.
Trade Desk......................  Exchange            N/A...............  N/A...............  Added to Rule 1.1;
                                   operations staff                                            Trade Desk is new
                                   authorized to                                               term for Help
                                   make certain                                                Desk at the
                                   trading                                                     Exchange (which
                                   determinations on                                           term will be
                                   behalf of the                                               deleted from the
                                   Exchange.                                                   Rules).
Trading Session.................  hours during which  1.1 and 6.1A(a)     C2 Rule 1.1 and     Moved provisions
                                   the Exchange is     and (h).            EDGX Rule 16.1.     from Rule 6.1A(a)
                                   open for trading                                            and (h) regarding
                                   for Regular                                                 applicability of
                                   Trading Hours or                                            Rules during GTH
                                   Global Trading                                              to definition.
                                   Hours (each of
                                   which may be
                                   referred to as a
                                   trading session),
                                   each as set forth
                                   in proposed Rule
                                   5.1. Unless
                                   otherwise
                                   specified in the
                                   Rules or the
                                   context otherwise
                                   indicates, all
                                   Rules apply in
                                   the same manner
                                   during each
                                   trading session.
Underlying index................  with respect to an  N/A...............  N/A...............  Added to Rule 1.1;
                                   index option,                                               consistent with
                                   means the index                                             index options
                                   that is the                                                 (based on OCC By-
                                   subject of an                                               Laws Article
                                   index option.                                               1(U)).
Underlying security.............  with respect to an  1.1 and 24.1(e)...  N/A...............  Added provision
                                   equity option,                                              from Rule 24.1(e)
                                   the security that                                           to 1.1.
                                   the Clearing
                                   Corporation must
                                   sell (in the case
                                   of a call option
                                   contract) or
                                   purchase (in the
                                   case of a put
                                   option contract)
                                   upon the valid
                                   exercise of the
                                   option contract,
                                   and, with respect
                                   to an index
                                   option any of the
                                   securities or
                                   mutual funds that
                                   are the basis for
                                   the calculation
                                   of the underlying
                                   index.
User............................  any TPH or          N/A...............  BZX Rule            Added to C2 Rule
                                   Sponsored User                          16.1(a)(63), C2     1.1 (common term
                                   who is authorized                       Rule 1.1, and       to apply to two
                                   to obtain access                        EDGX Rule 16.1.     types of market
                                   to the System                                               participants
                                   pursuant to                                                 defined in C2
                                   proposed Rule 5.5                                           Rules, which are
                                   (current Rule                                               the only two
                                   6.23A) \11\.                                                market
                                                                                participants that
                                                                                may access the
                                                                                System under C2
                                                                                Rules).
----------------------------------------------------------------------------------------------------------------

    The proposed rule change deletes current Rule 1.1 (and any other
current Rule referenced in the table above) from the current Rulebook,
as further discussed below.
---------------------------------------------------------------------------

    \5\ Eligible Exchange is defined in current Rule 6.80(7) and
proposed Rule 5.65(g).
    \6\ The proposed rule change also deletes current Rule 6.1A(g),
which describes the separate books currently used for the RTH and
GTH sessions.
    \7\ BOE Specifications, available at http://cdn.batstrading.com/resources/membership/BATS_US_Options_BOE2_Specification.pdf, and FIX
Specifications, available at http://cdn.batstrading.com/resources/membership/BATS_US_Options_BZX_FIX_Specification.pdf.
    \8\ Capacity codes applicable to trading of FLEX options will be
addressed in a separate rule filing.
    \9\ Rules related to orders submitted for routing to PAR for
open outcry trading will be addressed in a separate rule filing.
    \10\ The Exchange will move all Rules from the current Rulebook
regarding options the Exchange is authorized to list for trading
into Chapter 4 of the shell Rulebook in a separate rule filing.
    \11\ The Exchange will add provisions regarding System access
from the current Rulebook to Rule 5.5 of the shell Rulebook in a
separate rule filing.
---------------------------------------------------------------------------

    The proposed rule change deletes the term Voluntary Professional,
as that Capacity designation will no longer be available on Cboe
Options following the technology migration. It is currently unavailable
on the Cboe Affiliated Exchanges. Within the definition of the term
Professional, the proposed rule change deletes the list of rules
pursuant to which a Professional would be treated as a broker-dealer,
which in general relate to allocation priority, but adds that a
Professional order will be handled the same as a broker-dealer order
unless the Rules specify otherwise. The definition of a Priority
Customer (which excludes Professionals) and this change to the
definition of Professional accomplish the same result, as that
definition within the applicable rules provide that Professionals will
not be treated as customers, and instead as broker-dealers. The
proposed rule change also deletes the term TPH Department, as that is
not the current name of the Exchange department that handle s
membership requirements. Additionally, the Exchange believes it is
appropriate to refer to the Exchange rather than a specific department
in the Rules, as is the case in the Cboe Affiliated Exchanges' rules.
The Rules that use that term will be updated in a separate rule filing.
Definitions for continuous electronic quotes, Exchange spread market,
and national spread market will be added to different rules in a
separate filing to conform to the location of those defined terms in
the rules of the Cboe Affiliated Exchanges. The Exchange also deletes
the definitions of Quarterly Options Series and Short Term Options
Series from Rule 1.1, as those terms are defined and explained in the
appropriate listing rules. There are other types of series the Exchange
may list that are not defined in Rule 1.1. The proposed rule change
also makes nonsubstantive changes to certain defined terms, including
to make the rule provisions plain English, update defined terms, add
cross-references to defined terms in other Rules, add clarifying
language, and update rule cross-references (to

reference the expected Rule number for the cross-referenced Rule).
    Proposed Rule 1.5 (current Rule 1.2) states the Exchange announces
to Trading Permit Holders all determinations it makes pursuant to the
Rules via (a) specifications, Notices, or Regulatory Circulars with
appropriate advanced notice, which will be posted on the Exchange's
website, or as otherwise provided in the Rules, (b) electronic message,
or (c) other communication method as provided in the Rules. Most
current Rules indicate determinations will be made by Regulatory
Circular, which current Rule 1.2 indicates may also be made by Exchange
Notice. The Exchange will update references to Regulatory Circular
throughout the Rules in separate rule filings. Proposed Rule 1.5(b)
states to the extent the Rules allow the Exchange to make a
determination, including on a class-by-class or series-by-series basis,
the Exchange may make a determination for GTH that differs from the
determination it makes for RTH. This is consistent with current Rule
6.1A(i), which the proposed rule change deletes. This single rule
simplifies the Rules by including all provisions related to
determinations the Exchange may make within a single Rule. The Exchange
will make conforming changes throughout the Rules in separate rule
filings. The proposed rule change deletes current Rules 1.2 and 6.1A(i)
from the current Rulebook, as further discussed below.
    Proposed Cboe Options Rule 1.6 of the shell Rulebook states unless
otherwise specified, all times in the Rules are Eastern Time. Current
Cboe Options Rules are generally in Chicago time. The Exchange will
update times to Eastern Time in other Rules as necessary in separate
rule filings.
    The proposed rule change moves current rules related to Exchange
liability, including disclaimers and limitations, from the current
Rulebook to Chapter 1, Section C of the shell Rulebook (to be named
Exchange Liability and Disclaimers, as proposed) as follows:

------------------------------------------------------------------------
                                    Number in current      Rule in shell
              Rule                       Rulebook            Rulebook
------------------------------------------------------------------------
Exchange Liability Disclaimers   6.7, 20.5(a) (which                1.10
 and Limitations.                 states 6.7 applies to
                                  Range options, which
                                  are a type of Index
                                  option), 22.5(a)
                                  (which states 6.7
                                  applies to Binary
                                  options, which are a
                                  type of Index option).
Limitation on the Liability of   6.15...................            1.11
 Index Licensors for Options on
 Units.
Limitation on Liability of       20.5(b) (which states              1.12
 Reporting Authorities for        24.14 applies to Range
 Indexes Underlying Options.      options, which are a
                                  type of Index option),
                                  22.5(b) (which states
                                  24.14 applies to
                                  Binary options, which
                                  are a type of Index
                                  option), and 24.14.
Limitation of Liability of       23.14..................            1.13
 Reporting Authority for
 Interest Rate Options.
Limitation of Liability of       29.10..................            1.14
 Reporting Authority for Credit
 Options.
Legal Proceedings Against the    6.7A...................            1.15
 Exchange.
------------------------------------------------------------------------

    These rules are virtually identical (other than updating cross-
references and defined terms), and are merely moving locations. The
proposed rule change deletes current Rules referenced in the table
above from the current Rulebook, as further discussed below.
Chapter 2
    The proposed rule change moves current rules related to TPH Fees
from Chapter 2 of the current Rulebook to Chapter 2 of the shell
Rulebook as follows:

------------------------------------------------------------------------
                                             Number in
                  Rule                        current      Rule in shell
                                             Rulebook        Rulebook
------------------------------------------------------------------------
TPH Fees and Charges....................             2.1             2.1
Regulatory Revenues.....................             2.4             2.2
Integrated Billing System...............            3.23             2.3
Liability for Payment...................             2.2             2.4
Exchange's Cost of Defending Legal                   2.3             2.5
 Proceedings............................
------------------------------------------------------------------------

    These rules are virtually identical (other than updating cross-
references and defined terms), and are merely moving locations. The
proposed rule change deletes current Rules referenced in the table
above from the current Rulebook, as further discussed below.
Chapter 5
    The proposed rule change moves all rule provisions in the current
Rulebook related to trading days and trading hours from the current
Rulebook (specifically, Rules 6.1, 6.1A, 20.2, 21.10, 22.2, 23.6,
24.6,\12\ 24A.2, 28.9, and 29.11) to proposed Rule 5.1(a) and (b) in
the shell Rulebook.\13\ The proposed rule change adds Rule 5.1(a),
which states the System will accept orders and quotes at times set
forth in proposed Rule 5.7 (current Rule 6.2(a)). Proposed Rule 5.1(c)
states the hours for GTH, the classes and series that may be listed
during GTH, that trading during GTH is electronic only, as well as a

provision regarding the dissemination of index values during GTH (which
provisions are unchanged and just moved from Rule 6.1(c) and (k),
except as described below regarding FLEX options). Currently, the
Exchange does not allow FLEX options to trade during GTH. The Exchange
has authorized FLEX options classes with the same underlying index as
options deemed eligible for trading during GTH (currently SPX, XSP, and
VIX options) to be eligible for trading during GTH, and proposed
paragraph (c)(1) includes that authorization. The Exchange believes
there may be demand from investors for FLEX options with the same
underlying indexes as the options that currently trade during GTH, and
listing FLEX option classes \14\ with these underlying indexes will
provide investors that participate in GTH with alternatives for hedging
and other investment purposes. Proposed Rule 5.1 is substantially
similar to C2 Rule 6.1 (except C2 has a shorter GTH trading session and
different GTH-eligible products are different, and proposed Rule 5.1
lists hours for additional products that are not expected to be listed
on C2). Proposed Rule 5.1 is also consistent with EDGX Rule 21.2(a). No
other substantive changes were made to these Rules. This single rule
simplifies the Rules by including all provisions related to trading
days and hours within a single Rule. The proposed rule change deletes
current Rules referenced above regarding trading days and hours from
the current Rulebook, as further discussed below.
---------------------------------------------------------------------------

    \12\ The Exchange proposes to delete all indexes listed in
current Rule 24.6 other than ETF-Based Volatility Indexes and S&P
Select Sector Indexes, as the Exchange does not currently list
options on those other indexes and does not intend to in the future.
    \13\ Current Rule 24.6 includes conflicting language regarding
the Regular Trading Hours for ETF-Based Volatility Index options, as
paragraph (b) provides such options will trade from 8:30 a.m. until
3:00 p.m., while Interpretation and Policy .02 states they will
trade from 8:30 a.m. until 3:15 p.m., except if the closing time for
the index components is earlier. The proposed rule change deletes
ETF-Based Volatility Index options from the list of options that
will trade until 3:00 p.m., and includes the language from
Interpretation and Policy .02, as that language is accurate. Note
these options are not currently listed for trading, and if the
Exchange does list them in the future and determines they should
close at 3:00 p.m., the Exchange will submit a rule filing to make
such a change.
    \14\ Because SPX, XSP, and VIX options may only be listed Cboe
and its affiliated exchanges, FLEX options on the same indexes may
also only be listed on Cboe and its affiliated exchanges.
---------------------------------------------------------------------------

    Global Trading Hours will continue to be a separate trading session
from Regular Trading Hours, and will continue to be electronic only
trading.\15\ However, the Book used during Regular Trading Hours will
be the same Book used during Global Trading Hours. This is different
than the current trading sessions on Cboe Options, each of which use a
separate Book.\16\ There is generally reduced liquidity, higher
volatility, and wider markets during Global Trading Hours, and
investors may not want their orders or quotes to execute during Global
Trading Hours given those trading conditions. To provide investors with
flexibility to have their orders and quotes execute only during RTH, or
both RTH and GTH, the proposed rule change adds an All Sessions order
and an RTH Only order. An ``All Sessions'' order is an order a User
designates as eligible to trade during both GTH and RTH. An unexecuted
All Sessions order on the GTH Book at the end of a GTH trading session
enters the RTH Queuing Book and becomes eligible for execution during
the RTH opening rotation and trading session on that same trading day,
subject to a User's instructions.\17\ An ``RTH Only'' order is an order
a User designates as eligible to trade only during RTH or not
designated as All Sessions. An unexecuted RTH Only order with a Time-
in-Force of good-til-cancelled (``GTC'') or good-til-day (``GTD'') on
the RTH Book at the end of an RTH trading session enters the RTH
Queuing Book and becomes eligible for execution during the RTH opening
rotation and trading session on the following trading day (but not
during the GTH trading session on the following trading day), subject
to a User's instructions.\18\
---------------------------------------------------------------------------

    \15\ See proposed Rule 5.1(c)(4) (current Rule 6.1A(b), which
the proposed rule change deletes). The proposed rule change also
deletes Rule 6.1A(j) regarding disclosures that must be made
regarding GTH trading and moves it to proposed Rule 9.20. The
proposed rule change makes no changes to this provision.
    \16\ See proposed Rule 1.1, which amends the definition of Book
to mean the electronic book of simple orders and quotes maintained
by the System on which orders and quotes may execute during the
applicable trading session. The Book during GTH may be referred to
as the ``GTH Book,'' and the Book during RTH may be referred to as
the ``RTH Book.'' This is different than Cboe Options, which uses
separate books for each trading session, which are not connected.
See current Rule 6.1A(g) (which the proposed rule change deletes).
    \17\ See proposed Rule 5.6(c), proposed definition of All
Sessions order. The Exchange notes the ``RTH Queuing Book'' means
the book into which Users may submit orders and quotes (and onto
which orders remaining on the Book from the previous trading session
or trading day, as applicable, are entered) during the Queuing
Period for participation in the applicable opening rotation. The
Exchange will add a definition and additional descriptions regarding
the Queuing Book to the Rules in a future rule filing. However, the
Queuing Book is equivalent to the Book into which TPHs may submit
quotes and orders during the order entry period prior to the opening
process. See current Rule 6.2.
    \18\ See proposed Rule 5.6(c), proposed definition of RTH Only
order.
---------------------------------------------------------------------------

    Because trading sessions are currently completely separate on Cboe
Options, there are not distinct order types corresponding to the
proposed RTH Only and All Sessions order instructions. An order or
quote submitted to GTH on Cboe Options may only execute during GTH, and
an order or quote submitted to RTH on Cboe Options may only execute
during RTH. The proposed RTH Only order is equivalent to any order
submitted to RTH on Cboe Options. While the Exchange is not proposing
an equivalent to an order submitted to GTH on Cboe Options, and instead
is proposing an All Sessions order, Users may still submit an
equivalent to a ``GTH only'' order by submitting an All Sessions order
with a good-til-date Time-in-Force, with a time to cancel before the
RTH market open. Therefore, Users can submit orders to participate in
either trading session, or both, and thus the proposed rule change
provides Users with the same order entry ability as well as additional
flexibility and control regarding in which trading sessions their
orders and quotes may be eligible to trade.
    Generally, trading during the GTH trading session will occur in the
same manner as it occurs during the RTH trading session. However,
because the GTH market may have different characteristics than the RTH
market (such as lower trading levels, reduced liquidity, and fewer
participants), the Exchange may deem it appropriate to make different
determinations for trading rules for each trading session. Proposed
Rule 1.5(b) states to the extent the Rules allow the Exchange to make a
determination, including on a class-by-class or series-by-series basis,
the Exchange may make a determination for GTH that differs from the
determination it makes for RTH.\19\ The Exchange maintains flexibility
with respect to certain rules so that it may apply different settings
and parameters to address the specific characteristics of that class
and its market. For example, current Rule 6.45(a) allows the Exchange
to determine electronic allocation algorithms on a class-by-class
basis; \20\ and current Rule 6.53 (proposed Rule 5.6) allows the
Exchange to make certain order types, Order Instructions, and Times-in-
Force not available for all Exchange systems or classes (and unless
stated in the Rules or the context indicates otherwise, as
proposed).\21\ Because trading characteristics during RTH may be
different than those during GTH (such as lower trading levels,

reduced liquidity, and fewer participants), the Exchange believes it is
appropriate to extend this flexibility to each trading session. The
Exchange represents that it will continue to have appropriate personnel
available during GTH to make any determinations that Rules provide the
Exchange or Exchange personnel will make (such as trading halts,
opening series, and obvious errors).
---------------------------------------------------------------------------

    \19\ See current Rule 6.1A(i) (which the proposed rule change
proposes to delete).
    \20\ Therefore, the allocation algorithm that applies to a class
during RTH may differ from the allocation algorithm that apply to
that class during GTH.
    \21\ Proposed Rule 5.6(a) explicitly state that the Exchange may
make these determinations on a trading session basis. It also states
that all order types the Exchange makes available in an All Sessions
class for RTH electronic trading are available in that class for GTH
electronic trading, except as otherwise specified in the Rules. See
current Rule 6.1A(f) (which the proposed rule change proposes to
delete). The Exchange notes Rule 6.1A(f) currently provides GTC
orders are not available during GTH. However, because the Exchange
will use the same Book for GTH and RTH, the Exchange will make
available the GTC time-in-force for GTH, as an order in an All
Sessions class with that time-in-force can remain in the Book
following the conclusion of the GTH trading session and be available
for trading during the RTH trading session.
---------------------------------------------------------------------------

    The proposed rule change also moves Rule 6.40 regarding the unit of
trading for option series from the current Rulebook to Rule 5.2 of the
shell Rulebook, and deletes current Rule 6.40 from the current
Rulebook, as discussed below. The proposed rule change makes no
substantive changes to this Rule. The proposed rule change moves all
provisions regarding the meaning of bids and offers from the current
Rulebook (including Rules 6.41 and 6.44 (including Interpretations and
Policies .01 [sic], .02 [sic], .04 and .05) \22\ as well as Rules
20.10(a), 21.13, 22.13(a), 23.9, 24.8, 28.11, and 29.14(a) and (c)
related to the meaning of bids and offers for Range options, Government
Security options, Binary options, Corporate Debt Security options,
Interest Rate options, and Credit options, respectively) to proposed
Rule 5.3 in the shell Rulebook. The proposed rule change makes no
substantive changes to those Rules. This single rule simplifies the
Rules by including all provisions related to the meaning of bids and
offers within a single Rule. The proposed rule change deletes current
Rules referenced above regarding the meaning of bids and offers from
the current Rulebook, as further discussed below. The proposed rule
change deletes current Rules referenced in the table above from the
current Rulebook, as further discussed below. The proposed rule change
also moves all provisions regarding the minimum increments for bids and
offers (including Rule 6.42 as well as provisions in Rules 20.10(b),
21.13, 22.13(b), 23.9, 28.11, and 29.14(b) related to minimum
increments for Range options, Government Security options, Binary
options, Interest Rate options, Corporate Debt Security options, and
Credit options, respectively) to proposed Rule 5.4 in the shell
Rulebook. This single rule simplifies the Rules by including all
provisions related to minimum increments of options trading on the
Exchange within a single Rule. No substantive changes were made to
these Rules. The proposed rule change deletes current Rules referenced
above regarding minimum increments from the current Rulebook, as
further discussed below.
---------------------------------------------------------------------------

    \22\ The Exchange will move provisions in Rules 6.41.01 and
24.8.01 related to orders with cash prices to the shell Rulebook in
separate rule filings.
---------------------------------------------------------------------------

    The proposed rule change moves the order types currently available
on the Exchange from Rule 6.53 in the current Rulebook to proposed Rule
5.6 in the shell Rulebook. The proposed rule change makes certain
changes to conform some of the definitions to those used in the Cboe
Affiliated Exchanges' Rules, and also adds certain Order Instructions
and Times-in-Force, as described below. The introduction to proposed
Rule 5.6 states unless otherwise specified in the Rules or the context
indicates otherwise, the Exchange determines which of the following
order types, Order Instructions, and Times-in-Force are available on a
class, system, or trading session basis.\23\ The introduction also
states other Rules will list which order types, Order Instructions, and
Times-in-Force the Exchange may make available for electronic and PAR
routing (for open outcry trading), during RTH, during GTH, and for
complex orders.\24\ This is consistent with the introductory language
in current Rule 6.53(a), as well as current Rule 6.1A(i), which permits
the Exchange to make separate determinations for GTH and RTH.
---------------------------------------------------------------------------

    \23\ As noted above, the introduction also states all order
types the Exchange makes available in an All Sessions class for RTH
electronic trading will be available in that class for GTH
electronic trading, except as otherwise specified in the Rules.
    \24\ The Exchange will add Rules regarding which order types,
Order Instructions, and Times-in-Force will be available
specifically for electronic trading and PAR routing (and open outcry
trading), for GTH, and for complex orders in separate rule filings.

----------------------------------------------------------------------------------------------------------------
                                                                              Corresponding
          Defined term                  Provision           Current Cboe     Cboe affiliated     Description of
                                                            options rule      exchange rule          change
----------------------------------------------------------------------------------------------------------------
Order Type.....................  orders may be market    6.53.............  C2 Rule 6.10(b)..  Moved to proposed
                                  or limit orders.                                              Rule 5.6(b).
Limit Order....................  order to buy or sell a  6.53.............  BZX Rule           Moved to proposed
                                  stated number of                           21.1(d)(2), C2     Rule 5.6(b);
                                  option contracts at a                      Rule 6.10(b),      clarified that
                                  specified price or                         and EDGX Rule      the order price
                                  better; a limit order                      21.1(d)(2).        compared to then-
                                  to buy (sell) is                                              current bid or
                                  marketable when, at                                           offer determines
                                  the time it enters                                            whether the
                                  the System, the order                                         limit order is
                                  price is equal to or                                          marketable.
                                  higher (lower) than
                                  the then-current
                                  offer (bid).
Market Order...................  order to buy or sell a  6.1A(f) and 6.53.  BZX Rule           Moved to proposed
                                  stated number of                           21.1(d)(5), C2     Rule 5.6(b).
                                  option contracts at                        Rule 6.10(b),
                                  the best price                             and EDGX Rule
                                  available at the time                      21.1(d)(5).
                                  of execution; Users
                                  may not designate a
                                  market order as All
                                  Sessions.
Order Instruction..............  processing instruction  6.53.............  BZX Rule 21.1(d),  Added to Rule
                                  a User may apply to                        C2 Rule 6.10(c),   5.6(c) (rules
                                  an order (multiple                         and EDGX Rule      currently permit
                                  instructions may                           21.1(d).           various
                                  apply to a single                                             instructions).
                                  order) when entering
                                  it into the System
                                  for electronic or
                                  open outcry
                                  processing, subject
                                  to any restrictions
                                  set forth in the
                                  Rules.

All-or-None....................  order a User            6.1A(f), 6.53,     EDGX Rule          Moved to Rule
                                  designates to be        and 6.44.03.       21.1(d)(4).        5.6(c).
                                  executed in whole or
                                  not at all; an AON
                                  order may be a market
                                  or limit order; Users
                                  may not designate an
                                  AON order as All
                                  Sessions; the
                                  Exchange does not
                                  disseminate bids or
                                  offers of AON orders
                                  to OPRA; a User may
                                  not designate an AON
                                  order as Post Only;
                                  an AON limit order is
                                  always subject to the
                                  Price Adjust process
                                  as set forth in
                                  proposed Rule 5.32; a
                                  User may apply MCN
                                  (as defined below),
                                  but no other MTP
                                  Modifier (if a User
                                  applies any other MTP
                                  Modifier to an AON
                                  order, the System
                                  handles it as an
                                  MCN), to an AON
                                  order; the Exchange
                                  may restrict the
                                  entry of AON orders
                                  in a series or class
                                  if the Exchange deems
                                  it necessary or
                                  appropriate to
                                  maintain a fair and
                                  orderly market \25\.
Attributable...................  order a User            6.53.............  BZX Rule           Moved to Rule
                                  designates for                             21.1(c)(1), C2     5.6(c).
                                  display (price and                         Rule 6.10(c),
                                  size) that includes                        and EDGX Rule
                                  the User's EFID or                         21.1(c)(1).
                                  other unique
                                  identifier.
Book Only......................  order the System ranks  6.53.............  BZX Rule           Moved to Rule
                                  and executes pursuant                      21.1(d)(7), C2     5.6(c);
                                  to current Rule 6.45,                      Rule 6.10(c),      currently
                                  subjects to the to be                      and EDGX Rule      referred to as
                                  proposed Price Adjust                      21.1(d)(7).        Cboe Options
                                  process, or cancels,                                          Only in Rule
                                  as applicable (in                                             6.53.
                                  accordance with User
                                  instructions),
                                  without routing away
                                  to another exchange.
Cancel Back....................  order a User            N/A..............  C2 Rule 6.10(c)    Added to Rule
                                  designates to not be                       and EDGX Rule      5.6(c)
                                  subject to the to be                       11.6(b).           (consistent with
                                  proposed Price Adjust                                         current Rule
                                  process that the                                              6.82) and
                                  System cancels or                                             substantively
                                  rejects (immediately                                          similar Cboe
                                  at the time the                                               Affiliated
                                  System receives the                                           Exchanges Rules
                                  order or upon return                                          (further
                                  to the System after                                           discussed
                                  being routed away) if                                         below).
                                  displaying the order
                                  on the Book would
                                  create a violation
                                  current Rule
                                  6.82,\26\ or if the
                                  order cannot
                                  otherwise be executed
                                  or displayed in the
                                  Book at its limit
                                  price; the System
                                  executes a Book Only--
                                  Cancel Back order
                                  against resting
                                  orders, and cancels
                                  or rejects a Post
                                  Only--Cancel Back
                                  order, that locks or
                                  crosses the opposite
                                  side of the BBO.
Combination Order..............  an order involving a    6.53.............  N/A..............  Moved to Rule
                                  number of call option                                         5.6(c);
                                  contracts and the                                             clarified that
                                  same number of put                                            the legs need
                                  option contracts in                                           not consist of
                                  the same underlying                                           the same number
                                  security; in the case                                         of contracts if
                                  of an adjusted option                                         the contracts
                                  contract, a                                                   represent the
                                  combination order                                             same number of
                                  need not consist of                                           shares of the
                                  the same number of                                            underlying
                                  put and call                                                  (currently says
                                  contracts if such                                             ``shares at
                                  contracts both                                                option'').
                                  represent the same
                                  number of shares of
                                  the underlying.
Electronic Only................  order a User            6.53.............  N/A..............  Moved to Rule
                                  designates for                                                5.6(c).
                                  electronic execution
                                  (in whole or in part)
                                  on the Exchange only,
                                  and does not route to
                                  PAR for execution in
                                  open outcry; the
                                  System cancels an
                                  Electronic Only order
                                  that would otherwise
                                  route to PAR pursuant
                                  to the Rules.

Intermarket Sweep Order/ISO....  order that has the      6.53.............  BZX Rule           Moved to Rule
                                  meaning provided in                        21.1(d)(10), C2    5.6(c).
                                  current Section E of                       Rule 6.10(c),
                                  Chapter 6, which may                       and EDGX Rule
                                  be executed at one or                      21.1(d)(9).
                                  multiple price levels
                                  in the System without
                                  regard to Protected
                                  Quotations at other
                                  options exchanges;
                                  the Exchange relies
                                  on the marking of an
                                  order by a User as an
                                  ISO order when
                                  handling such order,
                                  and thus, it is the
                                  entering Trading
                                  Permit Holder's
                                  responsibility, not
                                  the Exchange's
                                  responsibility, to
                                  comply with the
                                  requirements relating
                                  to ISOs.
Match Trade Prevention/MTP       order that does not     6.53.............  BZX Rule 21.1(g),  Moved to Rule
 Modifier.                        execute against a                          C2 Rule 6.10(c),   5.6(c) and
                                  resting opposite side                      and EDGX Rule      conformed to
                                  order also marked                          21.1(g).           Cboe Affiliated
                                  with an MTP modifier                                          Exchanges' rules
                                  and originating from                                          (further
                                  the same EFID,                                                discussed
                                  Trading Permit Holder                                         below).
                                  identifier, trading
                                  group identifier, or
                                  Sponsored User
                                  identifier (``Unique
                                  Identifier''), with
                                  five types of
                                  modifiers available.
Minimum Quantity...............  order that requires a   6.53 and 6.44.05.  BZX Rule           Moved to Rule
                                  specified minimum                          21.1(d)(3), C2     5.6(c) and
                                  quantity of contracts                      Rule 6.10(c),      renamed as
                                  be executed or is                          and EDGX Rule      minimum quantity
                                  cancelled; Minimum                         21.1(d)(3).        from minimum
                                  Quantity orders will                                          volume; may be
                                  only execute against                                          eligible for
                                  multiple, aggregated                                          electronic
                                  orders if such                                                trading, in
                                  executions would                                              addition to open
                                  occur simultaneously,                                         outcry trading
                                  and only a Book Only                                          (currently
                                  order with TIF                                                minimum volume
                                  designation of IOC                                            orders are only
                                  may have a Minimum                                            eligible for
                                  Quantity instruction                                          open outcry
                                  (the System                                                   trading).
                                  disregards a Minimum
                                  Quantity instruction
                                  on any other order)
                                  \27\.
Non-Attributable...............  order a User            N/A..............  BZX Rule           Added to Rule
                                  designates for                             21.1(c)(2), C2     5.6(c); orders
                                  display (price and                         Rule 6.10(c),      currently not
                                  size) on an anonymous                      and EDGX Rule      marked
                                  basis or not                               21.1(c)(2).        Attributable on
                                  designated as an                                              Cboe Options are
                                  Attributable Order.                                           non-
                                                                                attributable;
                                                                                proposed rule
                                                                                change merely
                                                                                permits Users to
                                                                                affirmatively
                                                                                designate orders
                                                                                as non-
                                                                                attributable,
                                                                                and specify the
                                                                                Exchange will by
                                                                                default treat
                                                                                orders as Non-
                                                                                Attributable
                                                                                unless the User
                                                                                designates it as
                                                                                Attributable.
Not Held.......................  order marked ``not      6.53.............  N/A..............  Moved to Rule
                                  held'', ``take time''                                         5.6(c).
                                  or which bears any
                                  qualifying notation
                                  giving discretion as
                                  to the price or time
                                  at which such order
                                  is to be executed. An
                                  order entrusted to a
                                  Floor Broker will be
                                  considered a not held
                                  order, unless
                                  otherwise specified
                                  by a Floor Broker's
                                  client or the order
                                  was received by the
                                  Exchange
                                  electronically and
                                  subsequently routed
                                  to a Floor Broker or
                                  PAR Official pursuant
                                  to the User's
                                  instructions. Not
                                  held orders and/or
                                  ``held'' orders must
                                  be marked in a manner
                                  and form prescribed
                                  by the Exchange.

Post Only......................  order the System ranks  N/A..............  BZX Rule           Added to Rule
                                  and executes pursuant                      21.1(d)(8), C2     5.6(c) (further
                                  to current Rule                            Rule 6.10(c),      discussed
                                  6.45,\28\ subjects to                      and EDGX Rule      below).
                                  the to be proposed                         21.1(d)(8).
                                  Price Adjust process,
                                  or cancels or rejects
                                  (including if it is
                                  not subject to the
                                  Price Adjust process
                                  and locks or crosses
                                  a Protected Quotation
                                  of another exchange),
                                  as applicable (in
                                  accordance with a
                                  User's instructions),
                                  except the order may
                                  not remove liquidity
                                  from the Book or
                                  route away to another
                                  Exchange.
Price Adjust...................  order a User            N/A..............  BZX Rule 21.1(j),  Added to Rule
                                  designates to be                           C2 Rule 6.10(c),   5.6(c) (further
                                  subject to the to be                       and EDGX Rule      discussed
                                  proposed Price Adjust                      21.1(i).           below).
                                  process, or an order
                                  a User does not
                                  designate as Cancel
                                  Back \29\.
QCC Order......................  initiating order to     6.53.............  EDGX Rule 21.1(d)  Moved to Rule
                                  buy (sell) at least                                           5.6(c).
                                  1,000 standard option
                                  contracts or 10,000
                                  mini-option contracts
                                  that is identified as
                                  being part of a
                                  qualified contingent
                                  trade coupled with a
                                  contra-side order or
                                  orders totaling an
                                  equal number of
                                  contracts. QCC orders
                                  with one option leg
                                  may only be entered
                                  in the standard
                                  increments applicable
                                  to simple orders in
                                  the options class
                                  under Rule 5.4. QCC
                                  orders with more than
                                  one option leg may be
                                  entered in the
                                  increments specified
                                  for complex orders
                                  under Rule 5.4; QCC
                                  orders may execute
                                  without exposure
                                  subject to certain
                                  requirements.
Ratio Order....................  a spread, straddle, or  6.53.............  N/A..............  Moved to Rule
                                  combination order in                                          5.6(c).
                                  which the stated
                                  number of option
                                  contracts to buy
                                  (sell) is not equal
                                  to the stated number
                                  of option contracts
                                  to sell (buy),
                                  provided that the
                                  number of contracts
                                  differ by a
                                  permissible ratio;
                                  for purposes of the
                                  Rules, a permissible
                                  ratio is any ratio
                                  that is equal to or
                                  greater than one-to-
                                  three (.333) and less
                                  than or equal to
                                  three-to-one (3.00);
                                  for example, a one-to-
                                  two (.5) ratio, a two-
                                  to-three (.667)
                                  ratio, or a two-to-
                                  one (2.00) ratio is
                                  permissible, whereas
                                  a one-to-four (.25)
                                  ratio or a four-to-
                                  one (4.0) ratio is
                                  not.
Reserve Order..................  limit order with both   6.53.............  BZX Rule           Moved to Rule
                                  a portion of the                           21.1(d)(1), C2     5.6(c) and
                                  quantity displayed                         Rule 6.10(c),      conformed to
                                  (``Display                                 and EDGX Rule      Cboe Affiliated
                                  Quantity'') and a                          21.1(d)(1).        Exchanges rules
                                  reserve portion of                                            (further
                                  the quantity                                                  discussed
                                  (``Reserve                                                    below).
                                  Quantity'') not
                                  displayed; both
                                  display quantity and
                                  reserve quantity are
                                  available for
                                  potential execution
                                  against incoming
                                  orders, with Max
                                  Floor and
                                  replenishment
                                  instructions
                                  available \30\.
Spread.........................  order to buy a stated   6.53.............  N/A..............  Moved to Rule
                                  number of option                                              5.6(c);
                                  contracts and to sell                                         clarified that
                                  the same number of                                            the contracts
                                  option contracts, or                                          may represent
                                  contracts                                                     the same number
                                  representing the same                                         of shares of the
                                  number of shares as                                           underlying
                                  the underlying, of                                            (currently says
                                  the same class of                                             ``shares at
                                  options.                                                      option'').
Stop (Stop-Loss) Order.........  order to buy (sell)     6.1A(f) and        BZX Rule           Moved to Rule
                                  that becomes a market   6.10(c)(3).        21.1(d)(11), C2    5.6(c); modified
                                  order when the                             Rule 6.10(c),      to compare stop
                                  consolidated last                          and EDGX Rule      prices to
                                  sale price (excluding                      21.1(d)(11).       national prices
                                  prices from complex                                           rather than
                                  order trades if                                               Exchange prices
                                  outside the NBBO) or                                          (BZX, EDGX, and
                                  NBB (NBO) for a                                               C2 similarly use
                                  particular option                                             the NBBO), which
                                  contract is equal to                                          reflect prices
                                  or above (below) the                                          from the entire
                                  stop price specified                                          market.
                                  by the User; Users
                                  may not designate a
                                  Stop Order as All
                                  Sessions.

Stop-Limit Order...............  order to buy (sell)     6.1A(f) and 6.53.  BZX Rule           Moved to Rule
                                  that becomes a limit                       21.1(d)(12), C2    5.6(c); modified
                                  order when the                             Rule 6.10(c),      to compare stop
                                  consolidated last                          and EDGX Rule      prices to
                                  sale price (excluding                      21.1(d)(12).       national prices
                                  prices from complex                                           rather than
                                  order trades if                                               Exchange prices
                                  outside the NBBO) or                                          (BZX, C2, and
                                  NBB (NBO) for a                                               EDGX similarly
                                  particular option                                             use the NBBO),
                                  contract is equal to                                          which reflect
                                  or above (below) the                                          prices from the
                                  stop price specified                                          entire market.
                                  by the User; Users
                                  may not designate a
                                  Stop-Limit Order as
                                  All Sessions.
Straddle.......................  order to buy a number   6.53.............  N/A..............  Moved to Rule
                                  of call option                                                5.6(c);
                                  contracts and the                                             clarified that
                                  same number of put                                            the contracts
                                  option contracts on                                           may represent
                                  the same underlying                                           the same number
                                  security which                                                of shares of the
                                  contracts have the                                            underlying
                                  same exercise price                                           (currently says
                                  and expiration date;                                          ``shares at
                                  or an order to sell a                                         option'').
                                  number of call option
                                  contracts and the
                                  same number of put
                                  option contracts on
                                  the same underlying
                                  security which
                                  contracts have the
                                  same exercise price
                                  and expiration date
                                  (e.g., an order to
                                  buy two XYZ July 50
                                  calls and to buy two
                                  July 50 XYZ puts is a
                                  straddle order) In
                                  the case of adjusted
                                  option contracts, a
                                  straddle order need
                                  not consist of the
                                  same number of put
                                  and call contracts if
                                  such contracts both
                                  represent the same
                                  number of shares of
                                  the underlying.
Time-in-Force..................  period of time the      6.53(d)..........  BZX Rule 21.1(f),  Moved to Rule
                                  System will hold an                        C2 Rule 6.10(d),   5.6(d).
                                  order for potential                        and EDGX Rule
                                  execution; or quote                        21.1(f).
                                  for potential
                                  execution; unless
                                  otherwise specified
                                  in the Rules or the
                                  context indicates
                                  otherwise, the
                                  Exchange determines
                                  which of the
                                  following Times-in-
                                  Force are available
                                  on a class, system,
                                  or trading session
                                  basis; current Rule
                                  6.53C (which the
                                  Exchange intends to
                                  update and move to
                                  Rule 5.33 in the
                                  shell Rulebook) will
                                  set forth the Times-
                                  in-Force the Exchange
                                  may make available
                                  for complex orders.
Day............................  time-in-force that      6.53(d)..........  BZX Rule           Moved to Rule
                                  means an order to buy                      21.1(f)(3), C2     5.6(d).
                                  or sell that, if not                       Rule 6.10(d),
                                  executed, expires at                       and EDGX Rule
                                  the RTH market close.                      21.1(f)(3).
Fill-or-Kill/FOK...............  time-in-force that      6.53(d) and        BZX Rule           Moved to Rule
                                  means an order that     6.44.04.           21.1(f)(5), C2     5.6(d).
                                  is to be executed in                       Rule 6.10(d),
                                  its entirety as soon                       and EDGX Rule
                                  as the System                              21.1(f)(5).
                                  receives it and, if
                                  not so executed,
                                  cancelled; the System
                                  considers an FOK
                                  order to be an AON
                                  order.
Good-til-Cancelled/GTC.........  time-in-force that      6.53(d)..........  BZX Rule           Moved to Rule
                                  means, if after entry                      21.1(f)(4), C2     5.6(d).
                                  into the System, the                       Rule 6.10(d),
                                  order is not fully                         and EDGX Rule
                                  executed, the order                        21.1(f)(4).
                                  (or unexecuted
                                  portion) remains
                                  available for
                                  potential display or
                                  execution (with the
                                  same timestamp)
                                  unless cancelled by
                                  the entering User, or
                                  until the option
                                  expires, whichever
                                  comes first.
Good-til-Date/GTD..............  time-in-force that      N/A..............  BZX Rule           Added to Rule
                                  means, if after entry                      21.1(f)(1, C2      5.6(d); similar
                                  into the System, the                       Rule 6.10(d),      to GTC orders,
                                  order is not fully                         and EDGX Rule      except it
                                  executed, the order                        21.1(f)(1).        provides Users
                                  (or unexecuted                                                with additional
                                  portion) remains                                              flexibility to
                                  available for                                                 have an order
                                  potential display or                                          automatically
                                  execution (with the                                           cancel at a
                                  same timestamp) until                                         specific time on
                                  a date and time                                               a specific date,
                                  specified by the                                              rather than
                                  entering User unless                                          manually cancel
                                  cancelled by the                                              a GTC order at
                                  entering User.                                                that time
                                                                                (similar to Cboe
                                                                                Affiliated
                                                                                Exchanges'
                                                                                rules).

Immediate-or-Cancel/IOC........  time-in-force for a     6.53(d)..........  BZX Rule           Moved to Rule
                                  limit order that is                        21.1(f)(2), C2     5.6(d).
                                  to be executed in                          Rule 6.10(d),
                                  whole or in part as                        and EDGX Rule
                                  soon as the System                         21.1(f)(2).
                                  receives it; the
                                  System cancels and
                                  does not post to the
                                  Book any portion of
                                  an IOC order (or
                                  unexecuted portion)
                                  not executed
                                  immediately on the
                                  Exchange or another
                                  options exchange.
Limit-on-Close/LOC.............  a limit order that may  6.1A(f) and        .................  Moved to Rule
                                  not execute on the      6.53(d).                              5.6(d) and
                                  Exchange until three                                          separated from
                                  minutes prior to RTH                                          MOC definition;
                                  market close; at that                                         updated (as
                                  time, the System                                              discussed
                                  enters LOC orders                                             below).
                                  into the Book in time
                                  sequence (based on
                                  the times at which
                                  the System initially
                                  received them), where
                                  they may be processed
                                  in accordance with
                                  current Rule 6.45 (to
                                  be moved to Rule 5.32
                                  in the shell
                                  Rulebook); the System
                                  cancels an LOC order
                                  (or unexecuted
                                  portion) that does
                                  not execute by the
                                  RTH market close;
                                  Users may not
                                  designate an LOC
                                  order as All Sessions.
Market on Close/MOC............  a market order that     6.1A(f) and        .................  Moved to Rule
                                  may not execute on      6.53(d).                              5.6(d) and
                                  the Exchange until                                            separated from
                                  three minutes prior                                           LOC definition;
                                  to RTH market close;                                          updated (as
                                  at that time, the                                             discussed
                                  System enters MOC                                             below).
                                  orders into the Book
                                  in time sequence
                                  (based on the times
                                  at which the System
                                  initially received
                                  them), where they may
                                  be processed in
                                  accordance with
                                  current Rule 6.45 (to
                                  be moved to Rule 5.32
                                  in the shell
                                  Rulebook); the System
                                  cancels an MOC order
                                  (or unexecuted
                                  portion) that does
                                  not execute by the
                                  RTH market close;
                                  Users may not
                                  designate an MOC
                                  order as All Sessions.
At the Open/OPG................  time-in-force means an  6.53(d)..........  BXZ Rule           Moved to Rule
                                  order that may only                        21.1(f)(6), C2     5.6(d).
                                  participate in the                         Rule 6.10(d),
                                  Opening Process on                         and EDGX Rule
                                  the Exchange; the                          21.1(f)(6).
                                  System cancels an OPG
                                  order (or unexecuted
                                  portion) that does
                                  not execute during
                                  the Opening Process.
----------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------

    \25\ In addition to determining the availability of AONs on a
class basis, the Exchange may restrict the entry of AONs on a series
basis when it deems necessary to maintain a fair and orderly market.
This is consistent with current Rules 6.44.03 and 6.53, which the
proposed rule change deletes from the current Rulebook. The Exchange
will describe the proposed price adjust process in a future rule
filing, but it will be equivalent to the price adjust process
described in EDGX Rule 21.1(i).
    \26\ The Exchange intends to move Rule 6.82 from the current
Rulebook to Rule 5.67 in the shell Rulebook in a separate rule
filing. The substance of the rule will not change.
    \27\ The proposed rule change deletes Rule 6.44, Interpretation
and Policy .05. As noted above, the Exchange will make Minimum
Quantity orders available for electronic trading (currently, the
Exchange only makes these orders available for open outcry trading).
Additionally, because Minimum Quantity orders will be IOC (and thus
not rest in the Book), there is no need to address the priority of
Minimum Quantity orders.
    \28\ The Exchange intends to move Rule 6.45 from the current
Rulebook to Rule 5.32 in the shell Rulebook in a separate rule
filing. The rule will remain substantively the same.
    \29\ See BZX Rule 21.1(i), C2 Rule 6.12(b), and EDGX Rule
21.1(i) for a description of the Price Adjust process, which the
Exchange will propose to add to the shell Rulebook in a separate
filing.
    \30\ The Exchange will move provisions related to the priority
of Reserve Orders in a separate filing.
---------------------------------------------------------------------------

    The proposed rule change also makes nonsubstantive changes to the
definitions of certain order types, Order Instructions, and Times-in-
Force, including to make the rule provisions plain English, update
defined terms, and add clarifying language. The Exchange will also add
appropriate cross-references in the definitions of order types, Order
Instructions, and Times-in-Force as the applicable cross-referenced
Rules are moved from the current Rulebook to the shell Rulebook. The
proposed rule change deletes current Rules in the above table from the
current Rulebook, as further discussed below.
    As noted above, the proposed rule change adds the following Order
Instructions to proposed Rule 5.6(c), which are currently available on
the Cboe Affiliated Exchanges, as indicated above.
     AON: The Exchange currently permits AON orders.\31\ The
proposed rule change does not permit a User to designate an AON order
as Post Only.\32\ An AON order's size contingency, and the fact that
AON orders have last priority while resting in the Book,\33\ will
provide AON orders resting on the Book with few opportunities for AON
orders to receive an execution. Additionally, Post Only orders are
intended to add displayed liquidity to the Book; because AON orders are
not displayed, the purpose of a Post Only instruction conflicts with
AON functionality. For these reasons, the Exchange believes there will
be minimal investor demand for Post Only AON orders.\34\ The

Exchange believes it is appropriate to not restrict the opportunities
for execution of an AON order to the minimal execution opportunities
that would exist for an AON order while resting on the Book. This
ensures that an AON order may execute upon entry if there is sufficient
size resting on the Book, as well as have an opportunity for execution
if it cannot so execute.
---------------------------------------------------------------------------

    \31\ See Rule 6.53.
    \32\ As discussed below, a Post Only order may not, among other
things, remove liquidity from the Book.
    \33\ See Rule 6.45.
    \34\ Cboe Options does not currently offer a Post Only
instruction. Additionally, other exchanges, such as ISE and NOM,
only permit AON orders to be entered as IOC, and thus AON orders at
those options exchanges would only execute upon entry and never rest
on the book (and thus Post Only, if available on those exchanges,
would not be permitted).
---------------------------------------------------------------------------

    Additionally, the proposed rule change only permits Users to apply
MCN (MTP cancel newest), but no other MTP Modifiers, to an AON
order.\35\ Proposed Rule 5.6(c) provides that an incoming order marked
with the MCN Modifier will not execute against opposite side resting
interest market with any MTP modifier originating from the same Unique
Identifier. The incoming order marked with the MCN modifier will be
cancelled back to the originating User(s). The resting order marked
with an MTP modifier will remain on the Book. The Exchange believes
there will be little demand for the use of any MTP Modifiers on AON
orders given that primarily retail investors submit AONs, and retail
investors are unlikely to have interest on both sides of the market.
Therefore, orders of different retail investors would have the
opportunity to execute against each other, unlike a broker who may have
orders resting on both sides of the market and may want to avoid those
orders executing against each other. Therefore, the Exchange believes
offering one MTP Modifier for AON orders is sufficient. The Exchange
believes MCN is the most appropriate MTP modifier for AON orders,
because it is the simplest modifier to implement from a System
perspective and an offering of other MTP modifier for investors would
present significant technical complexities given the size contingency
of AON orders.\36\ Additionally, the Exchange has determined to handle
an AON order with any other MTP Modifier as an MCN rather than cancel
the AON, because the proposed rules provide investors with sufficient
transparency regarding how the System will handle AON orders with MTP
Modifiers, and Users may achieve other results manually if so desired.
For example, if User were to prefer to have a resting order with an MTP
Modifier cancel and let the newer AON order rest, it could manually
cancel the resting order and then resubmit the AON order.
---------------------------------------------------------------------------

    \35\ If a User applies any other MTP Modifier to an AON order,
the System will handle it as an MCN).
    \36\ Additionally, the Decrement and Cancel MTP Modifier is
inconsistent with an AON order, because it may result in partial
execution of an order.
---------------------------------------------------------------------------

    The Exchange currently only offers match trade prevention only for
market-makers, and thus the current rules regarding AON orders contains
no restrictions on the use of match trade prevention instructions, as
it would only be available to market-makers that submit AON orders.
Because the Exchange will have match-trade prevention functionality
available for all Users (as proposed) and not just Market-Makers, the
Exchange believes it is appropriate to provide this functionality to
all Users that submit AON orders and want match trade prevention
functionality. The rules of other exchanges are also silent on whether
any match trade prevention instructions are available for AON orders.
     Cancel Back: A Book Only or Post Only order a User
designates to not be subject to the Price Adjust Process (which the
Exchange will add to the shell Rulebook in a separate filing), which
the System cancels or rejects if it locks or crosses the opposite side
of the ABBO. The System executes a Book Only--Cancel Back order against
resting orders, and cancels or rejects a Post Only--Cancel Back order,
that locks or crosses the opposite side of the BBO. The proposed
functionality is partially included in the definition of Post Only in
the BZX and EDGX rules,\37\ and substantially similar to C2 Rule
6.10(c). The proposed rule change is also consistent with linkage
rules. Book Only orders and Post Only orders do not route by
definition, and the Cancel Back instruction provides an option for
Users to determine how these non-routable orders will be handled within
the System, consistent with their definitions.\38\
---------------------------------------------------------------------------

    \37\ See BZX Rule 21.6(d)(8); and EDGX Rule 21.6(d)(8).
    \38\ C2 Rule 6.10(c) contains a substantively similar Cancel
Back instruction. EDGX Rule 11.6(b) (which relates to the EDGX
Equities market) contains a similar Cancel Back instruction.
---------------------------------------------------------------------------

     Match Trade Prevention (MTP) Modifiers: Current Rule
6.53(c) defines a Market-Maker Trade Prevention Order as an IOC order
market with the Market-Maker Trade Prevention designation. A Market-
Maker Trade Prevention Order that would trade against a resting quote
or order for the same Market-Maker will be cancelled, as will the
resting quote or order (unless the Market-Maker Trade Prevention Order
is received while an order for the same Market-Maker is subject to an
auction, in which case only the Market-Maker Trade Prevention Order
will be cancelled). The Exchange proposes to adopt MTP modifiers
substantively the same as those available on the Cboe Affiliated
Exchanges.\39\ The proposed MTP modifiers expand this functionality to
all Users, rather than just Market-Makers, and provide Users with
multiple options regarding how the System handles orders with the same
Unique Identifiers. Pursuant to the proposed rule change, an order
designated with any MTP modifier is not executed against a resting
opposite side order also designated with an MTP modifier and
originating from the same Unique Identifier. Except for the MDC
modifier described below, the MTP modifier on the incoming order
controls the interaction between two orders marked with MTP modifiers:
---------------------------------------------------------------------------

    \39\ See BZX Rule 21.1(g), C2 Rule 6.10(c), and EDGX Rule
21.1(g).
---------------------------------------------------------------------------

    [cir] MTP Cancel Newest (``MCN''): An incoming order marked with
the ``MCN'' modifier does not execute against a resting order marked
with any MTP modifier originating from the same Unique Identifier. The
System cancels or rejects the incoming order, and the resting order
remains in the Book.
    [cir] MTP Cancel Oldest (``MCO''): An incoming order marked with
the ``MCO'' modifier does not execute against a resting order marked
with any MTP modifier originating from the same Unique Identifier. The
System cancels or rejects the resting order, and processes the incoming
order in accordance with current Rule 6.45 (which the Exchange will
move to the shell Rulebook in a separate filing).
    [cir] MTP Decrement and Cancel (``MDC''): An incoming order marked
with the ``MDC'' modifier does not execute against a resting order
marked with any MTP modifier originating from the same Unique
Identifier. If both orders are equivalent in size, the System cancels
or rejects both orders. If the orders are not equivalent in size, the
System cancels or rejects the smaller of the two orders and decrements
the size of the larger order by the size of the smaller order, which
remaining balance remains on or processes in accordance with the
equivalent of current Rule 6.45 (which the Exchange will move to the
shell Rulebook in a separate filing), as applicable. Notwithstanding
the foregoing, unless a User instructs the Exchange not to do so, the
System cancels or rejects both orders if the resting order is marked
with any MTP modifier other than MDC and the incoming order is smaller
in size than the resting order.
    [cir] MTP Cancel Both (``MCB''): An incoming order marked with the
``MCB'' modifier does not execute against a

resting order marked with any MTP modifier originating from the same
Unique Identifier. The System cancels or rejects both orders.
    [cir] MTP Cancel Smallest (``MCS''): An incoming order marked with
the ``MCS'' modifier does not execute against a resting order marked
with any MTP modifier originating from the same Unique Identifier. If
both orders are equivalent in size, the System cancels or rejects both
orders. If the orders are not equivalent in size, the System cancels or
rejects the smaller of the two orders, and the larger order remains on
the Book or processes in accordance with the equivalent of current Rule
6.45 (which the Exchange will move to the shell Rulebook in a separate
filing), as applicable.
    The proposed MTP functionality is designed to prevent market
participants from unintentionally causing a proprietary self-trade. The
Exchange believes these modifiers will allow firms to better manage
order flow and prevent undesirable executions with themselves. Trading
Permit Holders may have multiple connections into the Exchange
consistent with their business needs and function. As a result, orders
routed by the same firm via different connections may, in certain
circumstances, trade against each other. The proposed modifiers provide
Trading Permit Holders with functionality (in addition to what is
available on Cboe Options today) with the opportunity to prevent these
potentially undesirable trades. The Exchange notes that offering the
MTP modifiers may streamline certain regulatory functions by reducing
false positive results that may occur on Exchange generated wash
trading surveillance reports when orders are executed under the same
Unique Identifier. For these reasons, the Exchange believes the MTP
modifiers offer users enhanced order processing functionality that may
prevent potentially undesirable executions without negatively impacting
broker-dealer best execution obligations.
     Post Only Order: An order the System ranks and executes
pursuant to current Rule 6.45 (which the Exchange will move to the
shell Rulebook in a separate filing), subjects to the Price Adjust
process, or cancels (including if it is not subject to the Price Adjust
process and it would lock or cross a Protected Quotation on another
exchange), as applicable (in accordance with User instructions), except
the order may not remove liquidity from the Book or route away to
another Exchange. This proposed instructions is nearly identical to the
Cboe Options Only order instruction (the Book Only order instruction as
proposed), except it will also not remove liquidity from the Book. This
proposed instruction provides Users with flexibility to submit an order
to add liquidity to the Book without interacting with then-currently
resting interest and incurring applicable taker fees.
     Reserve Order: A limit order with both a portion of the
quantity displayed (``Display Quantity'') and a reserve portion of the
quantity (``Reserve Quantity'') not displayed. Both the Display
Quantity and Reserve Quantity of the Reserve Order are available for
potential execution against incoming orders. When entering a Reserve
Order, a User must instruct the Exchange as to the quantity of the
order to be initially displayed by the System (``Max Floor''). If the
Display Quantity of a Reserve Order is fully executed, the System will,
in accordance with the User's instruction, replenish the Display
Quantity from the Reserve Quantity using one of the below replenishment
instructions. If the remainder of an order is less than the
replenishment amount, the System will display the entire remainder of
the order. The System creates a new timestamp for both the Display
Quantity and Reserve Quantity of the order each time it is replenished
from reserve.
    [cir] Random Replenishment: An instruction that a User may attach
to an order with Reserve Quantity where the System randomly replenishes
the Display Quantity for the order with a number of contracts not
outside a replenishment range, which equals the Max Floor plus and
minus a replenishment value established by the User when entering a
Reserve Order with a Random Replenishment instruction.
    [cir] Fixed Replenishment: For any order for that a User does not
select Random Replenishment, the System will replenish the Display
Quantity of an order with the number of contracts equal to the Max
Floor.
    Current Rule 6.53(c) describes current reserve order functionality
available on the Exchange. The proposed functionality is generally the
same as the current functionality but enhances the use of reserve
orders by providing flexibility for Users to determine whether the
reserve replenishment amount is fixed or random. This proposed
functionality is substantively the same as that available on the Cboe
Affiliated Exchanges.\40\
---------------------------------------------------------------------------

    \40\ See BZX Rule 21.1(d)(1), C2 Rule 6.10(c), and EDGX Rule
21.1(d)(1).
---------------------------------------------------------------------------

    The proposed rule change also modifies and adds detail to the
definitions of MOC and LOC orders. Currently, an MOC order is a market
or limit order to be executed as close as possible to the close of the
market near to or at the closing price for the particular option
series. The proposed rule change specifies that an MOC or LOC may not
execute on the Exchange until three minutes prior to RTH market
close.\41\ The System enters LOC and MOC orders into the Book in time
sequence (based on the times at which the Exchange initially received
them), where they may be processed in accordance with current Rule 6.45
(which the Exchange intends to move to Rule 5.32 in the shell
Rulebook).\42\ The Exchange notes that it does not have a closing
auction in which market participants may participate in an auction
rotation that determines the closing price for a series, like that of
the equities space, but that the proposed MOC and LOC orders merely
become executable three minutes prior to the close of RTH. The Exchange
queues LOC and MOC orders in the System until three minutes before the
RTH market close. At that time, the System handles a LOC or MOC order
as a limit order or market order, as applicable, and processes them in
accordance with Rule 6.45. The Exchange believes that three minutes
prior to the RTH market close is a reasonable time prior to the market
close to trigger MOC and LOC orders, as it provides those orders with
sufficient time to interact with contra-side interest and potentially
execute at a time close to the RTH market close. The proposed LOC and
MOC order definitions also provide that the System cancels an LOC order
or an MOC order (or an unexecuted portion of an LOC or MOC order) that
does not execute by the RTH market close. This is consistent with
current functionality and the purpose of these orders, which is to
execute near the RTH market close on the day they were submitted to the
Exchange. As the execution of MOC and LOC orders is linked to the RTH
market close, such orders will be valid only during RTH; however, the
System will accept such orders during any trading session.\43\ A User
may not designate an MOC or LOC order as ``All Sessions''; any MOC or
LOC order designated as All Sessions will be rejected.
---------------------------------------------------------------------------

    \41\ The Exchange currently triggers MOC and LOC orders three
minutes prior to the RTH market close.
    \42\ Rule 6.45 describes how the System processes orders and
quotes in the Book.
    \43\ The Exchange notes that an RTH Only MOC or LOC order
submitted during GTH will remain on the book until the close of RTH.
---------------------------------------------------------------------------

    The proposed rule change deletes the definition of a market-if-
touched order and a facilitation order, as those order

types are not currently available on the Exchange and will not be
available following the technology migration. The Exchange will move
the definitions of an AIM Sweep order and Sweep and AIM order to the
shell Rulebook in separate rule filings.
Deletion of Current Rules
    As noted above, to the extent the proposed rule change moves
current Rules from the current Rulebook to the shell Rulebook, the
proposed rule change also deletes those current Rules from the current
Rulebook (as noted above, some rules will be moved to the shell
Rulebook in future rule filings). However, these Rules will remain in
effect and on the current Rulebook until completion of the technology
migration, at which time the Rules in the shell Rulebook will take
effect.
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.\44\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \45\ 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) \46\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \44\ 15 U.S.C. 78f(b).
    \45\ 15 U.S.C. 78f(b)(5).
    \46\ Id.
---------------------------------------------------------------------------

    In particular, the proposed rule changes are generally intended to
add or align certain system functionality currently offered by the
Exchange and the Cboe Affiliated Exchanges in order to provide a
consistent technology offering for the Cboe Affiliated Exchanges. A
consistent technology offering, in turn, will simplify the technology
implementation, changes and maintenance by Users of the Exchange that
are also participants on Cboe Affiliated Exchanges. The proposed rule
change does not propose to implement new or unique functionality that
has not been previously filed with the Commission or is not available
on Cboe Affiliated Exchanges. The Exchange notes that the proposed rule
text is generally based on rules of Cboe Affiliated Exchanges and is
different only to the extent necessary to conform to the Exchange's
current rules, retain intended differences based on the Exchange's
market model, or make other nonsubstantive changes to simplify,
clarify, eliminate duplicative language, or make the rule provisions
plain English.
    To the extent a proposed rule change is based on an existing Cboe
Affiliated Exchange rule, the language of Exchange Rules and Cboe
Affiliated Exchange rules may differ to extent necessary to conform
with existing Exchange rule text or to account for details or
descriptions included in the Exchange's Rules but not in the applicable
Cboe Affiliated Exchange rule, such as references to trading sessions,
which apply to the Exchange but not the Cboe Affiliated Exchanged, as
they do not have Global Trading Hours. Where possible, the Exchange has
substantively mirrored Cboe Affiliated Exchange rules, because
consistent rules will simplify the regulatory requirements and increase
the understanding of the Exchange's operations for Trading Permit
Holders that are also participants on Cboe Affiliated Exchanges. The
proposed rule change would provide greater harmonization between the
rules of the Cboe Affiliated Exchanges, resulting in greater uniformity
and less burdensome and more efficient regulatory compliance. As such,