[Federal Register Volume 84, Number 85 (Thursday, May 2, 2019)]
[Notices]
[Pages 18905-18907]
[FR Doc No: 2019-08910]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85725; File No. SR-CboeEDGX-2019-024]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating To Replace Obsolete Terminology

April 26, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 17, 2019, Cboe EDGX Exchange, Inc. (``Exchange'' or ``EDGX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') is filing
with the Securities and Exchange Commission (``Commission'') a proposed
rule change to replace obsolete terminology. The text of the proposed
rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    The Exchange proposes to amend its rules to replace certain
obsolete terms. Specifically, on November 30, 2018, the Exchange filed
a rule filing, SR-CboeEDGX-2018-058, which, among other things, adopted
the definition of

EFID in Rule 21.1(k). More specifically, ``EFID'' is an executing firm
ID and refers to what the automated trading system used by EDGX Options
for the trading of options contracts (``System'') uses to identify the
Member and the clearing number for the execution of orders and quotes
submitted to the System on its options platform.\5\ At the time, the
Exchange noted that BZX's rules had referred only to the term ``MPID'',
which is a Member's market participant identifier and generally
equivalent to an EFID. The Exchange also noted however, that MPIDs are
only used for equities trading and that the Exchange does not utilize
MPIDs on its options platform, but rather uses EFIDs. As such, the
Exchange now proposes to update all references to ``market participant
ID'' and ``MPID'' to ``executing firm ID'' and ``EFID'' under Chapter
XXI, which chapter relates to the trading of options listed on EDGX
Options (i.e., update terms in Rule 21.1(c)(1), Rule 21.1(g), and Rule
21.10(a)).
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    \5\ See Securities Exchange Act Release No. 84778 (December 10,
2018) 83 FR 64384 (December 14, 2018) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change Relating To Amend
Its Provision Related to Its Risk Monitor Mechanism) (SR-CboeEDGX-
2018-058).
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    The Exchange also proposes to further clarify Rule 21.1(c)(1),
which rule defines ``Attributable Orders''. Particularly, an
Attributable Order is currently defined as orders that are designated
for display (price and size) including the User's market participant
identifier (``MPID''). As discussed above, the Exchange proposes to
replace the reference to ``market participant identifier (``MPID'')''
to ``executing Firm ID (``EFID'')''. The Exchange proposes to also make
clear that Users may use other unique identifiers on Attributable
Orders in addition to, or in lieu of, EFIDs. More specifically, unique
identifiers are other identifiers chosen by a User and currently
comprised of a combination of four alpha characters appended to an
Attributable Order. These identifiers allow users to apply a more
granular, user-defined identifier on an Attributable Order to better
track their orders. The Exchange notes that Attributable Orders are
optional order designations and Users are currently able to allocate a
user-defined unique identifier for internal, order tracking purposes.
Additionally, the Exchange notes regardless of whether a User uses an
Attributable Order and regardless of whether a User determines to
display its EFID and/or another unique identifier on such Attributable
Order, there is no impact on the Exchange's audit trail, its ability to
surveil, its ability to match or clear trades, its ability to
disseminate real-time or near real time trade information or any risk
control functionality. Indeed, such identifiers on Attributable Orders
are for display purposes only. Even where a User determines to append a
unique identifier and not an EFID on an Attributable Order, the User's
EFID will still be associated with such order and the Exchange's system
will continue to be able to identify the Member and the clearing number
for the execution of the order. The Exchange further notes that the
proposed definition under 21.1(c)(1) is consistent with the definition
of Attributable Orders on its affiliate, Cboe C2 Exchange, Inc.
(``C2'').\6\ The proposed rule change to Rule 21.1(c)(1) provides
Members flexibility in what identifiers it may use on Attributable
Orders and also makes clear that User's may use unique identifiers
other than EFIDs. The Exchange notes no substantive change is being
made by this rule change. The Exchange is merely updating its options
rules to reflect the accurate terminology relating to market
participant identifiers and clarifying the current ways in which a User
may designate an optional display feature.
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    \6\ See C2 Rule 6.10.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
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    The Exchange believes its proposed rule change to update
inaccurately defined terms or references under Rule 21.1(c)(1), Rule
21.1(g), Rule 21.1(k)(3), and Rule 21.10(a) will provide consistency
and transparency in the rules and alleviate potential confusion,
thereby removing impediments to and perfecting the mechanism of a free
and open market and a national market system and protecting investors
and the public interest. Additionally, the Exchange believes that the
proposed change to the definition of Attributable Orders provides
consistency across the corresponding C2 Rule 6.10 and makes clear that
User's may use other unique identifiers, which, as discussed above, are
defined by the User and are currently comprised of a combination of
four alpha characters. As a result, the proposed change to this
definition provides further consistency and transparency in the
Exchange's rules and with that of its affiliate's rules and alleviates
potential confusion surrounding the designation of Attributable Orders,
which protects investors and the public interest. The Exchange also
believes that providing Users the option of using identifiers other
than EFIDs provides Users more flexibility and ability to better track
their orders. As noted above, the proposed filing does not
substantively change any Member abilities under the rules, nor does it
impact the Exchange's audit trail, its ability to surveil, its ability
to match or clear trades, its ability to disseminate real-time or near
real time trade information or any risk control functionality. The
proposed change merely corrects inadvertent oversights with respect to
terminology and makes explicit that a User may designate Attributable
Orders by using EFIDs and/or other unique identifiers, which is an
optional feature for display purposes only and that is currently
available to all Users.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
does not address competitive issues, but rather, as discussed above, is
merely intended to correct an inadvertent uses of inaccurate or
obsolete terms, which will alleviate potential confusion.

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    Because the foregoing proposed rule change does not:
    A. Significantly affect the protection of investors or the public
interest;
    B. impose any significant burden on competition; and
    C. become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \10\ and
Rule 19b-4(f)(6) \11\ thereunder.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest as
it will allow the Exchange to immediately update its rulebook to
reflect current terminology and reflect how Users can designate
Attributable Orders. The Exchange has represented that no substantive
changes are being made to its rules and further, that the proposed rule
change will have no impact on (i) its ability to surveil, match or
clear trades, and disseminate trade information; (ii) risk control
functionality; or (iii) the Exchange's audit trail. Accordingly, the
Commission waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CboeEDGX-2019-024 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeEDGX-2019-024. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeEDGX-2019-024 and should be
submitted on or before May 23, 2019.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-08910 Filed 5-1-19; 8:45 am]
 BILLING CODE 8011-01-P


treatment of ECOs, without proposing any material substantive changes.
As noted herein, proposed Rule 980NYP is substantively the same as Arca
Options Rule 6.91P-O except as noted herein (including to account for
the Exchange's Customer priority/pro rata allocation model).

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

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

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\90\ In particular, the Commission finds that the
proposed rule change, as modified by Amendment No. 1, is consistent
with section 6(b)(5) of the Act,\91\ which requires, among other
things, that the Exchange's rules be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trad 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. This order
approves the proposed rule change in its entirety, although only
certain more significant aspects of the proposed rules are discussed
below.
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    \90\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \91\ 15 U.S.C. 78f(b)(5).
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    As described more fully above, the Exchange proposes to amend its
rules to enable the transition of options trading to the Exchange's
Pillar technology platform. The Exchange states that its affiliated
options exchange, NYSE Arca Options, as well as its affiliated equity
markets, are currently operating on Pillar, and that, for the
transition of the Exchange's options trading platform, the Exchange
proposes to use the same Pillar technology already in operation for its
affiliated markets. As discussed below, the majority of the proposed
rules are substantively identical to rules relating to the trading of
ECOs on the Pillar trading platform of NYSE Arca Options, which the
Commission approved previously.\92\
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    \92\ See Arca Options ECO Approval Order, supra note 7.
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A. Definitions

    The defined terms in proposed Exchange Rule 980NYP(a), except for
the proposed definition of DBBO, are substantively identical to the
defined terms in NYSE Arca Rule 6.91P-O(a). These defined terms should
help to clearly describe the trading of ECOs on the Exchange's Pillar
technology platform. The proposed definition of ECO identifies the
Complex Orders that will be eligible to trade electronically on the
Exchange.\93\ The proposed definitions of ``leg'' or ``leg market'' and
``ratio'' or ``leg ratio'' should help to clarify the terminology used
to describe the trading of ECOs.\94\ The proposed definitions of
``complex strategy'' and ``ECO Order Instruction'' are identical to
defined terms used on NYSE Arca, and the Exchange states that the
proposed definition of ECO Order Instruction will incorporate existing
Pillar order handling functionality in an auction.\95\ The proposed
definition of ``Away Market Deviation'' and ``Complex NBBO'' are
identical to NYSE Arca's definitions of these terms,\96\ and the
definition of Complex NBBO also is consistent with defined terms used
on other options exchanges.\97\ The proposed defined terms relating to
the operation of the COA, including the definitions of ``COA Order
Auction,'' ``COA Order,'' ``Request for Response,'' ``RFR Response,''
and ``Response Time Interval'' are substantively identical to defined
terms in the rules of NYSE Arca.\98\
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    \93\ Proposed Exchange Rule 980NYP(a)(7) defines an ECO to mean
a Complex Order, as defined in Exchange Rule 900.3NYP(f) that is
submitted electronically to the Exchange. Exchange Rule 900.3NYP(f)
defines a Complex Order as any order involving the simultaneous
purchase and/or sale of two or more option series in the same
underlying security (the ``legs'' or ``components'' of the Complex
Order), for the same account, in a ratio that is equal to or greater
than one-to-three (.333) and less than or equal to three-to-one
(3.00) and for the purpose of executing a particular investment
strategy. See American Pillar Omnibus Filing, supra note 12.
    \94\ See proposed Exchange Rules 980NYP(a)(8) and (9).
    \95\ See NYSE Arca Rule 6.91P-O(a)(4) and (6).
    \96\ See NYSE Arca Rules 6.91P-O(a)(1) and (2).
    \97\ See, e.g., BOX Rule 7240(a)(3) (stating that the term
``cNBBO'' means the best net bid and offer price for a Complex Order
Strategy based on the NBBO for the individual options components of
such Strategy); and MIAX Rule 518(a)(2)) (stating, in part, that the
cNBBO is calculated using the NBBO for each component of a complex
strategy to establish the best net bid and offer for a complex
strategy).
    \98\ See NYSE Arca Rule 6.91P-O(a)(3).
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    The proposed definition of DBBO is largely identical to the
definition of DBBO in NYSE Arca Rule 6.91P-O(a)(5), except that
proposed Exchange Rule 980NYP(a)(5)(A) provides that, when there is no
Exchange BB (BO), no ABB (ABO), and no Exchange BO (BB) for a component
leg of a complex strategy, the bid (offer) priced used to calculate the
DBBO will be the ABO (ABB) for that leg minus (plus) the collar amounts
specified in Exchange Rule 900.3NYP(a)(4)(C) (the ``collar value''); or
$0.01 if the result of subtracting one collar value from the offer
would be equal to or less than zero. As described more fully above, the
Exchange states that referencing the collar values in Exchange Rule
900.3NYP(a)(4)(C) will help to align the values used in calculating the
DBBO with the collar values used in other Exchange rules, thereby
providing internal consistency to the Exchange's rules.

B. ECO Order Types and Times-in-Force

    The proposed ECO order types--Limit Orders, Limit Orders, Limit
Orders designated as Complex Only Orders, and Complex QCCs--are
identical to order types currently available on NYSE Arca.\99\ In
addition, the proposed times-

in-force--Day, IOC, FOK, or GTC--are identical to the times-in-force
available for ECOs on NYSE Arca.\100\ Other options exchanges also
offer similar order types and times-in-force for complex orders.\101\
As described more fully above, proposed Exchange Rule 980NYP(b)(2)(C)
provides that an ECO designated as GTX (a ``COA GTX Order'') will not
be displayed, may be entered only during the Response Time Interval of
a COA, must be on the opposite side of the COA Order, and must specify
the price, size, and side of the market. Any remaining size of a COA
GTX Order that does not trade with the COA Order will be cancelled at
the end of the COA.\102\ The proposed COA GTX Order is substantively
identical to the ECO GTX Order provided in NYSE Arca Rule 6.91P-
O(b)(2)(C), except for the difference in the names of the orders.
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    \99\ See NYSE Arca Rule 6.91P-O(b)(1). The Exchange states that
allowing ECOs to be designated as Complex QCC is consistent with
current functionality not described in the Exchange's rules. The
Exchange rules addressing the trading of Complex QCC Orders are
included in the American Pillar Omnibus Filing.
    \100\ See NYSE Arca Rule 6.91P-O(b)(2). In addition, proposed
Exchange Rule 980NYP(b)(2)(A) states that an ECO designated as IOC
or FOK will be rejected if entered during a pre-open state, and
proposed Exchange Rule 980NYP(b)(2)(B) states that an ECO designated
as FOK must also be designated as a Complex Only Order. These
provisions are identical to NYSE Arca Rules 6.91P-O(b)(2)(A) and
(B), respectively.
    \101\ See, e.g., BOX Rule 7240(b)(4)(i) (allowing complex orders
to be entered as Fill-and-Kill orders, Limit Orders, Market Orders,
or Session Orders); ISE Options 3, Section 14(b) (allowing complex
orders to be entered as, among others, market orders, limit orders,
AON orders, Day orders, FOK orders, IOC orders, and GTC orders; and
MIAX Rule 518(b)(1) (permitting the entry of complex orders that are
limit orders, market orders, GTC, or day limit orders, among
others).
    \102\ See proposed Exchange Rule 980NYP(b)(2)(C).
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C. Priority and Pricing of ECOs

    Proposed paragraph (c) of Exchange Rule 980NYP is substantively
identical to paragraph (c) of NYSE Arca Rule 6.91P-O, except that
proposed paragraph (c) incorporates the priority provisions in Exchange
Rule 964NYP rather than NYSE Arca's price/time priority framework.
Proposed Exchange Rules 980NYP(c)(1)-(4) establish pricing requirements
for ECOs. Proposed Exchange Rule 980NYP(c)(1), which states that when
trading with the leg markets, an ECO will trade at the price(s) of the
leg markets unless the leg markets are priced more than the maximum
allowable Away Market Deviation, is identical to NYSE Arca Rule 6.91P-
O(c)(1).\103\ The Commission believes that specifying that an ECO will
trade at the price(s) of the leg markets provides clarity regarding the
prices at which ECOs will trade when executing against leg market
interest. The Commission believes that limiting execution prices to
prices within the maximum allowable Away Market Deviation for the
component legs of an ECO is designed to protect investors by helping to
prevent ECOs from executing at prices that do not reflect the current
market.\104\ Another options exchange has adopted a similar protection
for complex orders.\105\
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    \103\ Proposed Exchange Rule 980NYP(a)(1) provides that the Away
Market Deviation means the difference between the Exchange BB (BO)
for a series and the ABB (ABO) for that same series when the
Exchange BB (BO) is lower (higher) than the ABB (ABO). The maximum
allowable Away Market Deviation is the greater of $0.05 or 5% below
(above) the ABB (ABO) (rounded down to the nearest whole penny). No
ECO on the Exchange will execute at a price that would exceed the
maximum allowable Away Market Deviation on any component of the
complex strategy. The proposed definition of Away Market Deviation
is identical to the definition of that term in NYSE Arca Rule 6.91P-
O(a)(1).
    \104\ Proposed Exchange Rule 980NYP(a)(1) provides that the Away
Market Deviation means the difference between the Exchange BB (BO)
for a series and the ABB (ABO) for that same series when the
Exchange BB (BO) is lower (higher) than the ABB (ABO). The maximum
allowable Away Market Deviation is the greater of $0.05 or 5% below
(above) the ABB (ABO) (rounded down to the nearest whole penny). No
ECO on the Exchange will execute at a price that would exceed the
maximum allowable Away Market Deviation on any component of the
complex strategy.
    \105\ See BOX Rule 7240(a)(5) (providing that the `` 'Extended
cNBBO' means the maximum permissible net bid and offer execution
price for a Complex Order Strategy. The Extended cNBBO is calculated
by subtracting the Extended cNBBO Limit from the cNBB and adding the
Extended cNBBO Limit to the cNBO. In calculating the Extended cNBBO,
each side of the Extended cNBBO is rounded to the nearest penny
within the Extended cNBBO (i.e., the cNBB is rounded up to the
nearest penny and the cNBO is rounded down to the nearest penny'')).
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    As described more fully above, proposed Exchange Rules
980NYP(c)(2)-(4) provide that each component leg of an ECO will trade
at a price at or within the Exchange BBO for the series, and not at a
price of zero; allow ECOs to trade without consideration of prices of
the same complex strategy available on other exchanges; and allow
complex strategies to be quoted and traded in $0.01 increments. These
provisions are identical to NYSE Arca Rules 6.91P-O(c)(2)-(4) and are
consistent with rules adopted by other options exchanges.\106\
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    \106\ See, e.g., BOX Rule 7240(b)(3)(iii) (stating that the
exchange will filter inbound Complex Orders to ensure that each leg
of a Complex Order will be executed at a price that is equal to or
better than the BOX BBO for each of the component series); and Cboe
Rule 5.33(f)(2)(A)(iii) (stating that the System does not execute a
complex order at a price that would cause any component of the
complex strategy to be executed at a price worse than the individual
component prices on the Simple Book). See also Cboe Rule
5.33(f)(2)(A)(i) and MIAX Rule 518(c)(1)(iii) (prohibiting any
component leg of a complex strategy from executing at a price of
zero); BOX Rule 7420(b)(3) (stating that Complex Orders will be
executed without consideration of any prices on the same Strategy
that might be available on other exchanges); and ISE Options 3,
Section 14(c)(1) (stating that bids and offers for Complex Options
Strategies may be expressed in one cent ($0.01) increments, and the
options leg of Complex Options Strategies may be executed in one
cent ($0.01) increments, regardless of the minimum increments
otherwise applicable to the individual options legs of the order.
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D. Execution of ECOs at the Open or Reopening After a Trading Halt

    The Commission believes that the ECO opening auction process in
proposed Exchange Rule 980NYP(d) is designed to provide for the orderly
opening, or re-opening after a trading halt, of ECOs on the Exchange.
The ECO Auction Collar in proposed Exchange Rule 980NYP(d)(3)(A), which
is identical to the ECO Auction Collar in NYSE Arca Rule 6.91P-
O(d)(3)(A), protects the priority of resting displayed Customer leg
market interest by providing that when the DBO (DBB) used to determine
the ECO Auction Collar is calculated using the Exchange BBO for all
legs of the complex strategy and all the Exchange BBOs have displayed
Customer interest, the upper (lower) price of the ECO Auction Collar
will be one penny ($0.01) times the smallest leg ratio inside the DBO
(DBB). As described more fully above, proposed Exchange Rule
980NYP(d)(3)(B), which is identical to NYSE Arca Rule 6.91P-O(d)(3)(B),
provides that the ECO Auction Price will be the price at which the
maximum volume of ECOs can be traded in an ECO Opening Auction and
establishes a process for identifying the ECO Auction Price when more
than one potential auction price is available. The Commission believes
that proposed Exchange Rule 980NYP(d)(3)(B) provides transparency with
respect to the process for determining the ECO Auction Price and is
designed to allow the maximum volume of ECOs to trade during the
opening or reopening. The Exchange states that the processing of ECOs
received during an ECO Opening Auction Process, as described in
proposed Exchange Rule 980NYP(d)(4), and the transition to continuous
trading following an ECO Opening Auction Process, as described in
proposed Exchange Rule 980NYP(d)(5), are identical to the processing
that occurs under NYSE Arca Rules 6.91P-O(d)(4) and (5) and will
promote consistency across the Exchange's options trading platforms.
The Commission believes that proposed Exchange Rules 980NYP(d)(4) and
(5), which are identical to NYSE Arca Rules 6.91P-O(d)(4) and (5),
should help to provide for an orderly opening process.

    The ECO opening auction process in proposed Exchange Rule 980NYP(d)
will operate in the same manner as the ECO opening auction process
provided in NYSE Arca Rule 6.91P-O(d), except that proposed Exchange
Rule 980NYP(d) will incorporate the Exchange's priority provisions
rather than NYSE Arca's price/time priority model. Accordingly,
proposed Exchange Rule 980NYP(d)(3)(iii) states that ECOs eligible to
participate in the ECO Opening or Reopening Auction Process will be
ranked as provided in Exchange Rule 964NYP(c)-(g) and will trade as
follows: (a) ECOs priced better than the ECO Auction Price will trade
based on ranking; and (b) ECOs priced at the ECO Auction Price will
trade per Exchange Rule 964NYP(j). The Commission believes that
applying these priority provisions to ECOs that are eligible to
participate in the ECO opening or reopening auction process will ensure
that ECOs that trade in an ECO opening or reopening auction trade in a
manner that is consistent with the Exchange's existing priority rules.

E. Execution of ECOs During Core Trading Hours

    Proposed Exchange Rule 980NYP(e), which addresses the trading of
ECOs during core trading hours, is substantially identical to NYSE Arca
Rule 6.91P-O(e), except that Exchange Rule 980NYP(e)(1)(A) provides for
order allocations pursuant to Exchange Rule 964NYP, rather than in
price/time priority.\107\ Proposed Exchange Rule 980NYP(e)(1)(A) is
designed to provide for the execution of complex orders while
protecting the priority of established leg market interest. Under
proposed Exchange Rule 980NYP(e)(1)(A), after a complex strategy is
open for trading, an ECO will trade with the best-priced contra-side
interest and if, at a price, the leg markets can trade with an eligible
ECO, in full or in a permissible ratio, the leg markets will trade
first at that price, pursuant to Exchange Rule 964NYP, until the
quantities on the leg markets are insufficient to trade with the ECO,
at which time the ECO will trade with contra-side ECOs resting in the
Consolidated Book at that price. This process is consistent with the
rules of another options exchange.\108\
---------------------------------------------------------------------------

    \107\ Proposed Exchange Rule 980NYP(e)(1)(A) states that if, at
a price, the leg markets can trade with an eligible ECO, in full or
in a permissible ratio, the leg markets will trade first at that
price, pursuant to Rule 964NYP, until the quantities on the leg
markets are insufficient to trade with the ECO, at which time such
ECO will trade with contra-side ECOs resting in the Consolidated
Book at that price, pursuant to Rule 964NYP.
    \108\ See BOX Rule 7240(b)(2)(ii). See also BOX Rules
7240(b)(3)(i) and (ii). BOX Rule 7240(b)(2)(ii) provides that ``A
Complex Order for which a leg of such Complex Order's underlying
Strategy is not in a one-to-one ratio with each other leg of such
Strategy will execute against the bids and offers on the BOX Book
for the individual legs of the Strategy for all of the quantity
available at the best price in a permissible ratio until the
quantities remaining on the BOX Book are insufficient to execute
against the Complex Order. Following such execution, a Complex Order
may execute against another Complex Order and the component legs of
the Complex Orders may trade at prices equal to the corresponding
prices on the BOX Book.'' BOX Rule 7240(b)(3)(i) states that
``Complex Orders will be automatically executed against bids and
offers on the Complex Order book in price/time priority; provided,
however, that Complex Orders will execute against Complex Orders
only after bids and offers at the same net price on the BOX Book for
the individual legs have been executed.'' BOX Rule 7240(b)(3)(ii)
states that ``Complex Orders will be automatically executed against
bids and offers on the BOX Book for the individual legs of the
Complex Order to the extent that the Complex Order can be executed
in full or in a permissible ratio by such bids and offers.''
---------------------------------------------------------------------------

    Proposed Exchange Rule 980NYP(e)(1)(B), which is identical to NYSE
Arca Rule 6.91(e)(1)(B), provides that an ECO will not trade with
orders in the leg markets designated as AON, FOK, or with an MTS
Modifier. The Exchange states that this provision is designed to
simplify the operation of ECO trading and to make clear that ECOs will
not trade with orders that have conditional size-related instructions.
Other options exchanges have adopted similar restrictions with respect
to the execution of AON orders.\109\
---------------------------------------------------------------------------

    \109\ See, e.g., Cboe Rules 5.33(d)(5) (stating that an AON
complex order may only execute against COA Responses and unrelated
orders resting in the COB in price-time priority if there is
sufficient size to satisfy the AON complex order (and may not
execute against orders resting in the Simple Book)); and 5.33(g)(4)
(stating that Post Only complex orders and AON complex orders may
not Leg into the Simple Book); and EDGX Rules 21.20(d)(5)(A) and
21.20(g)(4) (same).
---------------------------------------------------------------------------

    Proposed Exchange Rule 980NYP(e)(1)(C), which is identical to NYSE
Arca Rule 6.91O(e)(1)(C), provides that a Complex Only Order will not
be able to trade at a price that is worse than the Exchange BB(BO) when
the DBBO is calculated using the Exchange's BB(BO) for the component
legs of the order. The proposed rule further provides that if the
DBB(DBO) is calculated using the Exchange BBOs for all legs of the
strategy and all of the Exchange BBOs have displayed Customer interest,
the Complex Only Order will be required to trade at a price that is
better than the DBB(DBO).\110\ The Commission believes that proposed
Exchange Rule 980NYP(e)(1)(C) is designed to provide for the execution
of Complex Only Orders while protecting the priority of resting leg
market interest, including Customer interest.
---------------------------------------------------------------------------

    \110\ See proposed Exchange Rule 980NYP(e)(1)(C) (stating that a
Complex Only Order must trade at a price at or within the DBBO,
provided that if the DBB (DBO) is calculated using the Exchange BBOs
for all legs of the complex strategy and all such Exchange BBOs have
displayed Customer interest, the Complex Only Order will not trade
below (above) one penny ($0.01) times the smallest leg ratio inside
the DBB (DBO), regardless of whether there is sufficient quantity on
such leg markets to satisfy the ECO).
---------------------------------------------------------------------------

    Proposed Exchange Rule 980NYP(e)(1)(D), which is identical to NYSE
Arca Rule 6.91P-O(e)(1)(D), provides that an ECO will be processed as a
Complex Only Order if the ECO has a complex strategy with (i) more than
five legs; (ii) two legs and both legs are buying or both legs are
selling, and both legs are calls or both legs are puts; or (iii) three
or more legs and all legs are buying or all legs are selling. As
discussed above, the Exchange states that requiring these ECOs to be
processed as Complex Only Orders is designed to help Market Makers
manage risk. Other options exchanges have adopted similar rules.\111\
---------------------------------------------------------------------------

    \111\ See, e.g., Cboe Rule 5.33(g)(2) (stating that complex
orders for any capacity other than customer with two option legs
that are both buy or both sell and that are both calls or both puts
may not leg into the simple book and may execute against other
complex orders in the COB); Cboe Rule 5.33(g)(3) (stating that all
complex orders with three or four option legs that are all buy or
all sell (regardless of whether the option legs are calls or puts)
may not leg into the Simple Book and may execute against other
complex orders in the COB); ISE Options 3, Sections 14(d)(3)(A)
(stating that Complex Orders with two option legs where both legs
are buying or both legs are selling and both legs are calls or both
legs are puts may only trade against other Complex Orders in the
Complex Order Book); ISE Options 3, Section 14(d)(3)(B) (stating
that complex orders with three or four option legs where all legs
are buying or all legs are selling may only trade against other
Complex Orders in the Complex Order Book; and MIAX Rule 518(c)(iii)
(stating that complex orders with two option legs where both legs
are buying or both legs are selling and both legs are calls or both
legs are puts may only trade against other complex orders on the
Strategy Book and will not be permitted to leg into the Simple Order
Book. Complex orders with three option legs where all legs are
buying or all legs are selling may only trade against other complex
orders on the Strategy Book, regardless of whether the option leg is
a call or a put).
---------------------------------------------------------------------------

    Proposed Exchange Rule 980NYP(e)(2), which is identical to NYSE
Arca Rule 6.91P-O(e)(2), provides that the Exchange will evaluate
trading opportunities for a resting ECO when the leg markets comprising
a complex strategy update, provided that during periods of high message
volumes, such evaluation may be done less frequently. The Commission
believes that these evaluations could result in additional executions
of resting ECOs.

F. Execution of Orders During a COA

    The COA auction process in proposed Exchange Rule 980NYP(f) is
substantially identical to the COA auction process in NYSE Arca Rule
6.91P-O(f), except that proposed Exchange Rule 980NYP(f) provides for
customer priority in the allocation of RFR Responses, rather than
applying NYSE Arca's price/time priority framework.\112\ In addition,
unlike NYSE Arca Rule 6.91P-O(f), proposed Exchange Rule 980NYP(f)
refers to ``COA GTX Orders,'' as described above, rather than ``ECO GTX
Orders.'' The proposed rule also differs from NYSE Arca Rule 6.91P-O(f)
by including a reference to RFR Responses priced equal to the COA Order
and by providing that such Responses may trade with the COA Order down
to the DBB, as well as up to the DBO.\113\ The Commission believes the
COA in proposed Exchange Rule 980NYP(f) is designed to provide COA
Orders submitted to the auction with execution and price improvement
opportunities while preserving the priority of resting interest on the
Exchange's limit order book.\114\
---------------------------------------------------------------------------

    \112\ See proposed Exchange Rule 980NYP(f)(4)(A)(i) (stating
that the COA Order will trade with the best priced contra-side
interest and, within each priority category, will trade first with
Customer RFR Responses in time priority, followed by non-Customer
RFR Responses on a size pro rata basis pursuant to Rule 964NYP(i).
Non-Customer RFR Responses will be capped at the remaining size of
the COA Order for purposes of size pro rata allocation).
    \113\ Proposed Exchange Rule 980NYP(f)(4)(A) states that RFR
Responses to sell (buy) that are priced equal to or lower (higher)
than a COA Order to buy (sell) will trade with the COA Order down
(up) to the DBB (DBO), but if all legs of the DBB (DBO) are
calculated using Exchange BBOs and all such Exchange BBOs have
displayed Customer interest, RFR Responses to sell (buy) will not
trade below (above) one penny ($0.01) times the smallest leg ratio
inside the DBB (DBO).
    \114\ A COA Order is an ECO that is designated by the ATP Holder
as eligible to initiate a COA. See proposed Exchange Rule
980NYP(a)(2)(A).
---------------------------------------------------------------------------

    To initiate a COA, the limit price of the COA Order to buy (sell)
must be higher (lower) than the best-priced, same-side ECOs resting on
the Consolidated Book and equal to or higher (lower) than the midpoint
of the DBBO.\115\ The Commission believes that these requirements could
result in more competitive COA auctions, which could make it more
likely that COA Orders will receive price improvement. Prior to
initiating a COA, a COA Order to buy (sell) will trade with any ECO to
sell (buy) resting in the Consolidated Book that is priced equal to or
lower (higher) than the DBO (DBB).\116\ If the DBO (DBB) is calculated
using the Exchange BBO for all legs of the complex strategy and all
such Exchange BBOs have displayed Customer interest, the COA Order will
trade up (down) to one penny ($0.01) times the smallest leg ratio
inside the DBO (DBB) (i.e., priced better than the leg markets) and any
unexecuted portion of the COA Order will initiate a COA.\117\ At the
conclusion of a COA, RFR Responses to sell (buy) that are priced lower
(higher) than a COA Order to buy (sell) will trade in price-time
priority up (down) to the DBBO, provided that if all legs of the DBB
(DBO) are calculated using Exchange BBOs and all such Exchange BBOs
have displayed Customer interest, RFR Responses to sell (buy) will not
trade below (above) one penny ($0.01) times the smallest leg ratio
inside the DBB (DBO) on the Exchange.\118\ The Commission believes that
these provisions will provide help to preserve the priority of resting
leg market interest during a COA auction, including displayed Customer
leg market interest.
---------------------------------------------------------------------------

    \115\ See proposed Exchange Rule 980NYP(f)(1).
    \116\ See proposed Exchange Rule 980NYP(f)(2)(A).
    \117\ See id.
    \118\ See id.
---------------------------------------------------------------------------

    The Commission believes that proposed Exchange Rule 980NYP(f)(3),
which identifies circumstances that would cause the COA to end early,
including when interest on the Exchange locks or crosses the DBBO,
should help to prevent COA Orders from executing at prices too far away
from the prevailing market for the complex strategy. Proposed Exchange
Rule 980NY(f)(5), which is identical to NYSE Arca Rule 6.91P-O(f)(5),
states that a pattern or practice of submitting unrelated quotes or
orders that cause a COA to conclude early would be deemed conduct
inconsistent with just and equitable principles of trade. Other options
exchanges also have adopted similar rules.\119\
---------------------------------------------------------------------------

    \119\ See, e.g., Cboe Rule 5.33, Interpretation and Policy .03
(stating that a pattern or practice of submitting orders that cause
a COA to conclude early will be deemed conduct inconsistent with
just and equitable principles of trade and a violation of Rule 8.1);
and ISE Options 3, Section 13, Supplementary Material .01 (stating,
in part, that it shall be considered conduct inconsistent with just
and equitable principles of trade for any Member to enter orders,
quotes, Agency Orders, Counter-Side Orders or Improvement Orders for
the purpose of disrupting or manipulating the Price Improvement
Mechanism).
---------------------------------------------------------------------------

G. ECO Risk Checks

    Proposed Exchange Rule 980NYP(g)(1), which is identical to NYSE
Arca Rule 6.91P-O(g)(1), limits the maximum number of new complex
strategies that may be requested to be created per MPID. The Commission
believes that this provision could help the Exchange maintain a fair
and orderly market. Other options exchanges have similar strategy
limits.\120\
---------------------------------------------------------------------------

    \120\ See, e.g., Cboe Rule 5.33(a) (stating, in the definition
of Complex Strategy, that Cboe may limit the number of new complex
strategies that may be in [Cboe's] System or entered for any EFID
(which EFID limit would be the same for all Users) at a particular
time; and MIAX Rule 518(a)(6) (stating that MIAX may limit the
number of new complex strategies that may be in [MIAX's] System at a
particular time and will communicate this limitation to Members via
Regulatory Circular).
---------------------------------------------------------------------------

    The ECO price and strategy protections in proposed Exchange Rule
980NYP(g)(2) and (3) are designed to protect investors by preventing
the entry and execution of ECOs at potentially erroneous prices. Other
options exchanges have adopted price protections for complex
strategies.\121\ Proposed Exchange Rules 980NYP(g)(2) and (3) are
substantively identical to NYSE Arca Rule 6.91P-O(g)(2) and (3), except
the proposed Exchange Rule 980NYP(g)(2)(iv) states that ``Cross
Orders,'' rather than ``QCC Orders,'' will not be subject to the ECO
Price Protection. The Exchange states that proposed Exchange Rule
980NYP(g)(2)(iv) refers to Cross Orders because Cross Orders on the
Exchange include but are not limited to QCC Orders.\122\ The Exchange
further states that Cross Orders are not be subject to the ECO Price
Protection because the Exchange applies distinct price validations to
these paired orders.
---------------------------------------------------------------------------

    \121\ See, e.g., Cboe Rule 5.34(b)(3); ISE Options 3, Section
16(b); and MIAX Rule 532(b)(2), (3), and (4).
    \122\ Exchange Rule 900.3NYP(g)(1), which is included in the
American Pillar Omnibus Filing, describes Cross Orders as including
QCC Orders, Customer-to-Customer Cross Orders, and Single-Leg and
Complex CUBE Orders. The Exchange proposes to submit separate rule
proposals to adopt CUBE Auction functionality on Pillar.
---------------------------------------------------------------------------

H. Additional Changes

    As described more fully above, the Exchange proposes to add a
preamble to Exchange Rule 900NY indicating that rules with a ``P''
modifier are operative for symbols that are trading on the Pillar
trading platform, and that rules with the same number as a rule with a
``P'' modifier will no longer be operative for a symbol after the
symbol begins trading on Pillar. The proposed preamble further states
that the Exchange will announce by Trader Update when symbols are
trading on the Pillar trading platform. In addition, the Exchange
proposes to add a preamble to Exchange Rule 980NY, which describes how
ECOs currently trade on the Exchange, to state that Exchange Rule 980NY
is not applicable to trading on Pillar. The Commission believes that
these provisions will help to clarify the applicability of the
Exchange's rules

during the Exchange's transition to the Pillar trading platform.
    Exchange Rule 935NY provides that orders submitted to the COA
Process in Exchange Rule 980NY(e) satisfy the order exposure
requirements in Exchange Rule 935NY. The Exchange proposes to amend
Exchange Rule 935NY to provide that orders submitted to the Pillar COA
in proposed Exchange Rule 980NYP(f) also satisfy the order exposure
requirements of Exchange Rule 935NY. The Commission believes that the
proposed change to Exchange Rule 935NY is consistent with the Act
because, as discussed above, the COA Auction in proposed Exchange Rule
980NYP(f) is substantially identical to the COA in Exchange Rule
980NY(e).

IV. Solicitation of Comments on Amendment No. 1

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 1 is consistent with the
Act. Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2023-17 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEAMER-2023-17. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSEAMER-2023-17 and should
be submitted on or before July 13, 2023.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of the notice of Amendment No. 1 in the
Federal Register. Amendment No. 1 revises the Exchange's original
proposal to make the changes discussed in detail above. Notably,
Amendment No. 1 revises the definition of DBBO in proposed Exchange
Rule 980NYP(a)(5)(A) to clarify collar value used to determine the
DBBO, clarifies a cross-reference in the definition of ``Electronic
Complex Order,'' and eliminates the proposed definition of ``Complex
BBO,'' which is unnecessary because the term is not used in the
proposed rules. Amendment No. 1 also revises proposed Exchange Rule
980NYP(c)(4) to indicate that ECOs may be quoted, as well as traded in
$0.01 increments, revises proposed Exchange Rule 980NYP(d)(3)(B)(iii)
to more clearly describe the execution of ECOs eligible to participate
in an opening or reopening auction, and revises proposed Exchange Rule
980NYP(f)(4) to describe the execution of RFR Responses in a COA.
Amendment No. 1 also provides additional analysis of several aspects of
the proposal, including identifying provisions in the proposal that are
identical to NYSE Arca Rule 6.91P-O and more fully explaining the
process for determining the DBBO, thereby facilitating the Commission's
ability to make the findings set forth above to approve the proposal.
The Commission believes that Amendment No. 1 does not raise any novel
regulatory issues. Accordingly, the Commission finds good cause for
approving the proposed rule change, as modified by Amendment No. 1, on
an accelerated basis.

VI. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\123\ that the proposed rule change (SR-NYSEAMER-2023-17), as
modified by Amendment No. 1, is approved on an accelerated basis.
---------------------------------------------------------------------------

    \123\ 15 U.S.C. 78s(b)(2).
    \124\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\124\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-13221 Filed 6-21-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: October 1, 2009 (Volume 74, Number 189)]
[Notices]
[Page 50853]
[DOCID:fr01oc09-126]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60710; File No. SR-CBOE-2009-057]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change Related to Market-
Maker and Specialist Orders

September 23, 2009.

    On August 10, 2009, the Chicago Board Options Exchange,
Incorporated (``CBOE'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to eliminate Rule 6.73(d) and its
requirement to orally identify a Market-Maker or a Specialist order in
open outcry before requesting a quote. The proposed rule change was
published for comment in the Federal Register on August 19, 2009.\3\
The Commission received no comments on the proposal. This order
approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60491 (August 12,
2009), 74 FR 41953.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\4\ In
particular, the Commission finds that the proposed rule change is
consistent with the provisions of Section 6(b)(5) of the Act,\5\ which
requires, among other things, that the CBOE rules be designed to
promote just and equitable principles of trade, to prevent fraudulent
and manipulative acts and practices, to remove impediments to and to
perfect the mechanism for a free and open market and a national market
system, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \4\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition and capital
formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    According to the CBOE, it adopted Rule 6.73(d) to ensure that
Market-Maker and Specialist orders were not inadvertently represented
as public customer orders, which receive preferential treatment in
certain instances under CBOE rules.\6\ The CBOE proposes to eliminate
the requirement in Rule 6.73(d) to orally identify the Market-Maker and
Specialist orders in open outcry and represents that the requirement is
superfluous and unnecessary because the preferential treatment afforded
to public customer orders was system-enforced through the order marking
requirement. In addition, the CBOE represents that it no longer
utilizes the RAES trading platform for which the order identification
procedure was introduced.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 46102 (June 21,
2002), 67 FR 43692 (June 28, 2002) (SR-CBOE-2002-33) (immediately
effective rule change relating to the identification of Market-Maker
and Specialist orders).
---------------------------------------------------------------------------

    In approving the proposed rule change, the Commission notes that it
received no comments on the proposed rule change and bases its
approval, in part, on the CBOE's representations that public customer
orders will continue to receive appropriate preferential treatment
under its Hybrid Trading System and existing rules.
    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change (SR-CBOE-2009-057) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).
    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-23624 Filed 9-30-09; 8:45 am]

BILLING CODE 8011-01-P


Public Meeting on Enhancing Integrity Management of

Gas Distribution Pipelines

Draft Meeting Agenda (rev 6)

December 16, 2004

Washington, D.C.

Thursday, December 16

8:30 a.m.		Welcome   …………………………………….Stacey
Gerard (AA- OPS)

8:45 a.m.		Inspector General -
DOT………….………………………Kenneth Mead

9:05 a.m.	AGF Study & DIGIT Perspective……Gary Gardner (AGF) Mike
Musial                      (URS Corp.), Lee Reynolds (NiSource), Don
Martin (AR-State)

9:55 a.m.      	Incident Data Study …………………….Cheryl
Trench (Allegro Energy)

10.10 a.m.	Break

10:25 a.m.       NARUC …………………….…………..Linda
Kelly (Commissioner-CT)

             Randy Bynum (Commissioner-AR)

                 Don Mason (Commissioner-OH)

11:10 a.m.        NAPSR Comments ………………….……..… Jim
Anderson (NC State)

12:00 p.m.	Lunch

1:00  p.m.	GPTC …………………………………….….John
Frantz (Chair- GPTC)

1:15 p.m.	OPS Action Plan
……..……………………………….Mike Israni (OPS)

1:20 p.m.        Panel Discussion:  New Requirements? Objectives? OPS
Action Plan & Other Issues
……………..…(OPS/States/AGA/APGA/Industry/Public)

2:20 p.m.	Break

2:35 p.m.	Panel Discussion (continued)

3:30 p.m.	Q & As

3:50 p.m. 	Closing Remarks (OPS Vision)
……………….………….Stacey Gerard

4:00 p.m.	Adjourn for Drug and Alcohol Meeting

Note: Handouts and Docket postings will be used to communicate (a)
promising R&D, and (b) comparison of current regulations for
transmission and distribution