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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Notices
Exchange Act 2 with respect to certain rules of Cboe Exchange, Inc. Cboe that the Exchange seeks to incorporate by reference.3 Section 36a1 of the Exchange Act,4 subject to certain limitations, authorizes the Commission to conditionally or unconditionally exempt any person, security, or transaction, or any class thereof, from any provision of the Exchange Act or rule thereunder, if necessary or appropriate in the public interest and consistent with the protection of investors.
The Exchange filed a proposed rule change 5 under Section 19b of the Exchange Act to update various C2
Rules and Chapters to reflect changes to the Cboe Options rulebook. Namely, in the proposed rule change, the Exchange proposed to incorporate by reference rule changes made to each Cboe Options rule cross-referenced in the following C2 chapters or sections: Chapter 3, Section B TPH Registration; 6 Chapter 4, Section A Equity and ETP Options; 7
Chapter 4, Section B Index Options; 8
Chapter 5 Business Conduct; 9 Chapter 6, Section E Intermarket Linkage; 10
Chapter 6, Section F Exercises and Deliveries; 11 Chapter 7, Section A; 12
Chapter 7, Section B; 13 Chapter 9
Doing Business with the Public; 14
Chapter 10 Margin Requirements; 15
2 15

U.S.C. 78sb.
letter from Rebecca Tenuta, Counsel, Cboe C2 Exchange, Inc. to Vanessa Countryman, Secretary, Commission, dated February 9, 2021
Exemptive Request.
4 15 U.S.C. 78mma1.
5 See Securities Exchange Act Release No. 87646
December 2, 2019, 84 FR 66938 December 6, 2019 SRC22019025.
6 Incorporates by reference Cboe Options Chapter 3, Section B.
7 Incorporates by reference Cboe Options Chapter 4, Section A.
8 Incorporates by reference Cboe Options Chapter 4, Section B.
9 Incorporates by reference Cboe Options Chapter 8.
10 Incorporates by reference Cboe Options Chapter 5, Section E.
11 Incorporates by reference Cboe Options Chapter 6, Section B.
12 Incorporates by reference Cboe Options Chapter 7, Section A.
13 Incorporates by reference Cboe Options Chapter 7, Section B.
14 Incorporates by reference Cboe Options Chapter 9. See also Securities Exchange Act Release No. 87646 December 2, 2019, 84 FR 66938
December 6, 2019 SRC22019025, which relocated former Rule 3.19 to Rule 9.20 in order to include Cboe Options Rule 9.20 in C2 Chapter 9s incorporation of Cboe Options Chapter 9 by reference, as former Rule 3.19 is identical to Cboe Options Rule 9.20 and it is within the same category of exchange rules otherwise incorporated into C2 Chapter 9 by reference to Cboe Options Chapter 9 i.e. rule related to doing business with the public.
15 Incorporates by reference Cboe Options Chapter 10.

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Chapter 1 Net Capital Requirements; 16
Chapter 12 Summary Suspension; 17
Chapter 13 Discipline; 18 Chapter 14
Arbitration; 19 and Chapter 15
Hearings and Review 20 the Cboe Incorporated Rules.
The Commission notes it previously granted C2 an exemption from the rule filing requirements of Section 19b of the Act for the rules of the Cboe set forth in the C2 rules referenced above.21
Since that time, the Cboe has renumbered and relocated the previously incorporated rules within its rulebook. As a result, C2 has submitted this exemptive request to reflect rule number changes in the Cboe Options rulebook. Specifically, the Exchange is now requesting, pursuant to Rule 012
under the Exchange Act,22 that the Commission grant an exemption from the rule filing requirements of Section 19b of the Exchange Act for changes to the Chapters 37 and 915 of the Exchanges rules that are effected solely by virtue of a change to a Cboe Incorporated Rule. The Exchange requests that it be permitted to incorporate by reference changes made to the Cboe Incorporated Rules without the need for the Exchange to file separately the same proposed rule change pursuant to Section 19b of the Exchange Act.23
The Exchange represents that the Cboe Incorporated Rules are not trading rules.24 Moreover, the Exchange states that it proposes to incorporate by reference a category of rules rather than individual rules within a category.25
The Exchange also represents that, as a condition of this exemption, the Exchange will provide written notice to its applicants and members whenever Cboe proposes a change to a Cboe Incorporated Rule.26

According to the Exchange, this exemption is necessary and appropriate to maintain consistency between C2
rules and the Cboe Incorporated Rules, thus helping to ensure identical regulation of C2 Permit Holders that are also Cboe Trading Permit Holders with respect to the incorporated provisions as well as helping to ensure that C2-only Permit Holders are subject to consistent regulation as Cboe Trading Permit Holders.27 The Exchange believes that, without such an exemption, such Permit Holders could be subject to two different standards.28
The Commission has issued exemptions similar to the Exchanges request.29 In granting similar exemptions, the Commission stated that it would consider future exemption requests, provided that:
A self-regulatory organization SRO wishing to incorporate rules of another SRO by reference has submitted a written request for an order exempting it from the requirement in Section 19b of the Exchange Act to file proposed rule changes relating to the rules incorporated by reference, has identified the applicable originating SROs, together with the rules it wants to incorporate by reference, and otherwise has complied with the procedural requirements set forth in the Commissions release governing procedures for requesting exemptive orders pursuant to Rule 012 under the Exchange Act; 30
The incorporating SRO has requested incorporation of categories of rules rather than individual rules within a category that are not trading rules e.g., the SRO has requested incorporation of rules such as margin, suitability, or arbitration; and 27 See
16 Incorporates
by reference Cboe Options
Chapter 11.
17 Incorporates by reference Cboe Options Chapter 12.
18 Incorporates by reference Cboe Options Chapter 13.
19 Incorporates by reference Cboe Options Chapter 14.
20 Incorporates by reference Cboe Options Chapter 15.
21 See Securities Exchange Act Release Nos.
61152 December 10, 2009, 74 FR 66699 December 16, 2009; and 80339 March 29, 2017, 82 FR 16442
April 4, 2017.
22 17 CFR 240.012.
23 See Exemptive Request, supra note 3.
24 Id.
25 Id.
26 The Exchange states that it will provide such notice via a posting on the same website location where the Exchange posts its own rule filings pursuant to Rule 19b-4l within the timeframe required by such Rule. In addition, the Exchange states that the website posting will include a link to the location on Cboes website where the applicable proposed rule change is posted. Id.

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Exemptive Request, supra note 3.
id.
29 See, e.g., Securities Exchange Act Release Nos.
86896 September 6, 2019, 84 FR 48186 September 12, 2019 order granting exemptive request from Nasdaq BX, Inc. relating to rules of The Nasdaq Stock Market LLC incorporated by reference Nasdaq BX Order; 86422 July 22, 2019, 84 FR
36151 July 26, 2019 order granting exemptive request from Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, and Nasdaq Phlx LLC relating to rules of The Nasdaq Stock Market LLC incorporated by reference; 80338
March 29, 2017, 82 FR 16464 April 4, 2017
order granting exemptive request from MIAX
PEARL, LLC relating to rules of Miami International Securities Exchange, LLC incorporated by reference; and 72650 July 22, 2014, 79 FR 44075
July 29, 2014 order granting exemptive requests from NASDAQ OMX BX, Inc. and the NASDAQ
Stock Market LLC relating to rules of NASDAQ
OMX PHLX LLC incorporated by reference.
30 See 17 CFR 240.012 and Securities Exchange Act Release No. 39624 February 5, 1998, 63 FR
8101 February 18, 1998 Commission Procedures for Filing Applications for Orders for Exemptive Relief Pursuant to Section 36 of the Exchange Act;
Final Rule.
28 See
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