Notice2021-19859
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend EDGX Rule 11.1(a)(1) To Begin Accepting Orders at 2:30 a.m. Eastern Time
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 15, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 176 (Wednesday, September 15, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 176 (Wednesday, September 15, 2021)]
[Notices]
[Pages 51402-51404]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-19859]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92914; File No. SR-CboeEDGX-2021-037]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend EDGX Rule 11.1(a)(1) To Begin Accepting Orders at 2:30 a.m.
Eastern Time
September 9, 2021.
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 August 31, 2021, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to
amend EDGX Rule 11.1(a)(1) to begin accepting orders at 2:30 a.m.
Eastern Time. 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 (<a href="http://markets.cboe.com/us/options/regulation/rule_filings/edgx/">http://markets.cboe.com/us/options/regulation/rule_filings/edgx/</a>), 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 EDGX Rule 11.1 (Hours of Trading and
Trading Days) to begin accepting orders at 2:30 a.m. Eastern Time
rather than 3:30 a.m. Eastern Time. The proposal is substantially
similar to NYSE Arca, LLC (``Arca'') Rule 7.34-E(a)(1) that provides
Arca may accept orders 90 minutes before its early trading session
begins.\5\
---------------------------------------------------------------------------
\5\ The Arca early trading session begins at 4:00 a.m. Eastern
Time.
---------------------------------------------------------------------------
Currently EDGX Rule 11.1(a)(1) provides that orders may be entered
into the System from 3:30 a.m. until 8:00 p.m. Eastern Time. The rule
provides that orders entered between 3:30 a.m. and 4:00 a.m. Eastern
Time are not eligible for execution until the start of the Early
Trading Session,\6\ Pre-Opening Session \7\ or Regular Trading
Hours,\8\ depending on the time in force selected
[[Page 51403]]
by the User.\9\ The rule further provides that at the commencement of
the Early Trading Session, orders entered between 3:30 a.m. and 4 a.m.
Eastern Time will become eligible for execution (``4:00 a.m. Start''),
unless designated as eligible for execution during the Early Trading
Session beginning at 7:00 a.m. Eastern Time (``7:00 a.m. Start'').
Orders with a 7:00 a.m. Start designation may be entered between 3:30
a.m. and 7:00 a.m. Eastern Time.
---------------------------------------------------------------------------
\6\ The term ``Early Trading Session'' shall mean the time
between 4:00 a.m. and 8:00 a.m. Eastern Time. See EDGX Rule 1.5(ii).
\7\ The term ``Pre-Opening Session'' shall mean the time between
8:00 a.m. and 9:30 a.m. Eastern Time. See EDGX Rule 1.5(s).
\8\ The term ``Regular Trading Hours'' shall mean the time
between 9:30 a.m. and 4:00 p.m. Eastern Time. See EDGX Rule 1.5(y).
\9\ The term ``User'' shall mean any Member or Sponsored
Participant who is authorized to obtain access to the System
pursuant to Rule 11.3. See EDGX Rule 1.5(ee).
---------------------------------------------------------------------------
The Exchange proposes to amend Rule 11.1(a)(1) to provide that the
Exchange would begin accepting orders at 2:30 a.m. Eastern Time. The
Exchange proposes to begin accepting earlier orders to compete with
non-exchange trading venues that begin accepting orders before 3:30
a.m. Eastern Time. By moving the Exchange's order acceptance time
earlier, Members that route orders to multiple venues before 3:30 a.m.
Eastern Time would be able to include the Exchange in their early
morning routing determinations. The Exchange does not propose to change
the time when the Early Trading Session would begin or many any other
rule changes.
Because of the technology changes required to implement this
change, subject to effectiveness of this proposed rule change, the
Exchange will notify Members when the Exchange would begin accepting
orders at 2:30 a.m. Eastern Time, which the Exchange anticipates would
be in September 2021.
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.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \11\ 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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it would not change any trading
functions on the Exchange and would only move up the time when the
Exchange would begin accepting order flow for trading in the Early
Trading Session. In addition, a Member that opts to send in orders
during this earlier time period could, as today, designate which
trading session such orders would be eligible to trade, including per
Rule 11.1(a)(1), a 4:00 a.m. Start or a 7:00 a.m. Start. The Exchange
further believes that the proposed rule change would promote
competition among the exchanges and non-exchange venues because it
would allow Members that currently route to non-exchange trading venues
prior to 3:30 a.m. Eastern Time to include the Exchange in their early
morning routing determinations.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change would promote intermarket competition between
the Exchange and non-exchange trading venues that accept order flow
before 3:30 a.m. Eastern Time. Further, the Exchange believes the
proposed rule change would impose no burden on intramarket competition
as all Members could submit order flow to the Exchange beginning at
2:30 a.m. Eastern Time.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. According to the
Exchange, the technology supporting the proposed rule change would be
available less than 30 days after filing, and the Exchange would be
able to implement the change before the 30-day operative delay ends.
The Exchange also states that the proposed rule change would promote
competition by providing Members that route orders to non-exchange
venues or another exchange that accepts order flow before 3:30 a.m.
Eastern Time \16\ the opportunity to include the Exchange on its early
morning routing determinations. The Commission believes that the
Exchange's proposal does not raise any new or novel issues and that
waiver of the 30-day operative delay is consistent with the protection
of investors and the public interest. Accordingly, the Commission
designates the proposed rule change to be operative on upon filing.\17\
---------------------------------------------------------------------------
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6).
\16\ See Arca Rule 7.34-E(a)(1). See also Securities and
Exchange Act No. 92657 (August 12, 2021) 86 FR 46296 (August 18,
2021) (SR-NYSEArca-2021-71).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
[[Page 51404]]
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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#2f5d5a434a024c4042424a415b5c6f5c4a4c01484059"><span class="__cf_email__" data-cfemail="cebcbba2abe3ada1a3a3aba0babd8ebdabade0a9a1b8">[email protected]</span></a>. Please include
File Number SR-CboeEDGX-2021-037 on the subject line.
Paper Comments
<bullet> 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-2021-037. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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-2021-037 and should be
submitted on or before October 6, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19859 Filed 9-14-21; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 15, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.