Notice2021-22277
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a Rule Regarding the Allowance of Off-Exchange Transactions by a Member Acting as Agent Otherwise Than on EDGA in Accordance With Rule 19c-1 Under the Securities Exchange Act of 1934
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
October 14, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 196 (Thursday, October 14, 2021)</title>
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[Federal Register Volume 86, Number 196 (Thursday, October 14, 2021)]
[Notices]
[Pages 57226-57227]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-22277]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93271; File No. SR-CboeEDGA-2021-021]
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Adopt a Rule Regarding the Allowance of Off-Exchange Transactions by a
Member Acting as Agent Otherwise Than on EDGA in Accordance With Rule
19c-1 Under the Securities Exchange Act of 1934
October 7, 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 September 29, 2021, Cboe EDGA Exchange, Inc. (the
``Exchange'') 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 EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') proposes to
adopt a rule regarding the allowance of off-exchange transactions by a
Member acting as agent otherwise than on EDGA in accordance with Rule
19c-1 under the Securities Exchange Act of 1934 (the ``Act'').\5\ The
text of the proposed rule change is provided in Exhibit 5.
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\5\ See 17 CFR 240.19c-1.
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The text of the proposed rule change is also available on the
Exchange's website (<a href="http://markets.cboe.com/us/equities/regulation/rule_filings/edga/">http://markets.cboe.com/us/equities/regulation/rule_filings/edga/</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 adopt a rule regarding off-exchange
transactions by a Member acting as agent. Rule 19c-1 and Rule 19c-3
under the Act \6\ describe rule provisions that each national
securities exchange must include in its Rules regarding the ability of
members to engage in transactions off an exchange. While the Exchange
already incorporates the required provision in Rule 19c-3 under the Act
into Rule 13.6, and its stated policies and practices are consistent
with these provisions of the Act, the Exchange Rules do not currently
include the provisions in Rule 19c-1 under the Act. Therefore, the
proposed rule change adopts this provision in new Rule 13.6(a) \7\ in
accordance with Rule 19c-1 under the Act. Specifically, proposed Rule
13.6(a) (in accordance with Rule 19c-1 under the Act) provides that no
rule, stated policy, or practice of this Exchange shall prohibit or
condition, or be construed to prohibit or condition, or otherwise
limit, directly or indirectly, the ability of any Member acting as
agent to effect any transaction otherwise than on this Exchange with
another person (except when such Member also is acting as agent for
such other person in such transaction) in any equity security listed on
this Exchange or to which unlisted trading privileges on this Exchange
have been extended.
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\6\ See 17 CFR 240.19c-1 and 240.19c-3.
\7\ The proposed rule change also updates the provision in
current Rule 13.6 (which incorporate Rule 19c-3 under the Act) to be
Rule 13.6(b).
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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.\8\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ 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.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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In particular, the Exchange believes proposed Rule 13.16(a) is
consistent with the Act, because it adopts an Exchange Rule
specifically required by Rule 19c-1 regarding off-exchange transactions
for members' agency transactions. The Exchange's current Rule 13.6 and
stated policies and procedures currently comply with provisions
governing off-exchange trading in Rule 19c-3 under the Act. The
proposed rule change is designed to prevent fraudulent and manipulative
practices, promote just and equitable principles of trade and remove
impediments to and perfect the mechanism of a free and open market and
a national market system as it will add transparency to the Exchange
Rules by making it explicit in its Rules the provisions of Rule 19c-1
under the Act, as is required by all national exchanges.
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 is
not intended as a competitive trading tool, rather it makes explicit
the provisions governing off-exchange trading by a Member acting as
agent in Rule 19c-1 of the Act within the Exchange Rules, which were
[[Page 57227]]
previously inadvertently excluded. The provisions regarding off-
exchange trading by a Member acting as agent apply equally to all
Members, and each national securities exchange is required to include
the provision of Rule 19c-1 under the Act in its rules.
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) of the Act \10\ and Rule 19b-
4(f)(6) thereunder).\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay for this filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because such waiver will allow the Exchange to immediately update its
rules to reflect the requirements of Rule 19c-1 of the Act.\14\
Accordingly, the Commission hereby waives the 30-day operative delay
and designates the proposed rule change as operative upon filing.\15\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ 17 CFR 240.19c-1.
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 shall 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
<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#394b4c555c145a5654545c574d4a794a5c5a175e564f"><span class="__cf_email__" data-cfemail="ee9c9b828bc38d8183838b809a9dae9d8b8dc0898198">[email protected]</span></a>. Please include
File Number SR-CboeEDGA-2021-021 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-CboeEDGA-2021-021. 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-CboeEDGA-2021-021, and should be
submitted on or before November 4, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22277 Filed 10-13-21; 8:45 am]
BILLING CODE 8011-01-P
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