Notice2024-12465
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delay Implementation of a New Connectivity Offering Through Dedicated Cores
Primary source
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Published
June 7, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 111 (Friday, June 7, 2024)</title>
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[Federal Register Volume 89, Number 111 (Friday, June 7, 2024)]
[Notices]
[Pages 48695-48697]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-12465]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100260; File No. SR-CboeEDGX-2024-031]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Delay Implementation of a New Connectivity Offering Through Dedicated
Cores
June 3, 2024.
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 May 31, 2024, 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.
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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'') proposes to
delay implementation of a new connectivity offering.
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 delay the implementation of Dedicated
Cores. The Exchange previously filed SR-CboeEDGX-2024-026 to establish
Dedicated Cores effective June 3, 2024.\5\
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\5\ See Securities Exchange Act Release No. 97658 (May 20,
2024), 89 FR 45930 (May 24, 2024) (SR-CboeEDGX-2024-026) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Introduce a New Connectivity Offering Through Dedicated Cores)
(``SR-CboeEDGX-2024-026'').
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By way of background, SR-CboeEDGX-2024-026 proposed to introduce a
new connectivity offering relating to the use of Dedicated Cores.
Historically, Central Processing Units (``CPU Cores'') have been shared
by logical order entry ports (i.e., multiple logical ports from
multiple firms may connect to a single CPU Core). The introduction of
Dedicated Cores would allow Users \6\ to assign a single Binary Order
Entry (``BOE'') logical order entry port \7\ to a single dedicated CPU
Core (``Dedicated Core'').\8\ Use of Dedicated Cores can provide
reduced latency, enhanced throughput, and improved performance since a
firm using a Dedicated Core is utilizing the full processing power of a
CPU Core instead of sharing that power with other firms. This offering
is completely voluntary and will be available to all Users.\9\ Users
will also continue to have the option to utilize BOE logical order
entry ports on shared CPU Cores as they do today, either in lieu of, or
in addition to, their use of Dedicated Core(s). As such, Users will be
able to operate across a mix of shared and dedicated CPU Cores which
the Exchange believes provides additional risk and capacity
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management, especially during times of market volatility and high
message traffic. Further, Dedicated Cores are not required nor
necessary to participate on the Exchange and as such Users may opt not
to use Dedicated Cores at all.
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\6\ A User may be either a Member or Sponsored Participant. The
term ``Member'' shall mean any registered broker or dealer that has
been admitted to membership in the Exchange, limited liability
company or other organization which is a registered broker or dealer
pursuant to Section 15 of the Act, and which has been approved by
the Exchange. A Sponsored Participant may be a Member or non-Member
of the Exchange whose direct electronic access to the Exchange is
authorized by a Sponsoring Member subject to certain conditions. See
Exchange Rule 11.3.
\7\ Users may currently connect to the Exchange using a logical
port available through an application programming interface
(``API''), such as the Binary Order Entry (``BOE'') protocol. A BOE
logical order entry port is used for order entry.
\8\ The Exchange notes that firms will not have physical access
to their Dedicated Core and thus cannot make any modifications to
the Dedicated Core or server. All Dedicated Cores (including servers
used for this service) are owned and operated by the Exchange.
\9\ The Exchange intends to submit a separate rule filing to
adopt monthly fees related to the use of Dedicated Cores.
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SR-CboeEDGX-2024-026 stated that the rule change would be
implemented on June 3, 2024. At this time, the Exchange proposes to
delay the implementation of SR-CboeEDGX-2023-026 [sic] to on or after
July 1, 2024 to permit the Exchange additional time to implement
Dedicated Cores in the Exchange's data center. The Exchange would issue
a Trade Desk Notice announcing the exact implementation date to members
and member organizations.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
promote just and equitable principles of trade, 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. The Exchange's proposal to delay the implementation of SR-
CboeEDGX-2024-026 to on or after July 1, 2024 is consistent with the
Act and the protection of investors and the general public as it will
permit the Exchange additional time to ensure the Exchange's data
center can accommodate the proposed Dedicated Cores. As noted, the
Exchange would issue a Trade Desk Notice announcing the exact
implementation date to members and member organizations.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The Exchange's proposal to delay the implementation of SR-
CboeEDGX-2024-026 to on or after July 1, 2024 does not impose any
burden on competition as it will permit the Exchange additional time to
implement Dedicated Cores.
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 prior to 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, if consistent
with the protection of investors and the public interest, the proposed
rule change has become effective pursuant to Section 19(b)(3)(A)(iii)
of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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\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, 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) \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 the
protection of investors and the public interest.
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. Waiver of the operative delay would allow the Exchange to
immediately delay the implementation of SR-CboeEDGX-2024-026 to
establish Dedicated Cores and provide the Exchange additional time to
ensure readiness at the Exchange's data center for implementation of
Dedicated Cores on or after July 1, 2024. The Commission believes that
the proposed rule change presents no novel legal or regulatory issues,
and that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\16\
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\16\ 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 under
Section 19(b)(2)(B) of the Act \17\ to determine whether the proposed
rule change should be approved or disapproved.
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\17\ 15 U.S.C. 78s(b)(2)(B).
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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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#ed9f988188c08e8280808883999ead9e888ec38a829b"><span class="__cf_email__" data-cfemail="b9cbccd5dc94dad6d4d4dcd7cdcaf9cadcda97ded6cf">[email protected]</span></a>. Please include
file number SR-CboeEDGX-2024-031 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-2024-031. 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="https://www.sec.gov/rules/sro.shtml">https://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
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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-CboeEDGX-2024-031 and should
be submitted on or before June 28, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-12465 Filed 6-6-24; 8:45 am]
BILLING CODE 8011-01-P
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