Notice2025-21396
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend Rule 11.9(d) To Permit an Intermarket Sweep Order Containing a Time-in-Force Other Than IOC To Be Entered as a Non-Displayed Order
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
November 28, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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[Federal Register Volume 90, Number 227 (Friday, November 28, 2025)]
[Notices]
[Pages 54833-54837]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21396]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104242; File No. SR-CboeBZX-2025-142]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To Amend Rule 11.9(d) To Permit an
Intermarket Sweep Order Containing a Time-in-Force Other Than IOC To Be
Entered as a Non-Displayed Order
November 24, 2025.
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 November 13, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend Rule 11.9(d) to permit an Intermarket Sweep Order containing a
time-in-force other than IOC to be entered as a Non-Displayed Order.
The Exchange also proposes to amend Rule 11.9(c)(11) and Rule
11.13(a)(4)(C)-(D) in order to describe the behavior of Non-Displayed
Orders. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the
Exchange's website (<a href="https://www.cboe.com/us/equities/regulation/rule_filings/bzx/">https://www.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), and at the principal office of the Exchange.
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
As part of its suite of product offerings, BZX currently offers
Users the ability to enter Intermarket Sweep Orders (``ISOs''), which
are limit orders for an NMS stock that meet the following requirements:
(i) when routed to a trading center, the limit order is identified as
an ISO; (ii) simultaneously with the routing of the limit order
identified as an ISO, one or more additional limit orders, as
necessary, are routed to execute against the full displayed size of any
protected bid, in the case of a limit order to sell, or the full
displayed size of any protected offer, in the case of a limit order to
buy, for the NMS stock with a price that is superior to the limit price
of the limit order as identified as an ISO (and these additional routed
orders also must be marked as ISOs).\3\ Currently, the Exchange does
not specify that ISOs may be entered as Non-Displayed Orders.\4\ Based
on User \5\ feedback, the Exchange proposes to amend Rule 11.9(d) to
permit ISOs entered with a time-in-force other than Immediate or Cancel
(``IOC'') \6\ to be entered as Non-Displayed Orders (``Non-Displayed
ISOs''). In conjunction with the proposed amendment to Rule 11.9(d),
the Exchange also proposes to amend Rule 11.9(c)(11) and Rule
11.13(a)(4)(C)-(D) in order to more accurately describe the price at
which a Non-Displayed Order posts to the BZX Book \7\ and at what price
a Non-Displayed Order may execute in certain situations.
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\3\ See Regulation NMS Rule 600(a)(47).
\4\ See Exchange Rule 11.9(c)(11). A ``Non-Displayed Order'' is
a market or limit order that is not displayed on the Exchange.
\5\ See Exchange Rule 1.5(cc). The term ``User'' shall mean any
Member or Sponsored Participant who is authorized to obtain access
to the System pursuant to Rule 11.3.
\6\ See Rule 11.9(b)(1). An Immediate-or-Cancel Order is a limit
order that is to be executed in whole or in part as soon as such
order is received. The portion not executed immediately on the
Exchange or another trading center is treated as cancelled and is
not posted to the BZX Book. IOC limit orders that are not designated
as ``BZX Only'' and that cannot be executed in accordance with Rule
11.13(a)(4) on the System when reaching the Exchange will be
eligible for routing away pursuant to Rule 11.13(b).
\7\ See Exchange Rule 1.5(e). The term ``BZX Book'' shall mean
the System's electronic file of orders.
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Intermarket Sweep Orders
The Exchange currently permits Users to submit ISOs pursuant to
Rule 11.9(d). In order to be eligible for treatment as an ISO, the
limit order must be marked ISO and the User entering the order must
simultaneously route one or more additional limit orders marked
``ISO,'' as necessary, to away markets to execute against the full
displayed size of any Protected Quotation \8\ for the security with a
price that is superior to the limit price of the ISO entered in the
System.<SUP>9 10</SUP> Such orders, if they meet the requirements of
the foregoing sentence, may be executed at one or multiple price levels
in the system without regard to Protected Quotations at away markets
consistent with Regulation NMS (i.e., may trade through such
quotations).\11\ The Exchange relies on the marking of an order as an
ISO order when handling such order, and thus, it is the entering
Member's responsibility, not the Exchange's responsibility, to comply
with the requirements of Regulation NMS relation to ISOs.\12\ ISOs are
not eligible for routing pursuant to Rule 11.13(b).\13\
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\8\ See Rule 1.5(u). The term ``Protected Quotation'' shall mean
a quotation that is a Protected Bid or Protected Offer.
\9\ See Exchange Rule 11.9(d).
\10\ See Exchange Rule 1.5(aa). The term ``System'' shall mean
the electronic communications and trading facility designated by the
Board through which securities orders of Users are consolidated for
ranking, execution and, when applicable, routing away.
\11\ Supra note 9.
\12\ Id.
\13\ Id.
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The Exchange now proposes to add language to Rule 11.9(d) that
states that an ISO may be entered as a displayed order or as a Non-
Displayed Order (a ``Non-Displayed ISO''). In addition, the Exchange
proposes to introduce Rule 11.9(d)(1) that permits a Non-Displayed ISO
entered with a time-in-force other than IOC to be accepted at a price
that locks a Protected Quotation because the non-displayed nature of
the ISO allows it to lock a Protected Quotation under
[[Page 54834]]
Regulation NMS.\14\ Further, the Exchange proposes to introduce Rule
11.9(d)(2) which provides that a Non-Displayed ISO entered with a time-
in-force other than IOC will be accepted at a price that trades through
a Protected Quotation provided that a Member simultaneously routes one
or more additional limit orders marked ``ISO,'' as necessary, to
execute against the full, displayed size of any Protected Quotations in
the security with a price that is superior to the limit price of the
Non-Displayed ISO entered in the System. A Non-Displayed ISO will be
permitted to execute through a Protected Quotation for up to one second
following receipt of the order by the Exchange, subject to certain
limitations.
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\14\ See proposed Rule 11.9(d)(1). See also, Nasdaq Equity 4,
Rule 4702(b)(3)(C).
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The Exchange will also introduce rules to describe the behavior of
a Non-Displayed ISO during the one second period in which the Exchange
proposes to permit the Non-Displayed ISO to cross a Protected
Quotation. Pursuant to proposed Rule 11.9(d)(2)(i), in the event that
the Protected Quotation is unchanged after one second, the System will
slide the Non-Displayed ISO pursuant to Rule 11.9(g)(4) or cancel the
Non-Displayed ISO, based on User instruction. Proposed Rule
11.9(d)(2)(ii) provides that the System will immediately slide the Non-
Displayed ISO pursuant to Rule 11.9(g)(4) or cancel the Non-Displayed
ISO, based on User instruction, if the Protected Quotation bid becomes
higher (for sell orders) or offer becomes lower (for buy orders) before
the one second time period expires. The Non-Displayed ISO will remain
posted at the crossing price for the entirety of the one second time
period if the Protected Quotation moved lower (for sell orders) or
offer moves higher (for buy orders) before the one second time period
expires, pursuant to proposed Rule 11.9(d)(2)(iii). The Exchange has
provided the following examples in order to illustrate the behavior of
a Non-Displayed ISO with a time-in-force other than IOC that is
crossing a Protected Quotation.
Example 1
The System will slide a Non-Displayed ISO pursuant to Rule
11.9(g)(4) or cancel a Non-Displayed ISO, based on User instruction, if
the Protected Quotation is unchanged after one second.
NBBO: 10.00 x 10.05.
Order 1: Buy 100 at 10.06--Non-Displayed, ISO, price slide, time-
in-force Day. Timestamp 12:00:00:000. Order 1 is posted to the BZX Book
at a ranked price of 10.06.
NBBO: 10.00 x 10.05. Timestamp: 12:00:01:000.
RESULT: Under proposed Rule 11.9(d)(2)(i), Order 1 is slid to a
ranked price of 10.05 pursuant to Rule 11.9(g)(4) based on User
instruction because the NBBO did not update before the one second time
period expired. If, alternatively, the User had elected to have its
order cancelled rather than electing price slide, Order 1 would have
been cancelled at the expiration of the one second time period.
Example 2
The System will slide a Non-Displayed ISO pursuant to Rule
11.9(g)(4) or cancel a Non-Displayed ISO, based on User instruction, if
the Protected Quotation bid becomes higher (for sell orders) or offer
becomes lower (for buy orders) before the one second time period
expires.
NBBO: 10.00 x 10.05.
Order 1: Buy 100 at 10.08--Non-Displayed, ISO, price slide, time-
in-force Day. Timestamp 12:00:00:000. Order 1 is posted to the BZX Book
at a ranked price of 10.08.
NBBO: 10.01 x 10.07. Timestamp: 12:00:00:100.
Order 1 remains posted to the BZX Book at a ranked price of 10.08.
NBBO: 10.01 x 10.05. Timestamp: 12:00:00:101.
RESULT: Under proposed Rule 11.9(d)(2)(ii), Order 1 is slid to a
ranked price of 10.05 pursuant to Rule 11.9(g)(4) based on User
instruction because the Protected Quotation offer moved lower (from
10.07 to 10.05) before the one second time period expired. Order 1 did
not slide when the Protected Quotation offer moved higher (from 10.05
to 10.07). If, alternatively, the User had elected to have its order
cancelled rather than electing price slide, Order 1 would have been
cancelled immediately following the Protected Quotation offer's
movement from 10.07 to 10.05.
Example 3
The System will slide a Non-Displayed ISO pursuant to Rule
11.9(g)(4) or cancel a Non-Displayed ISO, based on User instruction, if
the Protected Quotation bid becomes higher (for sell orders) or offer
becomes lower (for buy orders) before the one second time period
expires.
NBBO: 10.00 x 10.05.
Order 1: Buy 100 at 10.06--Non-Displayed, ISO, price slide, time-
in-force Day. Timestamp 12:00:00:000. Order 1 is posted to the BZX Book
at a ranked price of 10.06.
NBBO: 10.01 x 10.07. Timestamp: 12:00:00:100.
Order 1 remains posted to the BZX Book at a ranked price of 10.06.
NBBO: 10.01 x 10.05. Timestamp: 12:00:00:101.
RESULT: Under proposed Rule 11.9(d)(2)(ii), Order 1 is slid to a
ranked price of 10.05 pursuant to Rule 11.9(g)(4) based on User
instruction because the Protected Quotation offer moved lower (from
10.07 to 10.05) before the one second time period expired. Order 1 did
not slide when the Protected Quotation offer moved higher (from 10.05
to 10.07). If, alternatively, the User had elected to have its order
cancelled rather than electing price slide, Order 1 would have been
cancelled immediately following the Protected Quotation offer's
movement from 10.07 to 10.05.
Example 4
A Non-Displayed ISO will remain posted and ranked at the crossing
price for the entirety of the one second time period if the Protected
Quotation bid moves lower (for sell orders) or offer moves higher (for
buy orders) before the one second time period expires.
NBBO: 10.00 x 10.05.
Order 1: Buy 100 at 10.06--Non-Displayed, ISO, price slide, time-
in-force Day. Timestamp 12:00:00:000. Order 1 is posted to the BZX at a
ranked price of 10.06.
NBBO: 10.01 x 10.06. Timestamp 12:00:00:500.
RESULT: Under proposed Rule 11.9(d)(2)(iii), Order 1 will remain
posted and ranked at the crossing price (10.06) because the Protected
Quotation offer moved higher (from 10.05 to 10.06) before the
expiration of the one second time period.
The Exchange notes that at least one other exchange \15\ offers the
ability to submit ISOs containing a Non-Displayed instruction with a
time-in-force other than IOC and does not believe that its proposal
introduces a novel order type. Additionally, the Exchange's proposal to
permit a Non-Displayed ISO entered with a time-in-force other than IOC
to cross a Protected Quotation for up to one second following receipt
by the Exchange is intended to provide clarity into the Exchange's
treatment of a Non-Displayed ISO entered with a time-in-force other
than IOC that crosses a Protected Quotation after the User's
simultaneously routed IOC orders to away market centers did not clear
the Protected Quotation. While the
[[Page 54835]]
Exchange's proposal to permit a Non-Displayed ISO to execute at a price
that trades through a Protected Quotation for up to one second
following receipt of the order by the Exchange may be a novel concept,
the Exchange believes that it is reasonable to permit a Non-Displayed
ISO with a time-in-force other than IOC to exist at a crossing price
for a short period of time following receipt of the order by the
Exchange due to the non-displayed nature of the order, which allows the
order to lock or cross a Protected Quotation under Regulation NMS. By
limiting the permissible time frame of execution at a price that would
trade through a Protected Quotation, the Exchange is attempting to
balance the intent of the Order Protection Rule with the
characteristics of the Non-Displayed ISO that make this order type
attractive to Members.
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\15\ See, e.g., Nasdaq Equity 4, Rule 4702(b)(3)(C) and Nasdaq
Equity 4, Rule 4703(j).
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Non-Displayed Order Behavior
The Exchange currently permits orders to be entered as Non-
Displayed Orders pursuant to Rule 11.9(c)(11). The Exchange now
proposes to amend Rule 11.9(c)(11) and Rule 11.13(a)(4)(C)-(D) in order
to more accurately describe the price at which a Non-Displayed Order
posts to the BZX Book and at what price a Non-Displayed Order may
execute in certain situations. The Exchange believes the below changes
to Rule 11.9(c)(11) and Rule 11.13(a)(4)(C)-(D) are necessary in order
to provide market participants with greater certainty and clarity
regarding the entry and execution of orders with Non-Displayed
instructions on the Exchange.\16\
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\16\ The Exchange notes that it has introduced identical
language regarding Non-Displayed Order behavior in a proposal on its
affiliate exchange, Cboe EDGX Exchage, Inc. See Securities Exchange
Act Release No. 104153 (September 30, 2025), 90 FR 48098 (October 3,
2025), SR-CboeEDGX-2025-072 (``EDGX RPI Proposal'').
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The Exchange proposes to introduce Rule 11.9(c)(11)(A), which
provides that when a Non-Displayed Order is entered, the Non-Displayed
Order will be executed against previously posted orders on the BZX Book
that are priced equal to or better than the price of the Non-Displayed
Order, up to the full amount of such previously posted orders, unless
such executions would trade through a Protected Quotation. Any portion
of a Non-Displayed Order that cannot be executed in this manner will be
posted to the BZX Book (unless the Non-Displayed Order has a time-in-
force of IOC) and/or routed if it has been designated as a routable
order.
The Exchange next proposes to introduce Rule 11.9(c)(11)(B), which
describes the price at which a Non-Displayed Order is posted and ranked
on the BZX Book in the event that it is not executed pursuant to
proposed Rule 11.9(c)(11)(A). Proposed Rule 11.9(c)(11)(B)(i) provides
if the limit price of a Non-Displayed Order would lock either a
Protected Quotation or the BZX Book, the Non-Displayed Order will be
posted on the BZX Book at the locking price and will be executed as set
forth in Rule 11.13(a)(4)(C). If, however, an inbound Non-Displayed
Order cannot execute due to User instruction and does not contain a
price slide instruction, the Non-Displayed Order will be cancelled. An
inbound Non-Displayed Order that cannot execute upon entry and contains
a price slide instruction will be ranked at the locking price upon
entry. Proposed Rule 11.9(c)(11)(B)(ii) provides if the limit price of
the Non-Displayed Order would cross a Protected Quotation and the Non-
Displayed Order contains a price slide instruction, the Non-Displayed
Order will be executed as set forth in Rule 11.9(g)(4) or cancel, based
on User instruction. If the entered limit price of the Non-Displayed
Order would cross a Protected Quotation and the Non-Displayed Order
does not contain a price slide instruction, the Non-Displayed Order
will cancel or route, based on User instruction. Proposed Rule
11.9(c)(11)(B)(iii) provides in situations where there is a resting
Non-Displayed Order on the buy (sell) side of the market and an
incoming Non-Displayed Order on the sell (buy) side of the market is
unable to execute due to User instruction and posts to the BZX Book at
a price that locks the resting Non-Displayed Order, an incoming Non-
Displayed Order on the buy (sell) side of the market may execute with
the resting Non-Displayed Order on the sell (buy) side of the market at
the locking price ahead of the Non-Displayed Order on the buy (sell)
side of the market.
In conjunction with the proposed changes to Rule 11.9(c)(11), the
Exchange also proposes to amend Rule 11.13(a)(4)(C)-(D) to better
describe the execution of Non-Displayed Orders in situations where a
locked market exists on the BZX Book. Rule 11.13(a)(4)(C) currently
states that certain orders are permitted to post and rest on the BZX
Book at prices that lock contra-side liquidity, provided, however, that
the System will never display a locked market. The Exchange proposes to
add language to Rule 11.13(a)(4)(C) to provide that consistent with
Rule 11.12, which sets forth the Exchange's rule regarding priority of
orders, Non-Displayed Orders and orders subject to display-price
sliding as set forth in Rule 11.9(g)(1) (defined as the ``Resting
Orders'') cannot be executed pursuant to Rule 11.13 when such Resting
Orders would be executed at prices equal to displayed orders on the
opposite side of the market (the ``Locking Price'').\17\ The Exchange
also proposes to amend Rule 11.13(a)(4)(D) to conform with the proposed
changes in Rule 11.13(a)(4)(C) with regard to the use of the terms
Resting Order and Locking Price. Proposed Rule 11.13(a)(4)(D) will be
revised from its current text to provide that in the event that an
incoming order described in sub-paragraphs (A) and (B) is a Market
Order or is a Limit Order priced more aggressively than the Locking
Price of a Resting Order as described in sub-paragraph (C), the
Exchange will execute the Resting Order at, in the case of a Resting
Order bid, one-half minimum price variation less than the Locking
Price, and, in the case of a Resting Order offer, one-half minimum
price variation more than the Locking Price.
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\17\ Any incoming order that would execute against the Resting
Order at the Locking Price would receive a priority advantage over
the displayed order at the Locking Price. As such, the Exchange does
not execute a Resting Order against an incoming order at the Locking
Price if there is also a displayed order resting on the EDGX Book at
the Locking Price.
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Implementation
The Exchange proposes to implement the proposed functionality
during the first half of 2026 and will announce the date via Trade Desk
Notice.
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.\18\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \19\ 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
[[Page 54836]]
the Section 6(b)(5) \20\ requirement that the rules of an exchange not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(5).
\20\ Id.
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In particular, the Exchange believes that its proposal to amend
Rule 11.9(d) to permit Non-Displayed ISOs and proposed amendments to
Rule 11.9(c)(11) and Rule 11.13(a)(4)(C)-(D) in order to more
accurately describe Non-Displayed Order behavior in certain situations
is designed to promote just and equitable principles of trade, help to
facilitate transactions in securities and remove impediments to and
perfect the mechanism of a free and open market and national market
system by providing Users with additional transparency into behavior of
Non-Displayed Orders, including Non-Displayed ISOs entered with a time-
in-force other than IOC, during locked and crossed markets.
The Exchange's proposal to permit the entry of Non-Displayed ISOs
promotes just and equitable principles of trade, helps to facilitate
transactions in securities, and removes impediments to and perfects the
mechanism of a free and open market and national market system by
providing Users with an additional manner in which to enter an ISO with
a time-in-force other than IOC. While the Exchange currently supports
the usage of displayed ISOs with a time-in-force other than IOC, Users
have a wide variety of trading strategies that they may seek to
implement across various market centers and the Exchange is seeking to
add the ability for Users to enter orders in a non-displayed capacity
in order to enhance the usefulness of the order type and to allow the
exchange to better compete with at least one other national securities
exchange that currently offers the ability to enter an ISO with a non-
displayed instruction.\21\ The Exchange notes that entering an ISO as a
Non-Displayed Order is completely optional, and Users are in the best
position to determine whether the proposed functionality is appropriate
and consistent with a User's given trading strategy. By providing Users
with this additional order type and allowing the User to decide whether
the Non-Displayed ISO is an appropriate order type for the User's
trading strategies, the Exchange is removing impediments to and
perfecting the mechanism of a free and open marketplace.
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\21\ Supra note 15.
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Further, the Exchange's proposal to permit a Non-Displayed ISO
entered with a time-in-force other than IOC to post to the BZX Book at
a price that crosses a Protected Quotation promotes just and equitable
principles of trade by allowing the System to briefly allow a crossed
market in limited situations. As described in Regulation NMS, a User
that enters an ISO is representing that it has also simultaneously
routed one or more additional limit orders to execute against the full
displayed size of any protected bid (in the case of a limit order to
sell), or the full displayed size of any protected offer (in the case
of a limit order to buy) for the security, which indicates that at the
time that the Exchange receives the ISO, the Exchange may rely on the
User's representation and execute the order at the limit price of the
ISO. If an ISO contains a time-in-force other than IOC and is not
filled in its entirety, the balance of the order will post to the BZX
Book.
In the event that the User's simultaneously routed orders also
marked ISO did not execute against the full displayed size of the
protected bid (offer) due to executing against hidden liquidity, it is
possible to end up in a scenario with a displayed ISO crossing a
Protected Quotation. While a displayed ISO may lock or cross a
Protected Quotation today, the locked or crossed market is generally
resolved quickly once the NBBO updates to reflect the locked or crossed
market. However, with a Non-Displayed ISO, the NBBO will not update and
market participants would be unaware of a crossed market that needs to
be resolved. Thus, the Exchange has proposed to allow the non-displayed
crossed market to exist for up to one second before sliding a Non-
Displayed ISO to the locking price pursuant to Rule 11.9(g)(4). By
allowing the crossed market to exist for up to one second, the Exchange
is promoting just and equitable principles of trade by honoring the
User's representation that it simultaneously routed orders to clear the
full, displayed size of any Protected Quotation in the security with a
price that is superior to the limit price of the Non-Displayed ISO,
while also giving the market ample time to potentially resolve the
crossed market. The Exchange is proposing to amend the ranked price of
a Non-Displayed ISO only when the Protected Quotation moves against the
price of the Non-Displayed ISO (e.g., if the Protected Quotation bid
becomes higher for sell orders or the Protected Quotation offer becomes
lower for buy orders). The Exchange believes that amending the ranked
price of a Non-Displayed ISO if the Protected Quotation moves against
the price of the Non-Displayed ISO before the expiration of the one-
second period is appropriate because it shows that the crossed market
is moving in a direction where the cross is unlikely to be resolved. By
immediately amending the ranked price of the Non-Displayed ISO to the
locking price of the crossed market if the Protected Quotation moves
against the price of the Non-Displayed ISO before the one-second period
expires, the Exchange believes it is promoting just and equitable
principles of trade by taking immediate action to resolve the crossed
market that is unlikely to resolve on its own. The Exchange's proposal
to slide the Non-Displayed ISO to the locking price if the crossed
market is unchanged after one second is not novel, as this price
sliding behavior is already contemplated pursuant to Rule 11.9(g)(4)
and simply seeks to apply an existing price sliding principle to a Non-
Displayed ISO with a time-in-force other than IOC at the conclusion of
the one second period.
The Exchange believes its proposal to introduce additional rule
text describing the entry and execution of Non-Displayed Orders on the
Exchange promotes just and equitable principles of trade by providing
additional clarity and transparency to market participants on how the
System processes Non-Displayed Orders. Specifically, the Exchange is
providing additional information regarding the price at which a Non-
Displayed Order is posted and ranked on the BZX Book when a Non-
Displayed Order either locks or crosses a Protected Quotation or when a
Non-Displayed Order locks the BZX Book. By introducing the proposed
rule text, Users will have a better understanding of how a Non-
Displayed Order is posted and ranked during certain scenarios involving
locked and crossed markets, which benefits all Users and the
marketplace as a whole. In addition, the Exchange believes its proposal
to introduce additional rule text describing the entry and execution of
Non-Displayed Orders on the Exchange is not unfairly discriminatory as
all Users and market participants will be subject to the same
application of the Exchange's rules and will have equal access to the
Exchange rulebook.
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. To the contrary, the
Exchange's proposal to introduce a Non-Displayed ISO is a competitive
response to a similar order type offered on at least one other
[[Page 54837]]
exchange. As with other national securities exchanges, the Exchange
must continually assess and improve its offerings to compete with other
exchanges and market centers. The proposed rule change is indicative of
this competition. Further, the Exchange does not believe that the
proposed rule change would implicate any intramarket competitive
concerns with respect to its Users. The proposed ability to enter an
ISO with a non-displayed instruction is completely voluntary and
available to all Users on an equal and non-discriminatory basis. Rather
than impede competition, the proposed rule change would provide an
additional order type for Users to facilitate their trading goals.
Additionally, the proposed change regarding Non-Displayed Order
entry and execution is not being made for competitive reasons, but
rather to provide Users with additional clarity and transparency about
what price a Non-Displayed Order is posted and ranked during certain
scenarios involving locked and crossed markets.
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be 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="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#ee9c9b828bc38d8183838b809a9dae9d8b8dc0898198"><span class="__cf_email__" data-cfemail="0775726b622a64686a6a626973744774626429606871">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-142 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-CboeBZX-2025-142. 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 filing 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-CboeBZX-2025-142 and should be submitted
on or before December 19, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2025-21396 Filed 11-26-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on November 28, 2025.
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.