Notice2025-23659
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Permit the Exchange To Extend the Quote-Only Period
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
December 23, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 244 (Tuesday, December 23, 2025)</title>
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[Federal Register Volume 90, Number 244 (Tuesday, December 23, 2025)]
[Notices]
[Pages 60156-60158]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23659]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104459; File No. SR-CboeBZX-2025-167]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Permit
the Exchange To Extend the Quote-Only Period
December 18, 2025.
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 December 16, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') 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 substantially 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
The Exchange is filing with the Commission a proposal to permit the
Exchange to extend the Quote-Only Period \5\ where there is a security
that is the subject of an initial pricing on the Exchange that has not
been listed on a national securities exchange immediately prior to the
initial pricing. The text of the proposed rule change is provided in
Exhibit 5.
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\5\ See Exchange Rule 11.23(a)(17).
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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
The Exchange proposes to add a new subsection (vi) to Rule
11.23(d)(2)(B) to permit the Exchange to extend the Quote-Only Period
where there is a security that is the subject of an initial pricing on
the Exchange that has not been listed on a national securities exchange
immediately prior to the initial pricing. The proposed ability to
extend the Quote-Only Period is substantively identical to capabilities
on other exchanges.\6\ The Exchange believes this proposal reinforces
the Exchange's broad discretionary authority over the initial and
continued listing of securities.\7\
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\6\ See e.g., NYSE American Rule 7.18E(e); Securities and
Exchange Commission No. 95945 (September 29, 2022) 87 FR 60428
(October 5, 2022) (SR-NYSEAMER-2022-44) (Self-Regulatory
Organizations; NYSE American LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Permit the Exchange to
Declare a Regulatory Halt).
\7\ See Exchange Rules 14.2 (Regulatory Authority of Exchange)
and 14.6 (Obligations for Companies Listed on the Exchange).
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Exchange Rule 11.23(d)(2) sets forth the IPO and Halt Auction
Process. Specifically, Rule 11.23(d)(2)(B) provides that the Quote-Only
Period for an IPO Auction \8\ may be extended in five specific
instances: (i) there are unmatched market orders on the Auction Book
\9\ associated with the auction; (ii) the underwriter requests an
extension; (iii) where the Indicative Price \10\ moves the greater of
10% or fifty (50) cents in the fifteen (15) seconds prior to the
auction; (iv) in the event of a technical or systems issue at the
Exchange that may impair the ability of Users \11\ to participate in
the IPO Auction or of the Exchange to complete the IPO Auction; or (v)
where a Derivative Security \12\ fails to meet the Exchange's listing
qualification requirements as set forth in Rule 14.11. Now, the
Exchange proposes to adopt Rule 11.23(d)(2)(B)(vi) which would provide
that the Quote-Only Period may be extended where there is a security
that is the subject of an initial pricing on the Exchange that has not
been listed on a national securities exchange immediately prior to the
initial pricing.
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\8\ See Exchange Rule 11.22(l)(2)(B) (defining ``IPO Auction'').
\9\ See Exchange Rule 11.23(a)(1) (defining ``Auction Book'').
\10\ See Exchange Rule 11.23(a)(10) (defining ``Indicative
Price'').
\11\ See Exchange Rule 1.5(cc) (defining ``Users'').
\12\ See Exchange Rule 1.5(dd) (defining ``Derivative
Security'').
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NYSE American LLC (``NYSE American'') Rule 7.18E(e) states ``[t]he
Exchange may declare a regulatory halt in a security that is the
subject of an initial pricing on the Exchange of a security that has
not been listed on a national securities exchange immediately prior to
the initial pricing. This regulatory halt will be terminated when the
security opens.'' This proposal is identical to the NYSE American rule
except that the NYSE American rule references a regulatory halt instead
of extension of the Quote-Only Period. Additionally, the Exchange is
proposing slightly different language than the NYSE American rule to
clarify that the rule only references one security. Further, the
Exchange is proposing to not include reference to the extension period
being terminated when the security opens, as this language is redundant
with respect to the Exchange's rules. While NYSE American's rule
references a regulatory halt and additional language, the Exchange's
approach of extending the Quote-Only Period achieves the same
protective purpose through a mechanism that is consistent with the
Exchange's existing auction framework under Rule 11.23(d)(2)(B).
Additionally, this proposal is identical to NYSE Arca, Inc. (``Arca'')
Rule 7.18-E(b)(1)(B)(i) \13\ and Nasdaq Rule 4120(a)(7).\14\ Initial
pricings of securities without prior exchange listing history can be
subject to heightened volatility and uncertainty, particularly where
there may be significant public interest or rapidly
[[Page 60157]]
changing market conditions. This authority complements the existing
extension provisions in Rule 11.23(d)(2)(B) and provides an additional
safeguard specifically tailored to the unique circumstances of initial
pricings.
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\13\ See Arca Rule 7.18-E(b)(1)(B)(i), which provides that
``[t]he Exchange may declare a Regulatory Halt in trading for any
security for which it is the Primary Listing Market . . . . of a
security that is the subject of an initial pricing on the Exchange
that has not been listed on a national securities exchange
immediately prior to initial pricing (``Initial Listing Regulatory
Halt'').'' See also Securities and Exchange Commission No. 103476
(July 16, 2025) 90 FR 34314 (July 21, 2025) (SR-NYSEARCA-2025-50)
(Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Rule
7.18-E To Effectuate Amendments to Second Restatement of the CTA
Plan and the Restated CQ Plan and To Make Confirming Changes to
Rules 1.1, 7.11-E, and 7.35-E).
\14\ See Nasdaq Rule 4120(a)(7), which provides that ``[i]n
circumstances in which Nasdaq deems it necessary to protect
investors and the public interest, Nasdaq, pursuant to the
procedures set forth in paragraph (c) . . . . may halt trading in a
security that is the subject of an Initial Public Offering on
Nasdaq.''
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\15\ Specifically, the Exchange believes the proposed rule change
is consistent with Section6(b)(5) \16\ 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 the Section 6(b)(5) \17\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ Id.
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In particular, the Exchange believes that proposed Rule
11.23(d)(2)(B)(vi) will remove impediments to and perfect the mechanism
of a free and open market and a national market system by providing the
Exchange with necessary operational flexibility to ensure orderly
opening auctions for newly listed securities that have not been listed
on a national securities exchange immediately prior to the initial
pricing. The proposed rule change clarifies the Exchange's broad
authority over initial and continued listings, including ETPs subject
to an IPO. This authority allows the Exchange to extend the Quote-Only
Period when necessary to prevent disorderly openings and ensure that
the initial price is established through a fair and transparent
process.
The Exchange believes the proposed rule change is consistent with
the protection of investors and the public interest because it
clarifies the Exchange's broad authority over initial and continued
listings, including ETPs subject to an IPO. This authority allows the
Exchange to extend the Quote-Only Period when necessary to prevent
disorderly openings and ensure that the initial price is established
through a fair and transparent process. Initial pricings of securities
without prior exchange listing history can be subject to significant
public interest or rapidly changing market conditions. This authority
complements the existing extension provisions in Rule 11.23(d)(2)(B)
and provides an additional safeguard specifically tailored to the
unique circumstances of initial pricing.
The Exchange believes the proposed rule change is consistent with
the requirement that the rules of an exchange not be designed to permit
unfair discrimination between customers, issuers, brokers, or dealers
because the proposed extension authority will apply uniformly to all
securities that are subject to an initial pricing on the Exchange and
have not been listed on a national securities exchange immediately
prior to the initial pricing. The Exchange's discretion to extend the
Quote-Only Period will be exercised to facilitate the orderly
establishment of an initial price, and all market participants will
benefit equally from any additional time provided during an extended
Quote-Only Period. The extension mechanism is transparent and
consistent with the Exchange's existing auction procedures and
discretionary authority under Rule 11.23(d)(2)(B).
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 intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed extension authority will apply uniformly to all securities
that are subject to an initial pricing on the Exchange and have not
been listed on a national securities exchange immediately prior to the
initial pricing. The Exchange's discretion to extend the Quote-Only
Period will be exercised to facilitate the orderly establishment of an
initial price, and all market participants will benefit equally from
any additional time provided during an extended Quote-Only Period. The
proposed rule change does not benefit or burden any specific type of
market participant, as it applies equally to all Users and their
customers participating in IPO Auctions on the Exchange.
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
rule change does not affect the ability of other exchanges to conduct
opening auctions for their listed securities or the manner in which
they choose to manage their auction processes. Market participants on
other exchanges are welcome to seek listings on the Exchange if they
determine that this proposed rule change has made the Exchange more
attractive or favorable as a listing venue.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \18\ and paragraph (f) of Rule 19b-4 \19\
thereunder. 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 \20\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\21\
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f).
\20\ 15 U.S.C. 78s(b)(3)(A)(iii).
\21\ 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 Commission has waived the pre-filing requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \22\ under the
Act does not normally become operative prior to 30 days after the date
of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\23\ the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay so
that the proposal may become operative immediately upon filing. The
Exchange states that the proposed rule change does not significantly
affect the protection of investors or the public interest and will
benefit investors and
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the public interest because the proposal will provide the Exchange with
operational flexibility to ensure orderly opening auctions for newly
listed securities that have not been listed on a national securities
exchange immediately prior to the initial pricing. The Exchange further
states that by exercising its discretion to extend the Quote-Only
Period during initial pricings, the Exchange will be able to allow
additional time for market participants to assess pricing information,
submit or modify orders, and ensure that the opening price is
established through a fair and transparent process. The Exchange
believes that this discretionary authority is particularly important
for securities without prior exchange trading history, where price
discovery may require additional time and there is no reference price
from prior trading activity.
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\22\ 17 CFR 240.19b-4(f)(6).
\23\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the operative delay could
benefit investors by allowing the Exchange additional flexibility to
offer more time in connection with initial pricing for securities with
no prior exchange listing history. In addition, the proposal does not
present any unique or novel regulatory issues because similar
functionality is currently in place on other national securities
exchanges. Therefore, the Commission believes 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 as operative
upon filing.\24\
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\24\ 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 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="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#493b3c252c642a2624242c273d3a093a2c2a672e263f"><span class="__cf_email__" data-cfemail="e193948d84cc828e8c8c848f9592a1928482cf868e97">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-167 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-2025-167. 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-2025-167 and should be submitted
on or before January 13, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23659 Filed 12-22-25; 8:45 am]
BILLING CODE 8011-01-P
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