Notice2025-23814
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Modify Rule 11.21 To Adopt a Retail Price Improvement Program and Modify Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) in Order To Describe the Behavior of Orders Containing a Non-Displayed Instruction
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 29, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 245 (Monday, December 29, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 245 (Monday, December 29, 2025)]
[Notices]
[Pages 60784-60785]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23814]
[[Page 60784]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104470; File No. SR-CboeEDGX-2025-072]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To Modify Rule 11.21 To Adopt a Retail Price
Improvement Program and Modify Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-
(D) in Order To Describe the Behavior of Orders Containing a Non-
Displayed Instruction
December 19, 2025.
I. Introduction
On September 30, 2025, Cboe EDGX Exchange, Inc. (``EDGX'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to modify Rule 11.21 to adopt a Retail Price
Improvement program (``Retail Price Improvement Program''). The
Exchange also proposes to modify Rule 11.6(e)(2) and Rule
11.10(a)(4)(C)-(D) in order to describe the behavior of orders
containing a ``Non-Displayed'' instruction. The proposed rule change
was published for comment in the Federal Register on October 3,
2025.\3\ On November 3, 2025, pursuant to Section 19(b)(2) of the
Act,\4\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\5\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 104153 (Sept. 30,
2025), 90 FR 48098 (``Notice''). The Commission has not received any
comments on the proposed rule change.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 104173, 90 FR 51424
(Nov. 17, 2025) (designating January 1, 2026, as the date by which
the Commission shall either approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
changes).
---------------------------------------------------------------------------
The Commission is publishing this order to institute proceedings
under Section 19(b)(2)(B) of the Act \6\ to determine whether to
approve or disapprove the proposed rule change.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
II. Summary of the Proposal
As described in more detail in the Notice,\7\ the Exchange proposes
to modify Rule 11.21 to add a Retail Price Improvement Program, and to
modify Rules 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) in order to
describe the behavior of orders containing a ``Non-Displayed''
instruction.\8\
---------------------------------------------------------------------------
\7\ See Notice, supra note 3.
\8\ EDGX Rule 11.6(e) defines ``Display Options,'' and EDGX Rule
11.6(e)(2) provides that a ``Non-Displayed'' instruction is an
instruction the User (defined in EDGX Rule 1.5(ee)) may attach to an
order stating that the order is not to be displayed by the System
(defined in EDGX Rule 1.5(cc)) on the EDGX Book (defined in EDGX
Rule 1.5(d)). An order with a Non-Displayed instruction that is to
be re-routed pursuant to the ``Post to Away'' routing option set
forth in EDGX Rule 11.11(g)(12) will be identified as Non-Displayed
when routed to an away Trading Center (defined in EDGX Rule
2.11(a)).
---------------------------------------------------------------------------
According to the Exchange, its proposed Retail Price Improvement
Program, designed to provide price improvement to Retail Orders,\9\ is
generally consistent with similar programs offered by other national
securities exchanges with the following main differences: \10\ (1)
Retail Orders entered on the Exchange may be entered with a time-in-
force other than Immediate-or-Cancel (``IOC''); \11\ (2) Retail Price
Improvement Orders \12\ will only be eligible to execute against
incoming Retail Orders and will not be eligible to remove resting
Retail Orders from the EDGX Book; and (3) Users will have the ability
to enter the proposed Retail Price Improvement Order as a MidPoint Peg
Order as described in Rule 11.8(d).\13\
---------------------------------------------------------------------------
\9\ Pursuant to EDGX Rule 11.21(a)(2), a ``Retail Order'' is an
agency order or riskless principal order that meets the criteria of
FINRA Rule 5320.03 that originates from a natural person and is
submitted to the Exchange by a Retail Member Organization, provided
that no change is made to the terms of the order with respect to
price or side of market and the order does not originate from a
trading algorithm or any other computerized methodology.
\10\ See Notice, supra note 3, at 48099.
\11\ See EDGX Rule 11.6(q)(1). Immediate-or-Cancel (``IOC'') is
an instruction the User may attach to an order stating the order 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 EDGX Book. An order with an IOC instruction that does not
include a Book Only instruction (defined in EDGX Rule 21.1(d)(7))
and that cannot be executed in accordance with EDGX Rule 11.10(a)(4)
on the System when reaching the Exchange will be eligible for
routing away pursuant to EDGX Rule 11.11. Under the proposal,
because Retail Orders may be entered with a time-in-force other than
IOC, Retail Orders will be allowed to post to the EDGX Book or route
to away trading centers according to User instructions. See Notice,
supra note 3, at 48099.
\12\ Under the proposed Retail Price Improvement Program,
``Retail Price Improvement Orders'' consist of non-displayed
interest on the Exchange that is eligible to interact with incoming
Retail Orders and that is identified as such. To be executable, a
Retail Price Improvement Order must be priced at least $0.001 better
than the Protected NBB or Protected NBO (each as defined in EDGX
Rule 1.5(f)) and may be priced in $0.001 increments (e.g., $10.001).
The Exchange states that it plans to submit a request for an
exemption under Regulation NMS Rule 612 that would permit it to
accept and rank non-displayed Retail Price Improvement interest. See
Notice, supra note 3, at 48100, n.22. Rule 612 generally prohibits a
national securities exchange from accepting, displaying, or ranking
bids, offers, orders and indications of interest in an increment
smaller than the minimum pricing increment. See 17 CFR 242.612.
\13\ See proposed EDGX Rule 11.21(a)(3). See also Notice, supra
note 3, at 48103.
---------------------------------------------------------------------------
The Exchange also proposes to amend Rule 11.6(e)(2) and Rule
11.10(a)(4)(C)-(D) in order to describe the price at which a Non-
Displayed Order is posted and ranked to the EDGX Book and at what price
a Non-Displayed Order may execute in certain situations.\14\
---------------------------------------------------------------------------
\14\ See Notice, supra note 3, at 48104.
---------------------------------------------------------------------------
III. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeEDGX-2025-072 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \15\ to determine whether the proposed rule
change should be approved or disapproved. Institution of proceedings is
appropriate at this time in view of the legal and policy issues raised
by the proposal. Institution of proceedings does not indicate that the
Commission has reached any conclusions with respect to any of the
issues involved. Rather, as described below, the Commission seeks and
encourages interested persons to provide comments on the proposed rule
change.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
Pursuant to Section 19(b)(2)(B) of the Act,\16\ the Commission is
providing notice of the grounds for disapproval under consideration. As
described above, the Exchange has proposed to modify its rules to add a
Retail Price Improvement Program, as well as to modify its rules
relating to how orders with Non-Displayed instructions will be posted,
ranked, and executed. The Commission is instituting proceedings to
allow for additional analysis of, and input from commenters with
respect to, the proposal's consistency with the Act, and in particular
with Section 6(b)(5) \17\ of the Act. Section 6(b)(5) of the Act
requires that the rules of a national securities exchange be designed,
among other things, 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, and not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\16\ Id.
\17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
[[Page 60785]]
The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, in addition to any
other comments they may wish to submit about the proposed rule change.
In particular, the Commission seeks comment on whether the proposal,
which would add a Retail Price Improvement Program and modify rules
relating to Non-Displayed order instructions: would protect investors
and the public interest, is not designed to permit unfair
discrimination, or raises any new or novel concerns not previously
contemplated by the Commission.
IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule change
is consistent with Section 6(b)(5) or any other provision of the Act,
and the rules and regulations thereunder. Although there do not appear
to be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of data, views, and arguments, the
Commission will consider, pursuant to Rule 19b-4 under the Act,\18\ any
request for an opportunity to make an oral presentation.\19\
---------------------------------------------------------------------------
\18\ 17 CFR 240.19b-4.
\19\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (Jun. 4, 1975), grants to
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is
appropriate for consideration of a particular proposal by a self-
regulatory organization. See Securities Acts Amendments of 1975,
Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75,
94th Cong., 1st Sess. 30 (1975).
---------------------------------------------------------------------------
Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by January 20, 2026. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
February 2, 2026.
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#0775726b622a64686a6a626973744774626429606871"><span class="__cf_email__" data-cfemail="a5d7d0c9c088c6cac8c8c0cbd1d6e5d6c0c68bc2cad3">[email protected]</span></a>. Please include
file number SR-CboeEDGX-2025-072 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-2025-072. 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-CboeEDGX-2025-072 and should be
submitted by January 20, 2026. Rebuttal comments should be submitted by
February 2, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23814 Filed 12-23-25; 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 December 29, 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.