Notice2026-07488
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) 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
April 17, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 74 (Friday, April 17, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 74 (Friday, April 17, 2026)]
[Notices]
[Pages 20747-20750]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07488]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105229; File No. SR-CboeEDGA-2026-010]
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) To Describe the
Behavior of Orders Containing a Non-Displayed Instruction
April 14, 2026.
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 April 8, 2026, Cboe EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') is filing
with the Securities and Exchange Commission (``Commission'') a proposal
to amend Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) to describe the
behavior of orders containing a Non-Displayed instruction. 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
The Exchange proposes to amend Rule 11.6(e)(2) and Rule
11.10(a)(4)(C)-(D) to describe the behavior of orders containing a Non-
Displayed instruction. The Commission recently approved a filing by the
Exchange's affiliate exchange, Cboe EDGX Exchange, Inc. (hereinafter
``EDGX'' or ``EDGX Exchange''), to implement a substantially similar
amendment to EDGX Exchange Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D)
in conjunction with EDGX's proposal to introduce a Retail Price
Improvement (``RPI'')
[[Page 20748]]
program (the ``EDGX RPI Filing'').\5\ The Exchange proposes to amend
Rule 11.6(e)(2) and Rule 11.10(a)(4)(C) to become substantially similar
to EDGX Exchange Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D), which as
described above, were recently approved by the Commission. The only
differences between the proposed Rules and the EDGX Rules are
references to corresponding rules within the EDGA Rulebook that differ
from the EDGX Rulebook. The Exchange is also not proposing to introduce
an RPI Program as was contained in the EDGX RPI Filing.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 105052 (March 19,
2026), 91 FR 14052 (March 24, 2026) (SR-CboeEDGX-2025-072).
---------------------------------------------------------------------------
By way of background, the Exchange currently permits orders to be
entered with a Non-Displayed instruction (a ``Non-Displayed Order'')
pursuant to Rule 11.6(e)(2). Current Rule 11.6(e)(2) states that a Non-
Displayed instruction is ``[a]n instruction the User \6\ may attach to
an order stating that the order is not to be displayed by the System on
the EDGA Book.'' \7\ The Exchange now proposes to amend Rule 11.6(e)(2)
and Rule 11.10(a)(4)(C)-(D) in order to more accurately describe the
price at which a Non-Displayed Order posts to the EDGA Book and at what
price a Non-Displayed Order may execute in certain situations. The
Exchange believes the proposed amendments to Rule 11.6(e)(2) and Rule
11.10(a)(4)(C)-(D) are necessary in order to provide market
participants with greater certainty and clarity regarding the current
entry and execution of orders with Non-Displayed instructions on the
Exchange. The Exchange also believes the proposed amendments are
necessary to align the rules of the Exchange with the rules of its
affiliate, EDGX Exchange.
---------------------------------------------------------------------------
\6\ See Rule 1.5(ee). The term ``User'' shall mean any Member or
Sponsored Participant who is authorized to obtain access to the
System pursuant to Rule 11.3.
\7\ See Rule 1.5(d). The term ``EDGA Book'' shall mean the
System's electronic file of orders.
---------------------------------------------------------------------------
Specifically, the Exchange proposes to introduce Rule
11.6(e)(2)(A), which provides that when a Non-Displayed Order is
entered, the Non-Displayed Order will be executed against previously
posted orders on the EDGA 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.\8\ Any portion of a Non-Displayed Order that
cannot be executed in this manner will be posted to the EDGA Book,
(unless the Non-Displayed Order has a time-in-force of Immediate-or-
Cancel (``IOC'') \9\) and/or routed if it has been designated as a
routable order.
---------------------------------------------------------------------------
\8\ See Rule 1.5(v). The term ``Protected Bid'' or ``Protected
Offer'' shall mean a bid or offer in a stock that is (i) displayed
by an automated trading center; (ii) disseminated pursuant to an
effective national market system plan; and (iii) an automated
quotation that is the best bid or best offer of a national
securities exchange or association. The term ``Protected Quotation''
shall mean a quotation that is a Protected Bid or Protected Offer.
\9\ See Exchange 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 and that cannot be executed in
accordance with Rule 11.10(a)(4) on the System when reaching the
Exchange will be eligible for routing away pursuant to Rule 11.11.
---------------------------------------------------------------------------
Next, the Exchange next proposes to introduce Rule 11.6(e)(2)(B),
which describes the price at which a Non-Displayed Order is posted and
ranked on the EDGA Book in the event that it is not executed pursuant
to proposed Rule 11.6(e)(2)(A). Proposed Rule 11.6(e)(2)(B)(i) provides
if the limit price of a Non-Displayed Order would lock the EDGA Book,
the Non-Displayed Order will be posted on the EDGA Book at the locking
price and will be executed as set forth in Rule 11.10(a)(4)(D). If,
however, an inbound Non-Displayed Order cannot execute due to User
instruction (e.g., Post Only \10\ or minimum quantity) 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 11.6(e)(2)(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 11.6(l)(1)(B) 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 11.6(e)(2)(B)(iii) provides that 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 (e.g., Post Only or minimum quantity) and posts to the EDGA
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. The Exchange believes that it is more
appropriate to permit later-arriving orders to execute ahead of a
resting order posted to the EDGA Book that is in a locked state due to
the presence of a contra-side order with specific User instructions
(e.g., Post Only or minimum quantity) rather than cancel or slide the
later-arriving order due to the information leakage that would occur as
a result of the cancellation. The Exchange has included an example to
demonstrate this operation, which is contained in proposed Rule
11.6(e)(2)(B)(iii).
---------------------------------------------------------------------------
\10\ See Rule 11.6(n)(4). A Post Only instruction is an
instruction that may be attached to an order that is to be ranked
and executed on the Exchange pursuant to Rule 11.9 and Rule
11.10(a)(4) or cancelled, as appropriate, without routing away to
another trading center except that the order will not remove
liquidity from the EDGA Book, except as described below. An order
with a Post Only instruction will remove contra-side liquidity from
the EDGA Book if the order is an order to buy or sell a security
priced below $1.00 or if the value of such execution when removing
liquidity equals or exceeds the value of such execution if the order
instead posted to the EDGA Book and subsequently provided liquidity,
include the applicable fees charged or rebates provided.
---------------------------------------------------------------------------
Example
<bullet> NBBO for security ABC is $10.00 x $10.05.
<bullet> User 1 enters a MidPoint Peg \11\ order to buy 100 shares
of ABC at $10.03. User 1's order is posted to the EDGA Book and ranked
at $10.025.
---------------------------------------------------------------------------
\11\ See Rule 11.8(d). A MidPoint Peg order is a non-displayed
Market Order or Limit Order with an instruction to execute at the
midpoint of the NBBO, or, alternatively, pegged to the less
aggressive of the midpoint of the NBBO or one minimum price
variation inside the same side of the NBBO as the order.
---------------------------------------------------------------------------
<bullet> User 2 enters a MidPoint Peg Post Only order to sell 100
shares of ABC at $10.02. User 2's order is posted to the EDGA Book and
ranked at $10.025.
<bullet> User 3 enters an IOC order to buy 100 shares of ABC at
$10.05.
<bullet> Result: Pursuant to proposed Rule 11.6(e)(2)(B)(iii), User
3's order trades with User 2's MidPoint Peg Post Only order at a price
of $10.025. In this instance, User 3's order trades with User 2's order
ahead of User 1's order because when User 2's order was originally
entered, it was unable to execute due to the Post Only instruction. As
both User 2's order and User 1's order are non-displayed orders
(MidPoint Peg orders by nature are non-displayed), the Exchange allows
User 2's order to post to the EDGA Book and
[[Page 20749]]
be ranked at the locking price as the non-displayed nature of these
orders would not cause a violation of Regulation NMS. The Exchange
believes that if it were instead to slide User 2's order in accordance
with Rule 11.6(l)(3) or cancel User 2's order so that it would not
create an internal locked book, the act of sliding or cancelling User
2's order would result in information leakage. As such, the Exchange
believes that it is appropriate to permit User 3's order to trade ahead
of User 1's resting order at a price of $10.025.
Finally, the Exchange also proposes to amend Rule 11.10(a)(4)(C)-
(D) to better describe the execution of Non-Displayed Orders in
situations where a locked market exists on the EDGA Book. Rule
11.10(a)(4)(C) currently states that certain orders are permitted to
post and rest on the EDGA 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
11.10(a)(4)(C) to provide that consistent with Rule 11.9, 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
11.6(l)(1) (defined as the ``Resting Orders'') cannot be executed
pursuant to Rule 11.10 when such Resting Orders would be executed at
prices equal to displayed orders on the opposite side of the market
(the ``Locking Price'').\12\ The Exchange also proposes to amend Rule
11.10(a)(4)(D) to conform with the proposed changes in Rule
11.10(a)(4)(C) with regard to the use of the terms Resting Order and
Locking Price. Proposed Rule 11.10(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.
---------------------------------------------------------------------------
\12\ 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 EDGA Book at
the Locking Price.
---------------------------------------------------------------------------
The proposed changes to Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D)
will describe the current behavior of orders containing a Non-Displayed
instruction in greater detail and align the rules of the Exchange with
its affiliate exchange, EDGX. The Exchange is not proposing to amend
its current functionality regarding Non-Displayed Orders, but rather
seeks to amend its rules so that Users and other market participants
will have greater certainty and clarity regarding how a Non-Displayed
Order is posted and ranked on the EDGA Book during certain scenarios
involving locked and crossed markets.
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.\13\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \14\ 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) \15\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
\15\ Id.
---------------------------------------------------------------------------
The Exchange believes the proposed amendments to Rule 11.6(e)(2)
and Rule 11.10(a)(4)(C)-(D) to introduce additional rule text
describing the entry and execution of Non-Displayed Orders on the
Exchange promote just and equitable principles of trade by providing
additional certainty and clarity to market participants regarding how
the System processes Non-Displayed Orders. Specifically, the Exchange
seeks to provide additional information regarding the price at which a
Non-Displayed Order is posted and ranked on the EDGA Book when a Non-
Displayed Order either locks or crosses a Protected Quotation or when a
Non-Displayed Order locks the EDGA Book. Further, the Exchange is not
proposing to amend Non-Displayed Order behavior, but rather only
seeking to introduce additional language to its rules to provide
additional explanation and clarity to Users and market participants
about Non-Displayed Order behavior during a locked or crossed market
scenario. 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.
Additionally, 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. Finally, the Exchange notes that the proposed text of Rule
11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) has already been approved by the
Commission for the Exchange's affiliate exchange.\16\ Indeed, the
proposed amendments are substantially similar those approved by the
Commission for EDGX Exchange with differences only to account for the
Exchange's existing rule text. Thus, the proposed amendments to Rule
11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) do not present any novel issues
for the Commission's consideration.
---------------------------------------------------------------------------
\16\ Supra note 5.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed changes do not impose any burden on intramarket or
intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed changes to Rule
11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) are not proposed for competitive
reasons but rather to provide Users with additional clarity and
transparency about what price a Non-Displayed Order is posted, ranked,
and executed during certain scenarios involving locked and crossed
markets. Nor do the proposed changes modify the functionality or
behavior of Non-Display Orders or any other order type on the Exchange.
Rather, the proposed rule changes clarify the current functionality and
behavior of Non-Displayed Orders on the Exchange. The proposed rule
changes will also align the Exchange's rule text with that
[[Page 20750]]
of its affiliate exchange, EDGX. Finally, 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. Thus, the
proposed rule changes add clarity and transparency to the rules of the
Exchange regarding Non-Displayed Orders and will not impose any burden
on intramarket or intermarket competition.
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)(iii) of the Act \17\ and Rule
19b-4(f)(6) \18\ thereunder.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(3)(A)(iii).
\18\ 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 Exchange has satisfied this requirement.
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 30-day
operative delay contained in Rule 19b-4(f)(6)(iii) so that the proposed
rule change may become operative upon filing. The Exchange states that
the proposed rule change will align the Exchange Rules regarding
treatment of Non-Displayed Order with that of the Exchange's affiliate,
EDGX. Because the proposed rule change does not raise any novel
regulatory issues, the Commission believes that waiver of the operative
delay is consistent with the protection with the protection of
investors and the public interest. Accordingly, the Commission hereby
waives the operative delay and designates the proposal operative upon
filing.\19\
---------------------------------------------------------------------------
\19\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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 will 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="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#f98b8c959cd49a9694949c978d8ab98a9c9ad79e968f"><span class="__cf_email__" data-cfemail="9fedeaf3fab2fcf0f2f2faf1ebecdfecfafcb1f8f0e9">[email protected]</span></a>. Please include
file number SR-CboeEDGA-2026-010 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-2026-010. 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-CboeEDGA-2026-010 and should be
submitted on or before May 8, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-07488 Filed 4-16-26; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js" defer></script></body>
</html>Indexed from Federal Register on April 17, 2026.
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.