Notice2026-08475
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule by Introducing New Fee Code ZP and Amending the Fee Associated With Fee Code DX
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Published
May 1, 2026
Issuing agencies
Securities and Exchange Commission
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<title>Federal Register, Volume 91 Issue 84 (Friday, May 1, 2026)</title>
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[Federal Register Volume 91, Number 84 (Friday, May 1, 2026)]
[Notices]
[Pages 23486-23489]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-08475]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105321; File No. SR-CboeEDGX-2026-026]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule by Introducing New Fee Code ZP and Amending the
Fee Associated With Fee Code DX
April 28, 2026.
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 April 15, 2026, Cboe EDGX Exchange, Inc. (``Exchange'' or ``EDGX'')
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 EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to
amend its Fee Schedule by introducing new fee code ZP and amending the
fee associated with fee code DX. 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 its Fee Schedule applicable to its
equities trading platform (``EDGX Equities'') by introducing new fee
code ZP and amending the fee associated with fee code DX. The Exchange
proposes to implement these changes effective April 1, 2026.\3\
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\3\ The Exchange initially submitted the proposed rule change on
April 1, 2026 (SR-CboeEDGX-2026-017). On April 8, 2026, the Exchange
withdrew that proposal and submitted SR-CboeEDGX-2026-022. On April
15, 2026, the Exchange withdrew that proposal and submitting this
filing.
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The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 17 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues
that do not have similar self-regulatory responsibilities under the
Securities Exchange Act of 1934 (the ``Act''), to which market
participants may direct their order flow. Based on publicly available
information,\4\ no single registered equities exchange has more than
15% of the market share. Thus, in such a low-concentrated and highly
competitive market, no single equities exchange possesses significant
pricing power in the execution of order flow. The Exchange in
particular operates a ``maker-taker'' model whereby it pays rebates to
members that add liquidity and assesses fees to those that remove
liquidity.
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\4\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (March 14, 2026), available at <a href="https://www.cboe.com/us/equities/_statistics/">https://www.cboe.com/us/equities/_statistics/</a>.
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The Exchange's Fee Schedule sets forth the standard rebates and
rates applied per share for orders that provide and remove liquidity,
respectively. Currently, for orders in securities priced at or above
$1.00, the Exchange provides a standard rebate of $0.00160 per share
for orders that add liquidity and assesses a fee of $0.0030 per share
for orders that remove liquidity.\5\ For orders in securities priced
below $1.00, the Exchange provides a standard rebate of 0.00003 per
share for orders that add liquidity and assesses a fee of 0.30% of the
dollar value for orders that remove
[[Page 23487]]
liquidity.\6\ The Exchange offers various fee codes applicable to
orders that add or remove liquidity on EDGX.
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\5\ See EDGX Equities Fee Schedule, Standard Rates.
\6\ Id.
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Fee Code ZP
On March 19, 2026, the Commission approved the Exchange's proposed
adoption of the EDGX RPI Program.\7\ The EDGX RPI Program will launch
on the Exchange on April 10, 2026. The EDGX RPI Program seeks to enable
Users to offer price improvement to eligible Retail Orders through use
of Retail Price Improving Orders (``RPI Orders'') \8\ in securities
priced at or above $1.00. As part of the implementation of the EDGX RPI
Program, the Exchange now proposes to introduce new fee code ZP to its
Fee Schedule, which would be assess a fee of $0.0002 to RPI Orders in
securities priced at or above $1.00 that add liquidity to the Exchange.
Securities with executions priced below $1.00 will not be eligible to
be appended with fee code ZP, as an RPI Order may not be entered in
securities priced below $1.00.\9\
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\7\ See Securities Exchange Act Release No. 105052 (March 19,
2026), 91 FR 14052 (March 24, 2026) (SR-CboeEDGX-2025-072).
\8\ See Rule 11.21(a)(3). A ``Retail Price Improvement Order''
or ``RPI Order'' consists of non-displayed interest on the Exchange
that is eligible to interact with incoming Retail Orders and that is
identified by the Retail Liquidity Identifier described in Rule
11.21(e). To be executable, an RPI Order for a security priced at or
above $1.00 must be priced at least $0.001 better than the Protected
NBB or Protected NBO and may be priced in $0.001 increments (e.g.,
$10.001). An RPI Order may not be entered in securities priced below
$1.00. An RPI Order is ineligible to execute at prices equal to or
inferior to the Protected NBB (for buy orders) or Protected NBO (for
sell orders). An RPI Order that is ineligible to execute because it
is priced equal to or inferior to the Protected NBB or Protected NBO
will not be canceled and will become eligible to execute against
incoming Retail Orders should the RPI Order become priced better
than the Protected NBB (for buy orders) or Protected NBO (for sell
orders) at a later time. An incoming RPI Order will not be eligible
to interact with a resting Retail Order on the EDGX Book and upon
entry will post to the EDGX Book to execute against later-arriving
Retail Orders.
\9\ See Rule 11.21(a)(3).
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The Exchange notes that its affiliate exchange, Cboe BYX Exchange,
Inc. (``BYX''), similarly assesses a fee for RPI Orders that add
liquidity to BYX as part of its retail liquidity program offering.\10\
While the proposed fee on EDGX differs from the identical fee code on
BYX, the Exchange notes that BYX has a different fee structure compared
to EDGX. BYX is structured as a ``taker-maker'' exchange, meaning BYX
pays rebates to Members that remove liquidity from BYX and assesses
fees to Users that add liquidity to BYX. Thus, a Member executing an
RPI Order on BYX receives a discounted fee as compared to the base rate
to encourage Members to submit RPI Orders to BYX. On the contrary, EDGX
is a ``maker-taker'' exchange and therefore a Member is paid a rebate
to add liquidity to the Exchange and assessed a fee to remove liquidity
from the Exchange. The proposed fee for liquidity-adding RPI Orders is
structured similar to the fee assessed for Midpoint Discretionary
Orders (``MDOs'') \11\ containing a Quote Depletion Protection
(``QDP'') \12\ order instruction that add liquidity to EDGX.\13\ While
Members are assessed a fee rather than provided a rebate for adding
liquidity to EDGX under proposed fee code ZP, the Exchange believes
that Members are encouraged to utilize this order type due to its
ability to execute only against marketable retail order flow, which is
generally preferred to non-retail order flow as it is less prone to
adverse selection.\14\ Thus, users of RPI Orders would be willing to
incur a fee and provide potential price improvement in order to
minimize their possible adverse selection costs by interacting with
retail order flow.
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\10\ See Cboe BYX Exchange Fee Schedule.
\11\ See Rule 11.8(g).
\12\ See Rule 11.8(g)(1).
\13\ See EDGX Fee Schedule, fee code DQ, which assesses a fee of
$0.0004 to orders that utilize QDP and add liquidity to EDGX.
\14\ Adverse selection is the phenomenon where the price of a
stock drops right after a liquidity provider purchases the stock.
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Fee Code DX
Additionally, the Exchange proposes to amend the fee associated
with fee code DX. Specifically, the proposed rule change amends the fee
assessed to orders that yield fee code DX under the Fee Codes and
Associated Fees table of the Fee Schedule. Fee code DX is appended to
MDOs using the QDP order instruction that remove liquidity from the
Exchange. QDP is designed to provide enhanced protections to MDOs by
tracking significant executions that constitute the best bid or offer
on the EDGX Book \15\ and enabling Users to avoid potentially
unfavorable executions by preventing MDOs entered with the optional QDP
instruction from exercising discretion to trade at more aggressive
prices when QDP has been triggered.
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\15\ See Exchange Rule 1.5(d). The term ``EDGX Book'' shall mean
the System's electronic file of orders.
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Currently, orders appended with fee code DX are assessed a fee of
$0.00150 per share in securities at or above $1.00 and 0.30% of dollar
value for securities priced below $1.00. The Exchange proposes to
increase the fee to $0.00250 per share in securities at or above $1.00.
There is no proposed change in the fee assessed to securities priced
below $1.00. The purpose of increasing the fee associated with fee code
DX in securities priced at or above $1.00 is for business and
competitive reasons, as the Exchange believes that increasing such fee
as proposed would decrease the Exchange's expenditures with respect to
transaction pricing in a manner that is still consistent with the
Exchange's overall pricing philosophy of encouraging added liquidity.
2. Statutory Basis
The Exchange believes the proposed rule changes are 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.\16\ Specifically, the Exchange believes the proposed rule changes
are consistent with the Section 6(b)(5) \17\ 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 changes
are consistent with the Section 6(b)(5) \18\ requirement that the rules
of an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers as well as Section 6(b)(4) \19\
as it is designed to provide for the equitable allocation of reasonable
dues, fees and other charges among its Members and other persons using
its facilities.
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\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(5).
\18\ Id.
\19\ 15 U.S.C. 78f(b)(4)
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In particular, the Exchange believes that proposed fee code ZP is
reasonable, equitable, and not unfairly discriminatory. As discussed,
proposed fee code ZP would introduce pricing specific to RPI Orders
executed in securities priced at or above $1.00 that add liquidity to
EDGX. The proposed fee code reflects a competitive pricing structure
designed to encourage Members to submit RPI Orders to EDGX for
execution against contra-side Retail Orders, which are generally seen
as more desirable than non-Retail Orders.
[[Page 23488]]
The Exchange believes proposed fee code ZP, which assesses a fee for
RPI Orders that add liquidity in securities priced at or above $1.00,
provides a reasonable means to encourage overall growth in RPI Order
flow on EDGX. An overall increase in RPI Order activity would deepen
the Exchange's liquidity pool, offer more narrow spreads, support the
quality of price discovery, promote market transparency, and improve
market quality for all investors. The Exchange believes that limiting
the proposed fee code to RPI Orders is reasonable, equitable, and not
unfairly discriminatory because the Exchange has identified such order
type as an order type for which it would like to inject additional
quoting competition, which it believes will generally act to narrow
spreads, increase size at the inside, and increase liquidity depth for
all market participants.
Additionally, the Exchange notes that the proposed fee code is not
dissimilar from other fee codes associated with retail liquidity
programs offered by other exchanges, such as those offered by BYX and
NYSE National Exchange, Inc. (``NYSE National'').\20\ The Exchange's
proposed fee code differs from the similar fee code for RPI Orders on
BYX by assessing a 0.0002 fee on RPI Orders adding liquidity instead of
0.0016 as BYX does.\21\ Proposed fee code ZP differs from the
corresponding NYSE National rate in that it would assess a fee of
$0.0002 while NYSE National does not provide a rebate or assess a fee
for retail liquidity provider orders that execute against a Retail
Order.\22\
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\20\ See, e.g., Cboe BYX Equities Fee Schedule, Fee Codes and
Associated Fees (Fee Code ZP). See also, NYSE National Equities Fee
Schedule, Tiered Rates (Fees and credits applicable in the Retail
Liquidity Program).
\21\ As discussed supra, BYX is structured as a taker-maker
exchange while EDGX is structured as a maker-taker exchange. Thus,
the fee assessed by BYX is a discounted fee as compared to the base
fee assessed to add liquidity to BYX while the fee assessed by EDGX
is unique to this particular product type as other liquidity-adding
orders on EDGX are provided a rebate to add liquidity to EDGX.
\22\ Supra note 20.
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Further, the Exchange's proposed fee code ZP is equitable and not
unfairly discriminatory because it would apply to all RPI Orders that
add liquidity to EDGX in securities priced at or above $1.00.
Additionally, the RPI Order type is open to all Users on an equal basis
and is completely voluntary. Users are not required to utilize the RPI
Order type and may choose whether to utilize the RPI Order type to
potentially benefit by executing against a contra-side Retail Order
while incurring a fee to utilize the RPI Order. Should a User desire
not to incur a fee to add liquidity to EDGX by using the RPI Order
type, the User is free to utilize other order types that are eligible
to execute against Retail Orders and would not incur a fee to add
liquidity to EDGX.
Finally, the Exchange believes that its proposal to modify the fee
associated with fee code DX is reasonable, equitable, and consistent
with the Act because such change is designed to decrease the Exchange's
expenditures with respect to transaction pricing in order to offset
some of the costs associated with the Exchange's current pricing
structure, which provides various rebates for liquidity-adding orders,
and the Exchange's operations generally, in a manner that is consistent
with the Exchange's overall pricing philosophy of encouraging added
liquidity. The Exchange further believes that the proposed change is
reasonable because the proposed fee remains consistent with pricing
offered by the other exchanges and does not represent a significant
departure from the Exchange's general pricing structure. Indeed, the
proposed fee applicable to fee code DX ($0.0025) is lower than that of
the Exchange's affiliate, Cboe EDGA Exchange, Inc. (``EDGA''), which
currently assesses a fee of $0.00300 for MDOs removed from EDGA with a
QDP order instruction. The Exchange further believes that the proposed
increase to the fee associated with fee code DX is equitable and not
unfairly discriminatory because it applies to all Members equally, in
that all Members will be assessed the higher fee upon submitting orders
appended with fee code DX. The Exchange notes that the QDP instruction
is optional and market participants who do not wish to incur the
increased flat fee can continue to enter MDOs without the QDP
instruction.
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. Rather, as discussed above,
the Exchange believes that the proposed changes will encourage the
submission of additional order flow to a public exchange, thereby
promoting market depth, execution incentives and enhanced execution
opportunities, as well as price discovery and transparency for all
Members. As a result, the Exchange believes that the proposed changes
further the Commission's goal in adopting Regulation NMS of fostering
competition among orders, which promotes ``more efficient pricing of
individual stocks for all types of orders, large and small.''
The Exchange believes the proposed rule changes do not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Particularly, the proposed
fee associated with fee code ZP does not impose an unnecessary burden
as all RPI Orders that add liquidity to EDGX in securities priced at or
above $1.00 will be appended with fee code ZP. Further, use of the RPI
Order type is completely voluntary and is not required by the Exchange.
Similarly, the Exchange believes the proposed amendment to the fee
associated with fee code DX does not impose any burden on intramarket
competition as all Members will be subject to the higher fee assessed
to orders appended with fee code DX. The Exchange does not believe the
proposed changes burden competition, but rather, enhance competition as
they are intended to increase the competitiveness of EDGX by amending
existing pricing incentives in order to attract order flow and
incentivize participants to increase their participation on the
Exchange. Greater overall order flow, trading opportunities, and
pricing transparency benefits all market participants on the Exchange
by enhancing market quality and continuing to encourage Members to send
orders, thereby contributing towards a robust and well-balanced market
ecosystem.
Next, the Exchange believes the proposed rule changes do not impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and direct their order flow, including other equities exchanges, off-
exchange venues, and alternative trading systems. Additionally, the
Exchange represents a small percentage of the overall market. Based on
publicly available information, no single equities exchange has more
than 15% of the market share.\23\ Therefore, no exchange possesses
significant pricing power in the execution of order flow. Indeed,
participants can readily choose to send their orders to other exchange
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. Moreover, the Commission has repeatedly expressed
its preference
[[Page 23489]]
for competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \24\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
Circuit stated as follows: ``[n]o one disputes that competition for
order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S.
national market system, buyers and sellers of securities, and the
broker-dealers that act as their order-routing agents, have a wide
range of choices of where to route orders for execution'; [and] `no
exchange can afford to take its market share percentages for granted'
because `no exchange possesses a monopoly, regulatory or otherwise, in
the execution of order flow from broker dealers'. . . .''.\25\
Accordingly, the Exchange does not believe its proposed fee changes
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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\23\ Supra note 4.
\24\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\25\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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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 \26\ and paragraph (f) of Rule 19b-4 \27\
thereunder. 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.
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\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#f082859c95dd939f9d9d959e8483b0839593de979f86"><span class="__cf_email__" data-cfemail="7c0e091019511f1311111912080f3c0f191f521b130a">[email protected]</span></a>. Please include
file number SR-CboeEDGX-2026-026 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-2026-026. 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-2026-026 and should be
submitted on or before May 22, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-08475 Filed 4-30-26; 8:45 am]
BILLING CODE 8011-01-P
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