Notice2026-19396
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.15(a) To Clarify That a Non-Member May Act as a Clearing Firm
Primary source
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Published
September 23, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 183 (Wednesday, September 23, 2026)</title>
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[Federal Register Volume 91, Number 183 (Wednesday, September 23, 2026)]
[Notices]
[Pages 60458-60460]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19396]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106414; File No. SR-CboeBZX-2026-076]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 11.15(a) To Clarify That a Non-Member May Act as a Clearing Firm
September 18, 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 September 8, 2026, 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 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
The Exchange proposes to amend Rule 11.15(a) (Clearance and
Settlement; Anonymity) to clarify that a non-Member may act as a
Clearing Firm.
The text of the proposed rule change is also available on the
Exchange's website (<a href="http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/">http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
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.
[[Page 60459]]
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 11.15 (Clearance and
Settlement; Anonymity) to clarify that a non-Member \3\ may act as a
Clearing Firm.\4\
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\3\ See Rule 1.5(n). The term ``Member'' shall mean any
registered broker or dealer that has been admitted to membership in
the Exchange. A Member will have the status of a ``member'' of the
Exchange as that term is defined in Section 3(a)(3) of the Act.
Membership may be granted to a sole proprietor, partnership,
corporation, limited liability company or other organization which
is a registered broker or dealer pursuant to Section 15 of the Act,
and which has been approved by the Exchange.
\4\ See proposed Rule 11.15(a), discussed infra. A ``Clearing
Firm'' is a firm that is a member of and clears transactions through
a Qualified Clearing Agency.
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Background and Proposed Rule Change
Rule 11.15(a) currently provides that all transactions through the
facilities of the Exchange shall be cleared and settled through a
Qualified Clearing Agency \5\ using a continuous net settlement system.
The rule further provides that this requirement may be satisfied by
direct participation, use of direct clearing services, or by entry into
a correspondent clearing arrangement with another Member that clears
trades through a Qualified Clearing Agency. If a Member clears
transactions through another Member that is a member of a Qualified
Clearing Agency (``Clearing Member''), such Clearing Member shall
affirm to the Exchange in writing, through a letter of authorization,
letter of guarantee, or other agreement acceptable to the Exchange, its
agreement to assume responsibility for clearing and settling any and
all trades executed by the Member designating it as its clearing firm.
The rules of any such clearing agency shall govern with respect to the
clearance and settlement of any transactions executed by the Member on
the Exchange.
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\5\ See Rule 1.5(u). The term ``Qualified Clearing Agency''
means a clearing agency registered with the Commission pursuant to
Section 17A of the Act that is deemed qualified by the Exchange.
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The Exchange proposes to amend the following sentences in Rule
11.15(a):
``This requirement may be satisfied by direct participation, use of
direct clearing services, or by entry into a correspondent clearing
arrangement with another Member that clears trades through a Qualified
Clearing Agency. If a Member clears transactions through another Member
that is a member of a Qualified Clearing Agency (``Clearing Member''),
such Clearing Member shall affirm to the Exchange in writing, through
letter of authorization, letter of guarantee, or other agreement
acceptable to the Exchange, its agreement to assume responsibility for
clearing and settling any and all trades executed by the Member
designating it as its clearing firm.''
The proposed rule text would state:
``This requirement may be satisfied by direct participation, use of
direct clearing services, or by entry into a correspondent clearing
arrangement with another member that clears trades through a Qualified
Clearing Agency. If a Member clears transactions through another firm
that is a member of a Qualified Clearing Agency (``Clearing Firm''),
such Clearing Firm shall affirm to the Exchange in writing, through
letter of authorization, letter of guarantee, or other agreement
acceptable to the Exchange, its agreement to assume responsibility for
clearing and settling any and all trades executed by the Member
designating it as its Clearing Firm.''
The Exchange proposes the above changes to its existing rule text
to clarify to market participants that a non-Member firm may clear
transactions for a Member. The Exchange notes that Rule 11.15(a) was
previously amended in 2015 to align with the rules of the Exchange's
affiliate exchanges, Cboe EDGA Exchange, Inc. (``EDGA''), and Cboe EDGX
Exchange, Inc. (``EDGX'').\6\ Specifically, the Rule 11.15(a) Amendment
provided that ``. . . Exchange Rule 11.15(a) would no longer require a
Qualified Clearing Agency be a Member in order to clear another
Members' transactions executed on the Exchange.'' \7\ While the intent
of the Rule 11.15(a) Amendment was to provide that non-Members could
clear other Members' transactions executed on the Exchange, the
Exchange believes the proposed changes to replace the term ``Member''
with the term ``firm'' and refer to a ``Clearing Firm'' rather than
``Clearing Member'' as described above provides necessary additional
clarity to market participants. The proposed rule change does not alter
the fundamental requirement that all transactions be cleared through a
registered clearing agency using a continuous net settlement system.
Non-Member Clearing Firms, along with Member Clearing Firms, remain
subject to the membership requirements of a Qualified Clearing Agency
and must execute appropriate guarantee agreements with the Exchange.
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\6\ See Securities Exchange Act Release No. 74152 (January 27,
2015), 80 FR 5593 (February 2, 2015), SR-BATS-2015-07 (``Rule
11.15(a) Amendment'').
\7\ Id. at 5594.
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The Exchange notes that its affiliate equities exchanges Cboe BYX
Exchange, Inc. (``BYX''), Cboe EDGA Exchange, Inc. (``EDGA''), and Cboe
EDGX Exchange, Inc. (``EDGX'') plan to submit similar proposals \8\ to
make clear that a non-Member firm may clear transactions for a Member.
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\8\ See SR-CboeBYX-2026-033; SR-CboeEDGA-2026-029; SR-CboeEDGX-
2026-061.
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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.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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) requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that clarifying that a non-Member may act as
a Clearing Firm is consistent with Section 6(b)(5) of the Act because
it promotes just and equitable principles of trade and removes
impediments to and perfects the mechanism of a free and open market by
providing transparency to market participants regarding the scope of
firms that may provide clearing services to Members, which supports the
efficient functioning of the clearance and settlement process and
protects investors and the public interest. Further, the proposed
change seeks to better align the Rule text with the intent of the Rule
11.15(a) Amendment, which explicitly provided that non-Member firms
could clear other Members' transactions on the Exchange. This proposed
change is not unfairly discriminatory because it applies equally to all
market participants.
[[Page 60460]]
Additionally, the Exchange notes that the proposed change
specifically fosters cooperation and coordination with persons engaged
in clearing and settling transactions in securities by removing
potential ambiguity regarding which entities may provide clearing
services to Members. Enhanced clarity in this area facilities the
establishment of clearing relationships and supports the prompt and
accurate settlement of transactions, which directly protects investors
and the public interest. The proposed change also removes impediments
to and perfects the mechanism of a free and open market by ensuring
that Members have access to a broader range of clearing arrangements
without regulatory uncertainty.
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. Specifically, the Exchange
does not believe 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. The proposed clarifying change
to state that a non-Member may serve as a Clearing Firm will apply to
all Members (and non-Members) equally.
Further, the Exchange does not believe 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 is not being made for competitive reasons, but rather to
provide clarity and certainty to Members regarding the requirements for
serving as a Clearing Firm. As such, the Exchange does not believe the
proposed rule change raises any competitive concerns.
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 after 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 \11\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. The Exchange
states that it is proposing clarifying edits to its rule text and is
not seeking to introduce any new or novel functionality that would
require additional notice to Members. The Exchange further states that
waiver of the operative delay would allow the Exchange to update its
rulebook immediately upon effectiveness of the proposal. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest as the proposal does
not raise any new or novel issues. Therefore, the Commission hereby
waives the 30-day operative delay and designates the proposed rule
change to be operative upon filing.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ 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 such 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 under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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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#cdbfb8a1a8e0aea2a0a0a8a3b9be8dbea8aee3aaa2bb"><span class="__cf_email__" data-cfemail="addfd8c1c880cec2c0c0c8c3d9deeddec8ce83cac2db">[email protected]</span></a>. Please include
file number SR-CboeBZX-2026-076 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-2026-076. 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-2026-076 and should be submitted
on or before October 14, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19396 Filed 9-22-26; 8:45 am]
BILLING CODE 8011-01-P
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