Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.15 (Clearly Erroneous Executions)

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<title>Federal Register, Volume 91 Issue 195 (Friday, October 9, 2026)</title>
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[Federal Register Volume 91, Number 195 (Friday, October 9, 2026)]
[Notices]
[Pages 64727-64730]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20709]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106604; File No. SR-CboeEDGX-2026-064]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 11.15 (Clearly Erroneous Executions)

October 6, 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 24, 2026, Cboe EDGX Exchange, Inc. (the ``Exchange'' 
or ``EDGX'') 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.
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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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[[Page 64728]]

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 Rule 11.15 (``Clearly Erroneous Executions'') in light of the 
Commission's approval of Overnight Protected Bands for 23/5 Trading. 
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/edgx/">https://www.cboe.com/us/equities/regulation/rule_filings/edgx/</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
    Cboe EDGX Exchange, Inc. (``EDGX'' or the ``Exchange'') proposes to 
amend Rule 11.15 (``Clearly Erroneous Executions'') in light of the 
Commission's approval of Overnight Protected Bands under the LULD Plan 
for 23/5 Trading.
Background
    In conjunction with the industry's plans for the introduction of 
trading 23 hours a day, 5 days a week (``23/5 Trading''), the Operating 
Committee of the Plan to Address Extraordinary Market Volatility 
(``LULD Plan'') filed proposed Amendment 27 to the LULD Plan, which 
proposed to establish price band protections during overnight trading 
hours (``Overnight Price Bands'').\5\ The Operating Committee proposed 
that the Overnight Price Bands would initially be temporary static 
bands 20% above and below two reference points, and that after 
implementation, the Operating Committee would evaluate the performance 
of such Overnight Price Bands and propose appropriate changes in a new 
plan amendment.\6\ On August 5, 2026, the Commission approved the 
proposal.\7\
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    \5\ See Securities Exchange Act Release No. 105596 (June 1, 
2026), 91 FR 33774 (June 4, 2026) (File No. 4-631) (Notice of Filing 
of 27th Amendment to the National Market System Plan).
    \6\ Id.
    \7\ See Securities Exchange Act Release No. 106042 (August 5, 
2026), 91 FR 51515 (August 10, 2026) (File No. 4-631) (Order 
Granting Approval of the 27th Amendment to the National Market 
System Plan to Address Extraordinary Market Volatility to Establish 
Temporary Price Band Protections in Overnight Trading).
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    In light of the Commission's approval of these changes to the LULD 
Plan, the Exchange now proposes several amendments to Rule 11.15 
regarding Clearly Erroneous Executions. In general, the rule describes 
the process a market participant may use to request cancellation of a 
transaction that was ``clearly erroneous.'' The current rule's central 
premise is that if LULD Price Bands under the LULD Plan were available 
and correct at the time the transaction was executed, the transaction 
is not eligible for clearly erroneous review. Specifically, Rule 
11.15(c)(1) currently provides that ``[i]f the execution time of the 
transaction(s) under review is during Regular Trading Hours, the 
transaction will not be reviewable as clearly erroneous'' except in 
certain limited circumstances, including when (A) the transaction is in 
an NMS stock that is not subject to the LULD Plan (e.g., rights and 
warrants), (B) the transaction was executed at a time with LULD Price 
Bands were unavailable or trading should have been prevented due to a 
regulatory halt or other halt, or (C) several other limited 
circumstances.\8\ In approving the existing version of the rule, the 
Commission noted that restricting clearly erroneous review in this way 
during times when LULD Price Bands were in effect was ``consistent with 
the Act and will further the goal of providing greater certainty to 
market participants that trades executed within the Price Bands will 
stand and not be broken. . . . Thus, the proposal is designed to limit 
the potential discordance between the LULD mechanism and CEE review 
process.'' \9\
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    \8\ See Rule 11.15(c)(1)(A), (B), and (C).
    \9\ See Securities Exchange Act Release No. 95658 (September 1, 
2022), 87 FR 55060 at 55063 (September 8, 2022) (SR-CboeBZX-2022-
037) (Order Approving a Proposed Rule Change, as Modified by 
Amendment Nos. 1 and 2, to Amend BZX Rule 11.17, Clearly Erroneous 
Executions).
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    Currently, LULD Price Bands are available only during Regular 
Trading Hours, meaning that the restrictions on clearly erroneous 
review described above apply only during Regular Trading Hours. With 
the introduction of Overnight Price Bands, the Exchange now proposes to 
extend the existing restrictions on clearly erroneous review to the 
period when Overnight Price Bands are in place. This proposed change 
would be consistent with the Commission's rationale in approving the 
current version of the rule because it would limit any potential 
discordance between the LULD mechanism and CEE review in the overnight 
trading session, providing greater certainty to market participants 
that trades executed with the Overnight Price Bands will stand and not 
be broken.
Proposed Changes to Rule 11.15(c)(1)
    To implement this change, the Exchange proposes to add several 
definitions to Rule 11.15(c)(1). First, the Exchange would add that the 
term ``LULD Protected Hours'' includes Regular Trading Hours and 
``Overnight Protected Hours'' defined in Section VIII of the LULD Plan. 
Second, the Exchange would define ``LULD Price Bands'' or ``Price 
Bands'' to mean the Price Bands defined in Section V of the LULD Plan 
(i.e., the Price Bands that apply during Regular Trading Hours) and 
``Overnight Price Bands'' as defined in Section VIII of the LULD Plan 
(i.e., the Price Bands that apply to the Overnight Protected Hours from 
9:00 p.m. ET through 4:00 a.m. ET).
    The Exchange proposes to amend the current first sentence of Rule 
11.15(c)(1) to replace the phrase ``Regular Trading Hours'' with ``LULD 
Protected Hours,'' to provide that ``[i]f the execution time of the 
transaction(s) under review is during LULD Protected Hours, the 
transaction will not be reviewable as clearly erroneous . . . .'' This 
change would extend the LULD-based restrictions on clearly erroneous 
review currently in place during Regular Trading Hours to the Overnight 
Protected Hours.
    The Exchange also proposes to amend Rule 11.15(c)(1)(B)'s reference 
to ``Percentage Parameter'' to incorporate the Percentage Parameter 
that applies to Overnight Protected Hours. The amended provision would 
provide for the applicability of clearly erroneous review if the price 
of the transaction to buy (sell) that is the subject of the clearly 
erroneous complaint is greater than (less than) the Reference Price by 
an amount that equals or exceeds the applicable Percentage Parameter 
defined in Appendix A to the LULD Plan (with respect to the Price Bands 
that apply during Regular Trading Hours) or the ``Overnight Percentage 
Parameter defined in Section VIII of the LULD

[[Page 64729]]

Plan'' (with respect to Overnight Protected Hours).
    In addition to these changes, the Exchange also proposes to make a 
non-substantive change to Rule 11.15(c)(1)(A), substituting the term 
``LULD Plan'' for the current text ``the Plan to Address Extraordinary 
Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act 
(the `Limit Up-Limit Down Plan' or `LULD Plan,')'' as the ``LULD Plan'' 
would be defined in the proposed revision to Rule 11.15(c)(1).
Proposed Changes to Rule 11.15(c)(2), (d)(3), and (f)
    As noted above, current Rule 11.15(c)(1)(A) permits clearly 
erroneous review even during Regular Trading Hours when the transaction 
in question is in an NMS Stock that is not subject to the LULD Plan, 
i.e., rights and warrants. Such transactions are reviewed for clearly 
erroneous status using the procedures set out in Rule 11.15(c)(2), 
including the Numerical Guidelines set out in the table accompanying 
Rule 11.15(c)(2)(A). The Exchange now proposes to introduce a similar 
provision regarding transactions in NMS Stocks not subject to the LULD 
Plan that are executed during the Overnight Protected Hours; such 
transactions would be subject to the same Numerical Guidelines as 
transactions occurring in the Early Trading, Pre-Opening, and Post-
Closing Sessions.
    The heading of Rule 11.15(c)(2) addresses ``[r]eview of 
transactions occurring during Early Trading, Pre-Opening, Post-Closing 
Session, or eligible for review pursuant to paragraph (c)(1)(A).'' The 
Exchange proposes to replace the phrase ``eligible for review pursuant 
to paragraph (c)(1)(A)'' (which, in the current rule, means 
transactions executed during Regular Trading Hours in NMS Stocks not 
subject to the LULD Plan) with ``during LULD Protected Hours in NMS 
Stocks not subject to the LULD Plan.'' This proposed language would 
cover transactions in NMS Stocks not subject to the LULD Plan in 
Regular Trading Hours and expand the same treatment to transactions 
executed in NMS Stocks not subject to the LULD Plan during Overnight 
Protected Hours. As such, the proposed change is not novel.
    The Exchange proposes to make the same change everywhere else such 
language appears in the rule--namely, in the text of paragraphs 
(c)(2)(A), (c)(2)(B), (c)(2)(C), (c)(2)(D), (d)(3), and (f).\10\ In 
each case, the Exchange proposes to replace the phrase ``transactions 
occurring during the Early Trading, Pre-Opening, or Post-Closing 
Session or eligible for review pursuant to paragraph (c)(1)(A)'' with 
``transactions occurring during the Early Trading, Pre-Opening, or 
Post-Closing Session or during LULD Protected Hours in NMS Stocks not 
subject to the LULD Plan.''
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    \10\ Rule 11.15(c)(2)(A)-(D) specifies general rules for 
applying clearly erroneous review to transactions where such review 
is not precluded by paragraph (c)(1). Rule 11.15(d)(3) specifies 
conditions where the Exchange may use a revised Reference Price for 
the purpose of clearly erroneous review in certain transactions 
where such review is not precluded by paragraph (c)(1). Rule 
11.15(f) specifies that for transactions where clearly erroneous 
review is not precluded by paragraph (c)(1), an Officer of the 
Exchange or senior level employee designee may initiate clearly 
erroneous review on his or her own motion.
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    The Exchange also proposes to make corresponding changes to the 
headings of the table accompanying Rule 11.15(c)(2)(A). The Exchange 
proposes to change the heading of the second column from ``Regular 
Trading Hours Numerical Guidelines for transactions eligible for review 
pursuant to paragraph (c)(1)(A)'' to ``Numerical Guidelines for 
Transactions Executed During Regular Trading Hours in NMS Stocks Not 
Subject to the LULD Plan.'' This change would simply replace the 
shorthand ``eligible for review pursuant to paragraph (c)(1)(A)'' with 
the fuller description that such transactions are ``executed during 
Regular Trading Hours in NMS Stocks not subject to the LULD Plan,'' and 
is not a substantive change.
    Similarly, the Exchange proposes to change the heading of the third 
column from ``Early Trading, Pre-Opening and Post-Closing Session 
Numerical Guidelines'' to ``Numerical Guidelines for Transactions 
Executed During the Early Trading, Pre-Opening and Post-Closing Session 
or During Overnight Protected Hours in NMS Stocks Not Subject to the 
LULD Plan.'' The proposed change addresses the fact that transactions 
executed during Overnight Protected Hours in NMS Stocks not subject to 
the LULD Plan are eligible for clearly erroneous review--just as are 
transactions in NMS Stocks not subject to the LULD Plan executed during 
Regular Trading Hours--but at the Numerical Guidelines that apply 
outside of Regular Trading Hours.
    Together, these proposed changes would extend the eligibility of 
clearly erroneous review for transactions in NMS Stocks not subject to 
the LULD Plan that is currently in place during Regular Trading Hours 
to the Overnight Protected Hours, and would apply the Commission's 
recent approval of Overnight Price Bands to the clearly erroneous 
executions rule.
Implementation
    The Exchange understands that the other national securities 
exchanges and FINRA will also file similar proposals,\11\ the substance 
of which are identical to this proposal. The Exchange proposes that 
this rule change would become operative at the commencement of 23/5 
Trading, which is scheduled to commence industry-wide on December 6, 
2026.
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    \11\ See, e.g., Securities Exchange Act Release No. 106315 
(September 9, 2026), 91 FR 58201 (September 14, 2026), SR-NYSEAMER-
2026-080 (September 2, 2026) (``NYSE American CEE Filing'').
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\12\ Specifically, the 
proposal is consistent with Section 6(b)(5) of the Act \13\ because it 
would promote just and equitable principles of trade, remove 
impediments to, and perfect the mechanism of, a free and open market 
and a national market system, and, in general, protect investors and 
the public interest.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed change is consistent with 
just and equitable principles of trade because it extends the basic 
premise of the current rule that clearly erroneous review should be 
generally unavailable any time a transaction is executed within LULD 
Price Bands at a time the Price Bands were available and correct. 
Currently, LULD Price Bands are available only during Regular Trading 
Hours, meaning that the restrictions on clearly erroneous review 
described above apply only during Regular Trading Hours. With the 
introduction of Overnight Price Bands, the Exchange believes that 
extending such restrictions on clearly erroneous review to the period 
when Overnight Price Bands are in place would remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system by enhancing the transparency and consistency of the rule.
    The resulting rule would thus extend the LULD-related limits on 
clearly erroneous review that are applicable in Regular Trading Hours 
to the overnight

[[Page 64730]]

period. The proposed change would also be consistent with the 
Commission's rationale in approving the current version of the rule 
because it would limit any potential discordance between the LULD 
mechanism and CEE review in the overnight trading session, providing 
greater certainty to market participants that trades executed with the 
Overnight Price Bands will stand and not be broken.\14\
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    \14\ See 87 FR 55060 at 55063, supra note 9.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposal is consistent with Section 
6(b)(8) of the Act \15\ in that it does not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Rather than impacting competition, the proposed 
change would simply extend the basic premise of the current rule that 
clearly erroneous review should be generally unavailable any time a 
transaction is executed within LULD Price Bands at a time the Price 
Bands were available and correct. The Exchange understands that the 
other national securities exchanges and FINRA will also file similar 
proposals, the substance of which are identical to this proposal. Thus, 
the proposed rule change will help to ensure consistency across SROs 
without implicating any competitive issues.
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    \15\ 15 U.S.C. 78f(b)(8).
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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

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest; impose any 
significant burden on competition; and 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) of the Act \16\ and Rule 19b-4(f)(6) \17\ 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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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 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, 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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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#9fedeaf3fab2fcf0f2f2faf1ebecdfecfafcb1f8f0e9"><span class="__cf_email__" data-cfemail="7a080f161f57191517171f140e093a091f19541d150c">[email&#160;protected]</span></a>. Please include 
file number SR-CboeEDGX-2026-064 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-2026-064. 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-2026-064 and should be 
submitted on or before October 30, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-20709 Filed 10-8-26; 8:45 am]
BILLING CODE 8011-01-P


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