Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Exchange Rule 11.6, Definitions, To Amend the Operation of the Super Aggressive Order Instruction, 35296-35300 [2018-15849]
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Federal Register / Vol. 83, No. 143 / Wednesday, July 25, 2018 / Notices
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the existing collection of
information provided for in the
following rule: Rule 24b–1 (17 CFR
240.24b–1).
Rule 24b–1 under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.) requires a national securities
exchange to keep and make available for
public inspection a copy of its
registration statement and exhibits filed
with the Commission, along with any
amendments thereto.
There are 21 national securities
exchanges that spend approximately
one half hour each complying with this
rule, for an aggregate total compliance
burden of 10.5 hours per year. The staff
estimates that the average cost per
respondent is $65.18 per year,
calculated as the costs of copying
($13.97) plus storage ($51.21), resulting
in a total cost of compliance for the
respondents of $1,368.78
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to: Shagufta_
Ahmed@omb.eop.gov; and (ii) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Candace Kenner, 100 F
Street NE, Washington, DC 20549, or by
sending an email to: PRA_Mailbox@
sec.gov. Comments must be submitted to
OMB within 30 days of this notice.
Dated: July 19, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–15852 Filed 7–24–18; 8:45 am]
BILLING CODE 8011–01–P
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SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
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Extension:
Rule 17f–1(b), SEC File No. 270–028, OMB
Control No. 3235–0032
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 17f–1(b) (17 CFR
240.17f–1(b)), under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.). The Commission plans to submit
this existing collection of information to
the Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Under Rule 17f–1(b) under the
Exchange Act, approximately 10,000
entities in the securities industry are
registered in the Lost and Stolen
Securities Program (‘‘Program’’).
Registration fulfills a statutory
requirement that entities report and
inquire about missing, lost, counterfeit,
or stolen securities. Registration also
allows entities in the securities industry
to gain access to a confidential database
that stores information for the Program.
The Commission staff estimates that
10 new entities will register in the
Program each year. The staff estimates
that the average number of hours
necessary to comply with Rule 17f–1(b)
is one-half hour. Accordingly, the staff
estimates that total annual burden for all
participants is 5 hours (10 × one-half
hour). The Commission staff estimates
that compliance staff work at subject
entities results in an internal cost of
compliance, at an estimated hourly
wage of $283, of $141.50 per year per
entity (.5 hours × $283 per hour =
$141.50 per year). Therefore, the
aggregate annual internal cost of
compliance is approximately $1,415
($141.50 × 10= $1,415).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
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under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: Pamela Dyson, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
Mailbox@sec.gov.
Dated: July 19, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–15854 Filed 7–24–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83674; File No. SR–
CboeEDGX–2018–025]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change to Exchange
Rule 11.6, Definitions, To Amend the
Operation of the Super Aggressive
Order Instruction
July 19, 2018.
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 July 11,
2018, Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders it effective upon filing
with the Commission. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend the operation of the Super
Aggressive order instruction under
paragraph (n)(2) of Exchange Rule 11.6.
The text of the proposed rule change
is available at the Exchange’s website at
www.markets.cboe.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
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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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
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The Exchange proposes to amend the
description of the Super Aggressive
instruction under paragraph (n)(2) of
Exchange Rule 11.6, Routing/Posting
Instructions to: (i) Specify that an
incoming order with a Post Only
instruction that locks a resting order
with a Super Aggressive instruction
must include a Displayed instruction for
the order with a Super Aggressive
instruction to engage in a liquidity swap
and execute against that incoming order;
and (ii) modify language from the
description of the Super Aggressive
instruction that states if an order that
does not contain a Super Aggressive
instruction maintains higher priority
than one or more Super Aggressive
eligible orders, the Super Aggressive
eligible order(s) with lower priority will
not be converted and the incoming
order with a Post Only instruction will
be posted or cancelled in accordance
with Exchange Rule 11.6(n)(4).5
Super Aggressive is an optional order
instruction that directs the System 6 to
route an order when an away Trading
Center locks or crosses the limit price of
the order resting on the EDGX Book.7
When an order with a Super Aggressive
instruction is locked by an incoming
order with a Post Only instruction that
does not remove liquidity pursuant to
5 The Exchange also proposes to remove the
extraneous word ‘‘solely’’ from the second sentence
of Rule 11.6(n)(2). The removal of this word does
not alter the operation of the Super Aggressive
order instruction.
6 The term ‘‘System’’ is defined as ‘‘the electronic
communications and trading facility designated by
the Board through which securities orders of Users
are consolidated for ranking, execution and, when
applicable, routing away.’’ See Exchange Rule
1.5(cc).
7 See Exchange Rule 1.5(d).
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Rule 11.6(n)(4),8 the order with a Super
Aggressive instruction is converted to
an executable order and will remove
liquidity against such incoming order.
First, the Exchange proposes to
modify the behavior of the Super
Aggressive instruction to require that
the incoming order with a Post Only
instruction that locks a resting order
with a Super Aggressive instruction
must include a Displayed instruction for
an execution to occur. The Super
Aggressive instruction is generally
utilized for best execution purposes
because it enables the order to
immediately attempt to access displayed
liquidity on another Trading Center that
is either priced equal to or better than
the order with a Super Aggressive
instruction’s limit price. The Super
Aggressive instruction also enables the
order to execute against an equally
priced incoming order with a Post Only
instruction that would otherwise not
execute by being willing to act as the
liquidity remover in such a scenario.
Today, the incoming order with a Post
Only instruction may include either a
Displayed or Non-Displayed instruction
for it to engage in a liquidity swap with
an order with a Super Aggressive
instruction resting on the EDGX Book.
Consistent with the Super Aggressive
instruction to access liquidity displayed
on other Trading Centers, the Exchange
proposes to amend the Super Aggressive
instruction such that an order with such
instruction will execute against an
equally priced incoming order with a
Post Only instruction only when such
order is to be displayed on the EDGX
Book. The order with a Super
Aggressive instruction would continue
to act as a liquidity remover in such a
scenario. Should such an equally priced
incoming order with a Post Only
instruction not include a Displayed
instruction, the resting order with a
Super Aggressive instruction would
remain on the EDGX Book and await an
execution where it may act as a liquidity
provider. The incoming order with a
Post Only instruction and a NonDisplayed instruction would be posted
to the EDGX Book at its limit price,
creating an internally locked nondisplayed book. As is the case today, an
execution would continue to occur
where an incoming order with a Post
Only instruction is priced more
aggressively than the order with a Super
8 The Exchange will execute an order with a Post
Only instruction priced at or above $1.00 in certain
circumstances where the value of such execution
when removing liquidity equals or exceeds the
value of such execution if the order instead posted
to the EDGX Book and subsequently provided
liquidity, including the applicable fees charged or
rebates provided. See Exchange Rule 11.6(n)(4).
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Aggressive instruction resting on the
EDGX Book, regardless of whether the
incoming order included a Displayed or
Non-Displayed instruction.9
The Exchange notes that Users
seeking to act as a liquidity remover
once resting on the EDGX Book in all
cases (i.e., seeking to execute against
incoming Post Only orders regardless of
the display instruction) may attach the
Non-Displayed Swap (‘‘NDS’’)
instruction to their order.10 The NDS
instruction is similar to the Super
Aggressive instruction, in that it also is
an optional order instruction that a User
may include on an order that directs the
Exchange to have such order, when
resting on the EDGX Book, execute
against an incoming order with a Post
Only instruction rather than have it be
locked by the incoming order. Today,
because orders with either instruction
(i.e., Super Aggressive and NDS) will
execute against incoming orders with a
Post Only instruction regardless of
whether the order is to be displayed, the
instructions are currently identical with
two exceptions. First, an order with a
Super Aggressive instruction will not
convert into a liquidity removing order
and execute against an order with a Post
Only instruction if there is an order on
the order book with priority over such
order that does not also contain a Super
Aggressive instruction. As further
described below, the Exchange is
proposing to modify this feature of the
Super Aggressive instruction. The
second current distinction between the
two instructions, which would remain,
is that an order with a Super Aggressive
instruction can be displayed on the
Exchange whereas an order with the
NDS instruction must be non-displayed.
As amended, the additional distinction
between the two instructions would be
whether an order would become a
liquidity removing order against any
order with a Post Only instruction that
would lock it (i.e., NDS) or only when
the order with a Post Only instruction
that would lock it also contains a
Displayed instruction (i.e., Super
Aggressive).
The below examples illustrate the
proposed behavior. Assume the
National Best Bid and Offer (‘‘NBBO’’)
is $10.00 by $10.10. An order to buy is
displayed on the EDGX Book at $10.00
with a Super Aggressive instruction.
There are no other orders resting on the
EDGX Book. An order to sell at $10.00
with a Post Only and Displayed
instruction is entered. The incoming
order to sell would execute against the
resting order to buy at $10.00, the
9 See
id.
Exchange Rule 11.6(n)(7).
10 See
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locking price, because the incoming
order included a Displayed instruction.
The order to buy would act as the
liquidity remover and the order to sell
would act as the liquidity adder.
However, no execution would occur if
the incoming order to sell included a
Non-Displayed instruction. Instead, the
incoming order to sell would be posted
non-displayed to the EDGX Book at
$10.00, its limit price, causing the EDGX
Book to be internally locked.
Second, the Exchange proposes to
enable an incoming order with a Post
Only instruction and Displayed
instruction to execute against an equally
priced non-displayed order with a
Super Aggressive instruction where a
non-displayed order without a Super
Aggressive instruction maintains time
priority over the Super Aggressive
eligible order at that price. In such case,
the non-displayed, non-Super
Aggressive order seeks to remain a
liquidity provider and would cede time
priority to the order with a Super
Aggressive instruction, which is willing
to act as a liquidity remover to facilitate
the execution. The Exchange proposes
to effect this change by modifying
language in the description of the Super
Aggressive instruction to state that if an
order displayed on the EDGX Book does
not contain a Super Aggressive
instruction and maintains higher
priority than one or more Super
Aggressive eligible orders, the Super
Aggressive eligible order(s) with lower
priority will not be converted and the
incoming order with a Post Only
instruction will be posted or cancelled
in accordance with Exchange Rule
11.6(n)(4). Thus, an order with a Super
Aggressive instruction, whether
displayed on the Exchange or nondisplayed, will never execute ahead of
a displayed order that maintains time
priority.
The Super Aggressive instruction is
designed to facilitate executions that
would otherwise not occur due to the
Post Only instruction requirement to not
remove liquidity. Users entering orders
with the Super Aggressive instruction
tend to be fee agnostic because an order
with a Super Aggressive instruction is
willing to route to an away Trading
Center displaying an equally or better
priced order (i.e., pay a fee at such
Trading Center). Meanwhile, an order
without the Super Aggressive
instruction elects to remain on the
EDGX Book as the liquidity provider
until it may execute against an incoming
order that would act as the liquidity
remover. Therefore, enabling the Super
Aggressive order to execute against an
incoming order, regardless of whether a
non-displayed order without a Super
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Aggressive instruction maintains
priority, is consistent with the User’s
intent for both orders—one choses to
remain the liquidity provider and forgo
the execution while the other is willing
to execute irrespective of whether it is
the liquidity provider or remover. The
Exchange notes that similar behavior
occurs for orders utilizing the NDS
instruction,11 which also seeks to
engage in a liquidity swap against
incoming orders with a Post Only
instruction. The Exchange, however, has
proposed to retain the existing
limitation with respect to orders
displayed on the EDGX Book.
The following example illustrates the
operation of an order with a Super
Aggressive instruction under the
proposed rule change. Assume the
NBBO is $10.00 by $10.04. There is a
non-displayed Limit Order to buy
resting on the EDGX Book at $10.03
(‘‘Order A’’). A second non-displayed
Limit Order to buy at $10.03 is then
entered with a Super Aggressive
instruction and has time priority behind
the first Limit Order (‘‘Order B’’). An
order to sell with a Post Only
instruction priced at $10.03 is entered.
Under current behavior, the incoming
sell order with a Post Only instruction
would not execute against Order A and
would post to the EDGX Book 12 because
the value of such execution against the
resting buy order when removing
liquidity does not equal or exceed the
value of such execution if the order
instead posted to the EDGX Book and
subsequently provided liquidity,
including the applicable fees charged or
rebates provided. Further, the incoming
sell order with a Post Only instruction
could not execute against Order B
because Order A is on the EDGX Book
and maintains time priority over Order
B. Under the proposed change, the
incoming sell order, if it contained a
Displayed instruction, would execute
against Order B and Order B would
become the remover of liquidity while
the incoming sell order with a Post Only
instruction would become the liquidity
provider. In such case, Order A cedes
priority to Order B because Order A did
not also include a Super Aggressive
Exchange Rule 11.6(n)(7). See also
Securities Exchange Act Release No. 80841 (June 1,
2017), 82 FR 26559 (June 7, 2017) (SR–BatsEDGX–
2017–25) (including an example where an order
cedes execution priority to an order with an NDS
instruction).
12 Such order would be posted to the EDGX Book
in accordance with the Exchange’s re-pricing
instructions to comply with Rule 610(d) of
Regulation NMS. See Exchange Rule 11.6(l)(1). See
also 242 CFR 242.610(d).
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11 See
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instruction 13 and thus the User that
submitted the order did not indicate the
preference to be treated as the remover
of liquidity in favor of an execution;
instead, by not using Super Aggressive,
a User indicates the preference to
remain posted on the EDGX Book as a
liquidity provider. However, if the
incoming sell order was priced at
$10.02, it would receive sufficient price
improvement to execute upon entry
against all resting buy Limit Orders in
time priority at $10.03.14 Also, if Order
A was displayed on the EDGX Book, no
execution would occur, as the proposed
change would only apply to nondisplayed liquidity.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 15 in general, and furthers the
objectives of Section 6(b)(5) of the Act 16
in particular, in that it is designed to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
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.
The proposed changes to the Super
Aggressive order instruction are
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in 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. The Super
Aggressive instruction is an optional
feature that is intended to reflect the
order management practices of various
market participants. The proposal to
limit the execution of an order with a
Super Aggressive instruction to execute
against incoming orders with a Post
Only instruction that also contain a
Displayed instruction promotes just and
equitable principles of trade because it
enables Users to elect an order
instruction consistent with their intent
to execute only against displayed
orders, in part, for best execution
13 This behavior is consistent with the operation
of the Exchange’s NDS instruction. See supra note
11.
14 The execution occurs here because the value of
the execution against the buy order when removing
liquidity exceeds the value of such execution if the
order instead posted to the EDGX Book and
subsequently provided liquidity, including the
applicable fees charged or rebates provided. See
supra note 8.
15 15 U.S.C. 78f(b).
16 15 U.S.C. 78f(b)(5).
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purposes. The amended Super
Aggressive instruction would ensure
executions at the best available price
displayed on another Trading Center or
against an incoming order that would
have been displayed on the EDGX Book.
Users seeking to act as a liquidity
remover once resting on the EDGX Book
and execute against an incoming order
with a Post Only and Non-Displayed
instruction may attach the NDS
instruction to their order.17
The proposed change to the Super
Aggressive instruction also removes
impediments to and perfects the
mechanism of a free and open market
and a national market system because it
is designed to facilitate executions that
would otherwise not occur due to the
Post Only instruction requirement to not
remove liquidity. The proposal enables
non-displayed Super Aggressive orders
to execute against an incoming order,
regardless of whether another nondisplayed order without a Super
Aggressive instruction maintains
priority consistent with the User’s intent
for both orders—one chooses to remain
the liquidity provider and forgo the
execution while the other is willing to
execute irrespective of whether it is the
liquidity provider or remover. The nonSuper Aggressive order seeks to remain
a liquidity provider and cede its time
priority to the order with a Super
Aggressive instruction, which is willing
to act as a liquidity remover to facilitate
the execution. It also enables an order
without the Super Aggressive
instruction to remain on the EDGX Book
as a liquidity provider, consistent with
the expected operation of their resting
order. The Exchange notes that similar
behavior occurs for orders utilizing the
NDS 18 instruction, which also seeks to
engage in a liquidity swap against
incoming orders with a Post Only
instruction. Finally, by limiting the
proposed change to non-displayed
orders, the proposal remains consistent
with NDS and also retains existing
functionality with respect to the
handling of displayed orders.
For the reasons set forth above, the
Exchange believes the proposal removes
impediments to and perfects the
mechanism of a free and open market
and a national market system, and, in
general, protects investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
On the contrary, the proposed changes
to the Super Aggressive order
instruction are intended to improve the
usefulness of the instruction and to
align its operation with the intention of
the User, resulting in enhanced
competition through increased usage
and execution quality on the Exchange.
Thus, to the extent the change is
intended to improve functionality on
the Exchange to encourage Users to
direct their orders to the Exchange, the
change is competitive, but the Exchange
does not believe the proposed change
will result in any burden on intermarket
competition as it is a minor change to
available functionality. The proposed
changes to the Super Aggressive order
instruction also promote intramarket
competition because they will facilitate
the execution of orders that would
otherwise remain unexecuted consistent
with the intent of the User entering the
order, thereby increasing the efficient
functioning of the Exchange. Further,
the Super Aggressive order instruction
will remain available to all Users in the
same way it is today. Thus, Users can
continue to choose between various
optional order instructions, including
Super Aggressive, NDS, and others,
depending on the order handling they
prefer the Exchange to utilize.
Therefore, the Exchange does not
believe the proposed rule change will
result in any burden on intramarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received written 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 19 and
subparagraph (f)(6) of Rule 19b–4
thereunder.20
19 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
17 See
Exchange Rule 11.6(n)(7).
18 See supra note 11.
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A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of the filing. However, Rule 19b–
4(f)(6)(iii) 21 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. In its
filing, EDGX requested that the
Commission waive the 30-day operative
delay so that the Exchange can
implement the proposed rule change
promptly after filing. The Exchange
stated that the proposal to allow an
order with a Super Aggressive
instruction to execute against an
incoming Post Only order only if the
Post Only order is displayable is
consistent with the use of the Super
Aggressive instruction to access
liquidity displayed on other Trading
Centers. Further, according to the
Exchange, users seeking to execute
against incoming non-displayable Post
Only orders will continue to be able to
attach the NDS order instruction, as
well as other order instructions that may
permit such executions. In addition, the
Exchange stated that the proposed
priority change where non-displayed
orders without a Super Aggressive
instruction would cede priority to nondisplayed orders with a Super
Aggressive instruction is similar to, and
consistent with, the Exchange’s priority
ceding functionality for orders with an
NDS instruction and would facilitate
executions that would otherwise not
occur due to an incoming Post Only
order’s requirement not to remove
liquidity. The Commission believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest, as the
proposed rule change relates to optional
functionality that is consistent with
existing functionality and, if selected by
Exchange users, may enable them to
better manage their orders and may
increase order interaction on the
Exchange. Accordingly, the Commission
hereby waives the 30-day operative
delay and designates the proposed rule
change operative upon filing.22
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
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.
21 17 CFR 240.19b–4(f)(6)(iii).
22 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).
E:\FR\FM\25JYN1.SGM
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Federal Register / Vol. 83, No. 143 / Wednesday, July 25, 2018 / Notices
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
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:
daltland on DSKBBV9HB2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeEDGX–2018–025 on the subject
line.
Paper Comments
• 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–2018–025. 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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
VerDate Sep<11>2014
18:50 Jul 24, 2018
Jkt 244001
to make available publicly. All
submissions should refer to File
Number SR–CboeEDGX–2018–025, and
should be submitted on or before
August 15, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–15849 Filed 7–24–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83678/July 20, 2018]
Pursuant to Commission Rule of
Practice 431,8 the Commission is
reviewing the delegated action, and the
June 29, 2018 order is stayed.
Accordingly, it is ordered, pursuant to
Commission Rule of Practice 431, that
by August 20, 2018, any party or other
person may file any additional
statement.
It is further ordered that the June 29,
2018 order approving the proposed rule
change, as modified by Amendment No.
1 (SR–IEX–2018–06) shall remain stayed
pending further order of the
Commission.
By the Commission.
Brent J. Fields,
Secretary.
Securities Exchange Act of 1934;
Order Scheduling Filing of Statements
on Review; in the Matter of the
Investors Exchange LLC; for an Order
Granting the Approval of Proposed
Rule Change To Establish a New
Optional Listing Category on the
Exchange, ‘‘LTSE Listings on IEX’’ (File
No. SR–IEX–2018–06)
[FR Doc. 2018–15926 Filed 7–24–18; 8:45 am]
On March 15, 2018, Investors
Exchange LLC (the ‘‘Exchange’’ or
‘‘IEX’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to establish a new optional
listing category on the Exchange,
referred to as the ‘‘LTSE Listings on
IEX’’ or ‘‘LTSE Listings.’’ The proposed
rule change was published for comment
in the Federal Register on April 2,
2018.3 On May 11, 2018, the Division of
Trading and Markets, for the
Commission pursuant to delegated
authority, extended the time period for
Commission action on the proposed rule
change.4 On June 27, 2018, the
Exchange submitted Amendment No. 1
to the proposed rule change.5 On June
29, 2018, the Division of Trading and
Markets, for the Commission pursuant
to delegated authority,6 approved the
proposed rule change, as modified by
Amendment No. 1.7
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
CFR 200.30–3(a)(12) and (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 82948
(March 27, 2018), 83 FR 14074 (April 2, 2018) (SR–
IEX–2018–06).
4 See Securities Exchange Act Release No. 83217
(May 11, 2018), 83 FR 22998 (May 17, 2018).
5 See letter from Claudia Crowley, Chief
Regulatory Officer, Investors Exchange LLC, dated
June 27, 2018, available at https://www.sec.gov/
comments/sr-iex-2018-06/iex201806-3956434167066.pdf.
6 17 CFR 200.30 3(a)(12).
7 See Securities Exchange Act Release No. 83558
(June 29, 2018).
PO 00000
23 17
1 15
Frm 00099
Fmt 4703
Sfmt 4703
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Extension:
Rule 17Ac2–2 and Form TA–2, SEC File
No. 270–298, OMB Control No. 3235–
0337
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of the
existing collection of information
provided for in Rule 17Ac2–2 (17 CFR
240.17Ac2–2) and Form TA–2 under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) (‘‘Exchange Act’’).
Rule 17Ac2–2 and Form TA–2 under
the Exchange Act require transfer agents
to file an annual report of their business
activities with the Commission. These
reporting requirements are designed to
ensure that all registered transfer agents
are providing the Commission with
sufficient information on an annual
basis about the transfer agent
community and to permit the
Commission to effectively monitor
business activities of transfer agents.
The amount of time needed to comply
with the requirements of amended Rule
17Ac2–2 and Form TA–2 varies. Of the
total 373 registered transfer agents,
approximately 9.2% (or 34 registrants)
8 17
E:\FR\FM\25JYN1.SGM
CFR 201.431.
25JYN1
]]>Agencies
[Federal Register Volume 83, Number 143 (Wednesday, July 25, 2018)]
[Notices]
[Pages 35296-35300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15849]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83674; File No. SR-CboeEDGX-2018-025]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change to
Exchange Rule 11.6, Definitions, To Amend the Operation of the Super
Aggressive Order Instruction
July 19, 2018.
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 July 11, 2018, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
has designated this proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders it effective upon filing with the
Commission. 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).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend the operation of the Super
Aggressive order instruction under paragraph (n)(2) of Exchange Rule
11.6.
The text of the proposed rule change is available at the Exchange's
website at www.markets.cboe.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
[[Page 35297]]
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 parts 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 the description of the Super
Aggressive instruction under paragraph (n)(2) of Exchange Rule 11.6,
Routing/Posting Instructions to: (i) Specify that an incoming order
with a Post Only instruction that locks a resting order with a Super
Aggressive instruction must include a Displayed instruction for the
order with a Super Aggressive instruction to engage in a liquidity swap
and execute against that incoming order; and (ii) modify language from
the description of the Super Aggressive instruction that states if an
order that does not contain a Super Aggressive instruction maintains
higher priority than one or more Super Aggressive eligible orders, the
Super Aggressive eligible order(s) with lower priority will not be
converted and the incoming order with a Post Only instruction will be
posted or cancelled in accordance with Exchange Rule 11.6(n)(4).\5\
---------------------------------------------------------------------------
\5\ The Exchange also proposes to remove the extraneous word
``solely'' from the second sentence of Rule 11.6(n)(2). The removal
of this word does not alter the operation of the Super Aggressive
order instruction.
---------------------------------------------------------------------------
Super Aggressive is an optional order instruction that directs the
System \6\ to route an order when an away Trading Center locks or
crosses the limit price of the order resting on the EDGX Book.\7\ When
an order with a Super Aggressive instruction is locked by an incoming
order with a Post Only instruction that does not remove liquidity
pursuant to Rule 11.6(n)(4),\8\ the order with a Super Aggressive
instruction is converted to an executable order and will remove
liquidity against such incoming order.
---------------------------------------------------------------------------
\6\ The term ``System'' is defined as ``the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away.'' See Exchange Rule
1.5(cc).
\7\ See Exchange Rule 1.5(d).
\8\ The Exchange will execute an order with a Post Only
instruction priced at or above $1.00 in certain circumstances where
the value of such execution when removing liquidity equals or
exceeds the value of such execution if the order instead posted to
the EDGX Book and subsequently provided liquidity, including the
applicable fees charged or rebates provided. See Exchange Rule
11.6(n)(4).
---------------------------------------------------------------------------
First, the Exchange proposes to modify the behavior of the Super
Aggressive instruction to require that the incoming order with a Post
Only instruction that locks a resting order with a Super Aggressive
instruction must include a Displayed instruction for an execution to
occur. The Super Aggressive instruction is generally utilized for best
execution purposes because it enables the order to immediately attempt
to access displayed liquidity on another Trading Center that is either
priced equal to or better than the order with a Super Aggressive
instruction's limit price. The Super Aggressive instruction also
enables the order to execute against an equally priced incoming order
with a Post Only instruction that would otherwise not execute by being
willing to act as the liquidity remover in such a scenario. Today, the
incoming order with a Post Only instruction may include either a
Displayed or Non-Displayed instruction for it to engage in a liquidity
swap with an order with a Super Aggressive instruction resting on the
EDGX Book.
Consistent with the Super Aggressive instruction to access
liquidity displayed on other Trading Centers, the Exchange proposes to
amend the Super Aggressive instruction such that an order with such
instruction will execute against an equally priced incoming order with
a Post Only instruction only when such order is to be displayed on the
EDGX Book. The order with a Super Aggressive instruction would continue
to act as a liquidity remover in such a scenario. Should such an
equally priced incoming order with a Post Only instruction not include
a Displayed instruction, the resting order with a Super Aggressive
instruction would remain on the EDGX Book and await an execution where
it may act as a liquidity provider. The incoming order with a Post Only
instruction and a Non-Displayed instruction would be posted to the EDGX
Book at its limit price, creating an internally locked non-displayed
book. As is the case today, an execution would continue to occur where
an incoming order with a Post Only instruction is priced more
aggressively than the order with a Super Aggressive instruction resting
on the EDGX Book, regardless of whether the incoming order included a
Displayed or Non-Displayed instruction.\9\
---------------------------------------------------------------------------
\9\ See id.
---------------------------------------------------------------------------
The Exchange notes that Users seeking to act as a liquidity remover
once resting on the EDGX Book in all cases (i.e., seeking to execute
against incoming Post Only orders regardless of the display
instruction) may attach the Non-Displayed Swap (``NDS'') instruction to
their order.\10\ The NDS instruction is similar to the Super Aggressive
instruction, in that it also is an optional order instruction that a
User may include on an order that directs the Exchange to have such
order, when resting on the EDGX Book, execute against an incoming order
with a Post Only instruction rather than have it be locked by the
incoming order. Today, because orders with either instruction (i.e.,
Super Aggressive and NDS) will execute against incoming orders with a
Post Only instruction regardless of whether the order is to be
displayed, the instructions are currently identical with two
exceptions. First, an order with a Super Aggressive instruction will
not convert into a liquidity removing order and execute against an
order with a Post Only instruction if there is an order on the order
book with priority over such order that does not also contain a Super
Aggressive instruction. As further described below, the Exchange is
proposing to modify this feature of the Super Aggressive instruction.
The second current distinction between the two instructions, which
would remain, is that an order with a Super Aggressive instruction can
be displayed on the Exchange whereas an order with the NDS instruction
must be non-displayed. As amended, the additional distinction between
the two instructions would be whether an order would become a liquidity
removing order against any order with a Post Only instruction that
would lock it (i.e., NDS) or only when the order with a Post Only
instruction that would lock it also contains a Displayed instruction
(i.e., Super Aggressive).
---------------------------------------------------------------------------
\10\ See Exchange Rule 11.6(n)(7).
---------------------------------------------------------------------------
The below examples illustrate the proposed behavior. Assume the
National Best Bid and Offer (``NBBO'') is $10.00 by $10.10. An order to
buy is displayed on the EDGX Book at $10.00 with a Super Aggressive
instruction. There are no other orders resting on the EDGX Book. An
order to sell at $10.00 with a Post Only and Displayed instruction is
entered. The incoming order to sell would execute against the resting
order to buy at $10.00, the
[[Page 35298]]
locking price, because the incoming order included a Displayed
instruction. The order to buy would act as the liquidity remover and
the order to sell would act as the liquidity adder. However, no
execution would occur if the incoming order to sell included a Non-
Displayed instruction. Instead, the incoming order to sell would be
posted non-displayed to the EDGX Book at $10.00, its limit price,
causing the EDGX Book to be internally locked.
Second, the Exchange proposes to enable an incoming order with a
Post Only instruction and Displayed instruction to execute against an
equally priced non-displayed order with a Super Aggressive instruction
where a non-displayed order without a Super Aggressive instruction
maintains time priority over the Super Aggressive eligible order at
that price. In such case, the non-displayed, non-Super Aggressive order
seeks to remain a liquidity provider and would cede time priority to
the order with a Super Aggressive instruction, which is willing to act
as a liquidity remover to facilitate the execution. The Exchange
proposes to effect this change by modifying language in the description
of the Super Aggressive instruction to state that if an order displayed
on the EDGX Book does not contain a Super Aggressive instruction and
maintains higher priority than one or more Super Aggressive eligible
orders, the Super Aggressive eligible order(s) with lower priority will
not be converted and the incoming order with a Post Only instruction
will be posted or cancelled in accordance with Exchange Rule
11.6(n)(4). Thus, an order with a Super Aggressive instruction, whether
displayed on the Exchange or non-displayed, will never execute ahead of
a displayed order that maintains time priority.
The Super Aggressive instruction is designed to facilitate
executions that would otherwise not occur due to the Post Only
instruction requirement to not remove liquidity. Users entering orders
with the Super Aggressive instruction tend to be fee agnostic because
an order with a Super Aggressive instruction is willing to route to an
away Trading Center displaying an equally or better priced order (i.e.,
pay a fee at such Trading Center). Meanwhile, an order without the
Super Aggressive instruction elects to remain on the EDGX Book as the
liquidity provider until it may execute against an incoming order that
would act as the liquidity remover. Therefore, enabling the Super
Aggressive order to execute against an incoming order, regardless of
whether a non-displayed order without a Super Aggressive instruction
maintains priority, is consistent with the User's intent for both
orders--one choses to remain the liquidity provider and forgo the
execution while the other is willing to execute irrespective of whether
it is the liquidity provider or remover. The Exchange notes that
similar behavior occurs for orders utilizing the NDS instruction,\11\
which also seeks to engage in a liquidity swap against incoming orders
with a Post Only instruction. The Exchange, however, has proposed to
retain the existing limitation with respect to orders displayed on the
EDGX Book.
---------------------------------------------------------------------------
\11\ See Exchange Rule 11.6(n)(7). See also Securities Exchange
Act Release No. 80841 (June 1, 2017), 82 FR 26559 (June 7, 2017)
(SR-BatsEDGX-2017-25) (including an example where an order cedes
execution priority to an order with an NDS instruction).
---------------------------------------------------------------------------
The following example illustrates the operation of an order with a
Super Aggressive instruction under the proposed rule change. Assume the
NBBO is $10.00 by $10.04. There is a non-displayed Limit Order to buy
resting on the EDGX Book at $10.03 (``Order A''). A second non-
displayed Limit Order to buy at $10.03 is then entered with a Super
Aggressive instruction and has time priority behind the first Limit
Order (``Order B''). An order to sell with a Post Only instruction
priced at $10.03 is entered. Under current behavior, the incoming sell
order with a Post Only instruction would not execute against Order A
and would post to the EDGX Book \12\ because the value of such
execution against the resting buy order when removing liquidity does
not equal or exceed the value of such execution if the order instead
posted to the EDGX Book and subsequently provided liquidity, including
the applicable fees charged or rebates provided. Further, the incoming
sell order with a Post Only instruction could not execute against Order
B because Order A is on the EDGX Book and maintains time priority over
Order B. Under the proposed change, the incoming sell order, if it
contained a Displayed instruction, would execute against Order B and
Order B would become the remover of liquidity while the incoming sell
order with a Post Only instruction would become the liquidity provider.
In such case, Order A cedes priority to Order B because Order A did not
also include a Super Aggressive instruction \13\ and thus the User that
submitted the order did not indicate the preference to be treated as
the remover of liquidity in favor of an execution; instead, by not
using Super Aggressive, a User indicates the preference to remain
posted on the EDGX Book as a liquidity provider. However, if the
incoming sell order was priced at $10.02, it would receive sufficient
price improvement to execute upon entry against all resting buy Limit
Orders in time priority at $10.03.\14\ Also, if Order A was displayed
on the EDGX Book, no execution would occur, as the proposed change
would only apply to non-displayed liquidity.
---------------------------------------------------------------------------
\12\ Such order would be posted to the EDGX Book in accordance
with the Exchange's re-pricing instructions to comply with Rule
610(d) of Regulation NMS. See Exchange Rule 11.6(l)(1). See also 242
CFR 242.610(d).
\13\ This behavior is consistent with the operation of the
Exchange's NDS instruction. See supra note 11.
\14\ The execution occurs here because the value of the
execution against the buy order when removing liquidity exceeds the
value of such execution if the order instead posted to the EDGX Book
and subsequently provided liquidity, including the applicable fees
charged or rebates provided. See supra note 8.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \15\ in general, and furthers the objectives of Section
6(b)(5) of the Act \16\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in 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.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The proposed changes to the Super Aggressive order instruction are
designed to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in 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. The Super
Aggressive instruction is an optional feature that is intended to
reflect the order management practices of various market participants.
The proposal to limit the execution of an order with a Super Aggressive
instruction to execute against incoming orders with a Post Only
instruction that also contain a Displayed instruction promotes just and
equitable principles of trade because it enables Users to elect an
order instruction consistent with their intent to execute only against
displayed orders, in part, for best execution
[[Page 35299]]
purposes. The amended Super Aggressive instruction would ensure
executions at the best available price displayed on another Trading
Center or against an incoming order that would have been displayed on
the EDGX Book. Users seeking to act as a liquidity remover once resting
on the EDGX Book and execute against an incoming order with a Post Only
and Non-Displayed instruction may attach the NDS instruction to their
order.\17\
---------------------------------------------------------------------------
\17\ See Exchange Rule 11.6(n)(7).
---------------------------------------------------------------------------
The proposed change to the Super Aggressive instruction also
removes impediments to and perfects the mechanism of a free and open
market and a national market system because it is designed to
facilitate executions that would otherwise not occur due to the Post
Only instruction requirement to not remove liquidity. The proposal
enables non-displayed Super Aggressive orders to execute against an
incoming order, regardless of whether another non-displayed order
without a Super Aggressive instruction maintains priority consistent
with the User's intent for both orders--one chooses to remain the
liquidity provider and forgo the execution while the other is willing
to execute irrespective of whether it is the liquidity provider or
remover. The non-Super Aggressive order seeks to remain a liquidity
provider and cede its time priority to the order with a Super
Aggressive instruction, which is willing to act as a liquidity remover
to facilitate the execution. It also enables an order without the Super
Aggressive instruction to remain on the EDGX Book as a liquidity
provider, consistent with the expected operation of their resting
order. The Exchange notes that similar behavior occurs for orders
utilizing the NDS \18\ instruction, which also seeks to engage in a
liquidity swap against incoming orders with a Post Only instruction.
Finally, by limiting the proposed change to non-displayed orders, the
proposal remains consistent with NDS and also retains existing
functionality with respect to the handling of displayed orders.
---------------------------------------------------------------------------
\18\ See supra note 11.
---------------------------------------------------------------------------
For the reasons set forth above, the Exchange believes the proposal
removes impediments to and perfects the mechanism of a free and open
market and a national market system, and, in general, protects
investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended. On
the contrary, the proposed changes to the Super Aggressive order
instruction are intended to improve the usefulness of the instruction
and to align its operation with the intention of the User, resulting in
enhanced competition through increased usage and execution quality on
the Exchange. Thus, to the extent the change is intended to improve
functionality on the Exchange to encourage Users to direct their orders
to the Exchange, the change is competitive, but the Exchange does not
believe the proposed change will result in any burden on intermarket
competition as it is a minor change to available functionality. The
proposed changes to the Super Aggressive order instruction also promote
intramarket competition because they will facilitate the execution of
orders that would otherwise remain unexecuted consistent with the
intent of the User entering the order, thereby increasing the efficient
functioning of the Exchange. Further, the Super Aggressive order
instruction will remain available to all Users in the same way it is
today. Thus, Users can continue to choose between various optional
order instructions, including Super Aggressive, NDS, and others,
depending on the order handling they prefer the Exchange to utilize.
Therefore, the Exchange does not believe the proposed rule change will
result in any burden on intramarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received written 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 \19\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\20\
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78s(b)(3)(A)(iii).
\20\ 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of the filing. However,
Rule 19b-4(f)(6)(iii) \21\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. In its filing, EDGX requested that
the Commission waive the 30-day operative delay so that the Exchange
can implement the proposed rule change promptly after filing. The
Exchange stated that the proposal to allow an order with a Super
Aggressive instruction to execute against an incoming Post Only order
only if the Post Only order is displayable is consistent with the use
of the Super Aggressive instruction to access liquidity displayed on
other Trading Centers. Further, according to the Exchange, users
seeking to execute against incoming non-displayable Post Only orders
will continue to be able to attach the NDS order instruction, as well
as other order instructions that may permit such executions. In
addition, the Exchange stated that the proposed priority change where
non-displayed orders without a Super Aggressive instruction would cede
priority to non-displayed orders with a Super Aggressive instruction is
similar to, and consistent with, the Exchange's priority ceding
functionality for orders with an NDS instruction and would facilitate
executions that would otherwise not occur due to an incoming Post Only
order's requirement not to remove liquidity. The Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest, as the proposed rule
change relates to optional functionality that is consistent with
existing functionality and, if selected by Exchange users, may enable
them to better manage their orders and may increase order interaction
on the Exchange. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposed rule change operative upon
filing.\22\
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\21\ 17 CFR 240.19b-4(f)(6)(iii).
\22\ 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 the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if
[[Page 35300]]
it appears to the Commission that such action is: (i) Necessary or
appropriate in the public interest; (ii) for the protection of
investors; or (iii) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule 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
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2018-025 on the subject line.
Paper Comments
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-2018-025. 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 (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeEDGX-2018-025, and should be
submitted on or before August 15, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12) and (59).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-15849 Filed 7-24-18; 8:45 am]
BILLING CODE 8011-01-P
