Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Exchange's Retail Price Improvement Program, 31650-31652 [2019-14055]

Download as PDF 31650 Federal Register / Vol. 84, No. 127 / Tuesday, July 2, 2019 / Notices All submissions should refer to File Number SR–NYSEArca–2019–45. 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 offices 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–NYSEArca–2019–45, and should be submitted on or before July 23, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–14054 Filed 7–1–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–656, OMB Control No. 3235–0715] khammond on DSKBBV9HB2PROD with NOTICES Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: U.S. Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. Extension: Rules 3a71–6 16 17 CFR 200.30–3(a)(12), (59). VerDate Sep<11>2014 17:00 Jul 01, 2019 Jkt 247001 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 (‘‘SEC’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for approval of extension of the previously approved collection of information provided for Rule 3a71–6 under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Rule 3a71–6 provides that non-U.S. security-based swap dealers and major security-based swap participants may comply with certain Exchange Act requirements via compliance with requirements of a foreign financial regulatory system that the Commission has determined by order to be comparable to those Exchange Act requirements, taking into account the scope and objectives of the relevant foreign requirements, and the effectiveness of supervision and enforcement under the foreign regulatory regime. Requests for substituted compliance may come from parties or groups of parties that may rely on substituted compliance, or from foreign financial authorities supervising such parties or their security-based swap activities. In practice, the Commission expects that the greater portion of any such substituted compliance requests will be submitted by foreign financial authorities. For purposes of the Paperwork Reduction Act, the Commission estimates that three security-based swap dealers or major security-based swap participants will submit substituted compliance applications. The Commission staff estimates that the one-time reporting burden associated with making each substituted compliance request pursuant to Rule 3a71–6 would occur in the first year and would be approximately 80 hours of inhouse counsel time, or 240 aggregate hours across the three entities. The Commission staff estimates that the total costs associated with each substituted compliance request would occur in the first year and would be appropriately $84,000 for outside counsel, or $252,000 in the aggregate across the three entities. Annualized over three years, the time burden is 26.67 hours per respondent per year for a total burden of 80 hours per year for all respondents. Annualized over three years, the cost burden is $28,000 per respondent per year for a total cost burden of $84,000 per year for all respondents. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 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: Lindsay Abate Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting 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: June 27, 2019. Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–14110 Filed 7–1–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86206; File No. SRCboeBYX–2019–010] Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Exchange’s Retail Price Improvement Program June 26, 2019 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 June 25, 2019, Cboe BYX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\02JYN1.SGM 02JYN1 Federal Register / Vol. 84, No. 127 / Tuesday, July 2, 2019 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe BYX Exchange, Inc. (‘‘BYX’’ or the ‘‘Exchange’’) is filing with the Securities and Exchange Commission (the ‘‘Commission’’) a proposed rule change to extend the pilot period for the Exchange’s Retail Price Improvement Program. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ equities/regulation/rule_filings/byx/), 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to extend the pilot period for the Exchange’s Retail Price Improvement Program (the ‘‘Program’’). The Program is currently set to expire on the earlier of approval of the filing to make the Program permanent or June 30, 2019.5 The Exchange now proposes to extend the Program until the earlier of approval of the filing to make the Program permanent or September 30, 2019. khammond on DSKBBV9HB2PROD with NOTICES Background In November 2012, the Commission approved the Program on a pilot basis.6 The Program is designed to attract retail 5 The Exchange filed to make the pilot program permanent but that filing was subsequently withdrawn. See Securities Exchange Act Release Nos. 83831 (August 13, 2018), 83 FR 41128 (August 17, 2018); 85586 (April 10, 20119), 84 FR 15657 (April 16, 2019) (SR-CboeBYX–2018–014). The Exchange intends to file a replacement filing to make the pilot program permanent. 6 See Securities Exchange Act Release No. 68303 (November 27, 2012), 77 FR 71652 (December 3, 2012) (‘‘RPI Approval Order’’) (SR–BYX–2012–019). VerDate Sep<11>2014 17:00 Jul 01, 2019 Jkt 247001 order flow to the Exchange, and allows such order flow to receive potential price improvement. The Program is currently limited to trades occurring at prices equal to or greater than $1.00 per share. Under the Program, all Exchange Users 7 are permitted to provide potential price improvement for Retail Orders 8 in the form of non-displayed interest that is better than the national best bid that is a Protected Quotation (‘‘Protected NBB’’) or the national best offer that is a Protected Quotation (‘‘Protected NBO’’, and together with the Protected NBB, the ‘‘Protected NBBO’’).9 The Program was approved by the Commission on a pilot basis running one year from the date of implementation.10 The Commission approved the Program on November 27, 2012.11 The Exchange implemented the Program on January 11, 2013, and has extended the pilot period seven times.12 The pilot period for the Program is currently set to expire on the earlier of approval of the filing to make this rule permanent or June 30, 2019. This filing seeks to extend the pilot until the earlier of approval of the filing to make the 7 A ‘‘User’’ is defined in BYX Rule 1.5(cc) as any member or sponsored participant of the Exchange who is authorized to obtain access to the System. 8 A ‘‘Retail Order’’ is defined in Rule 11.24(a)(2) as an agency order that originates from a natural person and is submitted to the Exchange by a RMO, provided that no change is made to the terms of the order with respect to price or side of market and the order does not originate from a trading algorithm or any computerized methodology. See Rule 11.24(a)(2). 9 The term Protected Quotation is defined in BYX Rule 1.5(t) and has the same meaning as is set forth in Regulation NMS Rule 600(b)(58). The terms Protected NBB and Protected NBO are defined in BYX Rule 1.5(s). The Protected NBB is the bestpriced protected bid and the Protected NBO is the best-priced protected offer. Generally, the Protected NBB and Protected NBO and the national best bid (‘‘NBB’’) and national best offer (‘‘NBO’’, together with the NBB, the ‘‘NBBO’’) will be the same. However, a market center is not required to route to the NBB or NBO if that market center is subject to an exception under Regulation NMS Rule 611(b)(1) or if such NBB or NBO is otherwise not available for an automatic execution. In such case, the Protected NBB or Protected NBO would be the best-priced protected bid or offer to which a market center must route interest pursuant to Regulation NMS Rule 611. 10 See RPI Approval Order, supra note 6 at 71652. 11 Id. 12 See Securities Exchange Act Release Nos. 71249 (January 7, 2014), 79 FR 2229 (January 13, 2014) (SR–BYX–2014–001); 74111 (January 22, 2015), 80 FR 4598 (January 28, 2015) (SR–BYX– 2015–05); 76965 (January 22, 2016), 81 FR 4682 (January 27, 2016) (SR–BYX–2016–01); 78180 (June 28, 2016), 81 FR 43306 (July 1, 2016) (SR–BatsBYX– 2016–15); 81368 (August 10, 2017), 82 FR 38960 (August 16, 2017) (SR–BatsBYX–2017–18); 83758 (August 1, 2018), 83 FR 38757 (August 7, 2018) (SR–CboeBYX–2018–015); 84845 (December 18, 2018), 83 FR 66329 (December 26, 2018) (SR– CboeBYX–2018–025). PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 31651 Program permanent or September 30, 2019. Proposal To Extend the Operation of the Program The Exchange established the Program in an attempt to attract retail order flow to the Exchange by potentially providing price improvement to such order flow. The Exchange believes that the Program promotes competition for retail order flow by allowing Exchange members to submit Retail Price Improvement Orders (‘‘RPI Orders’’) 13 to interact with Retail Orders. Such competition has the ability to promote efficiency by facilitating the price discovery process and generating additional investor interest in trading securities, thereby promoting capital formation. The Exchange believes that extending the pilot is appropriate because it will allow the Exchange and the Commission additional time to gather and analyze data regarding the Program that the Exchange has committed to provide.14 As such, the Exchange believes that it is appropriate to extend the current operation of the Program.15 Through this filing, the Exchange seeks to extend the current pilot period of the Program until the earlier of approval of the filing to make the Program permanent or September 30, 2019. 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.16 In particular, the Exchange believes the proposed change furthers the objectives of Section 6(b)(5) of the Act,17 in that it is 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 facilitating transactions in securities, 13 A ‘‘Retail Price Improvement Order’’ is defined in Rule 11.24(a)(3) as an order that consists of nondisplayed interest on the Exchange that is priced better than the Protected NBB or Protected NBO by at least $0.001 and that is identified as such. See Rule 11.24(a)(3). 14 See RPI Approval Order, supra note 6 at 71655. 15 Concurrently with this filing, the Exchange has submitted a request for an extension of the exemption under Regulation NMS Rule 612 previously granted by the Commission that permits it to accept and rank the RPI orders in sub-penny increments. See Letter from Adrian Griffiths, Assistant General Counsel, Cboe BYX Exchange, Inc. to Vanessa Countryman, Secretary, Securities and Exchange Commission dated June 25, 2019. 16 15 U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(5). E:\FR\FM\02JYN1.SGM 02JYN1 31652 Federal Register / Vol. 84, No. 127 / Tuesday, July 2, 2019 / Notices and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that extending the pilot period for the Program is consistent with these principles because the Program is reasonably designed to attract retail order flow to the exchange environment, while helping to ensure that retail investors benefit from the better price that liquidity providers are willing to give their orders. Additionally, as previously stated, the competition promoted by the Program may facilitate the price discovery process and potentially generate additional investor interest in trading securities. The extension of the pilot period will allow the Commission and the Exchange to continue to monitor the Program for its potential effects on public price discovery, and on the broader market structure. 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. The proposed rule change extends an established pilot program, thus allowing the Program to enhance competition for retail order flow and contribute to the public price discovery process. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from Members or other interested parties. khammond on DSKBBV9HB2PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (A) Significantly affect the protection of investors or the public interest; (B) impose any significant burden on competition; and (C) by its terms, 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 18 and paragraph (f)(6) of Rule 19b– 4 thereunder,19 the Exchange has 18 15 U.S.C. 78s(b)(3)(A). 19 17 CFR 240.19b–4. As required under Rule 19b–4(f)(6)(iii), the Exchange has given the Commission written notice of its intent to file the VerDate Sep<11>2014 17:00 Jul 01, 2019 Jkt 247001 designated this rule filing as noncontroversial. A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative prior to 30 days after the date of the filing.20 However, pursuant to Rule 19b–4(f)(6)(iii),21 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 upon filing. The Exchange states that waiver of the operative delay is consistent with the protection of investors and the public interest and will allow the Exchange to extend the Program, which will ensure that the Program continues while the Exchange and Commission continue to analyze data regarding the Program. The Commission believes that waiving the 30-day operative delay for the instant filing is consistent with the protection of investors. Accordingly, the Commission designates the proposed rule change as operative upon filing with the Commission.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 it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) 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: 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. 17 CFR 240.19b– 4(f)(6). 20 17 CFR 240.19b–4(f)(6). 21 17 CFR 240.19b–4(f)(6)(iii). 22 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 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– CboeBYX–2019–010 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–CboeBYX–2019–010. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (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–CboeBYX–≤2019–010 and should be submitted on or before July 23, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–14055 Filed 7–1–19; 8:45 am] BILLING CODE 8011–01–P 23 17 E:\FR\FM\02JYN1.SGM CFR 200.30–3(a)(12). 02JYN1

Agencies

[Federal Register Volume 84, Number 127 (Tuesday, July 2, 2019)]
[Notices]
[Pages 31650-31652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14055]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86206; File No. SR-CboeBYX-2019-010]


Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend 
the Pilot Period for the Exchange's Retail Price Improvement Program

June 26, 2019
    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 June 25, 2019, Cboe BYX Exchange, Inc. (the ``Exchange'' or 
``BYX'') 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 31651]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BYX Exchange, Inc. (``BYX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (the ``Commission'') a 
proposed rule change to extend the pilot period for the Exchange's 
Retail Price Improvement Program. The text of the proposed rule change 
is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/byx/), 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to extend the pilot 
period for the Exchange's Retail Price Improvement Program (the 
``Program''). The Program is currently set to expire on the earlier of 
approval of the filing to make the Program permanent or June 30, 
2019.\5\ The Exchange now proposes to extend the Program until the 
earlier of approval of the filing to make the Program permanent or 
September 30, 2019.
---------------------------------------------------------------------------

    \5\ The Exchange filed to make the pilot program permanent but 
that filing was subsequently withdrawn. See Securities Exchange Act 
Release Nos. 83831 (August 13, 2018), 83 FR 41128 (August 17, 2018); 
85586 (April 10, 20119), 84 FR 15657 (April 16, 2019) (SR-CboeBYX-
2018-014). The Exchange intends to file a replacement filing to make 
the pilot program permanent.
---------------------------------------------------------------------------

Background
    In November 2012, the Commission approved the Program on a pilot 
basis.\6\ The Program is designed to attract retail order flow to the 
Exchange, and allows such order flow to receive potential price 
improvement. The Program is currently limited to trades occurring at 
prices equal to or greater than $1.00 per share. Under the Program, all 
Exchange Users \7\ are permitted to provide potential price improvement 
for Retail Orders \8\ in the form of non-displayed interest that is 
better than the national best bid that is a Protected Quotation 
(``Protected NBB'') or the national best offer that is a Protected 
Quotation (``Protected NBO'', and together with the Protected NBB, the 
``Protected NBBO'').\9\
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    \6\ See Securities Exchange Act Release No. 68303 (November 27, 
2012), 77 FR 71652 (December 3, 2012) (``RPI Approval Order'') (SR-
BYX-2012-019).
    \7\ A ``User'' is defined in BYX Rule 1.5(cc) as any member or 
sponsored participant of the Exchange who is authorized to obtain 
access to the System.
    \8\ A ``Retail Order'' is defined in Rule 11.24(a)(2) as an 
agency order that originates from a natural person and is submitted 
to the Exchange by a RMO, provided that no change is made to the 
terms of the order with respect to price or side of market and the 
order does not originate from a trading algorithm or any 
computerized methodology. See Rule 11.24(a)(2).
    \9\ The term Protected Quotation is defined in BYX Rule 1.5(t) 
and has the same meaning as is set forth in Regulation NMS Rule 
600(b)(58). The terms Protected NBB and Protected NBO are defined in 
BYX Rule 1.5(s). The Protected NBB is the best-priced protected bid 
and the Protected NBO is the best-priced protected offer. Generally, 
the Protected NBB and Protected NBO and the national best bid 
(``NBB'') and national best offer (``NBO'', together with the NBB, 
the ``NBBO'') will be the same. However, a market center is not 
required to route to the NBB or NBO if that market center is subject 
to an exception under Regulation NMS Rule 611(b)(1) or if such NBB 
or NBO is otherwise not available for an automatic execution. In 
such case, the Protected NBB or Protected NBO would be the best-
priced protected bid or offer to which a market center must route 
interest pursuant to Regulation NMS Rule 611.
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    The Program was approved by the Commission on a pilot basis running 
one year from the date of implementation.\10\ The Commission approved 
the Program on November 27, 2012.\11\ The Exchange implemented the 
Program on January 11, 2013, and has extended the pilot period seven 
times.\12\ The pilot period for the Program is currently set to expire 
on the earlier of approval of the filing to make this rule permanent or 
June 30, 2019. This filing seeks to extend the pilot until the earlier 
of approval of the filing to make the Program permanent or September 
30, 2019.
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    \10\ See RPI Approval Order, supra note 6 at 71652.
    \11\ Id.
    \12\ See Securities Exchange Act Release Nos. 71249 (January 7, 
2014), 79 FR 2229 (January 13, 2014) (SR-BYX-2014-001); 74111 
(January 22, 2015), 80 FR 4598 (January 28, 2015) (SR-BYX-2015-05); 
76965 (January 22, 2016), 81 FR 4682 (January 27, 2016) (SR-BYX-
2016-01); 78180 (June 28, 2016), 81 FR 43306 (July 1, 2016) (SR-
BatsBYX-2016-15); 81368 (August 10, 2017), 82 FR 38960 (August 16, 
2017) (SR-BatsBYX-2017-18); 83758 (August 1, 2018), 83 FR 38757 
(August 7, 2018) (SR-CboeBYX-2018-015); 84845 (December 18, 2018), 
83 FR 66329 (December 26, 2018) (SR-CboeBYX-2018-025).
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Proposal To Extend the Operation of the Program
    The Exchange established the Program in an attempt to attract 
retail order flow to the Exchange by potentially providing price 
improvement to such order flow. The Exchange believes that the Program 
promotes competition for retail order flow by allowing Exchange members 
to submit Retail Price Improvement Orders (``RPI Orders'') \13\ to 
interact with Retail Orders. Such competition has the ability to 
promote efficiency by facilitating the price discovery process and 
generating additional investor interest in trading securities, thereby 
promoting capital formation. The Exchange believes that extending the 
pilot is appropriate because it will allow the Exchange and the 
Commission additional time to gather and analyze data regarding the 
Program that the Exchange has committed to provide.\14\ As such, the 
Exchange believes that it is appropriate to extend the current 
operation of the Program.\15\ Through this filing, the Exchange seeks 
to extend the current pilot period of the Program until the earlier of 
approval of the filing to make the Program permanent or September 30, 
2019.
---------------------------------------------------------------------------

    \13\ A ``Retail Price Improvement Order'' is defined in Rule 
11.24(a)(3) as an order that consists of non-displayed interest on 
the Exchange that is priced better than the Protected NBB or 
Protected NBO by at least $0.001 and that is identified as such. See 
Rule 11.24(a)(3).
    \14\ See RPI Approval Order, supra note 6 at 71655.
    \15\ Concurrently with this filing, the Exchange has submitted a 
request for an extension of the exemption under Regulation NMS Rule 
612 previously granted by the Commission that permits it to accept 
and rank the RPI orders in sub-penny increments. See Letter from 
Adrian Griffiths, Assistant General Counsel, Cboe BYX Exchange, Inc. 
to Vanessa Countryman, Secretary, Securities and Exchange Commission 
dated June 25, 2019.
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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.\16\ In particular, 
the Exchange believes the proposed change furthers the objectives of 
Section 6(b)(5) of the Act,\17\ in that it is 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 facilitating transactions in securities,

[[Page 31652]]

and to remove impediments to and perfect the mechanism of a free and 
open market and a national market system. The Exchange believes that 
extending the pilot period for the Program is consistent with these 
principles because the Program is reasonably designed to attract retail 
order flow to the exchange environment, while helping to ensure that 
retail investors benefit from the better price that liquidity providers 
are willing to give their orders. Additionally, as previously stated, 
the competition promoted by the Program may facilitate the price 
discovery process and potentially generate additional investor interest 
in trading securities. The extension of the pilot period will allow the 
Commission and the Exchange to continue to monitor the Program for its 
potential effects on public price discovery, and on the broader market 
structure.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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. The proposed rule change 
extends an established pilot program, thus allowing the Program to 
enhance competition for retail order flow and contribute to the public 
price discovery process.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from Members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (A) 
Significantly affect the protection of investors or the public 
interest; (B) impose any significant burden on competition; and (C) by 
its terms, 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 \18\ and 
paragraph (f)(6) of Rule 19b-4 thereunder,\19\ the Exchange has 
designated this rule filing as non-controversial.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4. As required under Rule 19b-4(f)(6)(iii), 
the Exchange has given 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. 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing.\20\ 
However, pursuant to Rule 19b-4(f)(6)(iii),\21\ 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 upon filing. The Exchange states that 
waiver of the operative delay is consistent with the protection of 
investors and the public interest and will allow the Exchange to extend 
the Program, which will ensure that the Program continues while the 
Exchange and Commission continue to analyze data regarding the Program.
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    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay for 
the instant filing is consistent with the protection of investors. 
Accordingly, the Commission designates the proposed rule change as 
operative upon filing with the Commission.\22\
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    \22\ For purposes only of waiving the operative delay for this 
proposal, the Commission has 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 it appears to the Commission that such action is: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) 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-CboeBYX-2019-010 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-CboeBYX-2019-010. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (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-CboeBYX->2019-010 and should be 
submitted on or before July 23, 2019.

    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).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-14055 Filed 7-1-19; 8:45 am]
 BILLING CODE 8011-01-P
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