Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Related to the Market-Wide Circuit Breaker in Rule 11.16, 56858-56860 [2019-23054]
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Federal Register / Vol. 84, No. 205 / Wednesday, October 23, 2019 / Notices
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U.S. Office of Personnel Management.
Stephen Hickman,
Regulatory Affairs Analyst.
[FR Doc. 2019–23062 Filed 10–22–19; 8:45 am]
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[FR Doc. 2019–23120 Filed 10–22–19; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87335; File No. SR–
CboeEDGA–2019–016]
Self-Regulatory Organizations; Cboe
EDGA Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Extend the
Pilot Related to the Market-Wide
Circuit Breaker in Rule 11.16
October 17, 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 October
15, 2019, Cboe EDGA Exchange, Inc.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Sep<11>2014
18:10 Oct 22, 2019
(the ‘‘Exchange’’ or ‘‘EDGA’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II, which Items have been
prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe EDGA Exchange, Inc. (‘‘EDGA’’
or the ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(the ‘‘Commission’’) a proposal to
extend the pilot related to the marketwide circuit breaker in Rule 11.16. The
text of the proposed rule change is
enclosed as 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/edga/),
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
EDGA Rules 11.16(a) through (d), (f)
and (g) describe the methodology for
determining when to halt trading in all
stocks due to extraordinary market
volatility, i.e., market-wide circuit
breakers. The market-wide circuit
breaker (‘‘MWCB’’) mechanism was
approved by the Commission to operate
on a pilot basis, the term of which was
to coincide with the pilot period for the
3 15
4 17
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U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
Frm 00104
Fmt 4703
Sfmt 4703
Plan to Address Extraordinary Market
Volatility Pursuant to Rule 608 of
Regulation NMS (the ‘‘LULD Plan’’),5
including any extensions to the pilot
period for the LULD Plan. The
Commission recently approved an
amendment to the LULD Plan for it to
operate on a permanent, rather than
pilot, basis.6 In light of the proposal to
make the LULD Plan permanent, the
Exchange amended Rule 11.16 to untie
the pilot’s effectiveness from that of the
LULD Plan and to extend the pilot’s
effectiveness to the close of business on
October 18, 2019.7
The Exchange now proposes to amend
Rule 11.16 to extend the pilot to the
close of business on October 18, 2020.
This filing does not propose any
substantive or additional changes to
Rule 11.16. The Exchange will use the
extension period to develop with the
other SROs rules and procedures that
would allow for the periodic testing of
the performance of the MWCB
mechanism, with industry member
participation in such testing. The
extension will also permit the
exchanges to consider enhancements to
the MWCB processes such as
modifications to the Level 3 process.
The market-wide circuit breaker
under Rule 11.16 provides an important,
automatic mechanism that is invoked to
promote stability and investor
confidence during a period of
significant stress when securities
markets experience extreme broad-based
declines. All U.S. equity exchanges and
FINRA adopted uniform rules on a pilot
basis relating to market-wide circuit
breakers in 2012 (‘‘MWCB Rules’’),
which are designed to slow the effects
of extreme price movement through
coordinated trading halts across
securities markets when severe price
declines reach levels that may exhaust
market liquidity. Market-wide circuit
breakers provide for trading halts in all
equities and options markets during a
severe market decline as measured by a
single-day decline in the S&P 500 Index.
Pursuant to Rule 11.16, a market-wide
trading halt will be triggered if the S&P
500 Index declines in price by specified
percentages from the prior day’s closing
price of that index. Currently, the
triggers are set at three circuit breaker
thresholds: 7% (Level 1), 13% (Level 2),
5 See Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012). The
LULD Plan provides a mechanism to address
extraordinary market volatility in individual
securities.
6 See Securities Exchange Act Release No. 85623
(April 11, 2019), 84 FR 16086 (April 17, 2019).
7 See Securities Exchange Act Release No. 85668
(April 16, 2019), 84 FR 16743 (April 22, 2019) (SR–
CboeEDGA–2019–006).
E:\FR\FM\23OCN1.SGM
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Federal Register / Vol. 84, No. 205 / Wednesday, October 23, 2019 / Notices
and 20% (Level 3). A market decline
that triggers a Level 1 or Level 2 halt
after 9:30 a.m. ET and before 3:25 p.m.
ET would halt market-wide trading for
15 minutes, while a similar market
decline at or after 3:25 p.m. ET would
not halt market-wide trading. A market
decline that triggers a Level 3 halt, at
any time during the trading day, would
halt market-wide trading until the
primary listing market opens the next
trading day.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,8 in general, and furthers the
objectives of Section 6(b)(5) of the Act,9
in particular, in that it is designed to
promote just and equitable principles of
trade, 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
market-wide circuit breaker mechanism
under Rule 11.16 is an important,
automatic mechanism that is invoked to
promote stability and investor
confidence during a period of
significant stress when securities
markets experience extreme broad-based
declines. Extending the market-wide
circuit breaker pilot for an additional
year would ensure the continued,
uninterrupted operation of a consistent
mechanism to halt trading across the
U.S. markets while the Exchange, with
the other SROs, consider and develop
rules and procedures that would allow
for the periodic testing of the
performance of the MWCB mechanism,
which would include industry member
participation in such testing. The
extension will also permit the
exchanges to consider enhancements to
the MWCB processes such as
modifications to the Level 3 process.
The Exchange also believes that the
proposed rule change promotes just and
equitable principles of trade in that it
promotes transparency and uniformity
across markets concerning when and
how to halt trading in all stocks as a
result of extraordinary market volatility.
Based on the foregoing, the Exchange
believes the benefits to market
participants from the MWCB under Rule
11.16 should continue on a pilot basis
because the MWCB will promote fair
and orderly markets, and protect
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 impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act because the
proposal would ensure the continued,
uninterrupted operation of a consistent
mechanism to halt trading across the
U.S. markets while the Exchange, in
conjunction with the other SROs,
consider and develop rules and
procedures that would allow for the
periodic testing of the performance of
the MWCB mechanism. In addition, as
noted above, the extension will permit
the exchanges to consider
enhancements to the MWCB processes
such as modifications to the Level 3
process. Further, the Exchange
understands that FINRA and other
national securities exchanges will file
proposals to extend their rules regarding
the market-wide circuit breaker pilot.
Thus, the proposed rule change will
help to ensure consistency across
market centers without implicating any
competitive issues.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No comments were solicited or
received 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; (2) impose any significant
burden on competition; and (3) 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 10 and Rule 19b–
4(f)(6) 11 thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 12 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii),13 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 proposal may become operative
upon filing. Extending the pilot for an
additional year will allow the
10 15
11 17
8 15
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
VerDate Sep<11>2014
18:10 Oct 22, 2019
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
12 Id.
13 17
Jkt 250001
PO 00000
CFR 240.19b–4(f)(6)(iii).
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56859
uninterrupted operation of the existing
pilot to halt trading across the U.S.
markets. Therefore, the Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest. The Commission hereby
designates the proposed rule change to
be operative upon filing.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change 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 rule-comments@
sec.gov. Please include File Number SRCboeEDGA–2019–016 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–CboeEDGA–2019–016. 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
14 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\23OCN1.SGM
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56860
Federal Register / Vol. 84, No. 205 / Wednesday, October 23, 2019 / Notices
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–CboeEDGA–2019–016 and
should be submitted on or before
November 13, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–23054 Filed 10–22–19; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Its
Price List To Add an Additional Step
Up Credit Tier
October 17, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on October
1, 2019, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
VerDate Sep<11>2014
18:10 Oct 22, 2019
Jkt 250001
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
self-regulatory organization 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 those 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.
1. Purpose
[Release No. 34–87330; File No. SR–NYSE–
2019–53]
1 15
The Exchange proposes to amend its
Price List to adopt a new pricing tier,
the Step Up Tier 2 Adding Credit, in
Tape A securities. The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
15 17
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Price List to adopt a new pricing tier,
the Step Up Tier 2 Adding Credit, in
Tape A securities.
The proposed changes respond to the
current competitive environment where
order flow providers have a choice of
where to direct liquidity-providing
orders by offering further incentives for
member organizations to send
additional displayed liquidity to the
Exchange.
The Exchange proposes to implement
the fee changes effective October 1,
2019.
Competitive Environment
The Commission has repeatedly
expressed its preference for competition
over regulatory intervention in
determining prices, products, and
services in the securities markets. In
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
broader forms that are most important to
investors and listed companies.’’ 4
As the Commission itself recognized,
the market for trading services in NMS
stocks has become ‘‘more fragmented
and competitive.’’ 5 Indeed, equity
trading is currently dispersed across 13
exchanges,6 31 alternative trading
systems,7 and numerous broker-dealer
internalizers and wholesalers, all
competing for order flow. Based on
publicly-available information, no
single exchange has more than 18%
market share (whether including or
excluding auction volume).8 Therefore,
no exchange possesses significant
pricing power in the execution of equity
order flow. More specifically, for the
month of August 2019, the Exchange’s
market share of intraday trading (i.e.,
excluding auctions) in Tapes A, B and
C securities was only 9.3%.9
The Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can move order flow, or discontinue or
reduce use of certain categories of
products, in response to fee changes.
With respect to non-marketable order
flow that would provide displayed
liquidity on an Exchange, member
organizations can choose from any one
of the 13 currently operating registered
exchanges to route such order flow.
Accordingly, competitive forces
constrain exchange transaction fees that
relate to orders that would provide
liquidity on an exchange.
In response to this competitive
environment, the Exchange has
established incentives for its member
organizations who submit orders that
provide liquidity on the Exchange. The
proposed fee change is designed to
attract additional order flow to the
Exchange by offering a new pricing tier
to incentivize member organizations to
step up their liquidity-providing orders
on the Exchange on all tapes.
4 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37495, 37499 (June 29, 2005)
(S7–10–04) (Final Rule) (‘‘Regulation NMS’’).
5 See Securities Exchange Act Release No. 51808,
84 FR 5202, 5253 (February 20, 2019) (File No. S7–
05–18) (Transaction Fee Pilot for NMS Stocks Final
Rule) (‘‘Transaction Fee Pilot’’).
6 See Cboe Global Markets, U.S. Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/. See
generally https://www.sec.gov/fast-answers/
divisionsmarketregmrexchangesshtml.html.
7 See FINRA ATS Transparency Data, available at
https://otctransparency.finra.org/otctransparency/
AtsIssueData. A list of alternative trading systems
registered with the Commission is available at
https://www.sec.gov/foia/docs/atslist.htm.
8 See Cboe Global Markets U.S. Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/.
9 See id.
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]]>Agencies
[Federal Register Volume 84, Number 205 (Wednesday, October 23, 2019)]
[Notices]
[Pages 56858-56860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23054]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87335; File No. SR-CboeEDGA-2019-016]
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Extend the Pilot Related to the Market-Wide Circuit Breaker in Rule
11.16
October 17, 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 October 15, 2019, Cboe EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and
II, 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).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGA Exchange, Inc. (``EDGA'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (the ``Commission'') a
proposal to extend the pilot related to the market-wide circuit breaker
in Rule 11.16. The text of the proposed rule change is enclosed as
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/edga/), 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
EDGA Rules 11.16(a) through (d), (f) and (g) describe the
methodology for determining when to halt trading in all stocks due to
extraordinary market volatility, i.e., market-wide circuit breakers.
The market-wide circuit breaker (``MWCB'') mechanism was approved by
the Commission to operate on a pilot basis, the term of which was to
coincide with the pilot period for the Plan to Address Extraordinary
Market Volatility Pursuant to Rule 608 of Regulation NMS (the ``LULD
Plan''),\5\ including any extensions to the pilot period for the LULD
Plan. The Commission recently approved an amendment to the LULD Plan
for it to operate on a permanent, rather than pilot, basis.\6\ In light
of the proposal to make the LULD Plan permanent, the Exchange amended
Rule 11.16 to untie the pilot's effectiveness from that of the LULD
Plan and to extend the pilot's effectiveness to the close of business
on October 18, 2019.\7\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012). The LULD Plan provides a
mechanism to address extraordinary market volatility in individual
securities.
\6\ See Securities Exchange Act Release No. 85623 (April 11,
2019), 84 FR 16086 (April 17, 2019).
\7\ See Securities Exchange Act Release No. 85668 (April 16,
2019), 84 FR 16743 (April 22, 2019) (SR-CboeEDGA-2019-006).
---------------------------------------------------------------------------
The Exchange now proposes to amend Rule 11.16 to extend the pilot
to the close of business on October 18, 2020. This filing does not
propose any substantive or additional changes to Rule 11.16. The
Exchange will use the extension period to develop with the other SROs
rules and procedures that would allow for the periodic testing of the
performance of the MWCB mechanism, with industry member participation
in such testing. The extension will also permit the exchanges to
consider enhancements to the MWCB processes such as modifications to
the Level 3 process.
The market-wide circuit breaker under Rule 11.16 provides an
important, automatic mechanism that is invoked to promote stability and
investor confidence during a period of significant stress when
securities markets experience extreme broad-based declines. All U.S.
equity exchanges and FINRA adopted uniform rules on a pilot basis
relating to market-wide circuit breakers in 2012 (``MWCB Rules''),
which are designed to slow the effects of extreme price movement
through coordinated trading halts across securities markets when severe
price declines reach levels that may exhaust market liquidity. Market-
wide circuit breakers provide for trading halts in all equities and
options markets during a severe market decline as measured by a single-
day decline in the S&P 500 Index.
Pursuant to Rule 11.16, a market-wide trading halt will be
triggered if the S&P 500 Index declines in price by specified
percentages from the prior day's closing price of that index.
Currently, the triggers are set at three circuit breaker thresholds: 7%
(Level 1), 13% (Level 2),
[[Page 56859]]
and 20% (Level 3). A market decline that triggers a Level 1 or Level 2
halt after 9:30 a.m. ET and before 3:25 p.m. ET would halt market-wide
trading for 15 minutes, while a similar market decline at or after 3:25
p.m. ET would not halt market-wide trading. A market decline that
triggers a Level 3 halt, at any time during the trading day, would halt
market-wide trading until the primary listing market opens the next
trading day.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\9\ in particular, in that it is designed to promote
just and equitable principles of trade, 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 market-wide circuit breaker mechanism under Rule 11.16 is an
important, automatic mechanism that is invoked to promote stability and
investor confidence during a period of significant stress when
securities markets experience extreme broad-based declines. Extending
the market-wide circuit breaker pilot for an additional year would
ensure the continued, uninterrupted operation of a consistent mechanism
to halt trading across the U.S. markets while the Exchange, with the
other SROs, consider and develop rules and procedures that would allow
for the periodic testing of the performance of the MWCB mechanism,
which would include industry member participation in such testing. The
extension will also permit the exchanges to consider enhancements to
the MWCB processes such as modifications to the Level 3 process.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange also believes that the proposed rule change promotes
just and equitable principles of trade in that it promotes transparency
and uniformity across markets concerning when and how to halt trading
in all stocks as a result of extraordinary market volatility. Based on
the foregoing, the Exchange believes the benefits to market
participants from the MWCB under Rule 11.16 should continue on a pilot
basis because the MWCB will promote fair and orderly markets, and
protect 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
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act because the proposal would
ensure the continued, uninterrupted operation of a consistent mechanism
to halt trading across the U.S. markets while the Exchange, in
conjunction with the other SROs, consider and develop rules and
procedures that would allow for the periodic testing of the performance
of the MWCB mechanism. In addition, as noted above, the extension will
permit the exchanges to consider enhancements to the MWCB processes
such as modifications to the Level 3 process. Further, the Exchange
understands that FINRA and other national securities exchanges will
file proposals to extend their rules regarding the market-wide circuit
breaker pilot. Thus, the proposed rule change will help to ensure
consistency across market centers without implicating any competitive
issues.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No comments were solicited or received 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; (2) impose any significant burden on competition; and (3)
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 \10\ and Rule 19b-
4(f)(6) \11\ thereunder.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\13\ 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 proposal
may become operative upon filing. Extending the pilot for an additional
year will allow the uninterrupted operation of the existing pilot to
halt trading across the U.S. markets. Therefore, the Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. The Commission hereby
designates the proposed rule change to be operative upon filing.\14\
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\12\ Id.
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ 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 it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change 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-CboeEDGA-2019-016 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-CboeEDGA-2019-016. 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
[[Page 56860]]
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-CboeEDGA-2019-016
and should be submitted on or before November 13, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-23054 Filed 10-22-19; 8:45 am]
BILLING CODE 8011-01-P
