Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Subparagraph (a)(1) of Rule 11.1 To Allow the Exchange To Accept Market Orders With a Stop Price Entered Between 6:00 and 7:00 a.m. Eastern Time, 65856-65858 [2019-25837]

Download as PDF 65856 Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeBYX–2019–022 on the subject line. khammond on DSKJM1Z7X2PROD with NOTICES 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–2019–022. 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 (http://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–2019–022, and should be submitted on or before December 20, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–25840 Filed 11–27–19; 8:45 am] SECURITIES AND EXCHANGE COMMISSION the most significant aspects of such statements. [Release No. 34–87592; File No. SR– CboeEDGA–2019–020] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Subparagraph (a)(1) of Rule 11.1 To Allow the Exchange To Accept Market Orders With a Stop Price Entered Between 6:00 and 7:00 a.m. Eastern Time November 22, 2019. 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 November 19, 2019, Cboe EDGA Exchange, Inc. (‘‘Exchange’’) 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 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 proposed rule change to amend subparagraph (a)(1) of Rule 11.1 to allow the Exchange to accept Market Orders with a Stop Price entered between 6:00 and 7:00 a.m. Eastern Time. 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 (http://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 BILLING CODE 8011–01–P 1 15 20 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:49 Nov 27, 2019 2 17 Jkt 250001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00081 Fmt 4703 Sfmt 4703 1. Purpose The Exchange proposes to amend subparagraph (a)(1) of Rule 11.1 to allow the Exchange to accept Market Orders 3 with a Stop Price 4 (a ‘‘Stop Order’’) entered between 6:00 and 7:00 a.m. Eastern Time. Subparagraph (a)(1) of Rule 11.1 provides that orders entered between 6:00 a.m. and 7:00 a.m. Eastern Time are not eligible for execution until the start of the Early Trading Session,5 PreOpening Session 6 or Regular Trading Hours,7 depending on the Time in Force selected by the User.8 Subparagraph (a)(1) also provides that the Exchange will not accept certain orders 9 entered prior to 7:00 a.m. Eastern Time including Market Orders with a Time in Force other than Regular Hours Only (‘‘RHO’’).10 Market Orders with a Time in Force other than RHO are rejected by the Exchange prior to 7:00 a.m. Eastern Time because Market Orders are not eligible to trade prior to the start of Regular Trading Hours and such orders are generally not designated to queue for later entry onto the Exchange’s order book. Rather, Market Orders with a Time in Force other than RHO are designed to immediately execute at the NBBO when the order reaches the Exchange, and thus are generally 3 A Market Order is an order to buy or sell a stated amount of a security that is to be executed at the NBBO or better when the order reaches the Exchange. See Exchange Rule 11.8(a). 4 A Market Order ‘‘may include a Stop Price which will convert the order into a Market Order when the Stop Price is triggered. An order to buy converts to a Market Order when the consolidated last sale in the security occurs at, or above, the specified Stop Price. An order to sell converts into a Market Order when the consolidated last sale in the security occurs at, or below, the specified Stop Price.’’ See Exchange Rule 11.8(a)(1). 5 See Exchange Rule 1.5(ii). 6 See Exchange Rule 1.5(s). 7 See Exchange Rule 1.5(y). 8 See Exchange Rule 1.5(ee). 9 Specifically, Exchange Rule11.1(a)(1) provides that orders with a Post Only instruction, Intermarket Sweep Orders (‘‘ISOs’’), Market Orders with a Time in Force instruction other that Regular Hours Only, orders with a Minimum Execution Quantity instruction that also include a Time in Force instruction of Regular Hours Only, and all orders with a Time in Force of Immediate-or-Cancel (‘‘IOC’’) or Fill-or-Kill (‘‘FOK’’) are not accepted if entered prior to 7:00 a.m. Eastern Time. 10 RHO is an ‘‘instruction a User may attach to an order designating it for execution only during Regular Trading Hours, which includes the Opening Process and Re-Opening Process following a halt suspension or pause.’’ See Exchange Rule 11.6(q)(6). E:\FR\FM\29NON1.SGM 29NON1 Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices intended for entry during a trading session where continuous trading is occurring. Alternatively, other order types and modifiers, such as Market Orders with a Time in Force of RHO and Limit Orders,11 including Limit Orders with a Stop Limit Price (‘‘Stop Limit Orders’’),12 are allowed for entry on the Exchange between 6:00 and 7:00 a.m. Eastern Time as those order types and modifiers are consistent with an order designated to queue for later entry on to the Exchange’s order book. Specifically, Market Orders with a Time in Force of RHO are effectively for use in the Opening Auction and are cancelled if not executed in the Opening Auction. Therefore, Market Orders with a Time in Force of RHO would be queued until the start of the regular trading session for participation in the Opening Auction. Similarly, the Stop Price of a Stop Limit Order can only be triggered by a consolidated last sale eligible trade.13 Therefore, a Stop Limit Order would be queued until the time the Stop Price of the order is triggered by a consolidated last sale eligible trade occurring Regular Trading Hours. As proposed, the amendment would allow the Exchange to accept Stop Orders entered between 6:00 and 7:00 a.m. Eastern Time, which is consistent with an order designated to queue for later entry on to the Exchange’s order book. Similar to a Stop Limit Order, the Stop Price of a Stop Order can only be triggered by a consolidated last sale eligible trade.14 Therefore, a Stop Order can only become a Market Order after at least the start of Regular Trading Hours. Further, Stop Orders entered on the Exchange between 6:00 and 7:00 a.m. Eastern Time would behave similar to Stop Limit Orders between the time of entry up to at least the start of Regular Trading Hours. khammond on DSKJM1Z7X2PROD with NOTICES 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the 11 A Limit Order is an ‘‘order to buy or sell a stated amount of a security at a specified price or better. A marketable Limit Order is a Limit Order to buy (sell) at or above (below) the lowest (highest) Protected Offer (Protected Bid) for the security.’’ See Exchange Rule 11.8(b). 12 A Stop Order ‘‘may contain a Stop Limit Price which will convert to a Limit Order once the Stop Limit Price is triggered. A Limit Order to buy with a Stop Limit Price becomes eligible for execution by the System when the consolidated last sale in the security occurs at, or above, the specified Stop Price. A Limit Order to sell with a Stop Limit Price becomes eligible for execution by the System when the consolidated last sale in the security occurs at, or below, the specified Stop Limit Price.’’ See Exchange Rule 11.8(b)(1). 13 See supra note 12. 14 See supra note 4. VerDate Sep<11>2014 16:49 Nov 27, 2019 Jkt 250001 ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.15 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 16 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. As discussed above, all Stop Orders are designed to queue until at least the start of Regular Trading Hours as such orders are only eligible to be elected based on the consolidated last sale set during Regular Trading Hours. Therefore, the proposed amendment to allow the entry of Stop Orders between 6:00 and 7:00 a.m. Eastern Time would not allow such Stop Orders to be elected and execute prior to the start of Regular Trading Hours. Prior to the start of Regular Trading Hours, Stop Orders entered between 6:00 and 7:00 a.m. Eastern Time would behave similar to Stop Limit Orders entered during that time. Therefore, the Exchange believes the proposed amendment would consistently allow order types and modifiers that are consistent with orders designated to queue to be entered on the Exchange between 6:00 and 7:00 a.m. Eastern Time. Additionally, the Exchange believes the proposed amendment would allow Members the convenience to enter all Stop Orders and Stop Limit Orders between 6:00 and 7:00 a.m. Eastern Time without those orders being eligible for election, and consequently execution, until at least the start of the Regular Trading Hours. Thus, the proposed amendment would provide Members with both greater convenience and flexibility in managing their Stop Orders and Stop Limit Orders without impacting how those orders trade. 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. Rather, the proposed rule change would consistently allow for the entry of order 15 15 16 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00082 Fmt 4703 types and modifiers that are designated to queue between 6:00 and 7:00 a.m. Eastern Time. Stop Limit Orders are currently allowed for entry on the Exchange between 6:00 and 7:00 a.m. Eastern Time and behave similar to the manner in which a Stop Order would behave prior to the start of Regular Trading Hours if allowed entry during that time. The Exchange therefore believes that the proposed rule change would increase consistency around the operation of the Exchange to the benefit of Members and investors as well as provide greater flexibility to Members in managing their Stop Orders, without imposing any significant burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days 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 17 and Rule 19b–4(f)(6) 18 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. 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: 17 15 18 17 Sfmt 4703 65857 E:\FR\FM\29NON1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 29NON1 65858 Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices Electronic Comments • Use the Commission’s internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeEDGA–2019–020 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. khammond on DSKJM1Z7X2PROD with NOTICES All submissions should refer to File Number SR–CboeEDGA–2019–020. 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 (http://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–CboeEDGA–2019–020, and should be submitted on or before December 20, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–25837 Filed 11–27–19; 8:45 am] BILLING CODE 8011–01–P 19 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:49 Nov 27, 2019 Jkt 250001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87603; File No. SR–OCC– 2019–007] Self-Regulatory Organizations; The Options Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Concerning a Proposed Capital Management Policy That Would Support The Options Clearing Corporation’s Function as a Systemically Important Financial Market Utility November 22, 2019. I. Introduction On August 9, 2019, the Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–OCC–2019– 007 (‘‘Proposed Rule Change’’) pursuant to Section 19(b) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 2 thereunder to adopt a policy concerning capital management at OCC, which includes OCC’s plan to replenish its capital in the event it falls close to or below target capital levels.3 The Proposed Rule Change was published for public comment in the Federal Register on August 27, 2019.4 The Commission received comments regarding the Proposed Rule Change.5 On September 11, 2019, OCC filed a partial amendment (‘‘Partial Amendment No. 1’’) to modify the Proposed Rule Change.6 On October 8, 2019, the Comission designated a longer period for Commission action on the Proposed Rule Change.7 The Commission is publishing this order pursuant to Section 19(b)(2)(B) of the Exchange Act 8 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Notice of Filing infra note 4, at 84 FR 44952. 4 Securities Exchange Act Release No. 86725 (Aug. 21, 2019), 84 FR 44952 (Aug. 27, 2019) (SR– OCC–2019–007) (‘‘Notice of Filing’’). OCC also filed a related advance notice (SR–OCC–2019–805) (‘‘Advance Notice’’) with the Commission pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled the Payment, Clearing, and Settlement Supervision Act of 2010 and Rule 19b–4(n)(1)(i) under the Exchange Act. 12 U.S.C. 5465(e)(1). 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b–4. The Advance Notice was published in the Federal Register on September 11, 2019. Securities Exchange Act Release No. 86888 (Sep. 5, 2019), 84 FR 47990 (Sep. 11, 2019) (SR–OCC–2019–805). 5 Comments are available at https://www.sec.gov/ comments/sr-occ-2019-007/srocc2019007.htm. 6 See Extension infra note 7, at 84 FR 55189. 7 Securities Exchange Act Release No. 87246 (Oct. 8, 2019), 84 FR 55189 (Oct. 15, 2019) (File No. SR– OCC–2019–007) (‘‘Extension’’). 8 15 U.S.C. 78s(b)(2)(B). 2 17 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 to institute proceedings to determine whether to approve or disapprove the Proposed Rule Change. II. Description of the Proposed Rule Change OCC now proposes changes to adopt, as part of its rules, a new policy concerning capital management at OCC (‘‘Capital Management Policy’’). Specifically, the proposed Capital Management Policy would (i) describe how OCC would determine the amount of liquid net assets funded by equity (‘‘LNAFBE’’) necessary to cover OCC’s potential general business losses; (ii) require OCC to hold a minimum amount of shareholders equity (‘‘Equity’’) sufficient to support the amount of LNAFBE determined to be necessary; 9 and (iii) establish a plan for replenishing OCC’s capital in the event that Equity were to fall below certain thresholds. OCC also proposes to revise its existing rules to support the terms of the proposed Capital Management policy. III. Proceedings To Determine Whether To Approve or Disapprove File No. SR– OCC–2019–007 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Exchange Act to determine whether the Proposed Rule Change should be approved or disapproved.10 Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the Proposed Rule Change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Pursuant to Section 19(b)(2)(B) of the Exchange Act,11 the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis and input concerning the Proposed Rule Change’s consistency with the Exchange Act and the rules thereunder, including the following: • Section 17A(b)(3)(D) of the Exchange Act, which requires the rules of a clearing agency provide for the equitable allocation of reasonable dues, fees, and other charges among its participants; 12 and • Section 17A(b)(3)(F) of the Exchange Act, which requires, among 9 LNAFBE would mean cash and cash equivalents to the extent that such cash and cash equivalents do not exceed Equity. 10 15 U.S.C. 78s(b)(2)(B). 11 Id. 12 15 U.S.C. 78q–1(b)(3)(D). E:\FR\FM\29NON1.SGM 29NON1

Agencies

[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Notices]
[Pages 65856-65858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25837]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87592; File No. SR-CboeEDGA-2019-020]


Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Subparagraph (a)(1) of Rule 11.1 To Allow the Exchange To Accept 
Market Orders With a Stop Price Entered Between 6:00 and 7:00 a.m. 
Eastern Time

November 22, 2019.
    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 November 19, 2019, Cboe EDGA Exchange, Inc. (``Exchange'') 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 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.
---------------------------------------------------------------------------

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 
proposed rule change to amend subparagraph (a)(1) of Rule 11.1 to allow 
the Exchange to accept Market Orders with a Stop Price entered between 
6:00 and 7:00 a.m. Eastern Time. 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 (http://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
    The Exchange proposes to amend subparagraph (a)(1) of Rule 11.1 to 
allow the Exchange to accept Market Orders \3\ with a Stop Price \4\ (a 
``Stop Order'') entered between 6:00 and 7:00 a.m. Eastern Time.
---------------------------------------------------------------------------

    \3\ A Market Order is an order to buy or sell a stated amount of 
a security that is to be executed at the NBBO or better when the 
order reaches the Exchange. See Exchange Rule 11.8(a).
    \4\ A Market Order ``may include a Stop Price which will convert 
the order into a Market Order when the Stop Price is triggered. An 
order to buy converts to a Market Order when the consolidated last 
sale in the security occurs at, or above, the specified Stop Price. 
An order to sell converts into a Market Order when the consolidated 
last sale in the security occurs at, or below, the specified Stop 
Price.'' See Exchange Rule 11.8(a)(1).
---------------------------------------------------------------------------

    Subparagraph (a)(1) of Rule 11.1 provides that orders entered 
between 6:00 a.m. and 7:00 a.m. Eastern Time are not eligible for 
execution until the start of the Early Trading Session,\5\ Pre-Opening 
Session \6\ or Regular Trading Hours,\7\ depending on the Time in Force 
selected by the User.\8\ Subparagraph (a)(1) also provides that the 
Exchange will not accept certain orders \9\ entered prior to 7:00 a.m. 
Eastern Time including Market Orders with a Time in Force other than 
Regular Hours Only (``RHO'').\10\ Market Orders with a Time in Force 
other than RHO are rejected by the Exchange prior to 7:00 a.m. Eastern 
Time because Market Orders are not eligible to trade prior to the start 
of Regular Trading Hours and such orders are generally not designated 
to queue for later entry onto the Exchange's order book. Rather, Market 
Orders with a Time in Force other than RHO are designed to immediately 
execute at the NBBO when the order reaches the Exchange, and thus are 
generally

[[Page 65857]]

intended for entry during a trading session where continuous trading is 
occurring. Alternatively, other order types and modifiers, such as 
Market Orders with a Time in Force of RHO and Limit Orders,\11\ 
including Limit Orders with a Stop Limit Price (``Stop Limit 
Orders''),\12\ are allowed for entry on the Exchange between 6:00 and 
7:00 a.m. Eastern Time as those order types and modifiers are 
consistent with an order designated to queue for later entry on to the 
Exchange's order book. Specifically, Market Orders with a Time in Force 
of RHO are effectively for use in the Opening Auction and are cancelled 
if not executed in the Opening Auction. Therefore, Market Orders with a 
Time in Force of RHO would be queued until the start of the regular 
trading session for participation in the Opening Auction. Similarly, 
the Stop Price of a Stop Limit Order can only be triggered by a 
consolidated last sale eligible trade.\13\ Therefore, a Stop Limit 
Order would be queued until the time the Stop Price of the order is 
triggered by a consolidated last sale eligible trade occurring Regular 
Trading Hours.
---------------------------------------------------------------------------

    \5\ See Exchange Rule 1.5(ii).
    \6\ See Exchange Rule 1.5(s).
    \7\ See Exchange Rule 1.5(y).
    \8\ See Exchange Rule 1.5(ee).
    \9\ Specifically, Exchange Rule11.1(a)(1) provides that orders 
with a Post Only instruction, Intermarket Sweep Orders (``ISOs''), 
Market Orders with a Time in Force instruction other that Regular 
Hours Only, orders with a Minimum Execution Quantity instruction 
that also include a Time in Force instruction of Regular Hours Only, 
and all orders with a Time in Force of Immediate-or-Cancel (``IOC'') 
or Fill-or-Kill (``FOK'') are not accepted if entered prior to 7:00 
a.m. Eastern Time.
    \10\ RHO is an ``instruction a User may attach to an order 
designating it for execution only during Regular Trading Hours, 
which includes the Opening Process and Re-Opening Process following 
a halt suspension or pause.'' See Exchange Rule 11.6(q)(6).
    \11\ A Limit Order is an ``order to buy or sell a stated amount 
of a security at a specified price or better. A marketable Limit 
Order is a Limit Order to buy (sell) at or above (below) the lowest 
(highest) Protected Offer (Protected Bid) for the security.'' See 
Exchange Rule 11.8(b).
    \12\ A Stop Order ``may contain a Stop Limit Price which will 
convert to a Limit Order once the Stop Limit Price is triggered. A 
Limit Order to buy with a Stop Limit Price becomes eligible for 
execution by the System when the consolidated last sale in the 
security occurs at, or above, the specified Stop Price. A Limit 
Order to sell with a Stop Limit Price becomes eligible for execution 
by the System when the consolidated last sale in the security occurs 
at, or below, the specified Stop Limit Price.'' See Exchange Rule 
11.8(b)(1).
    \13\ See supra note 12.
---------------------------------------------------------------------------

    As proposed, the amendment would allow the Exchange to accept Stop 
Orders entered between 6:00 and 7:00 a.m. Eastern Time, which is 
consistent with an order designated to queue for later entry on to the 
Exchange's order book. Similar to a Stop Limit Order, the Stop Price of 
a Stop Order can only be triggered by a consolidated last sale eligible 
trade.\14\ Therefore, a Stop Order can only become a Market Order after 
at least the start of Regular Trading Hours. Further, Stop Orders 
entered on the Exchange between 6:00 and 7:00 a.m. Eastern Time would 
behave similar to Stop Limit Orders between the time of entry up to at 
least the start of Regular Trading Hours.
---------------------------------------------------------------------------

    \14\ See supra note 4.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\15\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \16\ requirements that the rules of an exchange be 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

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

    As discussed above, all Stop Orders are designed to queue until at 
least the start of Regular Trading Hours as such orders are only 
eligible to be elected based on the consolidated last sale set during 
Regular Trading Hours. Therefore, the proposed amendment to allow the 
entry of Stop Orders between 6:00 and 7:00 a.m. Eastern Time would not 
allow such Stop Orders to be elected and execute prior to the start of 
Regular Trading Hours. Prior to the start of Regular Trading Hours, 
Stop Orders entered between 6:00 and 7:00 a.m. Eastern Time would 
behave similar to Stop Limit Orders entered during that time. 
Therefore, the Exchange believes the proposed amendment would 
consistently allow order types and modifiers that are consistent with 
orders designated to queue to be entered on the Exchange between 6:00 
and 7:00 a.m. Eastern Time.
    Additionally, the Exchange believes the proposed amendment would 
allow Members the convenience to enter all Stop Orders and Stop Limit 
Orders between 6:00 and 7:00 a.m. Eastern Time without those orders 
being eligible for election, and consequently execution, until at least 
the start of the Regular Trading Hours. Thus, the proposed amendment 
would provide Members with both greater convenience and flexibility in 
managing their Stop Orders and Stop Limit Orders without impacting how 
those orders trade.

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. Rather, the proposed rule 
change would consistently allow for the entry of order types and 
modifiers that are designated to queue between 6:00 and 7:00 a.m. 
Eastern Time. Stop Limit Orders are currently allowed for entry on the 
Exchange between 6:00 and 7:00 a.m. Eastern Time and behave similar to 
the manner in which a Stop Order would behave prior to the start of 
Regular Trading Hours if allowed entry during that time. The Exchange 
therefore believes that the proposed rule change would increase 
consistency around the operation of the Exchange to the benefit of 
Members and investors as well as provide greater flexibility to Members 
in managing their Stop Orders, without imposing any significant burden 
on competition.

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

    The Exchange neither solicited nor received comments on the 
proposed rule change.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days 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 \17\ and 
Rule 19b-4(f)(6) \18\ thereunder.
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6).
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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 will 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:

[[Page 65858]]

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeEDGA-2019-020 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-2019-020. 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 (http://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-CboeEDGA-2019-020, and should be 
submitted on or before December 20, 2019.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-25837 Filed 11-27-19; 8:45 am]
 BILLING CODE 8011-01-P