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]
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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 (https://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 (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–2019–022, 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 (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
BILLING CODE 8011–01–P
1 15
20 17
CFR 200.30–3(a)(12).
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2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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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
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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.
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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 (https://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 (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–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
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]]>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]
-----------------------------------------------------------------------
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 (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
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.
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\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.
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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.
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\14\ See supra note 4.
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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.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
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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 (https://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 (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-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
