Self-Regulatory Organizations; Cboe EDGX 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, 65851-65853 [2019-25838]
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Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice:
November 29, 2019.
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on November 22,
2019, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Express & Priority Mail
Contract 106 to Competitive Product
List. Documents are available at
www.prc.gov, Docket Nos. MC2020–36,
CP2020–34.
Sean Robinson,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2019–25830 Filed 11–27–19; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87593; File No. SR–
CboeEDGX–2019–070]
Self-Regulatory Organizations; Cboe
EDGX 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 EDGX 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.
khammond on DSKJM1Z7X2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe EDGX Exchange, Inc. (‘‘EDGX’’
or the ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(the ‘‘Commission’’) a proposed rule
change to amend subparagraph (a)(1) of
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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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/
options/regulation/rule_filings/edgx/),
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.
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
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 Rule 11.1(a)(1) provides
that orders with a Post Only instruction,
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65851
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
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
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.
E:\FR\FM\29NON1.SGM
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Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
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.
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.
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
14 See
supra note 4.
U.S.C. 78f(b).
16 15 U.S.C. 78f(b)(5).
15 15
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16:49 Nov 27, 2019
Jkt 250001
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
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
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:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeEDGX–2019–070 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeEDGX–2019–070. 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
17 15
18 17
E:\FR\FM\29NON1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
29NON1
Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CboeEDGX–2019–070, 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. 2019–25838 Filed 11–27–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736.
60 Day Notice—Proposed Collection;
Comment Request
khammond on DSKJM1Z7X2PROD with NOTICES
Extension:
Rule 22e–4 (60 Day Notice 2019), SEC File
No. 270–794, OMB Control No. 3235–
0737.
Notice is hereby given that, under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520), the Securities and
Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collections of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Section 22(e) of the Investment
Company Act of 1940 (‘‘Investment
Company Act’’) provides that no
registered investment company shall
suspend the right of redemption or
postpone the date of payment of
redemption proceeds for more than
seven days after tender of the security
absent specified unusual circumstances.
The provision was designed to prevent
funds and their investment advisers
from interfering with the redemption
rights of shareholders for improper
purposes, such as the preservation of
19 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
16:49 Nov 27, 2019
Jkt 250001
management fees. Although section
22(e) permits funds to postpone the date
of payment or satisfaction upon
redemption for up to seven days, it does
not permit funds to suspend the right of
redemption for any amount of time,
absent certain specified circumstances
or a Commission order.
Rule 22e–4 under the Act [17 CFR
270.22e–4] requires an open-end fund
and an exchange-traded fund that
redeems in kind (‘‘In-Kind ETF’’) to
establish a written liquidity risk
management program that is reasonably
designed to assess and manage the
fund’s or In-Kind ETF’s liquidity risk.
The rule also requires board approval
and oversight of a fund’s or In-Kind
ETF’s liquidity risk management
program and recordkeeping. Rule 22e–4
also requires a limited liquidity review,
under which a UIT’s principal
underwriter or depositor determines, on
or before the date of the initial deposit
of portfolio securities into the UIT, that
the portion of the illiquid investments
that the UIT holds or will hold at the
date of deposit that are assets is
consistent with the redeemable nature
of the securities it issues and retains a
record of such determination for the life
of the UIT and for five years thereafter.
The following estimates of average
burden hours and costs are made solely
for purposes of the Paperwork
Reduction Act and are not derived from
a comprehensive or even representative
survey or study of the cost of
Commission rules and forms.
Commission staff estimates that funds
within 846 fund complexes are subject
to rule 22e–4. Compliance with rule
22e–4 is mandatory for all such funds
and In-Kind ETFs, with certain program
elements applicable to certain funds
within a fund complex based upon
whether the fund is an In-Kind ETF or
does not primarily hold assets that are
highly liquid investments. The
Commission estimates that a fund
complex will incur a one time average
burden of 40 hours associated with
documenting the liquidity risk
management programs adopted by each
fund within a fund complex, in addition
to a one time burden of 10 hours per
fund complex associated with fund
boards’ review and approval of the
funds’ liquidity risk management
programs and preparation of board
materials. We estimate that the total
burden for initial documentation and
review of funds’ written liquidity risk
management program will be 42,300
hours.
Rule 22e–4 requires any fund that
does not primarily hold assets that are
highly liquid investments to determine
a highly liquid investment minimum for
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65853
the fund, which must be reviewed at
least annually, and may not be changed
during any period of time that a fund’s
assets that are highly liquid investments
are below the determined minimum
without approval from the fund’s board
of directors. We estimate that fund
complexes will have at least one fund
that will be subject to the highly liquid
investment minimum requirement.
Thus, we estimate that 846 fund
complexes will be subject to this
requirement under rule 22e–4 and that
the total burden for preparation of the
board report associated will be 11,844
hours.
Rule 22e–4 requires a fund or In-Kind
ETF to maintain a written copy of the
policies and procedures adopted
pursuant to its liquidity risk
management program for five years in
an easily accessible place. The rule also
requires a fund to maintain copies of
materials provided to the board in
connection with its initial approval of
the liquidity risk management program
and any written reports provided to the
board, for at least five years, the first
two years in an easily accessible place.
If applicable, a fund must also maintain
a written record of how its highly liquid
investment minimum and any
adjustments to the minimum were
determined, as well as any reports to the
board regarding a shortfall in the fund’s
highly liquid investment minimum, for
five years, the first two years in an
easily accessible place. We estimate that
the total burden for recordkeeping
related to the liquidity risk management
program requirement of rule 22e–4 will
be 3,384 hours.
We estimate that the hour burdens
and time costs associated with rule 22e–
4 for open-end funds, including the
burden associated with (1) funds’ initial
documentation and review of the
required written liquidity risk
management program, (2) reporting to a
fund’s board regarding the fund’s highly
liquid investment minimum, and (3)
recordkeeping requirements will result
in an average aggregate annual burden
of 25,380 hours.
UITs may in some circumstances be
subject to liquidity risk (particularly
where the UIT is not a pass-through
vehicle and the sponsor does not
maintain an active secondary market for
UIT shares). On or before the date of
initial deposit of portfolio securities into
a registered UIT, the UIT’s principal
underwriter or depositor is required to
determine that the portion of the
illiquid investments that the UIT holds
or will hold at the date of deposit that
are assets is consistent with the
redeemable nature of the securities it
issues, and maintain a record of that
E:\FR\FM\29NON1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Notices]
[Pages 65851-65853]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25838]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87593; File No. SR-CboeEDGX-2019-070]
Self-Regulatory Organizations; Cboe EDGX 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 EDGX 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 EDGX Exchange, Inc. (``EDGX'' 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/options/regulation/rule_filings/edgx/), 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 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
[[Page 65852]]
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 Rule 11.1(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:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2019-070 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-CboeEDGX-2019-070. 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
[[Page 65853]]
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-CboeEDGX-2019-070, 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.
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\19\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2019-25838 Filed 11-27-19; 8:45 am]
BILLING CODE 8011-01-P
