Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Approving a Proposed Rule Change To Extend the Cutoff Time for Accepting on Close Orders Entered for Participation in the Exchange's Closing Auction and To Clarify Changes to the Definitions of Late-Limit-On-Close and Late-Limit-On-Open Orders, 27905-27907 [2021-10842]
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khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 98 / Monday, May 24, 2021 / Notices
necessary to facilitate the
implementation of the Outbound
Commercial Provider Initiative (OCPI)
which would offer delivery of outbound
international service in foreign
countries through use of a commercial
delivery supplier in lieu of the
destination country postal operator.
Request at 2–3. The Postal Service states
that OCPI will be offered with Priority
Mail Express International (PMEI),
Priority Mail International (PMI), and
FCPIS. Id. at 2. The Postal Service
asserts that the existing classification
language for PMEI and PMI is
sufficiently broad to enable
implementation of OCPI, and thus its
Request only seeks changes to the
classification language for FCPIS. Id. at
2–3. The Postal Service notes that the
requested MCS revisions do not require
implementation of OCPI. Id. at 3.
Specifically, the requested MCS
revisions are:
• Removal from MCS section 2335.1a
of the provision that FCPIS be subject to
the provisions of the Universal Postal
Convention;
• Deletion from MCS section 2335.1a
of the phrase ‘‘that are not entered as
Priority Mail International’’; and
• Revision to MCS section 2335.1c to
state ‘‘Outbound Single-Piece First-Class
Package International Service pieces
that are undeliverable-as-addressed may
be forwarded if applicable or returned to
the sender.’’
Id.
In support of the Request, the Postal
Service notes that OCPI is intended
primarily to take advantage of
advantageous rates negotiated with
commercial suppliers, and thus these
classification changes should not result
in any violation of the standards of 39
U.S.C. 3633 and 39 CFR part 3035.
Request at 4–5. The Postal Service
notes, however, that in some cases the
use of OCPI suppliers may be desirable
to ensure stable and consistent service
abroad, rather than exclusively as a costsaving measure. See id. The Postal
Service states that because OCPI is in its
preliminary stages and it has yet to be
determined whether OCPI will be
offered in conjunction with FCPIS, it is
not possible at this time to generate
detailed financial workpapers showing
the impact of OCPI on the cost coverage
of FCPIS. Id. at 5.
The Postal Service describes the
impact of the proposed changes on the
users of FCPIS as positive by permitting
the Postal Service to use OCPI providers
to remain competitive in cross-border
shipping, enabling continuity of service
where issues arise with foreign postal
operators, and providing the possibility
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17:32 May 21, 2021
Jkt 253001
of offering additional services or
improved service performance. Id. at 6.
The Postal Service also notes how the
use of OCPI providers may result in
differences in the handling of FCPIS
pieces that are undeliverable as
addressed. Id. at 7. The Postal Service
describes competitors as affected by the
Postal Service’s implementation of
OCPI, but notes that by relying on
commercial customs practices in the
destination country, shipments
delivered by an OCPI provider would be
subject to same practices as shipments
originating with competing private
sector entities. Id. at 6.
II. Commission Action
The Commission establishes Docket
No. MC2021–91 to consider the Postal
Service’s proposals described in its
Request. Interested persons may submit
comments on whether the Request is
consistent with the policies of 39 CFR
3040.180. Comments are due by May 25,
2021.
The Request and related filings are
available on the Commission’s website
(https://www.prc.gov). The Commission
encourages interested persons to review
the Request for further details.
The Commission appoints Gregory
Stanton to serve as Public
Representative in this proceeding.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket
No. MC2021–91 for consideration of the
matters raised by the Request of the
United States Postal Service for
Classification Changes Concerning
Outbound Single-Piece First-Class
Package International Service, filed May
13, 2021.
2. Pursuant to 39 U.S.C. 505, Gregory
Stanton is appointed to serve as an
officer of the Commission (Public
Representative) to represent the
interests of the general public in this
proceeding.
3. Comments by interested persons
are due by May 25, 2021.
4. The Secretary shall arrange for
publication of this order in the Federal
Register.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2021–10857 Filed 5–21–21; 8:45 am]
BILLING CODE 7710–FW–P
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27905
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91921; File No. SR–
CboeBZX–2021–023]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Order Approving
a Proposed Rule Change To Extend
the Cutoff Time for Accepting on Close
Orders Entered for Participation in the
Exchange’s Closing Auction and To
Clarify Changes to the Definitions of
Late-Limit-On-Close and Late-LimitOn-Open Orders
May 18, 2021.
I. Introduction
On March 26, 2021, Cboe BZX
Exchange, Inc. (‘‘Cboe BZX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change to
modify Exchange Rule 11.23 to amend
the cutoff time for accepting on close
orders entered for participation in the
Exchange’s Closing Auction and to
make clarifying changes to the
definitions of Late-Limit-On-Close and
Late-Limit-On-Open orders. The
proposed rule change was published for
comment in the Federal Register on
April 9, 2021.3 The Commission
received no comments on the proposed
rule change. This order approves the
proposed rule change.
II. Description of the Proposal
Exchange Rule 11.23(c) currently
provides that Users may submit Limiton-Close (‘‘LOC’’) 4 and Market-on-Close
(‘‘MOC’’) 5 orders to the Exchange until
3:55 p.m. ET (‘‘Closing Auction
Cutoff’’), at which point any additional
LOC and MOC orders will be rejected.6
Users may submit Late-Limit-on-Close
(‘‘LLOC’’) 7 orders between 3:55 p.m.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 91479
(April 5, 2021), 86 FR 18580 (‘‘Notice’’).
4 Exchange Rule 11.23(a)(13) defines Limit-onClose as ‘‘. . . a BZX limit order that is designated
for execution only in the Closing Auction.’’
5 Exchange Rule 11.23(a)(15) defines Market-onClose as ‘‘. . . a BZX market order that is
designated for execution only in the Closing
Auction or Cboe Market Close.’’
6 See Exchange Rule 11.23(c)(1)(A).
7 Exchange Rule 11.23(a)(11) defines ‘‘Late-LimitOn-Close’’ as ‘‘. . . a BZX limit order that is
designated for execution only in the Closing
Auction. To the extent a LLOC bid or offer received
by the Exchange has a limit price that is more
aggressive than the NBB or NBO, the price of such
bid or offer is adjusted to be equal to the NBB or
NBO, respectively, at the time of receipt by the
2 17
Continued
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Federal Register / Vol. 86, No. 98 / Monday, May 24, 2021 / Notices
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and 4:00 p.m. and any LLOC orders
submitted before 3:55 p.m. or after 4:00
p.m. will be rejected.8 Exchange Rule
11.23(c) also provides that Eligible
Auction Orders 9 designated for the
Exchange’s Closing Auction 10 may not
be cancelled between 3:55 p.m. and 4:00
p.m.11
As described in more detail in the
Notice,12 the Exchange now proposes to
amend Exchange Rule 11.23(c) to extend
the cutoff time for accepting on close
orders to permit the submission of LOC
and MOC orders until 3:59 p.m. ET, to
allow the submission of LLOC orders
between 3:59 p.m. and 4:00 p.m. ET,
and to prevent the cancellation of
Eligible Auction Orders designated for
the Closing Auction between 3:59 p.m.
and 4:00 p.m. ET. As proposed,
Exchange Rule 11.23(c)(1)(A) would
provide that Users may submit LOC and
MOC orders until 3:59 p.m., at which
point any additional LOC and MOC
orders submitted would be rejected.
Proposed Exchange Rule 11.23(c)(1)(A)
would also provide that users may
submit LLOC orders between 3:59 p.m.
and 4:00 p.m., and any LLOC orders
submitted before 3:59 p.m. or after 4:00
p.m. would be rejected. As proposed,
Exchange Rule 11.23(c)(1)(B) would
provide that Eligible Auction Orders
designated for the Closing Auction may
not be cancelled between 3:59 p.m. and
4:00 p.m.
The Exchange also proposes to amend
the definitions of LLOC and Late-Limiton-Open (‘‘LLOO’’) 13 in Exchange Rule
Exchange. Where the NBB or NBO becomes more
aggressive, the limit price of the LLOC bid or offer
will be adjusted to the more aggressive price, only
to the extent that the more aggressive price is not
more aggressive than the original User entered limit
price. The limit price will never be adjusted to a
less aggressive price. If there is no NBB or NBO, the
LLOC bid or offer, respectively, will assume its
entered limit price.’’
8 See Exchange Rule 11.23(c)(1)(A).
9 See Exchange Rule 11.23(a)(8).
10 See Exchange Rule 11.23(c).
11 See Exchange Rule 11.23(c)(1)(B).
12 See Notice, supra note 3.
13 Exchange Rule 11.23(a)(12) defines the term
Late-Limit-On-Open as ‘‘. . . a BZX limit order that
is designated for execution only in the Opening
Auction. To the extent a LLOO bid or offer received
by the Exchange has a limit price that is more
aggressive than the NBB or NBO, the price of such
bid or offer is adjusted to be equal to the NBB or
NBO, respectively, at the time of receipt by the
Exchange. Where the NBB or NBO becomes more
aggressive, the limit price of the LLOO bid or offer
will be adjusted to the more aggressive price, only
to the extent that the more aggressive price is not
more aggressive than the original User entered limit
price. The limit price will never be adjusted to a
less aggressive price. If there is no NBB or NBO, the
LLOO bid or offer, respectively, will assume its
entered limit price. Notwithstanding the foregoing,
a LLOO order entered during the Quote-Only Period
of an IPO will be converted to a limit order with
a limit price equal to the original User entered limit
137 price and any LLOO orders not executed in
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17:32 May 21, 2021
Jkt 253001
11.23(a). Currently, Exchange Rules
11.23(a)(11) and (a)(12) provide that, to
the extent a LLOC or LLOO bid or offer
received by the Exchange has a limit
price that is more aggressive than the
National Best Bid (‘‘NBB’’) or National
Best Offer (‘‘NBO’’), the price of such
bid or offer is adjusted to be equal to the
NBB or NBO, respectively, at the time
of receipt by the Exchange. Where the
NBB or NBO becomes more aggressive,
the limit price of the LLOC or LLOO bid
or offer will be adjusted to the more
aggressive price, only to the extent that
the more aggressive price is not more
aggressive than the original User entered
limit price. The limit price will never be
adjusted to a less aggressive price. If
there is no NBB or NBO, the LLOC or
LLOO bid or offer, respectively, will
assume its entered limit price. The
Exchange proposes to amend these
definitions to clarify that, rather than
never be adjusted to a less aggressive
price, the limit price of a LLOC order or
a LLOO order would not be adjusted to
a less aggressive price, unless otherwise
provided by Exchange rules. The
Exchange stated that, for example, a
short sale LLOO or LLOC order entered
at a price less than the NBB while a
short sale circuit breaker pursuant to
Regulation SHO was in effect would be
re-priced by the Exchange’s System 14 at
one minimum price variation above the
NBB pursuant to Exchange Rules
11.9(g)(5) and (6).15
III. Discussion and Commission’s
Findings
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange and, in
particular, the requirements of Section
6(b) of the Act.16 Specifically, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
Act,17 which requires, among other
things, that a national securities
exchange have rules designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
their entirety during the IPO Auction will be
cancelled upon completion of the IPO Auction.’’
14 Exchange Rule 1.5(aa) provides that the term
‘‘System’’ means ‘‘the electronic communications
and trading facility designated by the Board through
which securities orders of Users are consolidated
for ranking, execution and, when applicable,
routing away.’’
15 See Notice, supra note 3, at 18581.
16 15 U.S.C. 78f. In approving this proposed rule
change, the Commission has considered the
proposed rule change’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
17 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
principles of trade, to foster cooperation
and coordination with persons engaged
in 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, the Exchange
proposes to amend Exchange Rule
11.23(c) to extend the cutoff time for
accepting on close orders to permit the
submission of LOC and MOC orders
until 3:59 p.m.,18 to allow the
submission of LLOC orders between
3:59 p.m. and 4:00 p.m.,19 and to
prevent the cancellation of Eligible
Auction Orders designated for the
Closing Auction between 3:59 p.m. and
4:00 p.m.20 The Exchange asserts that
extending the Closing Auction Cutoff for
submitting on close orders will assist
market participants in managing their
trading at the close by allowing them to
retain control over their orders for a
longer period of time.21 The Exchange
expects that this would reduce risk for
those market participants participating
in the Closing Auction and improve
price discovery by facilitating the
additional participation of market
participants.22 The Commission
believes that extending the cutoff time
to submit LOC, MOC and LLOC orders
and to cancel Eligible Auction Orders to
3:59 p.m. ET would allow market
participants to retain flexibility with
respect to submitting and cancelling
their orders, while still providing time
for market participants to react to and
offset imbalances. As a result, the
Commission believes that the proposal
could encourage participation in the
Closing Auction by market participants
that are unwilling to give up flexibility
and control over these orders. The
Commission notes that the Exchange
has represented that another exchange
uses a 3:59 p.m. ET cutoff time for the
entry of MOC and LOC orders in its
closing auction.23
In addition, as discussed above, the
Exchange proposes to amend the
definitions of LLOC and LLOO in
Exchange Rule 11.23(a), which currently
state that the limit price of these orders
will never be adjusted to a less
aggressive price, in order to clarify that
the limit price of LLOC and LLOO
orders, respectively, would not be
adjusted to a less aggressive price unless
otherwise provided by Exchange
18 See
proposed Exchange Rule 11.23(c)(1)(A).
19 Id.
20 See
proposed Exchange Rule 11.23(c)(1)(B).
Notice, supra note 3, at 18581.
22 Id. at 18582.
23 Id. at 18581, 18582.
21 See
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Federal Register / Vol. 86, No. 98 / Monday, May 24, 2021 / Notices
rules.24 The Exchange has explained
that its System, in certain instances,
may adjust the limit price of LLOC and
LLOO orders to a less aggressive price
pursuant to other Exchange Rules.25 The
Commission believes that the proposed
amendments to the definitions of LLOC
and LLOO would provide greater
transparency regarding the operation of
the Exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,26 that the
proposed rule change (SR–CboeBZX–
2021–023) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–10842 Filed 5–21–21; 8:45 am]
BILLING CODE 8011–01–P
The subject matter of the closed
meeting will consist of the following
topics:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations
and enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Dated: May 20, 2021.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2021–11013 Filed 5–20–21; 4:15 pm]
SECURITIES AND EXCHANGE
COMMISSION
BILLING CODE 8011–01–P
Sunshine Act Meetings
SECURITIES AND EXCHANGE
COMMISSION
2:00 p.m. on Thursday,
May 27, 2021.
PLACE: The meeting will be held via
remote means and/or at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
khammond on DSKJM1Z7X2PROD with NOTICES
TIME AND DATE:
24 See
proposed Exchange Rules 11.23(a)(11) and
(a)(12).
25 See supra note 15 and accompanying text.
26 15 U.S.C. 78s(b)(2).
27 17 CFR 200.300–3(a)(12).
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17:32 May 21, 2021
Jkt 253001
[Release No. 34–91930; File No. SR–ISE–
2021–09]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Options 4,
Section 5, ‘‘Series of Options Contracts
Open for Trading’’ To Limit Short Term
Options Series Intervals Between
Strikes
May 18, 2021.
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 May 5,
2021, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘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
The Exchange proposes to amend
Options 4, Section 5, ‘‘Series of Options
Contracts Open for Trading.’’ This
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00083
Fmt 4703
Sfmt 4703
27907
proposal seeks to limit Short Term
Options Series intervals between strikes
which are available for quoting and
trading on ISE.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/ise/rules, at the principal
office of the Exchange, 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
Options 4, Section 5, ‘‘Series of Options
Contracts Open for Trading.’’
Specifically, this proposal seeks to limit
the intervals between strikes for
multiply listed equity options classes
within the Short Term Options Series
program that have an expiration date
more than twenty-one days from the
listing date. This proposal is identical to
a proposal by Nasdaq BX, Inc.3
Background
Today, ISE’s listing rules within
Options 4, Section 5 permits the
Exchange, after a particular class of
options (call option contracts or put
option contracts relating to a specific
underlying stock, Exchange-Traded
3 See Securities Exchange Act Release No. 91125
(February 12, 2021), 86 FR 10375 (February 19,
2021) (SR–BX–2020–032) (Notice of Filing of
Amendment No. 1 and Order Granting Accelerated
Approval of Proposed Rule Change, as Modified by
Amendment No. 1, To Amend Options 4, Section
5, To Limit Short Term Options Series Intervals
Between Strikes That Are Available for Quoting and
Trading on BX).
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]]>Agencies
[Federal Register Volume 86, Number 98 (Monday, May 24, 2021)]
[Notices]
[Pages 27905-27907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10842]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91921; File No. SR-CboeBZX-2021-023]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order
Approving a Proposed Rule Change To Extend the Cutoff Time for
Accepting on Close Orders Entered for Participation in the Exchange's
Closing Auction and To Clarify Changes to the Definitions of Late-
Limit-On-Close and Late-Limit-On-Open Orders
May 18, 2021.
I. Introduction
On March 26, 2021, Cboe BZX Exchange, Inc. (``Cboe BZX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to modify Exchange Rule 11.23 to amend the cutoff
time for accepting on close orders entered for participation in the
Exchange's Closing Auction and to make clarifying changes to the
definitions of Late-Limit-On-Close and Late-Limit-On-Open orders. The
proposed rule change was published for comment in the Federal Register
on April 9, 2021.\3\ The Commission received no comments on the
proposed rule change. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 91479 (April 5,
2021), 86 FR 18580 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
Exchange Rule 11.23(c) currently provides that Users may submit
Limit-on-Close (``LOC'') \4\ and Market-on-Close (``MOC'') \5\ orders
to the Exchange until 3:55 p.m. ET (``Closing Auction Cutoff''), at
which point any additional LOC and MOC orders will be rejected.\6\
Users may submit Late-Limit-on-Close (``LLOC'') \7\ orders between 3:55
p.m.
[[Page 27906]]
and 4:00 p.m. and any LLOC orders submitted before 3:55 p.m. or after
4:00 p.m. will be rejected.\8\ Exchange Rule 11.23(c) also provides
that Eligible Auction Orders \9\ designated for the Exchange's Closing
Auction \10\ may not be cancelled between 3:55 p.m. and 4:00 p.m.\11\
---------------------------------------------------------------------------
\4\ Exchange Rule 11.23(a)(13) defines Limit-on-Close as ``. . .
a BZX limit order that is designated for execution only in the
Closing Auction.''
\5\ Exchange Rule 11.23(a)(15) defines Market-on-Close as ``. .
. a BZX market order that is designated for execution only in the
Closing Auction or Cboe Market Close.''
\6\ See Exchange Rule 11.23(c)(1)(A).
\7\ Exchange Rule 11.23(a)(11) defines ``Late-Limit-On-Close''
as ``. . . a BZX limit order that is designated for execution only
in the Closing Auction. To the extent a LLOC bid or offer received
by the Exchange has a limit price that is more aggressive than the
NBB or NBO, the price of such bid or offer is adjusted to be equal
to the NBB or NBO, respectively, at the time of receipt by the
Exchange. Where the NBB or NBO becomes more aggressive, the limit
price of the LLOC bid or offer will be adjusted to the more
aggressive price, only to the extent that the more aggressive price
is not more aggressive than the original User entered limit price.
The limit price will never be adjusted to a less aggressive price.
If there is no NBB or NBO, the LLOC bid or offer, respectively, will
assume its entered limit price.''
\8\ See Exchange Rule 11.23(c)(1)(A).
\9\ See Exchange Rule 11.23(a)(8).
\10\ See Exchange Rule 11.23(c).
\11\ See Exchange Rule 11.23(c)(1)(B).
---------------------------------------------------------------------------
As described in more detail in the Notice,\12\ the Exchange now
proposes to amend Exchange Rule 11.23(c) to extend the cutoff time for
accepting on close orders to permit the submission of LOC and MOC
orders until 3:59 p.m. ET, to allow the submission of LLOC orders
between 3:59 p.m. and 4:00 p.m. ET, and to prevent the cancellation of
Eligible Auction Orders designated for the Closing Auction between 3:59
p.m. and 4:00 p.m. ET. As proposed, Exchange Rule 11.23(c)(1)(A) would
provide that Users may submit LOC and MOC orders until 3:59 p.m., at
which point any additional LOC and MOC orders submitted would be
rejected. Proposed Exchange Rule 11.23(c)(1)(A) would also provide that
users may submit LLOC orders between 3:59 p.m. and 4:00 p.m., and any
LLOC orders submitted before 3:59 p.m. or after 4:00 p.m. would be
rejected. As proposed, Exchange Rule 11.23(c)(1)(B) would provide that
Eligible Auction Orders designated for the Closing Auction may not be
cancelled between 3:59 p.m. and 4:00 p.m.
---------------------------------------------------------------------------
\12\ See Notice, supra note 3.
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The Exchange also proposes to amend the definitions of LLOC and
Late-Limit-on-Open (``LLOO'') \13\ in Exchange Rule 11.23(a).
Currently, Exchange Rules 11.23(a)(11) and (a)(12) provide that, to the
extent a LLOC or LLOO bid or offer received by the Exchange has a limit
price that is more aggressive than the National Best Bid (``NBB'') or
National Best Offer (``NBO''), the price of such bid or offer is
adjusted to be equal to the NBB or NBO, respectively, at the time of
receipt by the Exchange. Where the NBB or NBO becomes more aggressive,
the limit price of the LLOC or LLOO bid or offer will be adjusted to
the more aggressive price, only to the extent that the more aggressive
price is not more aggressive than the original User entered limit
price. The limit price will never be adjusted to a less aggressive
price. If there is no NBB or NBO, the LLOC or LLOO bid or offer,
respectively, will assume its entered limit price. The Exchange
proposes to amend these definitions to clarify that, rather than never
be adjusted to a less aggressive price, the limit price of a LLOC order
or a LLOO order would not be adjusted to a less aggressive price,
unless otherwise provided by Exchange rules. The Exchange stated that,
for example, a short sale LLOO or LLOC order entered at a price less
than the NBB while a short sale circuit breaker pursuant to Regulation
SHO was in effect would be re-priced by the Exchange's System \14\ at
one minimum price variation above the NBB pursuant to Exchange Rules
11.9(g)(5) and (6).\15\
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\13\ Exchange Rule 11.23(a)(12) defines the term Late-Limit-On-
Open as ``. . . a BZX limit order that is designated for execution
only in the Opening Auction. To the extent a LLOO bid or offer
received by the Exchange has a limit price that is more aggressive
than the NBB or NBO, the price of such bid or offer is adjusted to
be equal to the NBB or NBO, respectively, at the time of receipt by
the Exchange. Where the NBB or NBO becomes more aggressive, the
limit price of the LLOO bid or offer will be adjusted to the more
aggressive price, only to the extent that the more aggressive price
is not more aggressive than the original User entered limit price.
The limit price will never be adjusted to a less aggressive price.
If there is no NBB or NBO, the LLOO bid or offer, respectively, will
assume its entered limit price. Notwithstanding the foregoing, a
LLOO order entered during the Quote-Only Period of an IPO will be
converted to a limit order with a limit price equal to the original
User entered limit 137 price and any LLOO orders not executed in
their entirety during the IPO Auction will be cancelled upon
completion of the IPO Auction.''
\14\ Exchange Rule 1.5(aa) provides that the term ``System''
means ``the electronic communications and trading facility
designated by the Board through which securities orders of Users are
consolidated for ranking, execution and, when applicable, routing
away.''
\15\ See Notice, supra note 3, at 18581.
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III. Discussion and Commission's Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange and, in particular, the requirements of Section 6(b) of the
Act.\16\ Specifically, the Commission finds that the proposal is
consistent with Section 6(b)(5) of the Act,\17\ which requires, among
other things, that a national securities exchange have rules designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, 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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\16\ 15 U.S.C. 78f. In approving this proposed rule change, the
Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\17\ 15 U.S.C. 78f(b)(5).
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As discussed above, the Exchange proposes to amend Exchange Rule
11.23(c) to extend the cutoff time for accepting on close orders to
permit the submission of LOC and MOC orders until 3:59 p.m.,\18\ to
allow the submission of LLOC orders between 3:59 p.m. and 4:00
p.m.,\19\ and to prevent the cancellation of Eligible Auction Orders
designated for the Closing Auction between 3:59 p.m. and 4:00 p.m.\20\
The Exchange asserts that extending the Closing Auction Cutoff for
submitting on close orders will assist market participants in managing
their trading at the close by allowing them to retain control over
their orders for a longer period of time.\21\ The Exchange expects that
this would reduce risk for those market participants participating in
the Closing Auction and improve price discovery by facilitating the
additional participation of market participants.\22\ The Commission
believes that extending the cutoff time to submit LOC, MOC and LLOC
orders and to cancel Eligible Auction Orders to 3:59 p.m. ET would
allow market participants to retain flexibility with respect to
submitting and cancelling their orders, while still providing time for
market participants to react to and offset imbalances. As a result, the
Commission believes that the proposal could encourage participation in
the Closing Auction by market participants that are unwilling to give
up flexibility and control over these orders. The Commission notes that
the Exchange has represented that another exchange uses a 3:59 p.m. ET
cutoff time for the entry of MOC and LOC orders in its closing
auction.\23\
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\18\ See proposed Exchange Rule 11.23(c)(1)(A).
\19\ Id.
\20\ See proposed Exchange Rule 11.23(c)(1)(B).
\21\ See Notice, supra note 3, at 18581.
\22\ Id. at 18582.
\23\ Id. at 18581, 18582.
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In addition, as discussed above, the Exchange proposes to amend the
definitions of LLOC and LLOO in Exchange Rule 11.23(a), which currently
state that the limit price of these orders will never be adjusted to a
less aggressive price, in order to clarify that the limit price of LLOC
and LLOO orders, respectively, would not be adjusted to a less
aggressive price unless otherwise provided by Exchange
[[Page 27907]]
rules.\24\ The Exchange has explained that its System, in certain
instances, may adjust the limit price of LLOC and LLOO orders to a less
aggressive price pursuant to other Exchange Rules.\25\ The Commission
believes that the proposed amendments to the definitions of LLOC and
LLOO would provide greater transparency regarding the operation of the
Exchange.
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\24\ See proposed Exchange Rules 11.23(a)(11) and (a)(12).
\25\ See supra note 15 and accompanying text.
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\26\ that the proposed rule change (SR-CboeBZX-2021-023) be, and
hereby is, approved.
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\26\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.300-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10842 Filed 5-21-21; 8:45 am]
BILLING CODE 8011-01-P
