Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Cboe BZX Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.; Order Granting Approval of Proposed Rule Changes, as Modified by Amendments No. 1, Relating to the Exchanges' Process for Re-Opening Securities Listed on Other National Securities Exchanges Following the Resumption of Trading After a Halt, Suspension, or Pause Outside of Regular Trading Hours, 34806-34807 [2021-13917]
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34806
Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92257; File Nos. SR–
CboeBYX–2021–012, SR–CboeBZX–2021–
035, SRCboeEDGA–2021–011, SR–
CboeEDGX–2021–025]
Self-Regulatory Organizations; Cboe
BYX Exchange, Inc.; Cboe BZX
Exchange, Inc.; Cboe EDGA Exchange,
Inc.; Cboe EDGX Exchange, Inc.; Order
Granting Approval of Proposed Rule
Changes, as Modified by Amendments
No. 1, Relating to the Exchanges’
Process for Re-Opening Securities
Listed on Other National Securities
Exchanges Following the Resumption
of Trading After a Halt, Suspension, or
Pause Outside of Regular Trading
Hours
June 24, 2021.
I. Introduction
On April 26, 2021, Cboe BYX
Exchange, Inc. (‘‘CboeBYX’’), Cboe BZX
Exchange, Inc. (‘‘CboeBZX’’), Cboe
EDGA Exchange, Inc. (‘‘CboeEDGA’’)
and Cboe EDGX Exchange, Inc.
(‘‘CboeEDGX,’’ and collectively, the
‘‘Exchanges’’) 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 proposed rule changes to
amend each Exchange’s process for reopening trading of securities listed on
other national securities exchanges
outside of regular trading hours. The
proposed rule changes were published
for comment in the Federal Register on
May 14, 2021.3 On June 21, 2021, the
Exchanges each filed an Amendment
No. 1 to their respective proposed rule
changes (‘‘Amendments No. 1’’).4 The
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release Nos. 91804
(May 10, 2021), 86 FR 26583 (May 14, 2021) (SR–
CboeBYX–2021–012); 91801 (May 10, 2021), 86 FR
26594 (May 14, 2021) (SR–CboeBZX–2021–035);
91802 (May 10, 2021), 86 FR 26574 (May 14, 2021)
(SR–CboeEDGA–2021–011) (‘‘CboeEDGA Notice’’);
91803 (May 10, 2021), 86 FR 26558 (May 14, 2021)
(SR–CboeEDGX–2021–025) (‘‘CboeEDGX Notice’’)
(collectively, ‘‘Notices’’). The proposed rule
changes are nearly identical.
4 In the Amendments No. 1, the Exchanges: (i)
Added additional justification for the proposed rule
changes, stating that the proposed re-opening
process would provide certainty as to how orders
will be handled across Tape A, B, and C securities
and promote consistency with the re-opening
process used by the Exchanges in other
circumstances; (ii) stated that allowing one second
to elapse prior to initiating the mid-point reopening would ensure sufficient time for the
midpoint to accurately reflect the market; and (iii)
made technical and conforming edits. Because the
Amendments No. 1 do not materially alter the
substance of the proposed rule changes and make
conforming and technical changes, the
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2 17
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Commission received no comments on
the proposed rule changes. This order
approves the proposed rule changes, as
modified by Amendments No. 1.
II. Description of the Proposed Rule
Changes, as Modified by Amendments
No. 1
The Exchanges have proposed to
harmonize the manner by which they
re-open trading in a security listed on
other national securities exchanges if
the trading halt, suspension or pause in
that security is lifted during one of the
Exchanges’ extra-hours sessions.5 The
Exchanges’ respective processes for the
re-opening of trading in securities listed
on other national security exchanges
under such circumstances vary
depending on whether the securities are
listed on the New York Stock Exchange
LLC (‘‘NYSE’’) (‘‘Tape A’’), or are listed
on exchanges other than NYSE (‘‘Tape
B’’ and ‘‘Tape C’’).6 Specifically, Tape A
securities that resume trading after a
halt, suspension, or pause during an
extra-hours trading session will be
automatically re-opened pursuant each
of the Exchanges’ contingent opening
procedures, as described in each of the
Exchanges’ rules,7 after one second has
passed following an Exchange’s receipt
of the first NBBO following such
resumption of trading.8 As a result,
when the Exchanges re-open Tape A
securities during their respective extrahours sessions today, orders are handled
in time sequence and placed on each
Exchange’s book, routed, cancelled, or
executed in accordance with the terms
of the order.
With respect to Tape B and C
securities, the Exchanges’ rules 9
provide that the re-opening process
Amendments No. 1 are not subject to notice and
comment. The Amendments No. 1 are available on
the Commission’s website at: https://www.sec.gov/
comments/sr-cboebyx-2021-012/srcboebyx20210128931890-245403.pdf; https://www.sec.gov/
comments/sr-cboebzx-2021-035/srcboebzx20210358931888-245385.pdf; https://www.sec.gov/
comments/sr-cboeedga-2021-011/
srcboeedga2021011-8931893-245388.pdf; and
https://www.sec.gov/comments/sr-cboeedgx-2021025/srcboeedgx2021025-8931886-245402.pdf.
5 Outside of regular trading hours, the Exchanges
operate certain extra-hours sessions. See CboeBYX
Rules 1.5(c), (r), and (ee); CboeBZX Rules 1.5(c), (r),
and (ee); CboeEDGA Rules 1.5(r), (s), and (ii);
CboeEDGX Rules 1.5(r), (s), and (ii).
6 The Exchanges state that Tape B securities are
those listed on exchanges other than NYSE and
Nasdaq and Tape C securities are those listed on
Nasdaq. See Notices, supra note 3.
7 See CboeBYX Rule 11.23(d); CboeBZX Rule
11.24(d); CboeEDGA Rule 11.7(d); CboeEDGX Rule
11.7(d).
8 See CboeBYX Rule 11.23(e)(3); CboeBZX Rule
11.24(e)(3); CboeEDGA Rule 11.7(e)(3); CboeEDGX
Rule 11.7(e)(3).
9 See CboeBYX Rule 11.23(e)(1); CboeBZX Rule
11.24(e)(1); CboeEDGA Rule 11.7(e)(1); CboeEDGX
Rule 11.7(e)(1).
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following the resumption of trading
after a trading halt, suspension, or pause
during each of the Exchanges’ extrahours sessions will occur at the
midpoint of the: (i) First NBBO
subsequent to the first reported trade
and first two-sided quotation on the
listing exchange following the
resumption of trading after a halt,
suspension, or pause; or (ii) NBBO
when the first two-sided quotation is
published by the listing exchange
following the resumption of trading
after a halt, suspension, or pause if no
first trade is reported by the listing
exchange within one second of
publication of the first two-sided
quotation by the listing exchange.
The Exchanges have proposed to
harmonize the different processes for reopening Tape A, and Tape B and C
securities during the extra-hours
sessions by: (1) Amending the
Exchanges’ automated re-opening
processes for Tape A securities to
provide for the execution of orders at
the midpoint of the NBBO; and (2)
eliminating unnecessary differences
between the process utilized for Tape A
securities and the process used for Tape
B and C securities. Thus, as proposed,
each of the Exchanges’ relevant rules 10
would provide that during extra-hours
sessions, the re-opening process for
Tape A securities will occur at the
midpoint of the NBBO after one second
has passed following the Exchange’s
receipt of the first NBBO following the
resumption of trading after a halt,
suspension, or pause. In addition, the
Exchanges propose to amend their
respective processes for re-opening Tape
B and C securities to mirror their
proposed processes for Tape A
securities, except that the Exchanges
would require the primary listing
market to have begun quoting a security
before it initiates its own re-opening
process. As amended, each of the
Exchanges’ rules 11 would provide that,
during extra-hours trading sessions, the
re-opening process for Tape B and C
securities will occur at the midpoint of
the NBBO after one second has passed
following the publication of the first
two-sided quotation by the listing
exchange following the resumption of
trading after a halt, suspension, or
pause. The Exchanges have stated that,
to simplify the re-opening during these
timeframes, the Exchanges are not
10 See proposed rules CboeBYX Rule
11.23(e)(1)(C); CboeBZX Rule 11.24(e)(1)(C);
CboeEDGA Rule 11.7(e)(1)(C); CboeEDGX Rule
11.7(e)(1)(C).
11 See proposed rules CboeBYX Rule
11.23(e)(1)(C); CboeBZX Rule 11.24(e)(1)(C);
CboeEDGA Rule 11.7(e)(1)(C); CboeEDGX Rule
11.7(e)(1)(C).
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Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices
proposing to retain a separate trigger
that would allow the re-opening process
to be initiated immediately when the
Exchanges receive both a two-sided
quotation and a trade from the listing
exchange.12
III. Discussion and Commission’s
Findings
The Commission has carefully
reviewed the proposed rule changes, as
modified by Amendments No. 1, and
finds that they are consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange, in
particular, the requirements of Section
6(b) of the Act and the rules and
regulations thereunder.13 Specifically,
the Commission finds that the
proposals, as modified by Amendments
No. 1, are consistent with Section
6(b)(5) of the Act,14 which requires,
among other things, that the rules of a
national securities exchange be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and in general, to protect
investors and the public interest.
As described above, the Exchanges
seek to harmonize their respective
processes for re-opening trading in a
security when a trading halt,
suspension, or pause in that security is
lifted and trading in that security
resumes outside regular trading hours.
In the Exchanges’ view, applying their
midpoint re-opening procedures in
these circumstances, regardless of
whether a security is a Tape A, B, or C
security, would: (1) Provide greater
consistency with the process currently
used by the each of the Exchanges in
other circumstances, (2) provide greater
certainty as to how orders will be
handled across security types, and (3)
potentially provide executions that
better reflect the applicable market for
the security.15 The Exchanges have
stated that the proposal to not retain a
separate trigger whereby the reopening
process for Tape B and C securities
would be initiated immediately when
the Exchange receives both a two-sided
quotation and a trade from the listing
exchange would harmonize the
reopening process with that for Tape A
securities, simplify the re-opening
process to be followed during these
timeframes, and ensure that sufficient
time is provided for the midpoint to
accurately reflect the market in those
securities.16
The Commission believes that the
proposals are reasonably designed to
facilitate a more orderly and efficient reopening process following the
resumption of trading after a trading
halt, suspension, or pause during each
of the Exchanges’ extra-hours sessions.
By providing a more consistent and
harmonized approach to each of the
Exchanges’ re-opening procedures, the
proposals should promote greater
certainty, reduce the likelihood of
confusion, and facilitate the resumption
of orderly trading under such
circumstances.
Therefore, the Commission finds that
the proposals, as modified by
Amendments No. 1, are consistent with
the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule changes (SR–CboeBYX–
2021–012, SR–CboeBZX–2021–035, SR–
CboeEDGA–2021–011, and SR–
CboeEDGX–2021–025), as modified by
Amendments No. 1, be, and hereby are,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–13917 Filed 6–29–21; 8:45 am]
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12 In
addition to these proposed changes to the
reopening process, the Exchanges also proposed
other technical and non-substantive changes to
their rules in order to facilitate the substantive
changes explained above. See Notices, supra note
3. CboeEDGA and CboeEDGX also proposed nonsubstantive changes to conform CboeEDGA Rule
11.7 and CboeEDGX 11.7 to CboeBZX Rule 11.24.
See CboeEDGA Notice and CboeEDGX Notice,
supra note 3.
13 15 U.S.C. 78f. In approving these proposed rule
changes, the Commission has considered the
proposed rule changes’ impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
14 15 U.S.C. 78f(b)(5).
15 See Notices, supra note 3, and Amendments
No. 1, supra note 4.
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17:47 Jun 29, 2021
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BILLING CODE 8011–01–P
16 See
Amendments No. 1, supra note 4.
U.S.C. 78s(b)(2).
18 17 CFR 200.30–3(a)(12).
17 15
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34807
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92249; File No. SR–DTC–
2021–005]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing of and Immediate Effectiveness
of Proposed Rule Change To Modify
the DTC Settlement Service Guide and
the Form of DTC Pledgee’s Agreement
June 24, 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 June 15,
2021, The Depository Trust Company
(‘‘DTC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below, which Items
have been prepared primarily by the
clearing agency. DTC filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 3 and Rule 19b–
4(f)(4) thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change 5 would
modify the DTC Settlement Service
Guide (‘‘Settlement Guide’’) 6 and the
form of DTC Pledgee’s Agreement
(‘‘Pledgee’s Agreement’’),7 as described
below. Specifically, the proposed rule
change would revise text in the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(4).
5 Capitalized terms not defined herein are defined
in the Rules, By-Laws and Organization Certificate
of DTC (‘‘Rules’’) available at https://www.dtcc.com/
∼/media/Files/Downloads/legal/rules/dtc_rules.pdf.
6 Available at https://www.dtcc.com/legal/rulesand-procedures. The Settlement Guide constitutes
Procedures of DTC relating to its Settlement
services. Pursuant to the Rules, the term
‘‘Procedures’’ means the Procedures, service guides,
and regulations of DTC adopted pursuant to Rule
27, as amended from time to time. See Rule 1,
Section 1, infra note 7. DTC’s Procedures are filed
with the Commission. They are binding on DTC and
each Participant in the same manner as they are
bound by the Rules. See Rule 27, infra note 7.
7 Available at https://www.dtcc.com/legal/rulesand-procedures. Pursuant to Rule 2, Section 3, an
entity that uses DTC’s Pledge services must enter
into an agreement with DTC satisfactory to DTC.
See Rule 2, Section 3, supra note 5. In this regard,
DTC requires a Pledgee that is not a Participant to
sign a Pledgee’s Agreement. Participants enter into
a Participant’s Agreement that binds them to the
Rules and Procedures (including, but not limited to,
those related to Pledge activity), and are not
required by DTC to enter into a separate Pledgee’s
Agreement. See also Rule 2, Section 1, supra note
5 (providing terms of the Participant’s Agreement).
2 17
E:\FR\FM\30JNN1.SGM
30JNN1
]]>Agencies
[Federal Register Volume 86, Number 123 (Wednesday, June 30, 2021)]
[Notices]
[Pages 34806-34807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13917]
[[Page 34806]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92257; File Nos. SR-CboeBYX-2021-012, SR-CboeBZX-2021-
035, SRCboeEDGA-2021-011, SR-CboeEDGX-2021-025]
Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Cboe BZX
Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.;
Order Granting Approval of Proposed Rule Changes, as Modified by
Amendments No. 1, Relating to the Exchanges' Process for Re-Opening
Securities Listed on Other National Securities Exchanges Following the
Resumption of Trading After a Halt, Suspension, or Pause Outside of
Regular Trading Hours
June 24, 2021.
I. Introduction
On April 26, 2021, Cboe BYX Exchange, Inc. (``CboeBYX''), Cboe BZX
Exchange, Inc. (``CboeBZX''), Cboe EDGA Exchange, Inc. (``CboeEDGA'')
and Cboe EDGX Exchange, Inc. (``CboeEDGX,'' and collectively, the
``Exchanges'') 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\
proposed rule changes to amend each Exchange's process for re-opening
trading of securities listed on other national securities exchanges
outside of regular trading hours. The proposed rule changes were
published for comment in the Federal Register on May 14, 2021.\3\ On
June 21, 2021, the Exchanges each filed an Amendment No. 1 to their
respective proposed rule changes (``Amendments No. 1'').\4\ The
Commission received no comments on the proposed rule changes. This
order approves the proposed rule changes, as modified by Amendments No.
1.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release Nos. 91804 (May 10,
2021), 86 FR 26583 (May 14, 2021) (SR-CboeBYX-2021-012); 91801 (May
10, 2021), 86 FR 26594 (May 14, 2021) (SR-CboeBZX-2021-035); 91802
(May 10, 2021), 86 FR 26574 (May 14, 2021) (SR-CboeEDGA-2021-011)
(``CboeEDGA Notice''); 91803 (May 10, 2021), 86 FR 26558 (May 14,
2021) (SR-CboeEDGX-2021-025) (``CboeEDGX Notice'') (collectively,
``Notices''). The proposed rule changes are nearly identical.
\4\ In the Amendments No. 1, the Exchanges: (i) Added additional
justification for the proposed rule changes, stating that the
proposed re-opening process would provide certainty as to how orders
will be handled across Tape A, B, and C securities and promote
consistency with the re-opening process used by the Exchanges in
other circumstances; (ii) stated that allowing one second to elapse
prior to initiating the mid-point re-opening would ensure sufficient
time for the midpoint to accurately reflect the market; and (iii)
made technical and conforming edits. Because the Amendments No. 1 do
not materially alter the substance of the proposed rule changes and
make conforming and technical changes, the Amendments No. 1 are not
subject to notice and comment. The Amendments No. 1 are available on
the Commission's website at: https://www.sec.gov/comments/sr-cboebyx-2021-012/srcboebyx2021012-8931890-245403.pdf; https://www.sec.gov/comments/sr-cboebzx-2021-035/srcboebzx2021035-8931888-245385.pdf; https://www.sec.gov/comments/sr-cboeedga-2021-011/srcboeedga2021011-8931893-245388.pdf; and https://www.sec.gov/comments/sr-cboeedgx-2021-025/srcboeedgx2021025-8931886-245402.pdf.
---------------------------------------------------------------------------
II. Description of the Proposed Rule Changes, as Modified by Amendments
No. 1
The Exchanges have proposed to harmonize the manner by which they
re-open trading in a security listed on other national securities
exchanges if the trading halt, suspension or pause in that security is
lifted during one of the Exchanges' extra-hours sessions.\5\ The
Exchanges' respective processes for the re-opening of trading in
securities listed on other national security exchanges under such
circumstances vary depending on whether the securities are listed on
the New York Stock Exchange LLC (``NYSE'') (``Tape A''), or are listed
on exchanges other than NYSE (``Tape B'' and ``Tape C'').\6\
Specifically, Tape A securities that resume trading after a halt,
suspension, or pause during an extra-hours trading session will be
automatically re-opened pursuant each of the Exchanges' contingent
opening procedures, as described in each of the Exchanges' rules,\7\
after one second has passed following an Exchange's receipt of the
first NBBO following such resumption of trading.\8\ As a result, when
the Exchanges re-open Tape A securities during their respective extra-
hours sessions today, orders are handled in time sequence and placed on
each Exchange's book, routed, cancelled, or executed in accordance with
the terms of the order.
---------------------------------------------------------------------------
\5\ Outside of regular trading hours, the Exchanges operate
certain extra-hours sessions. See CboeBYX Rules 1.5(c), (r), and
(ee); CboeBZX Rules 1.5(c), (r), and (ee); CboeEDGA Rules 1.5(r),
(s), and (ii); CboeEDGX Rules 1.5(r), (s), and (ii).
\6\ The Exchanges state that Tape B securities are those listed
on exchanges other than NYSE and Nasdaq and Tape C securities are
those listed on Nasdaq. See Notices, supra note 3.
\7\ See CboeBYX Rule 11.23(d); CboeBZX Rule 11.24(d); CboeEDGA
Rule 11.7(d); CboeEDGX Rule 11.7(d).
\8\ See CboeBYX Rule 11.23(e)(3); CboeBZX Rule 11.24(e)(3);
CboeEDGA Rule 11.7(e)(3); CboeEDGX Rule 11.7(e)(3).
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With respect to Tape B and C securities, the Exchanges' rules \9\
provide that the re-opening process following the resumption of trading
after a trading halt, suspension, or pause during each of the
Exchanges' extra-hours sessions will occur at the midpoint of the: (i)
First NBBO subsequent to the first reported trade and first two-sided
quotation on the listing exchange following the resumption of trading
after a halt, suspension, or pause; or (ii) NBBO when the first two-
sided quotation is published by the listing exchange following the
resumption of trading after a halt, suspension, or pause if no first
trade is reported by the listing exchange within one second of
publication of the first two-sided quotation by the listing exchange.
---------------------------------------------------------------------------
\9\ See CboeBYX Rule 11.23(e)(1); CboeBZX Rule 11.24(e)(1);
CboeEDGA Rule 11.7(e)(1); CboeEDGX Rule 11.7(e)(1).
---------------------------------------------------------------------------
The Exchanges have proposed to harmonize the different processes
for re-opening Tape A, and Tape B and C securities during the extra-
hours sessions by: (1) Amending the Exchanges' automated re-opening
processes for Tape A securities to provide for the execution of orders
at the midpoint of the NBBO; and (2) eliminating unnecessary
differences between the process utilized for Tape A securities and the
process used for Tape B and C securities. Thus, as proposed, each of
the Exchanges' relevant rules \10\ would provide that during extra-
hours sessions, the re-opening process for Tape A securities will occur
at the midpoint of the NBBO after one second has passed following the
Exchange's receipt of the first NBBO following the resumption of
trading after a halt, suspension, or pause. In addition, the Exchanges
propose to amend their respective processes for re-opening Tape B and C
securities to mirror their proposed processes for Tape A securities,
except that the Exchanges would require the primary listing market to
have begun quoting a security before it initiates its own re-opening
process. As amended, each of the Exchanges' rules \11\ would provide
that, during extra-hours trading sessions, the re-opening process for
Tape B and C securities will occur at the midpoint of the NBBO after
one second has passed following the publication of the first two-sided
quotation by the listing exchange following the resumption of trading
after a halt, suspension, or pause. The Exchanges have stated that, to
simplify the re-opening during these timeframes, the Exchanges are not
[[Page 34807]]
proposing to retain a separate trigger that would allow the re-opening
process to be initiated immediately when the Exchanges receive both a
two-sided quotation and a trade from the listing exchange.\12\
---------------------------------------------------------------------------
\10\ See proposed rules CboeBYX Rule 11.23(e)(1)(C); CboeBZX
Rule 11.24(e)(1)(C); CboeEDGA Rule 11.7(e)(1)(C); CboeEDGX Rule
11.7(e)(1)(C).
\11\ See proposed rules CboeBYX Rule 11.23(e)(1)(C); CboeBZX
Rule 11.24(e)(1)(C); CboeEDGA Rule 11.7(e)(1)(C); CboeEDGX Rule
11.7(e)(1)(C).
\12\ In addition to these proposed changes to the reopening
process, the Exchanges also proposed other technical and non-
substantive changes to their rules in order to facilitate the
substantive changes explained above. See Notices, supra note 3.
CboeEDGA and CboeEDGX also proposed non-substantive changes to
conform CboeEDGA Rule 11.7 and CboeEDGX 11.7 to CboeBZX Rule 11.24.
See CboeEDGA Notice and CboeEDGX Notice, supra note 3.
---------------------------------------------------------------------------
III. Discussion and Commission's Findings
The Commission has carefully reviewed the proposed rule changes, as
modified by Amendments No. 1, and finds that they are consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange, in particular, the
requirements of Section 6(b) of the Act and the rules and regulations
thereunder.\13\ Specifically, the Commission finds that the proposals,
as modified by Amendments No. 1, are consistent with Section 6(b)(5) of
the Act,\14\ which requires, among other things, that the rules of a
national securities exchange be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and in general,
to protect investors and the public interest.
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\13\ 15 U.S.C. 78f. In approving these proposed rule changes,
the Commission has considered the proposed rule changes' impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\14\ 15 U.S.C. 78f(b)(5).
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As described above, the Exchanges seek to harmonize their
respective processes for re-opening trading in a security when a
trading halt, suspension, or pause in that security is lifted and
trading in that security resumes outside regular trading hours. In the
Exchanges' view, applying their midpoint re-opening procedures in these
circumstances, regardless of whether a security is a Tape A, B, or C
security, would: (1) Provide greater consistency with the process
currently used by the each of the Exchanges in other circumstances, (2)
provide greater certainty as to how orders will be handled across
security types, and (3) potentially provide executions that better
reflect the applicable market for the security.\15\ The Exchanges have
stated that the proposal to not retain a separate trigger whereby the
reopening process for Tape B and C securities would be initiated
immediately when the Exchange receives both a two-sided quotation and a
trade from the listing exchange would harmonize the reopening process
with that for Tape A securities, simplify the re-opening process to be
followed during these timeframes, and ensure that sufficient time is
provided for the midpoint to accurately reflect the market in those
securities.\16\
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\15\ See Notices, supra note 3, and Amendments No. 1, supra note
4.
\16\ See Amendments No. 1, supra note 4.
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The Commission believes that the proposals are reasonably designed
to facilitate a more orderly and efficient re-opening process following
the resumption of trading after a trading halt, suspension, or pause
during each of the Exchanges' extra-hours sessions. By providing a more
consistent and harmonized approach to each of the Exchanges' re-opening
procedures, the proposals should promote greater certainty, reduce the
likelihood of confusion, and facilitate the resumption of orderly
trading under such circumstances.
Therefore, the Commission finds that the proposals, as modified by
Amendments No. 1, are consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\17\ that the proposed rule changes (SR-CboeBYX-2021-012, SR-
CboeBZX-2021-035, SR-CboeEDGA-2021-011, and SR-CboeEDGX-2021-025), as
modified by Amendments No. 1, be, and hereby are, approved.
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\17\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-13917 Filed 6-29-21; 8:45 am]
BILLING CODE 8011-01-P
