Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 21.17 Concerning Drill-Through Protection and Fat Finger Check, 62123-62125 [2022-22177]
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Federal Register / Vol. 87, No. 197 / Thursday, October 13, 2022 / Notices
POSTAL REGULATORY COMMISSION
[Docket Nos. CP2020–172; CP2020–179;
CP2020–181; and CP2020–182]
New Postal Products
Postal Regulatory Commission.
ACTION: Notice.
AGENCY:
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
a negotiated service agreement. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: October 17,
2022.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Docketed Proceeding(s)
khammond on DSKJM1Z7X2PROD with NOTICES
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
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17:49 Oct 12, 2022
Jkt 259001
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
1. Docket No(s).: CP2020–172; Filing
Title: Notice of the United States Postal
Service of Filing Modification Two to
Global Reseller Expedited Package 2
Negotiated Service Agreement; Filing
Acceptance Date: October 6, 2022;
Filing Authority: 39 CFR 3035.105;
Public Representative: Christopher C.
Mohr; Comments Due: October 17, 2022.
2. Docket No(s).: CP2020–179; Filing
Title: Notice of the United States Postal
Service of Filing Modification Two to
Global Reseller Expedited Package 2
Negotiated Service Agreement; Filing
Acceptance Date: October 6, 2022;
Filing Authority: 39 CFR 3035.105;
Public Representative: Jennaca D.
Upperman; Comments Due: October 17,
2022.
3. Docket No(s).: CP2020–181; Filing
Title: Notice of the United States Postal
Service of Filing Modification Two to
Global Reseller Expedited Package 2
Negotiated Service Agreement; Filing
Acceptance Date: October 6, 2022;
Filing Authority: 39 CFR 3035.105;
Public Representative: Jennaca D.
Upperman; Comments Due: October 17,
2022.
4. Docket No(s).: CP2020–182; Filing
Title: Notice of the United States Postal
Service of Filing Modification Two to
Global Reseller Expedited Package 2
Negotiated Service Agreement; Filing
Acceptance Date: October 6, 2022;
Filing Authority: 39 CFR 3035.105;
Public Representative: Jennaca D.
Upperman; Comments Due: October 17,
2022.
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2022–22265 Filed 10–12–22; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95994; File No. SR–
CboeBZX–2022–049]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule
21.17 Concerning Drill-Through
Protection and Fat Finger Check
October 6, 2022.
II. Docketed Proceeding(s)
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62123
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 October
4, 2022, Cboe BZX Exchange, Inc.
(‘‘Exchange’’ or ‘‘BZX’’) 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 by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX Options’’)
proposes to amend Rule 21.17. The text
of the proposed rule change is provided
in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), 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
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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62124
Federal Register / Vol. 87, No. 197 / Thursday, October 13, 2022 / Notices
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
khammond on DSKJM1Z7X2PROD with NOTICES
1. Purpose
The Exchange proposes to amend
Rule 21.17. Specifically, the Exchange
proposes to amend its drill-through
protection mechanism and limit order
fat finger check.
The Exchange proposes to amend
Rule 21.17(d) to update the drillthrough protection mechanism to
provide orders with additional
execution opportunities. Pursuant to the
current drill-through protection, if a buy
(sell) order enters the Book at the
conclusion of the opening auction
process or would execute or post to the
Book at the time of order entry, the
System executes the order up to a buffer
amount (the Exchange determines the
buffer amount on a class and premium
basis) above (below) the offer (bid) limit
of the opening collar 3 or the national
best bid (‘‘NBO’’) (national best offer
(‘‘NBB’’)) that existed at the time of
order entry, respectively (the ‘‘drillthrough price’’).4 The System enters an
order (or unexecuted portion) not
executed pursuant to the provision in
the immediately preceding sentence in
the Book with a displayed equal to the
drill-through price.5 The order (or
unexecuted portion) rests in the Book at
the drill-through price 6 until the earlier
to occur of its full execution and the end
of the duration of a number of
consecutive time periods (the Exchange
determines on a class-by-class basis the
number of periods, which may not
exceed five, and the length of the time
period in milliseconds, which may not
exceed three seconds).7
The proposed rule change amends
Rule 21.17(d)(2)(A) to eliminate the
concept that there will be a maximum
number of time periods and proposes
that the order (or unexecuted portion)
will rest in the Book at the drill-through
price for the duration of consecutive
time periods.8 The proposed rule
3 See Rule 21.7(a) for the definition of Opening
Collars.
4 See Rule 21.17(d)(1).
5 See Rule 21.17(d)(2).
6 The proposed rule change adds ‘‘at the drillthrough price’’ in the first sentence of subparagraph
(d)(2)(A), which is a nonsubstantive change, as it
reflects current functionality and is stated in the
introductory paragraph to Rule 21.17(d)(2). The
proposed rule change merely includes this detail in
the next portion of the rule for additional clarity.
7 See Rule 21.17(d)(2)(A).
8 The Exchange will continue to determine on a
class-by-class basis the length of the time periods
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17:49 Oct 12, 2022
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change makes conforming changes to
subparagraph (ii) by deleting references
to ‘‘the final period’’ and subparagraph
(iv) by deleting the reference to ‘‘any
remaining time period(s),’’ as there will
no longer be an Exchange-determined
limited number of time periods.
Currently, as set forth in current
subparagraph (i), the drill-through
mechanism will continue until the
earlier to occur of the order’s full
execution and the end of the duration of
the Exchange-determined number of
time periods. The Exchange proposes to
amend subparagraph (iv) to describe
when the drill-through process will
conclude. Specifically, proposed Rule
21.17(d)(2)(D) provides that the order
continues through the process described
in subparagraph (ii) (as proposed to be
amended) until the earliest of the
following to occur: (a) the order fully
executes; (b) the User cancels the order;
and (c) the order’s limit price equals or
is less than (if a buy order) or greater
than (if a sell order) the drill-through
price at any time during application of
the drill-through mechanism, in which
case the order rests in the Book at its
limit price, subject to a User’s
instructions. In other words, the order
will continue through consecutive time
periods until it fully executes (unless it
is cancelled by the User or reaches its
limit price prior to full execution),
compared to today when the order will
continue through consecutive time
periods until it fully executes or reaches
the Exchange-determined final time
period, at which time the order would
be cancelled (unless it reaches its limit
price prior to full execution). The
Exchange believes eliminating the limit
on the number of time periods may
increase execution opportunities for
limit orders, which will still continue to
be bound by their limit prices and
protected by the limit order fat finger
check.9
In addition, the Exchange proposes to
amend Rule 21.17(b) to add Limit-onClose orders 10 to the list of orders to
in milliseconds, which may continue to not exceed
three seconds.
9 If a limit price is ‘‘too far away’’ from the
market, the order will continue to be subject to the
limit order fat finger protection set forth in Rule
21.17(b) and thus will still be subject to protection
against a potentially erroneous execution due to an
order pricing error upon submission.
10 A ‘‘Limit-on-Close’’ or ‘‘LOC’’ order is, for an
order so designated, a limit order that may not
execute on the Exchange until three minutes prior
to market close. At that time, the System enters LOC
orders into the Book in time sequence (based on the
times at which the System initially received them),
where they may be processed in accordance with
Rule 21.8. The System cancels an LOC order (or
unexecuted portion) that does not execute by the
market close. Users may not designate bulk
PO 00000
Frm 00059
Fmt 4703
Sfmt 4703
which the limit order fat finger check
does not apply. Pursuant to the limit
order fat finger check, if a User submits
a buy (sell) limit order to the System
with a price that is more than a buffer
amount above (below) the NBO (NBB),
the System cancels or rejects the
order.11 Currently, the simple limit
order fat finger check does not apply to
bulk messages or Stop-Limit Orders.12
The Exchange proposes to also not
apply the limit order fat finger check to
Limit-on-Close orders. The limit order
fat finger check applies to orders upon
entry to the System. However, the limit
price of a Limit-on-Close order is
intended to relate to the price at the
market close, and thus may
intentionally be further away from the
NBBO at the time the order is entered.
This may cause the order to be
inadvertently rejected pursuant to this
check. The Exchange believes it is not
appropriate for this limit order to be
subject to the fat finger check, as the
check may inadvertently cause
rejections for orders with limit prices
that are intentionally ‘‘far away’’ from
the market at the time of order entry.
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.13 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 14 requirements that the rules of
an exchange be 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 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.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 15 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
the proposed rule change to eliminate
messages as LOC. See Rule 21.1(f)(7) (definition of
‘‘Limit-on-Close’’ and ‘‘LOC’’ order).
11 Rule 21.17(a).
12 Id.
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
15 Id.
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Federal Register / Vol. 87, No. 197 / Thursday, October 13, 2022 / Notices
the maximum number of time periods
for which an order will rest in the Book
during application of the drill-through
protection mechanism will remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, protect investors, because it
will provide orders with additional
execution opportunities. These orders
may continue to be available on the
Book for execution, at a wider range of
prices, as opposed to today when such
orders are cancelled after a specified
number of time periods (depending on
the User’s instructions and if the order
does not reach its limit price prior to the
end of those time periods). The
Exchange believes these additional
execution opportunities will benefit
investors that submit such orders and
believes such orders will continue to
receive protection against potentially
erroneous executions, as the limit order
fat finger check will continue to apply
to them.
Finally, the Exchange believes
excluding Limit-on-Close orders from
the limit order fat finger check will
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, protect investors, because it
may reduce inadvertent rejections of
Limit-on-Close orders, which may be
purposely priced further away from the
NBBO at the time of entry, as their limit
prices are intended to relate to price at
the market close. Therefore, this
proposed rule change may increase
execution opportunities for Users that
submit Limit-on-Close orders.
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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. The
Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act,
because the amended drill-through
protection mechanism and limit order
fat finger check will continue to apply
in the same manner to orders of all
Users and may lead to increased
execution opportunities. The Exchange
does not believe that the proposed rule
change will impose any burden on
intermarket competition that is not
necessary or appropriate in furtherance
of purposes of the Act, because the
proposed rule change relates solely to
Exchange risk controls and how the
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17:49 Oct 12, 2022
Jkt 259001
Exchange handles orders subject to
those risk controls.
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:
A. significantly affect the protection
of investors or the public interest;
B. impose any significant burden on
competition; and
C. 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 16 and Rule 19b–4(f)(6) 17
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–
CboeBZX–2022–049 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–CboeBZX–2022–049. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CboeBZX–2022–049 and
should be submitted on or before
November 3, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2022–22177 Filed 10–12–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95995; File No. SR–
CboeEDGX–2022–044]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule
21.17 Concerning Drill-Through
Protection and Fat Finger Check
October 6, 2022.
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 October
4, 2022, Cboe EDGX Exchange, Inc.
18 17
16 15
U.S.C. 78s(b)(3)(A).
17 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
62125
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\13OCN1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 197 (Thursday, October 13, 2022)]
[Notices]
[Pages 62123-62125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22177]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95994; File No. SR-CboeBZX-2022-049]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 21.17 Concerning Drill-Through Protection and Fat Finger Check
October 6, 2022.
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 October 4, 2022, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
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 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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX Options'')
proposes to amend Rule 21.17. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), 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
[[Page 62124]]
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 Rule 21.17. Specifically, the
Exchange proposes to amend its drill-through protection mechanism and
limit order fat finger check.
The Exchange proposes to amend Rule 21.17(d) to update the drill-
through protection mechanism to provide orders with additional
execution opportunities. Pursuant to the current drill-through
protection, if a buy (sell) order enters the Book at the conclusion of
the opening auction process or would execute or post to the Book at the
time of order entry, the System executes the order up to a buffer
amount (the Exchange determines the buffer amount on a class and
premium basis) above (below) the offer (bid) limit of the opening
collar \3\ or the national best bid (``NBO'') (national best offer
(``NBB'')) that existed at the time of order entry, respectively (the
``drill-through price'').\4\ The System enters an order (or unexecuted
portion) not executed pursuant to the provision in the immediately
preceding sentence in the Book with a displayed equal to the drill-
through price.\5\ The order (or unexecuted portion) rests in the Book
at the drill-through price \6\ until the earlier to occur of its full
execution and the end of the duration of a number of consecutive time
periods (the Exchange determines on a class-by-class basis the number
of periods, which may not exceed five, and the length of the time
period in milliseconds, which may not exceed three seconds).\7\
---------------------------------------------------------------------------
\3\ See Rule 21.7(a) for the definition of Opening Collars.
\4\ See Rule 21.17(d)(1).
\5\ See Rule 21.17(d)(2).
\6\ The proposed rule change adds ``at the drill-through price''
in the first sentence of subparagraph (d)(2)(A), which is a
nonsubstantive change, as it reflects current functionality and is
stated in the introductory paragraph to Rule 21.17(d)(2). The
proposed rule change merely includes this detail in the next portion
of the rule for additional clarity.
\7\ See Rule 21.17(d)(2)(A).
---------------------------------------------------------------------------
The proposed rule change amends Rule 21.17(d)(2)(A) to eliminate
the concept that there will be a maximum number of time periods and
proposes that the order (or unexecuted portion) will rest in the Book
at the drill-through price for the duration of consecutive time
periods.\8\ The proposed rule change makes conforming changes to
subparagraph (ii) by deleting references to ``the final period'' and
subparagraph (iv) by deleting the reference to ``any remaining time
period(s),'' as there will no longer be an Exchange-determined limited
number of time periods. Currently, as set forth in current subparagraph
(i), the drill-through mechanism will continue until the earlier to
occur of the order's full execution and the end of the duration of the
Exchange-determined number of time periods. The Exchange proposes to
amend subparagraph (iv) to describe when the drill-through process will
conclude. Specifically, proposed Rule 21.17(d)(2)(D) provides that the
order continues through the process described in subparagraph (ii) (as
proposed to be amended) until the earliest of the following to occur:
(a) the order fully executes; (b) the User cancels the order; and (c)
the order's limit price equals or is less than (if a buy order) or
greater than (if a sell order) the drill-through price at any time
during application of the drill-through mechanism, in which case the
order rests in the Book at its limit price, subject to a User's
instructions. In other words, the order will continue through
consecutive time periods until it fully executes (unless it is
cancelled by the User or reaches its limit price prior to full
execution), compared to today when the order will continue through
consecutive time periods until it fully executes or reaches the
Exchange-determined final time period, at which time the order would be
cancelled (unless it reaches its limit price prior to full execution).
The Exchange believes eliminating the limit on the number of time
periods may increase execution opportunities for limit orders, which
will still continue to be bound by their limit prices and protected by
the limit order fat finger check.\9\
---------------------------------------------------------------------------
\8\ The Exchange will continue to determine on a class-by-class
basis the length of the time periods in milliseconds, which may
continue to not exceed three seconds.
\9\ If a limit price is ``too far away'' from the market, the
order will continue to be subject to the limit order fat finger
protection set forth in Rule 21.17(b) and thus will still be subject
to protection against a potentially erroneous execution due to an
order pricing error upon submission.
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In addition, the Exchange proposes to amend Rule 21.17(b) to add
Limit-on-Close orders \10\ to the list of orders to which the limit
order fat finger check does not apply. Pursuant to the limit order fat
finger check, if a User submits a buy (sell) limit order to the System
with a price that is more than a buffer amount above (below) the NBO
(NBB), the System cancels or rejects the order.\11\ Currently, the
simple limit order fat finger check does not apply to bulk messages or
Stop-Limit Orders.\12\ The Exchange proposes to also not apply the
limit order fat finger check to Limit-on-Close orders. The limit order
fat finger check applies to orders upon entry to the System. However,
the limit price of a Limit-on-Close order is intended to relate to the
price at the market close, and thus may intentionally be further away
from the NBBO at the time the order is entered. This may cause the
order to be inadvertently rejected pursuant to this check. The Exchange
believes it is not appropriate for this limit order to be subject to
the fat finger check, as the check may inadvertently cause rejections
for orders with limit prices that are intentionally ``far away'' from
the market at the time of order entry.
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\10\ A ``Limit-on-Close'' or ``LOC'' order is, for an order so
designated, a limit order that may not execute on the Exchange until
three minutes prior to market close. At that time, the System enters
LOC orders into the Book in time sequence (based on the times at
which the System initially received them), where they may be
processed in accordance with Rule 21.8. The System cancels an LOC
order (or unexecuted portion) that does not execute by the market
close. Users may not designate bulk messages as LOC. See Rule
21.1(f)(7) (definition of ``Limit-on-Close'' and ``LOC'' order).
\11\ Rule 21.17(a).
\12\ Id.
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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.\13\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \14\ requirements that the rules of an exchange be
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 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. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \15\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
\15\ Id.
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In particular, the Exchange believes the proposed rule change to
eliminate
[[Page 62125]]
the maximum number of time periods for which an order will rest in the
Book during application of the drill-through protection mechanism will
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, protect
investors, because it will provide orders with additional execution
opportunities. These orders may continue to be available on the Book
for execution, at a wider range of prices, as opposed to today when
such orders are cancelled after a specified number of time periods
(depending on the User's instructions and if the order does not reach
its limit price prior to the end of those time periods). The Exchange
believes these additional execution opportunities will benefit
investors that submit such orders and believes such orders will
continue to receive protection against potentially erroneous
executions, as the limit order fat finger check will continue to apply
to them.
Finally, the Exchange believes excluding Limit-on-Close orders from
the limit order fat finger check will remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general, protect investors, because it may reduce inadvertent
rejections of Limit-on-Close orders, which may be purposely priced
further away from the NBBO at the time of entry, as their limit prices
are intended to relate to price at the market close. Therefore, this
proposed rule change may increase execution opportunities for Users
that submit Limit-on-Close orders.
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. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act, because the amended drill-
through protection mechanism and limit order fat finger check will
continue to apply in the same manner to orders of all Users and may
lead to increased execution opportunities. The Exchange does not
believe that the proposed rule change will impose any burden on
intermarket competition that is not necessary or appropriate in
furtherance of purposes of the Act, because the proposed rule change
relates solely to Exchange risk controls and how the Exchange handles
orders subject to those risk controls.
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:
A. significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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 \16\ and
Rule 19b-4(f)(6) \17\ 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.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6).
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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-CboeBZX-2022-049 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-CboeBZX-2022-049. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeBZX-2022-049 and should be submitted
on or before November 3, 2022.
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\18\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2022-22177 Filed 10-12-22; 8:45 am]
BILLING CODE 8011-01-P
