Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Change To Amend Rule 11.6(n)(4) and Rule 11.10(a)(4)(D) To Permit the Use of the Post Only Order Instruction at Prices Below $1.00, 38933-38935 [2024-10003]
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lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 90 / Wednesday, May 8, 2024 / Notices
‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 38a–1 (17 CFR 270.38a–1) under
the Investment Company Act of 1940
(15 U.S.C. 80a) (‘‘Investment Company
Act’’) is intended to protect investors by
fostering better fund compliance with
securities laws. The rule requires every
registered investment company and
business development company
(‘‘fund’’) to: (i) adopt and implement
written policies and procedures
reasonably designed to prevent
violations of the federal securities laws
by the fund, including procedures for
oversight of compliance by each
investment adviser, principal
underwriter, administrator, and transfer
agent of the fund; (ii) obtain the fund
board of directors’ approval of those
policies and procedures; (iii) annually
review the adequacy of those policies
and procedures and the policies and
procedures of each investment adviser,
principal underwriter, administrator,
and transfer agent of the fund, and the
effectiveness of their implementation;
(iv) designate a chief compliance office
to administer the fund’s policies and
procedures and prepare an annual
report to the board that addresses
certain specified items relating to the
policies and procedures; and (v)
maintain for five years the compliance
policies and procedures and the chief
compliance officer’s annual report to the
board.
The rule contains certain information
collection requirements that are
designed to ensure that funds establish
and maintain comprehensive, written
internal compliance programs. The
information collections also assist the
Commission’s examination staff in
assessing the adequacy of funds’
compliance programs.
The Commission staff estimates that
13,628 funds are subject to rule 38a–1.
Based on these estimates, the total
annual burden hours associated with
Rule 38a–1 is 476,980 hours. The
estimated total annual burden hours
associated with rule 38a–1 have
increased 25,572 hours, from 451,408
hours to 476,980 hours and external
costs increased from $19,608,000 to
$23,876,256. These changes in burden
hours and external costs reflect changes
in the number of affected entities and in
the external cost associated with the
information collection requirements.
These changes reflect revised estimates.
The estimate of average burden hours
is made solely for the purposes of the
VerDate Sep<11>2014
17:03 May 07, 2024
Jkt 262001
Paperwork Reduction Act. The estimate
is based on communications with
industry representatives and is not
derived from a comprehensive or even
a representative survey or study.
Responses will not be kept confidential.
Other information provided to the
Commission in connection with staff
examinations or investigations is kept
confidential subject to the provisions of
applicable law. If information collected
pursuant to rule 38a–1 is reviewed by
the Commission’s examination staff, it is
accorded the same level of
confidentiality accorded to other
responses provided to the Commission
in the context of its examination and
oversight program.
Written comments are invited on: (a)
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
by July 8, 2024.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: David Bottom, Chief Information
Officer, Securities and Exchange
Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549 or
send an email to: PRA_Mailbox@
sec.gov.
Dated: May 2, 2024.
J. Matthew DeLesDernier,
Deputy Secretary.
38933
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100051; File No. SR–
CboeEDGA–2024–003]
Self-Regulatory Organizations; Cboe
EDGA Exchange, Inc.; Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove Proposed Rule
Change To Amend Rule 11.6(n)(4) and
Rule 11.10(a)(4)(D) To Permit the Use
of the Post Only Order Instruction at
Prices Below $1.00
May 2, 2024.
I. Introduction
On January 19, 2024, Cboe EDGA
Exchange, Inc. (‘‘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 permit the use of the Post
Only order instruction (‘‘EDGA Post
Only Orders’’) at prices below $1.00.
The proposed rule change was
published for comment in the Federal
Register on February 7, 2024.3 On
March 19, 2024, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 The Commission did not
receive any comments. The Commission
is instituting proceedings pursuant to
Section 19(b)(2)(B) of the Act 6 to
determine whether to approve or
disapprove the proposed rule change.
II. Description of the Proposed Rule
Change 7
The Exchange proposes to amend
Rule 11.6(n)(4) and Rule 11.10(a)(4)(D)
to modify the treatment of EDGA Post
Only Orders priced below a dollar on
the Exchange. EDGA Post Only Orders
priced at or above $1.00 will only
remove liquidity if the value of the
execution when removing liquidity
equals or exceeds the value of such
[FR Doc. 2024–09964 Filed 5–7–24; 8:45 am]
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 99458
(February 1, 2024), 89 FR 8460 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 99765,
89 FR 20721 (March 25, 2024) (designating May 7,
2024, as the date by which the Commission shall
either approve, disapprove, or institute proceedings
to determine whether to disapprove the proposed
rule change).
6 15 U.S.C. 78s(b)(2)(B).
7 For a more detailed description of the proposed
rule change, including examples, refer to the
Notice, supra note 3.
BILLING CODE 8011–01–P
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38934
Federal Register / Vol. 89, No. 90 / Wednesday, May 8, 2024 / Notices
lotter on DSK11XQN23PROD with NOTICES1
execution if the order instead posted to
the EDGA Book and subsequently
provided liquidity, including the
applicable fees charged or rebates
provided. Currently, all EDGA Post
Only Orders priced below $1.00 are
automatically treated as orders that
remove liquidity. Under the proposed
rule change, EDGA Post Only Orders
priced below $1.00 will be treated in the
same manner as EDGA Post Only Orders
priced at or above $1.00 in that EDGA
Post Only Orders priced below $1.00
will only remove liquidity if the value
of the overall execution (taking into
account all applicable fees and rebates)
make it economically beneficial for the
order to remove liquidity.
The Exchange also proposes to amend
Rule 11.10(a)(4)(D) to permit NonDisplayed Orders 8 and orders subject to
display-price sliding (collectively,
‘‘Resting Orders’’) which are not
executable at their most aggressive price
due to the presence of a contra-side
EDGA Post Only Order to be executed
at one minimum price variation less
aggressive than the order’s most
aggressive price.9 Currently, Rule
11.10(a)(4)(D) states that, for securities
priced at or above $1.00, incoming
orders that are Market Orders 10 or Limit
Orders 11 priced more aggressively than
an order displayed on the EDGA Book,
the Exchange will execute the incoming
order at, in the case of an incoming sell
order, one-half minimum price variation
less than the price of the displayed
order, and, in the case of an incoming
buy order, at one-half minimum price
variation more than the price of the
displayed order. The Exchange proposes
8 See Rule 11.6(e)(2). A User may attach a ‘‘NonDisplayed Order’’ instruction to an order stating
that the order is not to be displayed by the System
on the EDGA Book.
9 See Securities Exchange Act Release No. 75700
(August 14, 2015), 80 FR 50689 (August 20, 2015),
SR–EDGA–2015–33 (‘‘EDGA Order Handling
Filing’’). See also Securities Exchange Act Release
No. 64475 (May 12, 2011), 76 FR 28830 (May 18,
2011), SR–BATS–2011–015 (‘‘Resting Order
Execution Filing’’). The Resting Order Execution
Filing introduced an order handling change for
certain Non-Displayed Orders and orders subject to
display-price sliding that are not executable at
prices equal to displayed orders on the opposite
side of the market (the ‘‘locking price’’) on the
Exchange’s affiliate, BZX (BATS) Exchange in 2011
and is incorporated by reference in the EDGA Order
Handling Filing. The Resting Order Execution
Filing permits Resting Orders priced at or above
$1.00 to be executed at one-half minimum price
variation less aggressive than the locking price (for
bids) and one-half minimum price variation more
aggressive than the locking price (for offers), under
certain circumstances.
10 See Rule 11.8(a). A ‘‘Market Order’’ is an order
to buy or sell a stated amount of a security that is
to be executed at the NBBO or better when the order
reaches the Exchange.
11 See Rule 11.8(b). A ‘‘Limit Order’’ is an order
to buy or sell a stated amount of a security at a
specified price or better.
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17:03 May 07, 2024
Jkt 262001
that for securities priced below $1.00,
incoming orders that are Market Orders
or Limit Orders priced more
aggressively than an order displayed on
the EDGA Book, the Exchange will
execute the incoming order at, in the
case of an incoming sell order, one
minimum price variation less than the
price of the displayed order, and, in the
case of an incoming buy order, at one
minimum price variation more than the
price of the displayed order.
III. Proceedings To Determine Whether
To Approve or Disapprove SR–
CboeEDGA–2024–003, and Grounds for
Disapproval Under Consideration
The Commission is instituting
proceedings pursuant to Section
19(b)(2)(B) of the Act 12 to determine
whether the proposed rule change
should be approved or disapproved.
Institution of such proceedings is
appropriate at this time in view of the
legal and policy issues raised by the
proposed rule change. Institution of
proceedings does not indicate that the
Commission has reached any
conclusions with respect to any of the
issues involved. Rather, as described
below, the Commission seeks and
encourages interested persons to
provide additional comment on the
proposed rule change to inform the
Commission’s analysis of whether to
approve or disapprove the proposed
rule change.
Pursuant to Section 19(b)(2)(B) of the
Act,13 the Commission is providing
notice of the grounds for disapproval
under consideration. As described
above, the Exchange proposes to permit
the use of EDGA Post Only Orders at
prices below $1.00. In addition, as
described above, for securities priced
below $1.00, incoming orders that are
Market Orders or Limit Orders priced
more aggressively than an order
displayed on the EDGA Book, the
Exchange will execute the incoming
order at one minimum price variation
less (more) than the price of the
displayed order for sell (buy) orders.14
In contrast, under the current rule for
securities priced above $1.00, the
incoming order would execute at onehalf minimum price variation less
(more) than the price of the displayed
order for sell (buy) orders.15 The
Commission is instituting proceedings
12 15
U.S.C. 78s(b)(2)(B).
13 Id.
14 According to the Exchange, executing an
incoming order at the same price as the price as that
of a displayed order on the same side of the market
would violate the time priority of the displayed
order. See Notice supra note 3, 89 FR at 8463; see
also Exchange Rules 11.9(a) and 11.10(a)(4).
15 See Exchange Rule 11.10(a)(4)(D).
PO 00000
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Sfmt 4703
to allow for additional analysis of, and
input from commenters with respect to,
the proposed rule change’s consistency
with the Act, and in particular, Section
6(b)(5) of the Act, 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.16 In
addition, Sections 6(b)(5) and 6(b)(8) of
the Act, respectively, prohibit the rules
of an exchange from being designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers 17
or imposing any burden on competition
not necessary or appropriate in
furtherance of the purposes of the Act.18
Under the Commission’s Rules of
Practice, the ‘‘burden to demonstrate
that a proposed rule change is
consistent with the [Act] and the rules
and regulations issued thereunder . . .
is on the self-regulatory organization
that proposed the rule change.’’ 19 The
description of a proposed rule change,
its purpose and operation, its effect, and
a legal analysis of its consistency with
applicable requirements must all be
sufficiently detailed and specific to
support an affirmative Commission
finding,20 and any failure of a selfregulatory organization to provide this
information may result in the
Commission not having a sufficient
basis to make an affirmative finding that
a proposed rule change is consistent
with the Act and the applicable rules
and regulations.21
IV. Procedure: Request for Written
Comments
The Commission requests that
interested persons provide written
submissions of their data, views, and
arguments with respect to the issues
identified above, as well as any other
concerns they may have with the
proposal. In particular, the Commission
invites the written views of interested
persons concerning whether the
proposed rule change, is consistent with
Sections 6(b)(5) or any other provision
of the Act, or the rules and regulations
thereunder. Although there do not
appear to be any issues relevant to
approval or disapproval that would be
16 15
U.S.C. 78f(b)(5).
U.S.C. 78f(b)(5).
18 15 U.S.C. 78f(b)(8).
19 Rule 700(b)(3), Commission Rules of Practice,
17 CFR 201.700(b)(3).
20 See id.
21 See id.
17 15
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Federal Register / Vol. 89, No. 90 / Wednesday, May 8, 2024 / Notices
facilitated by an oral presentation of
data, views, and arguments, the
Commission will consider, pursuant to
Rule 19b–4 under the Act,22 any request
for an opportunity to make an oral
presentation.23
Interested persons are invited to
submit written data, views, and
arguments regarding whether the
proposed rule change should be
approved or disapproved by May 29,
2024. Any person who wishes to file a
rebuttal to any other person’s
submission must file that rebuttal by
June 12, 2024. The Commission asks
that commenters address the sufficiency
of the Exchange’s statements in support
of the proposal, in addition to any other
comments they may wish to submit
about the proposed rule change.
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–
CboeEDGA–2024–003 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR-CboeEDGA–2024–003. 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
22 17
CFR 240.19b–4.
19(b)(2) of the Act, as amended by the
Securities Acts Amendments of 1975, Public Law
94–29 (Jun. 4, 1975), grants to the Commission
flexibility to determine what type of proceeding—
either oral or notice and opportunity for written
comments—is appropriate for consideration of a
particular proposal by a self-regulatory
organization. See Securities Acts Amendments of
1975, Senate Comm. on Banking, Housing & Urban
Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30
(1975).
lotter on DSK11XQN23PROD with NOTICES1
23 Section
VerDate Sep<11>2014
17:03 May 07, 2024
Jkt 262001
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR-CboeEDGA–2024–003 and should be
submitted by May 29, 2024. Rebuttal
comments should be submitted by June
12, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–10003 Filed 5–7–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100052; File No. SR–
CboeEDGX–2024–007]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove Proposed Rule
Change To Amend Rule 11.6(n)(4) and
Rule 11.10(a)(4)(D) To Permit the Use
of the Post Only Order Instruction at
Prices Below $1.00
May 2, 2024.
I. Introduction
On January 19, 2024, Cboe EDGX
Exchange, Inc. (‘‘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 permit the use of the Post
Only order instruction (‘‘EDGX Post
Only Orders’’) at prices below $1.00.
The proposed rule change was
published for comment in the Federal
Register on February 7, 2024.3 On
March 19, 2024, pursuant to Section
19(b)(2) of the Act,4 the Commission
24 17
CFR 200.30–3(a)(57).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 99459
(February 1, 2024), 89 FR 8473 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
1 15
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
38935
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 The Commission did not
receive any comments. The Commission
is instituting proceedings pursuant to
Section 19(b)(2)(B) of the Act 6 to
determine whether to approve or
disapprove the proposed rule change.
II. Description of the Proposed Rule
Change 7
The Exchange proposes to amend
Rule 11.6(n)(4) and Rule 11.10(a)(4)(D)
to modify the treatment of EDGX Post
Only Orders priced below a dollar on
the Exchange. EDGX Post Only Orders
priced at or above $1.00 will only
remove liquidity if the value of the
execution when removing liquidity
equals or exceeds the value of such
execution if the order instead posted to
the EDGX Book and subsequently
provided liquidity, including the
applicable fees charged or rebates
provided. Currently, all EDGX Post Only
Orders priced below $1.00 are
automatically treated as orders that
remove liquidity. Under the proposed
rule change, EDGX Post Only Orders
priced below $1.00 will be treated in the
same manner as EDGX Post Only Orders
priced at or above $1.00 in that EDGX
Post Only Orders priced below $1.00
will only remove liquidity if the value
of the overall execution (taking into
account all applicable fees and rebates)
make it economically beneficial for the
order to remove liquidity.
The Exchange also proposes to amend
Rule 11.10(a)(4)(D) to permit NonDisplayed Orders 8 and orders subject to
display-price sliding (collectively,
‘‘Resting Orders’’) which are not
executable at their most aggressive price
due to the presence of a contra-side
EDGX Post Only Order to be executed
at one minimum price variation less
aggressive than the order’s most
aggressive price.9 Currently, Rule
5 See Securities Exchange Act Release No. 99766,
89 FR 20735 (March 25, 2024) (designating May 7,
2024, as the date by which the Commission shall
either approve, disapprove, or institute proceedings
to determine whether to disapprove the proposed
rule change).
6 15 U.S.C. 78s(b)(2)(B).
7 For a more detailed description of the proposed
rule change, including examples, refer to the
Notice, supra note 3.
8 See Rule 11.6(e)(2). A User may attach a ‘‘NonDisplayed Order’’ instruction to an order stating
that the order is not to be displayed by the System
on the EDGX Book.
9 See Securities Exchange Act Release No. 75479
(July 17, 2015), 80 FR 43810 (July 23, 2015), SR–
EDGX–2015–33 (‘‘EDGX Order Handling Filing’’).
See also Securities Exchange Act Release No. 64475
E:\FR\FM\08MYN1.SGM
Continued
08MYN1
]]>Agencies
[Federal Register Volume 89, Number 90 (Wednesday, May 8, 2024)]
[Notices]
[Pages 38933-38935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10003]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100051; File No. SR-CboeEDGA-2024-003]
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove
Proposed Rule Change To Amend Rule 11.6(n)(4) and Rule 11.10(a)(4)(D)
To Permit the Use of the Post Only Order Instruction at Prices Below
$1.00
May 2, 2024.
I. Introduction
On January 19, 2024, Cboe EDGA Exchange, Inc. (``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 permit the
use of the Post Only order instruction (``EDGA Post Only Orders'') at
prices below $1.00. The proposed rule change was published for comment
in the Federal Register on February 7, 2024.\3\ On March 19, 2024,
pursuant to Section 19(b)(2) of the Act,\4\ the Commission designated a
longer period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to disapprove the proposed rule change.\5\ The
Commission did not receive any comments. The Commission is instituting
proceedings pursuant to Section 19(b)(2)(B) of the Act \6\ to determine
whether to approve or disapprove 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. 99458 (February 1,
2024), 89 FR 8460 (``Notice'').
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 99765, 89 FR 20721
(March 25, 2024) (designating May 7, 2024, as the date by which the
Commission shall either approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change).
\6\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change \7\
---------------------------------------------------------------------------
\7\ For a more detailed description of the proposed rule change,
including examples, refer to the Notice, supra note 3.
---------------------------------------------------------------------------
The Exchange proposes to amend Rule 11.6(n)(4) and Rule
11.10(a)(4)(D) to modify the treatment of EDGA Post Only Orders priced
below a dollar on the Exchange. EDGA Post Only Orders priced at or
above $1.00 will only remove liquidity if the value of the execution
when removing liquidity equals or exceeds the value of such
[[Page 38934]]
execution if the order instead posted to the EDGA Book and subsequently
provided liquidity, including the applicable fees charged or rebates
provided. Currently, all EDGA Post Only Orders priced below $1.00 are
automatically treated as orders that remove liquidity. Under the
proposed rule change, EDGA Post Only Orders priced below $1.00 will be
treated in the same manner as EDGA Post Only Orders priced at or above
$1.00 in that EDGA Post Only Orders priced below $1.00 will only remove
liquidity if the value of the overall execution (taking into account
all applicable fees and rebates) make it economically beneficial for
the order to remove liquidity.
The Exchange also proposes to amend Rule 11.10(a)(4)(D) to permit
Non-Displayed Orders \8\ and orders subject to display-price sliding
(collectively, ``Resting Orders'') which are not executable at their
most aggressive price due to the presence of a contra-side EDGA Post
Only Order to be executed at one minimum price variation less
aggressive than the order's most aggressive price.\9\ Currently, Rule
11.10(a)(4)(D) states that, for securities priced at or above $1.00,
incoming orders that are Market Orders \10\ or Limit Orders \11\ priced
more aggressively than an order displayed on the EDGA Book, the
Exchange will execute the incoming order at, in the case of an incoming
sell order, one-half minimum price variation less than the price of the
displayed order, and, in the case of an incoming buy order, at one-half
minimum price variation more than the price of the displayed order. The
Exchange proposes that for securities priced below $1.00, incoming
orders that are Market Orders or Limit Orders priced more aggressively
than an order displayed on the EDGA Book, the Exchange will execute the
incoming order at, in the case of an incoming sell order, one minimum
price variation less than the price of the displayed order, and, in the
case of an incoming buy order, at one minimum price variation more than
the price of the displayed order.
---------------------------------------------------------------------------
\8\ See Rule 11.6(e)(2). A User may attach a ``Non-Displayed
Order'' instruction to an order stating that the order is not to be
displayed by the System on the EDGA Book.
\9\ See Securities Exchange Act Release No. 75700 (August 14,
2015), 80 FR 50689 (August 20, 2015), SR-EDGA-2015-33 (``EDGA Order
Handling Filing''). See also Securities Exchange Act Release No.
64475 (May 12, 2011), 76 FR 28830 (May 18, 2011), SR-BATS-2011-015
(``Resting Order Execution Filing''). The Resting Order Execution
Filing introduced an order handling change for certain Non-Displayed
Orders and orders subject to display-price sliding that are not
executable at prices equal to displayed orders on the opposite side
of the market (the ``locking price'') on the Exchange's affiliate,
BZX (BATS) Exchange in 2011 and is incorporated by reference in the
EDGA Order Handling Filing. The Resting Order Execution Filing
permits Resting Orders priced at or above $1.00 to be executed at
one-half minimum price variation less aggressive than the locking
price (for bids) and one-half minimum price variation more
aggressive than the locking price (for offers), under certain
circumstances.
\10\ See Rule 11.8(a). A ``Market Order'' is an order to buy or
sell a stated amount of a security that is to be executed at the
NBBO or better when the order reaches the Exchange.
\11\ See Rule 11.8(b). A ``Limit Order'' is an order to buy or
sell a stated amount of a security at a specified price or better.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeEDGA-2024-003, and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \12\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved. Rather, as described below, the
Commission seeks and encourages interested persons to provide
additional comment on the proposed rule change to inform the
Commission's analysis of whether to approve or disapprove the proposed
rule change.
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\12\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\13\ the Commission is
providing notice of the grounds for disapproval under consideration. As
described above, the Exchange proposes to permit the use of EDGA Post
Only Orders at prices below $1.00. In addition, as described above, for
securities priced below $1.00, incoming orders that are Market Orders
or Limit Orders priced more aggressively than an order displayed on the
EDGA Book, the Exchange will execute the incoming order at one minimum
price variation less (more) than the price of the displayed order for
sell (buy) orders.\14\ In contrast, under the current rule for
securities priced above $1.00, the incoming order would execute at one-
half minimum price variation less (more) than the price of the
displayed order for sell (buy) orders.\15\ The Commission is
instituting proceedings to allow for additional analysis of, and input
from commenters with respect to, the proposed rule change's consistency
with the Act, and in particular, Section 6(b)(5) of the Act, 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.\16\ In addition, Sections 6(b)(5) and 6(b)(8) of the
Act, respectively, prohibit the rules of an exchange from being
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers \17\ or imposing any burden on competition not
necessary or appropriate in furtherance of the purposes of the Act.\18\
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\13\ Id.
\14\ According to the Exchange, executing an incoming order at
the same price as the price as that of a displayed order on the same
side of the market would violate the time priority of the displayed
order. See Notice supra note 3, 89 FR at 8463; see also Exchange
Rules 11.9(a) and 11.10(a)(4).
\15\ See Exchange Rule 11.10(a)(4)(D).
\16\ 15 U.S.C. 78f(b)(5).
\17\ 15 U.S.C. 78f(b)(5).
\18\ 15 U.S.C. 78f(b)(8).
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Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the [Act]
and the rules and regulations issued thereunder . . . is on the self-
regulatory organization that proposed the rule change.'' \19\ The
description of a proposed rule change, its purpose and operation, its
effect, and a legal analysis of its consistency with applicable
requirements must all be sufficiently detailed and specific to support
an affirmative Commission finding,\20\ and any failure of a self-
regulatory organization to provide this information may result in the
Commission not having a sufficient basis to make an affirmative finding
that a proposed rule change is consistent with the Act and the
applicable rules and regulations.\21\
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\19\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
\20\ See id.
\21\ See id.
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IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule
change, is consistent with Sections 6(b)(5) or any other provision of
the Act, or the rules and regulations thereunder. Although there do not
appear to be any issues relevant to approval or disapproval that would
be
[[Page 38935]]
facilitated by an oral presentation of data, views, and arguments, the
Commission will consider, pursuant to Rule 19b-4 under the Act,\22\ any
request for an opportunity to make an oral presentation.\23\
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\22\ 17 CFR 240.19b-4.
\23\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (Jun. 4, 1975), grants to
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is
appropriate for consideration of a particular proposal by a self-
regulatory organization. See Securities Acts Amendments of 1975,
Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75,
94th Cong., 1st Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by May 29, 2024. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
June 12, 2024. The Commission asks that commenters address the
sufficiency of the Exchange's statements in support of the proposal, in
addition to any other comments they may wish to submit about the
proposed rule change.
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-CboeEDGA-2024-003 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeEDGA-2024-003. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-CboeEDGA-2024-003 and should
be submitted by May 29, 2024. Rebuttal comments should be submitted by
June 12, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-10003 Filed 5-7-24; 8:45 am]
BILLING CODE 8011-01-P
