[Federal Register Volume 86, Number 176 (Wednesday, September 15, 2021)]
[Notices]
[Pages 51402-51404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19859]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92914; File No. SR-CboeEDGX-2021-037]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend EDGX Rule 11.1(a)(1) To Begin Accepting Orders at 2:30 a.m. 
Eastern Time

September 9, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 31, 2021, Cboe EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Exchange 
filed the proposal as a ``non-controversial'' proposed rule change 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to 
amend EDGX Rule 11.1(a)(1) to begin accepting orders at 2:30 a.m. 
Eastern Time. The text of the proposed rule change is provided in 
Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

 1. Purpose
    The Exchange proposes to amend EDGX Rule 11.1 (Hours of Trading and 
Trading Days) to begin accepting orders at 2:30 a.m. Eastern Time 
rather than 3:30 a.m. Eastern Time. The proposal is substantially 
similar to NYSE Arca, LLC (``Arca'') Rule 7.34-E(a)(1) that provides 
Arca may accept orders 90 minutes before its early trading session 
begins.\5\
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    \5\ The Arca early trading session begins at 4:00 a.m. Eastern 
Time.
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    Currently EDGX Rule 11.1(a)(1) provides that orders may be entered 
into the System from 3:30 a.m. until 8:00 p.m. Eastern Time. The rule 
provides that orders entered between 3:30 a.m. and 4:00 a.m. Eastern 
Time are not eligible for execution until the start of the Early 
Trading Session,\6\ Pre-Opening Session \7\ or Regular Trading 
Hours,\8\ depending on the time in force selected

[[Page 51403]]

by the User.\9\ The rule further provides that at the commencement of 
the Early Trading Session, orders entered between 3:30 a.m. and 4 a.m. 
Eastern Time will become eligible for execution (``4:00 a.m. Start''), 
unless designated as eligible for execution during the Early Trading 
Session beginning at 7:00 a.m. Eastern Time (``7:00 a.m. Start''). 
Orders with a 7:00 a.m. Start designation may be entered between 3:30 
a.m. and 7:00 a.m. Eastern Time.
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    \6\ The term ``Early Trading Session'' shall mean the time 
between 4:00 a.m. and 8:00 a.m. Eastern Time. See EDGX Rule 1.5(ii).
    \7\ The term ``Pre-Opening Session'' shall mean the time between 
8:00 a.m. and 9:30 a.m. Eastern Time. See EDGX Rule 1.5(s).
    \8\ The term ``Regular Trading Hours'' shall mean the time 
between 9:30 a.m. and 4:00 p.m. Eastern Time. See EDGX Rule 1.5(y).
    \9\ The term ``User'' shall mean any Member or Sponsored 
Participant who is authorized to obtain access to the System 
pursuant to Rule 11.3. See EDGX Rule 1.5(ee).
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    The Exchange proposes to amend Rule 11.1(a)(1) to provide that the 
Exchange would begin accepting orders at 2:30 a.m. Eastern Time. The 
Exchange proposes to begin accepting earlier orders to compete with 
non-exchange trading venues that begin accepting orders before 3:30 
a.m. Eastern Time. By moving the Exchange's order acceptance time 
earlier, Members that route orders to multiple venues before 3:30 a.m. 
Eastern Time would be able to include the Exchange in their early 
morning routing determinations. The Exchange does not propose to change 
the time when the Early Trading Session would begin or many any other 
rule changes.
    Because of the technology changes required to implement this 
change, subject to effectiveness of this proposed rule change, the 
Exchange will notify Members when the Exchange would begin accepting 
orders at 2:30 a.m. Eastern Time, which the Exchange anticipates would 
be in September 2021.
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.\10\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \11\ 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.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because it would not change any trading 
functions on the Exchange and would only move up the time when the 
Exchange would begin accepting order flow for trading in the Early 
Trading Session. In addition, a Member that opts to send in orders 
during this earlier time period could, as today, designate which 
trading session such orders would be eligible to trade, including per 
Rule 11.1(a)(1), a 4:00 a.m. Start or a 7:00 a.m. Start. The Exchange 
further believes that the proposed rule change would promote 
competition among the exchanges and non-exchange venues because it 
would allow Members that currently route to non-exchange trading venues 
prior to 3:30 a.m. Eastern Time to include the Exchange in their early 
morning routing determinations.

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 believes that 
the proposed rule change would promote intermarket competition between 
the Exchange and non-exchange trading venues that accept order flow 
before 3:30 a.m. Eastern Time. Further, the Exchange believes the 
proposed rule change would impose no burden on intramarket competition 
as all Members could submit order flow to the Exchange beginning at 
2:30 a.m. Eastern Time.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.
    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission 
may designate a shorter time if such action is consistent with 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative upon filing. According to the 
Exchange, the technology supporting the proposed rule change would be 
available less than 30 days after filing, and the Exchange would be 
able to implement the change before the 30-day operative delay ends. 
The Exchange also states that the proposed rule change would promote 
competition by providing Members that route orders to non-exchange 
venues or another exchange that accepts order flow before 3:30 a.m. 
Eastern Time \16\ the opportunity to include the Exchange on its early 
morning routing determinations. The Commission believes that the 
Exchange's proposal does not raise any new or novel issues and that 
waiver of the 30-day operative delay is consistent with the protection 
of investors and the public interest. Accordingly, the Commission 
designates the proposed rule change to be operative on upon filing.\17\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ See Arca Rule 7.34-E(a)(1). See also Securities and 
Exchange Act No. 92657 (August 12, 2021) 86 FR 46296 (August 18, 
2021) (SR-NYSEArca-2021-71).
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).

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[[Page 51404]]

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeEDGX-2021-037 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeEDGX-2021-037. 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 (http://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-CboeEDGX-2021-037 and should be 
submitted on or before October 6, 2021.

    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. 2021-19859 Filed 9-14-21; 8:45 am]
BILLING CODE 8011-01-P