[Federal Register Volume 89, Number 196 (Wednesday, October 9, 2024)]
[Notices]
[Pages 81969-81970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23288]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101241; File No. SR-CboeEDGA-2024-038]
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Extend the Implementation Date of Functionality That Will Provide
Members and Clearing Members With the Option To Utilize Additional
Credit Risk Settings Under Interpretation and Policy .03 of Rule 11.10
(``Aggregate Credit Risk Checks'')
October 3, 2024.
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 September 26, 2024, Cboe EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') proposes to
extend the implementation date of functionality that will provide
Members and Clearing Members with the option to utilize additional
credit risk settings under Interpretation and Policy .03 or Rule 11.10
(``Aggregate Credit Risk Checks'').
The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/edga/), 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 is filing this proposal to extend the implementation
date of functionality providing Members and Clearing Members with the
option to utilize additional Aggregate Credit Risk Checks. The
functionality relating to these additional risk settings was submitted
by the Exchange on an immediately effective basis on May 29, 2024.\3\
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\3\ See Securities Exchange Act Release No. 100303 (June 10,
2024), 89 FR 50640 (June 14, 2024) (SR-CboeEDGA-2024-017).
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The Aggregate Credit Risk Checks offered under Interpretation and
Policy .03 or Rule 11.10, provide Members and Clearing Members with
additional, optional credit risk settings, at the Market Participant
Identifier (``MPID'') level and/or to a subset of orders identified
within the MPID level (the ``risk group identifier'' level) that
authorizes the Exchange to take automated action if a designated limit
for a Member is breached. These risk settings will provide Members and
Clearing Members with enhanced abilities to manage their risk with
respect to orders on the Exchange. Specifically, the Exchange intends
to offer two aggregate credit risk settings as follows:
The ``Aggregate Gross Credit Exposure Limit'', which
refers to a pre-established maximum daily dollar amount for purchases
and sales across all symbols, where both purchases and sales are
counted as positive values. For purposes of calculating the Aggregate
Gross Credit Exposure Limit, both executed and open orders are
included; and
The ``Aggregate Net Credit Exposure Limit'', which refers
to a pre-established maximum daily dollar amount for purchases and
sales across all symbols, where purchases are counted as positive
values and sales are counted as negative values. For purposes of
calculating the Aggregate Net Credit Exposure Limit, both executed and
open orders are included.
The Exchange initially proposed to implement the Aggregate Credit
Risk Checks by October 31, 2024. While this date is not included in the
relevant rule text codifying the Aggregate Credit Risk Checks, the
Exchange separately notates in its rulebook when it plans to implement
new functionality that was either immediately effective upon rule
filing, or approved by the SEC. Estimated implementation dates are
sometimes necessary so because implementing new functionality sometimes
requires additional time to develop, test, and deploy, and such
timeline may not always coincide with the statutory rule filing
process. As such, the Exchange provides estimated implementation dates
to make Members aware that certain rule text is subject to amendment
post implementation of the new functionality, as well as to provide
Members with sufficient notice so that they can make any necessary
technological or operational adjustments to their systems (if
applicable). However, more time is needed to design, test, and
implement the Aggregate Credit Risk Checks. Accordingly, the Exchange
proposes to implement the Aggregate Credit Risk Checks on or after
November 22, 2024. The Exchange would issue a Trade Desk Notice
announcing the exact implementation date to Users.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act''), in general, and
furthers the objectives of Section 6(b) of the Act \4\ in particular,
in that it is designed 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. The Exchange's proposal to delay the
implementation of Aggregate Credit Risk Checks to on or after November
22, 2024, is consistent with the Act and protection of investors and
general public because it will permit the Exchange additional time to
ensure the Exchange can properly develop, test, and deploy the
Aggregate Credit Risk Checks. Moreover, the Aggregate Credit Risk
Checks themselves were previously
[[Page 81970]]
approved [sic] by the Commission,\5\ and this proposal does not change
the substance of those functionalities. As noted, the Exchange would
issue a Trade Desk Notice announcing the exact implementation date to
members and member organizations.
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\4\ 15 U.S.C. 78f(b).
\5\ Supra note 3.
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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. As noted above, the purpose
of this proposal is simply to extend the implementation date for the
additional aggregate credit risk settings so that the Exchange has
additional time for development, testing, and deployment.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6)(iii) thereunder.\9\
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\6\ 15 U.S.C. 78s(b)(3)(A)(iii).
\7\ 17 CFR 240.19b-4(f)(6).
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of 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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A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
more time is required to ensure optimal design, testing, and
implementation for the Aggregate Credit Risk Checks, and thus, waiver
of the operative delay will provide Exchange with such additional time.
As such, the Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest
because it would ensure that the Exchange has extra time to properly
deploy these new aggregate credit risk functionalities, which is to the
benefit of market participants that will eventually utilize the
Aggregate Credit Risk Checks. Accordingly, the Commission hereby waives
the 30-day operative delay and designates the proposal operative upon
filing.\12\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of this 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 under
Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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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-CboeEDGA-2024-038 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-2024-038. 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-2024-038, and
should be submitted on or before October 30, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-23288 Filed 10-8-24; 8:45 am]
BILLING CODE 8011-01-P