[Federal Register Volume 90, Number 103 (Friday, May 30, 2025)]
[Notices]
[Pages 23092-23094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09765]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103121; File No. SR-CboeEDGX-2025-042]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Rules 13.4(a) and 11.11(g)(8) and (13)
May 23, 2025.
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 May 15, 2025, 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 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 EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to
amend Rule 13.4(a) regarding the public disclosure of the sources of
data that the Exchange utilizes when performing: (i) order handling;
(ii) order routing; (iii) order execution; and (iv) related compliance
processes to reflect the name change of NYSE Chicago, Inc. to NYSE
Texas, Inc. The Exchange also proposes to amend Rule 11.11(g)(8) and
Rule 11.11(g)(13) to remove the list of primary listing markets shown
in the rule text. 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 update Rule 13.4(a) regarding the public
disclosure of the sources of data that the Exchange utilizes when
performing: (i) order handling; (ii) order routing; (iii) order
execution; and (iv) related compliance processes to reflect the recent
name change of NYSE Chicago, Inc. (``NYSE Chicago'') to NYSE Texas,
Inc. (``NYSE Texas''). The Exchange also proposes to amend Rule
11.11(g)(8) and Rule 11.11(g)(13) to remove the list of primary listing
markets.
On February 28, 2025, NYSE Chicago filed with the Commission a
proposal to convert from a corporation organized under the laws of the
state of Delaware to one organized under the laws of the state of Texas
and changed its name from NYSE Chicago, Inc. to NYSE Texas, Inc.\3\ The
Exchange accordingly proposes a conforming change to its rules to
replace the name of NYSE Chicago, Inc. with NYSE Texas, Inc.
Specifically, the Exchange proposes to replace one reference to
``Chicago'' in Rule 13.4(a) with ``Texas.'' The proposed changes are
conforming and non-substantive in nature.
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\3\ See Securities Exchange Act Release No. 102507 (February 28,
2025), 90 FR 11445 (March 6, 2025) (SR-NYSECHX-2025-01) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Repeal
the Exchange's Certification of Incorporation; Adopt the Certificate
of Formation of NYSE Texas, Inc.; Amend the Exchange's By-Laws,
Rules, and Certain Fee Schedules; and Amend the Certification of
Incorporation and By-Laws of the Exchange's Holding Company To
Reflect the Conversion of the Exchange to a Texas Corporation and
the Renaming of NYSE Chicago Holdings, Inc.).
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In addition to its proposal to become a Texas corporation and
change its name to NYSE Texas, NYSE Chicago filed and received approval
to amend its rules to permit the qualification, listing and trading of
certain exchange traded products.\4\ The Exchange currently lists names
of venues that are also primary listing markets in Rule 11.11(g)(8) and
Rule 11.11(g)(13),\5\ which provide information about the ROOC routing
strategy and associated port attribute offered by the Exchange,
respectively. Pursuant to Rule 11.11(g)(8), the Exchange offers the
ROOC routing strategy, which allows orders that the entering firm
wishes to designate for participation in the opening, re-opening
(following a halt, suspension, or pause), or closing process of a
primary listing market (Cboe BZX, NYSE, Nasdaq, NYSE American, or NYSE
Arca) if received before the opening/re-opening/closing time of such
market. If shares remain unexecuted after attempting to execute in the
opening, re-opening, or closing process, they are either posted to the
EDGX Book,\6\ executed, or routed to destinations on the System \7\
routing table. Rule 11.11(g)(13) provides that a User \8\ may designate
their order for participation in the re-opening (following a halt,
suspension, or pause) of a primary listing market (Cboe BZX, NYSE,
Nasdaq, NYSE MKT, or NYSE Arca) if received before the re-opening time
of such market. If shares remain unexecuted after attempting to execute
in the re-opening process, they are either posted to the EDGX Book,
executed, or routed to destinations on the System routing table. Rule
[[Page 23093]]
11.11(g)(13) supplements Rule 11.11(g)(8) by describing the port
attribute that is associated with the ROOC routing option described in
Rule 11.11(g)(8).
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\4\ See Securities Exchange Act Release No. 102957 (April 29,
2025), 90 FR 19054 (May 5, 2025) (SR-NYSECHX-2025-04) (``NYSE Texas
Listing Venue Filing'').
\5\ Rule 11.11(g)(13) does not describe an individual routing
strategy, but rather supplements Rule 11.11(g)(8) by detailing how a
firm may designate its orders using port settings. By way of
background, a physical port is utilized by a Member or non-Member to
connect to the Exchange at the data centers where the Exchange's
servers are located.
\6\ See Rule 1.5(d). The term EDGX Book shall mean the System's
electronic file of orders.
\7\ See Rule 1.5(cc). The term System shall mean the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away.
\8\ See Rule 1.5(ee). The term User shall mean any Member or
Sponsored Participant who is authorized to obtain access to the
System pursuant to Rule 11.3.
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The Exchange now proposes to remove the list of primary listing
markets that is currently listed in Rule 11.11(g)(8) and Rule
11.11(g)(13). While the Exchange notes that having a list of primary
listing markets provides additional specificity to market participants,
the Exchange also notes that confusion may occur if this list is not
maintained in a timely fashion and believes that market participants
will not be harmed by the removal of the list of primary listing
markets as it does not affect the functionality of the ROOC routing
strategy. Notably, there are many places throughout the Exchange's
rulebook where the term ``primary listing market'' is used without
including the list of primary listing markets that is shown under Rule
11.11(g)(8) and Rule 11.11(g)(13).\9\ Similarly, the term ``primary
listing market'' is used throughout the rulebook of NYSE Arca, Inc.
(``NYSE Arca'') and The Nasdaq Stock Market LLC (``Nasdaq'') without
reference to a list of exchanges that currently serve as primary
listing markets.\10\ Given that the term ``primary listing market'' is
commonly used throughout the industry and its meaning is well
understood by market participants, the Exchange believes that Users are
not harmed by the removal of the list of primary listing markets from
Rule 11.11(g)(8) and Rule 11.11(g)(13) and that sufficient clarity
exists within the proposed rule text for Users to understand the
routing behavior of the ROOC routing strategy and the functionality
offered by the port setting.
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\9\ See, e.g., Rule 11.8(d)(1)(B) (Obligations of Market
Makers--Quotation Requirements and Obligations); Rule 11.17(c)(1)(B)
(Clearly Erroneous Executions--Clearly erroneous review); Rule
11.18(c) (Trading Halts Due to Extraordinary Market Volatility);
Rule 11.22(j) (Data Products--Cboe Aggregated Market ``Cboe One''
Feed); Rule 11.28 (Cboe Market Close, a closing Match Process for
Non-EDGX-Listed Securities).
\10\ See, e.g., NYSE Arca Rule 7.31-E(f)(1) (Primary Only
Order); NYSE Arca Rule 7.34-E(c)(1)(D) (Trading Sessions--Orders
Permitted in Each Session); NYSE Arca Rule 7.37-E(a)(5) (Order
Execution and Routing). See also, Nasdaq Equity 2, Section 5 (Market
Maker Obligations); Nasdaq Equity 4, Rule 4120 (Limit Up-Limit Down
Plan and Trading Halts); Nasdaq Equity 4, Rule 4758(a)(1)(x) (Order
Routing).
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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.\11\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \12\ 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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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that its proposal to update Exchange Rule
13.4(a) to reference NYSE Texas will ensure that the Rule correctly
identifies and publicly states on a market-by-market basis all of the
specific network processor and proprietary data feeds that the Exchange
utilizes for the handling, routing, and execution of orders, and for
performing the regulatory compliance checks related to each of those
functions. In addition, the proposed amendments would reduce potential
investor and market participant confusion and therefore remove
impediments to and perfect the mechanism of a free and open market and
a national market system by ensuring that investors and market
participants can more easily navigate, understand, and comply with the
Exchange's rules. The Exchange also believes that the proposed
amendments remove impediments to and perfects the mechanism of a free
and open market by ensuring that persons subject to the Exchange's
jurisdiction, regulators, and the investing public can more easily
navigate and understand the Exchange's rules. The proposed amendments
would not be inconsistent with the public interest and the protection
of investors because investors will not be harmed and in fact would
benefit from the increased transparency and clarity, thereby reducing
potential confusion.
Additionally, the Exchange believes that its proposal to update
Rule 11.11(g)(8) and Rule 11.11(g)(13) removes impediments to and
perfects the mechanism of a free and open market by harmonizing the
rule text found in Rule 11.11(g)(8) and Rule 11.11(g)(13) with other
rules throughout the Exchange's rulebook that also reference primary
listing markets without naming each primary listing market within the
rule text. In addition, the proposed amendments would reduce potential
investor and market participant confusion by simplifying the Exchange's
rule text without changing the applicability of the rule or the
function of the applicable routing strategy and corresponding port
attribute, therefore removing impediments to and perfecting the
mechanism of a free and open market and a national market system by
ensuring that investors and market participants receive accurate
information that is easily understood. The proposed amendments would
not be inconsistent with the public interest and the protection of
investors because investors will not be harmed and in fact would
benefit from the simplified language within the rule text, thereby
reducing potential confusion.
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 proposed rule change is
not intended to address competitive issues but rather is concerned
solely with updating Rule 13.4(a) to reflect the name change associated
with a source of data utilized to when performing: (i) order handling;
(ii) order routing; (iii) order execution; and (iv) related compliance
processes and update Rule11.11(g)(8) and Rule 11.11(g)(13) to remove
the list of primary listing markets found within the rule text in order
to simplify the rule text without amending the meaning or functionality
of the rule as well as harmonize the rule text with that of other rules
within the Exchange's rulebook.
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) of the Act \13\ and Rule 19b-4(f)(6) \14\ thereunder.
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
[[Page 23094]]
competition; or (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) of
the Act \15\ and Rule 19b-4(f)(6) \16\ thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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 its
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) \17\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ 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 immediately upon filing. The
Commission believes that the proposed rule change raises no novel
issues because it proposes a non-substantive conforming change to
reflect the name change of NYSE Chicago to NYSE Texas and removes an
outdated list of primary listing markets; therefore, waiver of the
operative delay is consistent with the protection of investors and the
public interest. Accordingly, the Commission designates the proposed
rule change to be operative upon filing.\19\
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\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ 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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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 [email protected]. Please include
file number SR-CboeEDGX-2025-042 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-2025-042. 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-CboeEDGX-2025-042 and should
be submitted on or before June 20, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09765 Filed 5-29-25; 8:45 am]
BILLING CODE 8011-01-P