[Federal Register Volume 85, Number 121 (Tuesday, June 23, 2020)]
[Notices]
[Pages 37706-37708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13434]
[[Page 37706]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89083; File No. SR-CboeEDGX-2020-029]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Content of the Cboe One Feed Under Rule 13.8(b) To Identify
the Primary Listing Market's Official Opening and Closing Price
June 17, 2020.
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 June 15, 2020, 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. (``EDGX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (the ``Commission'') a
proposed rule change to amend the content of the Cboe One Feed under
Rule 13.8(b) to identify the primary listing market's official opening
and closing price. The text of the proposed rule change is provided
below.
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 the content of the Cboe One Feed
under Rule 13.8(b) to identify the primary listing market's official
opening and closing price effective July 10, 2020. Additionally, the
Exchange proposes to amend Rule 13.8(b) to make an administerial change
so that the Rule references Cboe rather than Bats.
The Cboe One Feed is a data feed that disseminates, on a real-time
basis, the aggregate best bid and offer (``BBO'') of all displayed
orders for securities traded on EDGX and its affiliated exchanges.\5\
Among other things, the Cboe One Feed also includes consolidated volume
for all listed equity securities regardless of where the transaction
was executed and the Cboe One Opening Price and the Cboe One Closing
Price.\6\
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\5\ EDGX's affiliated exchanges are the Cboe BZX Exchange, Inc.
(``BZX''), Cboe BYX Exchange, Inc. (``BYX''), and Cboe EDGA
Exchange, Inc. (``EDGA'', and together with BYX, BZX, and EDGX, the
``Cboe Equity Exchanges''). See Securities Exchange Act Release No.
73918 (December 23, 2014), 79 FR 78920 (December 31, 2014) (File
Nos. SR-EDGX-2014-25; SR-EDGA-2014-25; SR-BATS-2014-055; SR-BYX-
2014-030) (Notice of Amendments No. 2 and Order Granting Accelerated
Approval to Proposed Rule Changes, as Modified by Amendments Nos. 1
and 2, to Establish a New Market Data Product called the Cboe
(formerly Bats) One Feed) (``Cboe One Approval Order'').
\6\ For securities listed on Cboe BZX Exchange, Inc. (``BZX''),
the Cboe One Opening Price shall be the BZX Official Opening Price
as defined in BZX Rule 11.23(a)(5) and the Cboe One Closing Price
shall be the BZX Official Closing Price as defined in BZX Rule
11.23(a)(3). For securities not listed on BZX, the Cboe One Opening
Price shall be the first last sale eligible trade that occurred on
the Exchange or any of its affiliates after 9:30 a.m. Eastern Time,
and the Cboe One Closing Price shall be the final last sale eligible
trade to occur on the Exchange or any of its affiliates prior to
4:00 p.m. Eastern Time. See Exchange Rule 13.8(b).
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Now, in addition to the information currently provided in the Cboe
One Feed, the Exchange is proposing to include the primary listing
market's official opening and closing price for all listed equity
securities as obtained directly from the securities information
processors. Such information would supplement the existing consolidated
volume and Cboe One Opening/Closing Price information included in the
Cboe One Feed by providing additional consolidated trade information.
The official opening and closing price for all listed equity securities
would be disseminated via the Cboe One Feed after the Consolidated Tape
Association (``CTA'') and Unlisted Trading Privileges (``UTP'') Plan
Securities Information Processor (``SIP'') delay period, which is
currently 15 minutes.
Additionally, the Exchange proposes to amend Rule 13.8(b) to
eliminate any reference to Bats and replace such reference with Cboe.
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.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ 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. The Exchange
also believes that the proposed rule change is consistent with Section
11(A) of the Act \9\ in that it supports (1) fair competition among
brokers and dealers, among exchange markets, and between exchange
markets and markets other than exchange markets and (2) the
availability to brokers, dealers, and investors of information with
respect to quotations for and transactions in securities. Furthermore,
the proposed rule change is consistent with Rule 603 of Regulation
NMS,\10\ which provides that any national securities exchange that
distributes information with respect to quotations for or transactions
in an NMS stock do so on terms that are not unreasonably
discriminatory. In adopting Regulation NMS, the Commission granted
self-regulatory organizations and broker-dealers increased authority
and flexibility to offer new and unique market data products to the
public. It was believed that this authority would expand the
[[Page 37707]]
amount of data available to consumers, and also spur innovation and
competition for the provision of market data.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78k-1.
\10\ See 17 CFR 242.603.
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The proposed rule change is designed to promote just and equitable
principles of trade and remove impediments to and perfect the mechanism
of a free and open market and a national market system by identifying
the primary listing market's official opening and closing price.
Significant volumes typically occur in the primary listing market
auctions, and the prices derived from those auctions are used as a
reference price for various other instruments, including options and
exchange-traded products. Therefore, official opening and closing price
information would provide meaningful information to investors. The
Exchange also believes this proposal is consistent with Section 6(b)(5)
of the Act because it protects investors and the public interest and
promotes just and equitable principles of trade by providing investors
with new options for receiving such information. The Exchange also
notes that the primary listing market's official opening and closing
price is currently included in a competing market data products offered
by the New York Stock Exchange (``NYSE'').\11\ Therefore, the Exchange
believes the proposed rule change removes impediments to and perfects
the mechanism of a free and open market and a national market system,
and, in general, protects investors and the public interest as it would
provide an additional avenue for investors to receive this information
from a competing product. The proposal would not permit unfair
discrimination because the primary listing market's official opening
and closing price will be available to all of the Exchange's customers
and market data vendors on an equivalent basis. In addition, any
customer that wishes to receive this information via a different source
will be able to do so.
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\11\ Specifically, the NYSE BQT (Best Quote and Trade)
proprietary feed includes the primary listing market's official
opening and closing price. See https://www.nyse.com/publicdocs/nyse/data/NYSE_BQT_Client_Specification_v2.3a.pdf.
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The proposed administerial amendment to Exchange Rule 13.8(b) is
designed remove impediments to and perfect the mechanism of a free and
open market by accurately referencing Cboe rather than Bats. Further, a
consistent reference to Cboe rather than Bats will help avoid potential
investor 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. Rather, the Exchange
believes that the proposed rule change will enhance competition because
it would enable the Exchange to include primary listing market's
official opening and closing price as part of the Cboe One Feed,
thereby enabling it to better compete with similar market data products
currently offered by NYSE that include such information.\12\ The
Exchange is not the exclusive distributor of the primary listing
market's official opening and closing price, and a vendor seeking to
offer a similar product that includes this information would be able to
do so on the same terms as the Exchange. Specifically, a competing
vendor could receive the primary listing market's official opening and
closing price from the securities information processors and include
that information as part of their market data products to be
disseminated to customers pursuant to the same terms and policies as
the Exchange.\13\ Therefore, the Exchange believes the inclusion of the
primary listing market's official opening and closing price in the Cboe
One Feed would not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.
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\12\ Id.
\13\ See CTA Consolidated Volume Display Policy with FAQ, supra
note 7.
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The Exchange does not believe the proposed administerial change to
Exchange Rules 13.8(b) will have any impact on competition as it is
merely designed to consistently and accurately refer to Cboe rather
than Bats.
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) of the Act \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization 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 pursuant to Rule 19b-4(f)(6) under the
Act \16\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the
Commission to 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 Exchange may implement the proposed rule change on the anticipated
launch date of July 10, 2020. The Exchange states that waiver of the
operative delay would allow subscribers to the Cboe One Feed to receive
the official opening and closing price from the primary listing market
on the anticipated launch date, which would provide an additional
avenue for market participants to receive this information. For this
reason, the Commission believes that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest. Therefore, the Commission hereby waives the operative delay
and designates the proposal as operative upon filing.\18\
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ 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 shall 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.
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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-2020-029 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-2020-029. 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-2020-029, and should be
submitted on or before July 14, 2020.
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\19\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13434 Filed 6-22-20; 8:45 am]
BILLING CODE 8011-01-P