[Federal Register Volume 85, Number 125 (Monday, June 29, 2020)]
[Notices]
[Pages 38958-38960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13870]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89126; File No. SR-CboeBZX-2020-050]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Content of the Cboe One Feed Under Rule 11.22(j) to Identify the
Primary Listing Market's Official Opening and Closing Price
June 23, 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 10, 2020, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') 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 BZX Exchange, Inc. (``BZX'' 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 11.22(j) to identify the primary listing market's official opening
and closing price. 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/equities/regulation/rule_filings/bzx/), 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 11.22(j) to identify the primary listing market's official
opening and closing price. Additionally, the Exchange proposes to amend
Rules 11.22(i) and (j) to make an administerial change so that the
Rules reference 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 BZX 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\ BZX's affiliated exchanges are the Cboe BYX Exchange, Inc.
(``BYX''), Cboe EDGA Exchange, Inc. (``EDGA''), and Cboe EDGX
Exchange, Inc. (``EDGX'', and together with BZX, BYX, and EDGA, 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 11.22(j).
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[[Page 38959]]
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 Rules 11.22(i) and (j)
to eliminate any reference to Bats and replace such references 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 changes are 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 changes are 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 changes are 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 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 change to Exchange Rule 11.22(j) 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 amendments to Exchange Rules 11.22(i)
and (j) are 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 change to Rule
11.22(j) 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 6.
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The Exchange does not believe the proposed administerial changes to
Exchange Rules 11.22(i) and (j) 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.
[[Page 38960]]
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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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. 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-CboeBZX-2020-050 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-CboeBZX-2020-050. 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-CboeBZX-2020-050, and should be
submitted on or before July 20, 2020.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13870 Filed 6-26-20; 8:45 am]
BILLING CODE 8011-01-P