68730 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

62 17 CFR 200.30–3(a)(57). 

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). 

5See generally Rules 21.19(e) and 21.22(e). 

6See generally Rules 21.19(a) and 21.22(a). 

7See Rule 21.19(c)(1) (which provides that if 

there is more than one AIM Auction in a series 

underway at a time, those auctions will conclude 

sequentially based on the exact time each auction 

commenced, including if they are terminated early 

pursuant to Rule 21.19(d)); and Rule 21.22(c)(1)(A) 

and (B) (which provides that if there is more than 

one C–AIM Auction in a complex strategy 

underway at a time, those auctions will conclude 

sequentially based on the exact time each auction 

commenced, including if they are terminated early 

pursuant to Rule 21.22(d)). 

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 

to File Number SR–NASDAQ–2023–022 

and should be submitted by October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.62

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22035 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98591; File No. SR– 

CboeEDGX–2023–060] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Automated Price Improvement Auction 

Rules 

September 28, 2023. 

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 

September 27, 2023, 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. 

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 its automated price improvement 

auction rules. 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 

provisions in Rule 21.19 (Automated 

Price Improvement Mechanism (‘‘AIM’’ 

or ‘‘AIM Auction’’)) and Rule 21.22 

(Complex Automated Improvement 

Mechanism (‘‘C–AIM’’ or ‘‘C–AIM 

Auction’’)) regarding concurrent AIM 

and C–AIM Auctions, respectively. The 

Exchange also proposes to update the 

provisions in those Rules regarding the 

minimum increment. 

By way of background, Rules 21.19 

and 21.22 contain the requirements 

applicable to the execution of orders 

using AIM and C–AIM, respectively. 

The AIM and C–AIM auctions are 

electronic auctions intended to provide 

orders that Members represent as agent 

(‘‘Agency Orders’’) with opportunities to 

receive price improvement (over the 

National Best Bid or Offer (‘‘NBBO’’) in 

AIM, or the synthetic best bid or offer 

(‘‘SBBO’’) on the Exchange in C–AIM). 

Upon submitting an Agency Order into 

an AIM or C–AIM auction, the initiating 

Member (‘‘Initiating Member’’) must 

also submit a contra-side second order 

(‘‘Initiating Order’’) for the same size as 

the Agency Order. The Initiating Order 

guarantees that the Agency Order will 

receive an execution at no worse than 

the auction price (i.e., acts as a stop). 

During an AIM or C–AIM Auction, 

market participants may submit 

responses to trade against the Agency 

Order. At the end of an auction, 

depending on the contra-side interest 

available, the Initiating Order may be 

allocated a certain percentage of the 

Agency Order.5

An Initiating Member may initiate an 

AIM or C–AIM auction provided that 

the Agency Order is in a class and of 

sufficient size as determined by the 

Exchange.6 Upon receipt of an Agency 

Order, the AIM or C–AIM auction 

process commences. Currently, under 

Rule 21.19(c)(1), for Agency Orders for 

less than 50 standard option contracts 

(or 500 mini-option contracts), only one 

AIM Auction may be ongoing at any 

given time in a series, and AIM 

Auctions in the same series may not 

queue or overlap in any manner. One or 

more AIM Auctions in the same series 

for Agency Orders of 50 standard option 

contracts (or 500 mini-option contracts) 

or more may occur at the same time. 

The Exchange proposes amending Rule 

21.19(c)(1) to allow one or more AIM 

Auctions in the same series to occur at 

the same time for Agency Orders for less 

than 50 standard option contracts (or 

500 mini-option contracts). This would 

effectively allow for one or more AIM 

Auctions in the same series to occur at 

the same time for orders of all sizes. 

Concurrent AIM Auctions for these 

smaller-sized orders will occur in the 

same manner as concurrent AIM 

Auctions for orders of 50 or more 

contracts occur today.7

Similarly, under current Rule 

21.22(c)(1)(A), with respect to Agency 

Orders for which the smallest leg is less 

than 50 standard option contracts (or 

500 mini-option contracts), only one C– 

AIM Auction may be ongoing at any 

given time in a complex strategy, and C– 

AIM Auctions in the same complex 

strategy may not queue or overlap in 

any manner. One or more C–AIM 

Auctions in the same complex strategy 

for Agency Orders for which the 

smallest leg is 50 standard option 

contracts (or 500 mini-option contracts) 

or more may occur at the same time. 

The Exchange proposes amending Rule 

21.22(c)(1)(A) to allow one or more C– 

AIM Auctions in a complex strategy to 

occur at the same time for Agency 

Orders for which the smallest leg is less 

than 50 standard option contracts (or 

500 mini-option contracts). This would 


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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68731 

8See, e.g., NYSE American LLC (‘‘NYSE 

American’’) Rule 971.1NYP(c) (as recently 

amended) (see Securities Exchange Act Release No. 

97938 (July 18, 2023), 88 FR 47536 (July 24, 2023) 

(SR–NYSEAMER–2023–35) (permitting concurrent 

simple price improvement auctions). 

9See, e.g., NYSE American Rule 971.1NYP, 

Commentary .01; BOX Exchange LLC (‘‘BOX’’) 

Rules 7150, IM–7150–1 and 7245, IM–7245–2; and 

Nasdaq ISE, LLC (‘‘ISE’’) Options 3, Sections 11(g) 

and 13, Supplementary Material .04. 

10As part of the proposed rule change, the 

Exchange proposes to amend other provisions 

within Rules 21.19 and 21.22 which explicitly 

reference the minimum increment of $0.01, to 

reflect the proposed change; specifically, the 

Exchange proposes to amend Rule 21.19(b)(1)(A), 

(b)(1)(B), (b)(2)(A), (b)(2)(B), (c)(5)(A), and (c)(5)(B), 

and Rule 21.22(b)(1)(A), (b)(2), (b)(3)(A), (c)(5)(A), 

and (c)(5)(B). 

11See Rule 21.19(b)(1). The proposed rule change 

continues to provide price improvement assurances 

for those for buy (sell) Agency Orders submitted for 

AIM Auction processing with less than 50 standard 

option contracts (or 500 mini-option contracts) and 

NBBO width equaling the minimum increment, 

pursuant to Rule 21.19(b)(1)(A), as amended. 

12See Rule 21.22(b)(1). 

effectively allow for one or more C–AIM 

Auctions in the same complex strategy 

to occur at the same time for complex 

orders of all sizes. The Exchange 

believes this proposed functionality will 

allow more AIM Auctions in the same 

series and more C–AIM Auctions in the 

same complex strategy to be conducted, 

thereby increasing opportunities for 

price improvement on the Exchange to 

the benefit of all market participants. 

Currently, if an Agency Order of fewer 

than 50 contracts (or 500 mini-option 

contracts) is submitted to AIM or C– 

AIM while an AIM or C–AIM Auction 

is in progress, the Agency order is 

rejected. The proposal to add concurrent 

AIM and C–AIM Auctions for Agency 

Orders of any size, including for Agency 

Orders of fewer than 50 contracts (or 

500 mini-option contracts), would also 

prevent the rejection of these smaller 

Agency Orders that occurs when such 

smaller Agency Orders are submitted 

while an AIM or C–AIM Auction is in 

progress. By eliminating this rejection 

scenario, the Exchange would increase 

execution and price improvement 

opportunities for these smaller Agency 

orders to the benefit of investors. 

The Exchange notes that allowing 

more than one price improvement 

auction at a time in the same series for 

paired agency orders of fewer than 50 

contracts is not new or novel and is 

current functionality on at least one 

other options exchange.8 While the 

Exchange is unaware of another options 

exchange that offers concurrent price 

improvement auctions for orders in 

complex strategies for which the 

smallest leg is fewer than 50 contracts, 

other options exchanges (as well as the 

Exchange) permit simple price 

improvement auctions to occur 

simultaneously with complex price 

improvement auctions for complex 

strategies involving the same series, 

with no size restrictions.9 Having 

simple price improvement auctions in 

multiple legs of a complex strategy in 

progress at the same time as a complex 

price improvement auction for that 

complex strategy for orders of any size 

is similar to two complex price 

improvement auctions in the same 

complex strategy being in progress at 

the same time. Additionally, the 

benefits of allowing concurrent price 

improvement auctions for simple orders 

of all sizes and complex strategies with 

50 contracts in the smallest leg or more 

(as described above) would apply to 

concurrent price improvement auctions 

for complex strategies with fewer than 

50 contracts in the smallest leg. 

Specifically, allowing concurrent C– 

AIM Auctions in the same complex 

strategy if the smallest leg has fewer 

than 50 contracts would benefit 

investors because it would afford 

smaller-sized complex orders increased 

opportunities to solicit price-improving 

auction interest. The Exchange further 

believes this proposed change would 

provide additional benefits to 

customers, as smaller-sized orders tend 

to represent retail interest, and could 

improve the customer experience on the 

Exchange by increasing trading 

opportunities in the C–AIM Auctions. 

The proposal to allow concurrent AIM 

and C–AIM Auctions for Agency Orders 

for less than 50 contracts (or 500 minioption contracts) in the same series or 

complex strategy, respectively, would 

benefit investors because it would afford 

smaller-sized Agency Orders increased 

opportunities for price improvement, 

including because such smaller Agency 

Orders would no longer be rejected if 

submitted while an AIM or C–AIM 

Auction is in progress. 

The Exchange also proposes to amend 

the minimum increment requirement for 

AIM and C–AIM Auctions. Rules 

21.19(a)(4) and 21.22(a)(4) currently 

require the price of the Agency Order 

and Initiating Order to be in an 

increment of $0.01, for AIM and C–AIM 

Auctions respectively. The Exchange 

proposes amending Rules 21.19(a)(4) 

and 21.22(a)(4) to require the price of 

the Agency Order and Initiating Order 

to be in an increment the Exchange 

determines on a class basis, which may 

be smaller than $0.01.10 The Exchange 

notes that currently the minimum 

increment for AIM and C–AIM auctions 

for all classes listed on the Exchange is 

$0.01, so the proposed rule amendments 

result in no changes from a practical 

perspective; however, because the 

minimum quoting increment for certain 

classes is greater than $0.01 in 

accordance with Rule 21.5, it is possible 

the Exchange may determine to have a 

different minimum increment for AIM 

and C–AIM auctions. Additionally, 

these proposed amendments further 

align the Exchange Rules with that of its 

affiliate, Cboe Exchange, Inc. 

The Exchange will continue to protect 

smaller-sized simple Agency Orders in 

minimum increment-wide markets by 

requiring price improvement of at least 

one minimum increment for such orders 

and rejecting such orders in minimum 

increment-wide markets that do not 

provide for such price improvement.11

Additionally, the Exchange will 

continue to protect Priority Customers 

on the Simple Book by requiring price 

improvement of at least one minimum 

increment better than the SBBO if the 

applicable side of the BBO on any 

component of the complex Agency 

Order complex strategy represents a 

Priority Customer on the Simple Book.12

These protections would apply when 

the proposed concurrent Auctions are 

occurring. Thus, the Exchange believes 

the proposed changes should allow the 

Exchange to better compete for auctionrelated order flow that may lead to an 

increase in Exchange volume, while 

continuing to ensure that displayed 

customer interest on the Book is 

protected, to the benefit of all market 

participants. 

The Exchange believes that its System 

has sufficient capacity to process a large 

volume of concurrent AIM and C–AIM 

Auctions for Agency Orders of any size, 

including for Agency Orders of fewer 

than 50 contracts (or 500 mini-option 

contracts). 

Additionally, the Exchange proposes 

to amend Rule 21.22(c)(1)(B) related to 

early termination priority in the event of 

concurrent AIM and C–AIM Auctions. 

Currently, if the System receives a 

simple order that causes AIM and C– 

AIM (or multiple AIM and/or C–AIM) 

Auctions to end in early termination, 

the System first processes AIM Auctions 

(in price-time priority) and then 

processes C–AIM Auctions (in pricetime priority). The Exchange proposes 

to update Rule 21.22(c)(1)(B) to provide 

for the processing of early terminations 

in time priority in these instances. 

Under the proposed rule, if the System 

receives a simple order that causes AIM 

and C–AIM (or multiple AIM and/or C– 

AIM) Auctions to end in early 

termination, the System will continue to 

first process AIM Auctions (sequentially 

based on the exact time each AIM 

Auction commenced) and then process 


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68732 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

15 Id. 

16See supra note 8. 17See supra note 12. 

C–AIM Auctions (sequentially based on 

the exact time each C–AIM Auction 

commenced), which is consistent with 

the priority the System processes 

concurrent AIM Auctions and 

concurrent C–AIM Auctions. 

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.13 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 14 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 15 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes the proposal to 

permit concurrent AIM and C–AIM 

Auctions for Agency Orders for less 

than 50 contracts (or 500 mini-option 

contracts) in the same series or complex 

strategy, respectively, would remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system because it 

would extend concurrent auction 

functionality to smaller-sized Agency 

Orders. The Exchange also believes this 

proposed change is non-controversial 

because it does not raise any issues that 

differ from those previously considered 

when the Exchange and other options 

exchanges adopted this functionality for 

larger-sized agency orders submitted to 

price improvement auctions, or when 

another options exchange adopted this 

functionality (pursuant to an 

immediately effective, noncontroversial 

rule filing) for smaller-sized simple 

agency orders submitted into a price 

improvement auction.16 The Exchange 

believes the proposal will benefit 

investors because it would afford 

smaller-sized Agency Orders increased 

opportunity to solicit price-improving 

auction interest. The Exchange further 

believes that this proposed rule change 

would provide additional benefits to 

customers, as smaller-sized Agency 

Orders tend to represent retail interest, 

and could improve the customer 

experience on the Exchange by 

increasing trading opportunities in AIM 

and C–AIM Auctions. Notwithstanding 

the proposal to allow concurrent AIM 

auctions for smaller-sized Agency 

Orders, the Exchange would continue to 

protect customer interest on the simple 

Book by requiring price improvement 

over the BBO to initiate an Auction for 

smaller-sized Agency Orders and 

rejecting such orders in increment wide 

markets when price improvement is not 

possible. Additionally, the Exchange 

will continue to protect Priority 

Customers on the Simple Book by 

requiring price improvement of at least 

one minimum increment better than the 

SBBO if the applicable side of the BBO 

on any component of the complex 

Agency Order complex strategy 

represents a Priority Customer on the 

Simple Book.17

Further, the Exchange believes the 

proposed new functionality to allow 

concurrent AIM and C–AIM auctions for 

Agency Orders of any size is consistent 

with the Act, as the proposed rule 

changes will prevent the rejection of 

these smaller Agency Orders that occurs 

when such smaller Agency Orders are 

submitted while an AIM or C–AIM 

Auction is in progress, which the 

Exchange believes will increase 

execution opportunities for these 

smaller Agency orders to the benefit of 

investors. For example, in July 2023, the 

new functionality would have provided 

investors with additional price 

improvement and execution 

opportunities via approximately 4,500 

additional AIM or C–AIM Auctions that 

were otherwise rejected due to current 

concurrency limitations. 

The Exchange also believes this 

proposed new functionality to allow 

concurrent AIM and C–AIM auctions for 

Agency Orders of any size should 

promote and foster competition and 

provide more options contracts with the 

opportunity for price improvement, 

which should benefit all market 

participants. In addition, this proposed 

change may lead to an increase in 

Exchange volume and should allow the 

Exchange to better compete against 

other markets that permit overlapping 

price improvement auctions, while 

continuing to ensure that displayed 

customer interest on the simple Book is 

protected. The proposed enhancement 

to allow concurrent auctions for Agency 

Orders of any size would be a 

competitive change and may make the 

Exchange a more attractive venue for 

auction-related order flow. As noted 

above, the Exchange believes that its 

trading platform has sufficient capacity 

to process a large volume of concurrent 

Auctions for Agency Orders of any size, 

including for Agency Orders of fewer 

than 50 contracts (or 500 mini-option 

contracts). 

Further, the Exchange believes its 

proposal to amend its AIM and C–AIM 

Rules to require the minimum 

increment for AIM and C–AIM Auctions 

to be in an increment the Exchange 

determines on a class basis, which may 

be no smaller than $0.01, and to update 

provisions within the Rules to reference 

this increment, would remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system. The 

purpose of the AIM and C–AIM Auction 

mechanisms is to provide price 

improvement opportunities. By 

expanding the minimum increment 

requirement, such price improvement 

opportunities could, in the future, be 

expanded to additional classes that may 

have a minimum increment greater than 

$0.01. 

Further, certain provisions in the AIM 

and C–AIM Rules require price 

improvement, for example, for smaller 

orders where the width of the NBBO is 

as narrow as possible. However, if the 

minimum increment for a class is, for 

example, $0.05, it would not be possible 

to price improve penny-wide market in 

the permissible minimum increment of 

$0.05. The Exchange believes the 

proposal, which is consistent with the 

original intention of current AIM and C– 

AIM rules, will ensure such orders 

receive this price improvement when 

the NBBO is as narrow as possible, to 

the benefit of the marketplace and 

investors. 

Finally, the Exchange believes the 

proposed rule change related to the 

processing of AIM and C–AIM Auctions 

in the event of early termination will 

promote just and equitable principles of 

trade, in accordance with the Act. The 

Exchange believes processing 

concurrent AIM and C–AIM Auctions 

that end in early termination in time 

priority is a fair and equitable process, 

and consistent with the priority 

applicable to concurrent AIM Auctions 

and concurrent C–AIM Auctions when 

they are terminated early. 


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18See supra note 8. 

19See supra note 9. The Exchange also notes that 

the proposed change to the minimum increment 

requirement for AIM and C–AIM Auctions is 

consistent with at least one other exchange, namely 

Cboe Exchange, Inc. 

20 15 U.S.C. 78s(b)(3)(A). 

21 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 Commission 

has waived the five-day prefiling requirement in 

this case. 

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 does not believe the proposed 

rule change will impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, because it 

will apply uniformly to Members. The 

proposed rule change will result in 

smaller orders receiving the same 

opportunities for execution and price 

improvement through AIM and C–AIM 

that are already afforded to larger 

orders, which are not subject to the 

concurrency restriction. 

As noted above, the proposed rule 

change proposal to amend its AIM and 

C–AIM Rules to require the minimum 

increment for AIM and C–AIM Auctions 

to be in an increment the Exchange 

determines on a class basis, which may 

be no smaller than $0.01, and to update 

provisions within the Rules to reference 

this increment will ensure that all 

classes that may be listed on the 

Exchange may be eligible for AIM and 

C–AIM Auctions, which the Exchange 

believes will result in orders in all 

classes receiving the same price 

improvement opportunities through 

AIM and C–AIM, in a consistent 

manner. Further, the Exchange does not 

believe the proposed rule change related 

to the processing of AIM and C–AIM 

Auctions in the event of early 

termination will impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as it will 

apply in the same manner to all Agency 

Orders. 

Additionally, the Exchange notes that 

participation in the AIM and C–AIM 

Auctions is completely voluntary. The 

Exchange believes all market 

participants, particular those that 

submit smaller orders, may benefit from 

any additional liquidity, execution 

opportunities, and price improvement 

in the AIM and C–AIM Auctions that 

may result from the proposed rule 

change. 

The Exchange does not believe the 

proposed rule change will impose any 

burden on intermarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily direct 

order flow to competing venues who 

offer similar functionality. The 

Exchange believes this proposed rule 

change would promote fair competition 

among the options exchanges and 

establish more uniform functionality 

across the various price improvement 

auctions offered by other options 

exchanges. The proposed functionality 

may lead to an increase in Exchange 

volume and should allow the Exchange 

to better compete against other options 

markets that already offer similar price 

improvement mechanisms and for this 

reason the proposal does not create an 

undue burden on intermarket 

competition. By contrast, not having the 

proposed functionality places the 

Exchange at a competitive disadvantage 

vis-a`-vis other exchanges that offer 

similar price improvement mechanisms. 

As noted above, another options 

exchange adopted this functionality 

(pursuant to an immediately effective, 

noncontroversial rule filing) to allow for 

concurrent price improvement auctions 

for smaller-sized simple agency 

orders,18 and other options exchanges 

(as well as the Exchange) permit simple 

price improvement auctions to occur 

simultaneously with complex price 

improvement auctions for complex 

strategies involving the same series, 

with no size restrictions.19

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 20 and Rule 19b– 

4(f)(6) 21 thereunder. 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 rule-comments@

sec.gov. Please include file number SR– 

CboeEDGX–2023–060 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–2023–060. 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 


lotter on DSK11XQN23PROD with NOTICES1
68734 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

22 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4For purposes of this filing, Nasdaq and Nasdaq 

BX are referred to collectively as the ‘‘Nasdaq 

Exchanges.’’ Nasdaq General 2, Section 6(a) and 

Nasdaq BX General 2, Section 6(a) are referred to 

collectively as the ‘‘Nasdaq Exchanges’ Rules.’’ 

5The term ‘‘Participant’’ is defined in Article 1, 

Rule 1(s) to mean, among other things, any 

Participant Firm that holds a valid Trading Permit 

and that a Participant shall be considered a 

‘‘member’’ of the Exchange for purposes of the Act. 

If a Participant is not a natural person, the 

Participant may also be referred to as a Participant 

Firm. By way of comparison, FINRA uses the term 

‘‘member’’ in its rules and NYSE uses the term 

‘‘member organization.’’ 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

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–2023–060 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21937 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98586; File No. SR– 

NYSECHX–2023–17] 

Self-Regulatory Organizations; NYSE 

Chicago, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 0 

September 28, 2023. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

September 27, 2023, the NYSE Chicago, 

Inc. (‘‘NYSE Chicago’’ or the 

‘‘Exchange’’) 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 self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 0 (Regulation of the Exchange and 

Participants) to adopt new rule text 

based on based on [sic] Rule 0 

(Regulation of the Exchange and its 

Member Organizations) of its affiliate 

New York Stock Exchange LLC. The 

proposed rule change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 0 (Regulation of the Exchange and 

Participants) to adopt new rule text 

based on Rule 0 (Regulation of the 

Exchange and its Member 

Organizations) of its affiliate New York 

Stock Exchange LLC (‘‘NYSE’’). 

Specifically, the Exchange proposes a 

new subsection (b) in conformity with 

NYSE Rule 0(b). NYSE Rule 0(b) is in 

turn based on FINRA Rule 0140(a) 

(Applicability), Nasdaq Stock Market 

LLC (‘‘Nasdaq’’) General 2 (Organization 

and Administration), Section 6(a), and 

Nasdaq BX, Inc. (‘‘Nasdaq BX’’) General 

2 (Organization and Administration), 

Section 6(a).4

NYSE Rule 0(b) provides that the 

NYSE’s rules apply to all member 

organizations and persons associated 

with a member organization and that 

persons associated with a member 

organization shall have the same duties 

and obligations as a member 

organization under the NYSE’s rules. 

NYSE Rule 0(b) mirrors FINRA Rule 

0140(a) and the versions of FINRA Rule 

0140(a) adopted by the Nasdaq 

Exchanges, which similarly provide that 

the rules of those self-regulatory 

organizations, as applicable, apply to all 

members and persons associated with a 

member and that persons associated 

with a member shall have the same 

duties and obligations as a member 

under such rules.5 Proposed Rule 0(d) 

[sic] is substantively identical to NYSE 

Rule 0(b). 

The Exchange believes that the 

proposed rule change would improve 

the clarity of the Exchange’s rules by 

reflecting that the Exchange’s rules 

apply to persons associated with a 

Participant or Participant Firm and that 

such persons have the same duties and 

obligations as their Participant or 

Participant Firm employer. A 

Participant’s or Participant Firm’s 

compliance with Exchange rules may 

depend on the actions of persons 

associated with the Participant or 

Participant Firm. Accordingly, the 

Exchange believes that the proposed 

rule, which mirrors the rules of its 

affiliate NYSE, FINRA and the Nasdaq 

Exchanges, would promote consistency 

in the Exchange’s rules by expressly 

providing that the Exchange may 

enforce its rules with respect to persons 

associated with a Participant or 

Participant Firm, including by taking 

appropriate disciplinary action against 

such persons for their Participant’s or 

Participant Firm’s violation of NYSE 

Chicago rules. The Exchange notes that 

the proposed rule does not contemplate 

disciplinary action against individuals 

not involved in violations of Exchange 

rules. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the Act,6

in general, and furthers the objectives of 

Section 6(b)(5),7 in particular, because it 

is 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 

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 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 and, in 

general, protect investors and the public 

interest because the proposed changes 

would add clarity to the Exchange’s 

rules. As previously noted, the proposed 

rule text conforms to current NYSE Rule 

0(b) without change. The Exchange 

believes that adopting separate rule text 

expressly providing that all Exchange 


lotter on DSK11XQN23PROD with NOTICES1