Federal Register / Vol. 89, No. 11 / Wednesday, January 17, 2024 / Notices 2993 

29 15 U.S.C. 78s(b)(3)(A). 

30 17 CFR 240.19b–4(f). 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Rule 11.24(a)(3) (‘‘Retail Price Improvement 

Order’’). 

4See Rule 11.24(a)(2) (‘‘Retail Order’’). 

appropriate in furtherance of the 

purposes of the Act. 

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 foregoing rule change has become 

effective pursuant to section 19(b)(3)(A) 

of the Act 29 and paragraph (f) of Rule 

19b–4 30 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– 

CboeBZX–2024–003 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–2024–003. 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–CboeBZX–2024–003 and should be 

submitted on or before February 7, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–00710 Filed 1–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99311; File No. SR– 

CboeBYX–2023–020] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change To Modify 

Rule 11.24 To Introduce an Enhanced 

RPI Order and Expand Its Retail Price 

Improvement Program To Include 

Securities Priced Below $1.00 

January 10, 2024. 

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 December 

27, 2023, Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify 

Rule 11.24 to introduce an Enhanced 

RPI Order and expand its Retail Price 

Improvement program to include 

securities priced below $1.00. The text 

of the proposed rule change is provided 

in Exhibit 5. 

The text of the proposed rule change 

is available on the Exchange’s website 

(http://markets.cboe.com/us/equities/ 

regulation/rule_filings/byx/), 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 

Rule 11.24 to enhance the Exchange’s 

Retail Price Improvement Program (the 

‘‘Program’’) for the benefit of retail 

investors. Specifically, the Exchange 

proposes to introduce a new Retail Price 

Improvement Order type (‘‘RPI Order’’) 3

to be known as an ‘‘Enhanced RPI 

Order.’’ The proposed Enhanced RPI 

Order will allow retail liquidity 

providers to post orders at their limit 

price but have the opportunity to 

provide a greater amount of price 

improvement as compared to other 

resting orders on the same side of the 

BYX Book with higher priority in order 

to execute with an incoming Retail 

Order 4 by exercising at a price within 

their established step-up range. The 

proposed change is designed to provide 

retail investors with additional 

opportunities for meaningful price 


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2994 Federal Register / Vol. 89, No. 11 / Wednesday, January 17, 2024 / Notices 

5See Rule 1.5(e) (‘‘BYX Book’’). The ‘‘BYX Book’’ 

is the System’s electronic file of orders. The 

‘‘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. See Rule 1.5(aa) 

(‘‘System’’). 

6See Rule 11.24(h). The Program is currently 

limited to trades occurring at prices equal to or 

greater than $1.00 per share. 

7See Securities Exchange Act Release No. 68303 

(November 27, 2012), 77 FR 71652 (December 3, 

2012), SR–BYX–2012–019 (‘‘Pilot Approval 

Order’’). 

8See Securities Exchange Act Release No. 87154 

(September 30, 2019), 84 FR 53183 (October 4, 

2019), SR–CboeBYX–2019–014 (‘‘RPI Approval 

Order’’). 

9See Letter from David Shillman to Eric Swanson 

(November 27, 2012) (‘‘No Action Letter’’), available 

at https://www.sec.gov/divisions/marketreg/mrnoaction/byx-112712-602.pdf. 

10Supra note 8 at 53185. 

11Supra note 6. The Exchange will periodically 

notify the membership regarding the securities 

included in the Program through an information 

circular. The Exchange is proposing to make the 

Program available to all securities (discussed infra). 

12See Rule 11.24(a)(1). A ‘‘Retail Member 

Organization’’ or ‘‘RMO’’ is a Member (or a division 

thereof) that has been approved by the Exchange 

under Rule 11.24 to submit Retail Orders. 

13See Rule 1.5(cc). A ‘‘User’’ is defined as any 

member or sponsored participant of the Exchange 

who is authorized to obtain access to the System. 

14Supra note 4. A ‘‘Retail Order’’ is defined as 

an agency or riskless principal order that originates 

from a natural person and is submitted to the 

Exchange by an RMO, provided that no change is 

made to the terms of the order with respect to price 

or side of market and the order does not originate 

from a trading algorithm or any computerized 

methodology. 

15See Rule 1.5(t). The term ‘‘Protected 

Quotation’’ has the same meaning as is set forth in 

Regulation NMS Rule 600(b)(71). The terms 

Protected NBB and Protected NBO are defined in 

BYX Rule 1.5(s). The Protected NBB is the bestpriced protected bid and the Protected NBO is the 

best-priced protected offer. Generally, the Protected 

NBB and Protected NBO and the national best bid 

(‘‘NBB’’) and national best offer (‘‘NBO’’, together 

with the NBB, the ‘‘NBBO’’) will be the same. 

However, a market center is not required to route 

to the NBB or NBO if that market center is subject 

to an exception under Regulation NMS Rule 

611(b)(1) or if such NBB or NBO is otherwise not 

available for an automatic execution. In such case, 

the Protected NBB or Protected NBO would be the 

best-priced protected bid or offer to which a market 

center must route interest pursuant to Regulation 

NMS Rule 611. 

16See, e.g., NYSE and NYSE Arca Retail Liquidity 

programs, which promote cost savings through 

price improvement for individual investors 

provided by retail liquidity providers that submit 

non-displayed interest priced better than the best 

protected best bid or protected best offer. Available 

at https://www.nyse.com/markets/liquidityprograms. See also IEX Retail Program, which 

incentivizes midpoint liquidity for retail orders 

through the use of retail liquidity provider orders. 

Available at https://www.iexexchange.io/products/ 

retail-program. See also Nasdaq BX Retail Price 

Improvement, which allows retail orders to interact 

with price-improving liquidity. Available at https:// 

www.nasdaqtrader.com/content/BXRPIfs.pdf. 

17See Securities Exchange Act Release No. 96495 

(December 14, 2022), 88 FR 128 (January 3, 2023) 

(‘‘Order Competition Rule’’) at 144. 

18See Securities Exchange Act Release No. 96494 

(December 14, 2022), 87 FR 80266 (December 29, 

2022) (‘‘Tick Size Proposal’’) at 80273. 

19Source: Cboe internal data. 

20The Exchange notes that the minimum amount 

of required price improvement will vary between 

$0.001 and $0.01, based on the order types resting 

on the BYX Book (discussed infra). 

improvement by introducing a new 

order type that will ‘‘step-up’’ its price 

against orders with a higher priority 

resting on the BYX Book.5 Additionally, 

the Exchange proposes to expand the 

Program to securities priced below 

$1.00.6

Background 

In November 2012, the Exchange 

received approval to operate its Program 

on a pilot basis.7 The Program operated 

under a pilot basis until September 30, 

2019, when the Program was approved 

on a permanent basis.8 In addition, the 

Exchange was granted a limited 

exemption from the Sub-Penny Rule, as 

well as Regulation NMS Rule 602 

(Quote Rule) No Action relief 9 to 

operate the Program.10 The Program is 

currently designed to attract Retail 

Orders to the Exchange and allow such 

order flow to receive potential price 

improvement. The Program is currently 

limited to trades occurring at prices 

equal to or greater than $1.00 per 

share.11 Under the Program, a class of 

market participant called a Retail 

Member Organization (‘‘RMO’’) 12 is 

eligible to submit certain retail order 

flow (‘‘Retail Orders’’) to the Exchange. 

Users 13 are permitted to provide 

potential price improvement for Retail 

Orders 14 in the form of non-displayed 

interest that is better than the national 

best bid that is a Protected Quotation 

(‘‘Protected NBB’’) or the national best 

offer that is a Protected Quotation 

(‘‘Protected NBO’’, and together with the 

Protected NBB, the ‘‘Protected 

NBBO’’).15

The Exchange developed this Program 

with the goal of incentivizing RMOs to 

execute their Retail Orders on the 

Exchange, rather than off-exchange 

venues, by providing Retail Orders with 

greater access to potential opportunities 

for price improvement on the Exchange. 

However, as noted by the Commission, 

even with the presence of retail 

liquidity programs (‘‘RLPs’’) offered by 

Cboe and other national securities 

exchanges,16 the great majority of 

marketable orders of retail investors 

continue to be sent to wholesalers.17

Indeed, as noted in the Commission’s 

recent rule proposal related to minimum 

pricing increments, RLPs have not yet 

attracted a significant volume of retail 

order flow.18 In fact, since RLPs have 

been adopted, the percentage of onexchange share volume has continued to 

decrease from approximately 71% to 

approximately 56% as of November 

2023.19

Accordingly, the Exchange now seeks 

to enhance its current Program by 

offering retail liquidity providers an 

optional Enhanced RPI Order type. The 

Exchange believes the Enhanced Order 

type will incentivize additional retail 

liquidity provision by enabling RPI 

liquidity providers to submit an order 

that is ranked at a less aggressive price 

than the step-up range at which the 

provider is willing to execute, but have 

the opportunity to ‘‘step up’’ to provide 

a greater amount of price improvement 

as compared to other higher priority 

resting orders on the same side of the 

BYX Book in order to execute with an 

incoming contra-side Retail Order. As 

discussed in more detail, below, the 

Enhanced RPI Order type will have 

price priority over resting orders when 

its step-up range allows for additional 

price improvement when a contra-side 

Retail Order is submitted to the 

Exchange. With the deeper pool of retail 

liquidity-providing orders, the Exchange 

believes that RMOs will see increased 

opportunities for on-exchange price 

improvement and seek to execute more 

of their Retail Orders on the Exchange. 

Proposal 

The Exchange proposes to amend 

Rule 11.24(a) to include the proposed 

Enhanced RPI Order, which allows a 

retail liquidity provider to post a limit 

order to the Exchange, but also the 

opportunity to ‘‘step-up’’ its price 

within their defined step-up range by 

providing a greater amount of price 

improvement as compared to orders 

with higher priority that are resting on 

the same side of the BYX Book in order 

to execute against an incoming Retail 

Order seeking to remove liquidity. An 

Enhanced RPI Order is designed to be 

entered with a limit price, but must also 

include a step-up range, which is the 

most aggressive price it is willing to 

execute against a contra-side Retail 

Order. If the Enhanced RPI Order 

includes a step-up range that improves 

against the price of the highest-ranked 

resting order on the same side of the 

BYX Book, the Enhanced RPI Order will 

be given price priority over the highestranked resting order. In order for an 

Enhanced RPI Order to receive price 

priority, the Enhanced RPI Order must 

be able to provide a greater amount of 

price improvement to an incoming 

contra-side Retail Order than would 

otherwise be available by stepping up to 

the next valid tick increment.20


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21See Rule 11.9(c)(9). A Mid-Point Peg Order is 

a limit order that, after entry into the System, the 

price of the order is automatically adjusted by the 

System in response to changes in the NBBO to be 

pegged to the mid-point of the NBBO, or, 

alternatively, pegged to the less aggressive of the 

midpoint of the NBBO or one minimum price 

variation inside the same side of the NBBO as the 

order. 22Supra note 3. 

23See Rule 11.24(f) for additional examples of 

priority and order allocation in the current Program. 

The Exchange believes this proposed 

change would further the purpose of the 

Program to attract retail marketable 

order flow to the Exchange, while also 

increasing opportunities for price 

improvement. By offering the Enhanced 

RPI Order, the Exchange has created an 

enhancement to its current Program that 

offers a greater incentive for liquidity 

providers to provide liquidity eligible to 

execute against marketable retail order 

flow on the Exchange. The Enhanced 

RPI Order would allow Users to post 

orders at their limit price but step-up to 

a more aggressive price in order to 

execute against marketable retail order 

flow that is less prone to adverse 

selection. Marketable retail order flow, 

in turn, would receive price 

improvement greater than what is 

currently available under the Program. 

The Exchange believes that the 

proposed change will lead to increased 

participation in the Program by Users 

seeking to provide liquidity for 

marketable retail order flow, which in 

turn will attract additional marketable 

retail order flow to the Exchange in 

search of price improvement 

opportunities. 

The Exchange also proposes to 

introduce Rule 11.24(a)(5) in order to 

define the term RPI Interest as either RPI 

Orders or Enhanced RPI Orders. 

Additionally, the Exchange proposes to 

amend Rule 11.24(g) in order to describe 

order priority for Enhanced RPI Orders. 

The Exchange also proposes to make 

corresponding changes within Rule 

11.24 to replace certain references to 

RPI Order with the term RPI Interest in 

order to have language inclusive of both 

RPI Orders and Enhanced RPI Orders. 

Further, the Exchange proposes to 

delete Rule 11.24(h), as the Exchange 

proposes to expand the Program to subdollar securities. The Exchange will 

announce that the RPI Program has 

expanded to all securities in a Trade 

Desk notice, and periodic updates will 

no longer be required. The Exchange 

also proposes to renumber Rule 11.24(i) 

in conjunction with the deletion of Rule 

11.24(h). 

Additionally, with the introduction of 

the Enhanced RPI Order, the Exchange 

proposes to amend Rule 11.24(a)(2) to 

permit a Retail Order to be entered as 

a Mid-Point Peg Order.21 The Exchange 

also proposes to amend Rule 11.24(a)(2) 

to better describe that the time-in-force 

requirement for all Retail Orders, 

including those entered as a Mid-Point 

Peg Order, is required to be Immediate 

or Cancel (‘‘IOC’’). The Exchange 

believes that allowing the Mid-Point Peg 

Order instruction on a Retail Order will 

benefit Users who choose to submit 

Retail Orders because it will permit a 

Retail Order to guarantee price 

improvement at the midpoint or better. 

The Mid-Point Peg Order instruction 

will be optional, and not required for 

Users of Retail Orders. 

Current RPI Orders 

Rule 11.24(a)(3) currently defines an 

RPI Order as ‘‘non-displayed interest on 

the Exchange that is priced better than 

the Protected NBB or Protected NBO by 

at least $0.001 and that is identified as 

such.’’ 22 The Exchange now proposes to 

amend the definition of RPI Order to 

more accurately reflect how an RPI 

Order may be entered by defining an 

RPI Order as ‘‘non-displayed interest on 

the Exchange that is eligible to execute 

at prices better than the Protected NBB 

or Protected NBO by at least $0.001 in 

securities priced at or above $1.00 and 

by at least $0.0001 in securities priced 

below $1.00 and that is identified as 

such.’’ As the Exchange is also 

proposing to expand the Program to 

prices below $1.00, more specificity is 

required regarding the minimum pricing 

increment. Further, the Exchange is 

clarifying that an RPI Order may be 

entered at any price but may execute 

only at prices better than the Protected 

NBB or Protected NBO. 

As stated in Rule 11.24(a)(3), RPI 

Orders are non-displayed and are 

ranked in accordance with Rule 

11.12(a). Furthermore, under Rule 

11.24(g), competing RPI Orders in the 

same security are ranked and allocated 

according to price then time of entry 

into the System. Executions occur in 

price/time priority in accordance with 

Rule 11.12. Any remaining unexecuted 

RPI interest remains available to interact 

with other incoming Retail Orders if 

such interest is at an eligible price. Any 

remaining unexecuted portion of the 

Retail Order will cancel or execute in 

accordance with Rule 11.24(f). The 

following example illustrates this 

method: 

• Protected NBBO for security ABC is 

$10.00–$10.05 

• User 1 enters an RPI Order to buy 

ABC at $10.015 for 500 shares 

• User 2 then enters an RPI Order to 

buy ABC at $10.02 for 500 shares 

• User 3 then enters an RPI Order to 

buy ABC at $10.035 for 500 shares 

An incoming Retail Order to sell ABC 

for 1,000 shares executes first against 

User 3’s bid for 500 shares at $10.035, 

because it is the best priced bid, then 

against User 2’s bid for 500 shares at 

$10.02, because it is the next best priced 

bid. User 1 is not filled because the 

entire size of the Retail Order to sell 

1,000 shares is depleted. The Retail 

Order executes against RPI Orders in 

price/time priority.23

Enhanced RPI Order 

The Exchange now proposes to 

introduce a new type of RPI Order that 

Users seeking to provide RPI liquidity 

may utilize on an optional basis. The 

proposed Enhanced RPI Order will be 

eligible to obtain price priority over 

resting orders in the same security on 

the same side of the BYX Book in order 

to execute against a Retail Order by 

including a step-up range when entered. 

Enhanced RPI Orders will be ranked in 

accordance with proposed Rule 

11.24(g)(2) (discussed infra). In order to 

effect the proposed change, the 

Exchange proposes to introduce Rule 

11.24(a)(4), which would define an 

Enhanced RPI Order as: 

• An ‘‘Enhanced Retail Price 

Improvement Order’’ or ‘‘Enhanced RPI 

Order’’ consists of non-displayed 

interest on the Exchange that is eligible 

to execute against contra-side Retail 

Orders. An Enhanced RPI Order will be 

ranked at its limit price and must also 

include a step-up range, which is the 

maximum price (for buy orders) or 

minimum price (for sell orders) at 

which the Enhanced RPI Order is 

willing to execute. An Enhanced RPI 

Order may execute at: (i) its limit price; 

(ii) for securities priced at or above 

$1.00, at a price within the step-up 

range that is able to improve upon the 

price of a same-side resting order on the 

BYX Book by stepping up to the next 

half cent or full cent, and for securities 

priced below $1.00 by stepping up to 

the next valid tick increment; or (iii) at 

a price within the step-up range when 

the limit price of a contra-side Retail 

Order is within the step-up range. An 

Enhanced RPI Order may be a primary 

pegged order or a limit order. The 

System will monitor whether Enhanced 

RPI interest, including the step-up 

range, and adjusted by any offset and 

subject to the ceiling or floor price, is 

eligible to interact with incoming Retail 

Orders. An Enhanced RPI Order (the 

buy or sell interest, the step-up range, 

the offset, and the ceiling or floor) 

remains non-displayed in its entirety. 

Any User is permitted, but not required, 


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24 Discussed infra Examples 2 and 5. An 

Enhanced RPI Order may only need to step-up one 

half cent in order to provide meaningful price 

improvement in situations where the best-priced 

resting order is ranked at a full cent. 25See proposed Rule 11.24(g)(2)(A). 

26See proposed Rule 11.24(g)(2)(A). 

27See proposed Rule 11.24(g)(2)(A). 

to submit Enhanced RPI Orders. An 

Enhanced RPI Order may be an odd lot, 

round lot or mixed lot. An Enhanced 

RPI Order shall have priority as 

described in Rule 11.24(g)(2). 

The price of an Enhanced RPI Order 

will be determined by a User’s entry of 

the following into the Exchange: (1) 

Enhanced RPI buy or sell interest; (2) 

the step-up range; (3) an offset, if any; 

and (4) a ceiling or floor price, if any. 

The step-up range of an Enhanced RPI 

Order is the maximum amount above 

the order’s limit price at which a User 

is willing to execute. If the Enhanced 

RPI Order can improve upon resting 

liquidity on the same side of the BYX 

Book by stepping up to the nearest 

whole cent tick or half cent midpoint 

tick, it will receive price priority over 

the resting liquidity on the BYX Book. 

An Enhanced RPI Order, however, will 

not improve upon the price of another 

resting Enhanced RPI Order to receive 

price priority. 

Enhanced RPI Order Priority 

As discussed above, the proposed 

Enhanced RPI Order will be ranked at 

its limit price, which is less aggressive 

than its step-up range. With the 

introduction of the proposed Enhanced 

RPI Order, the Exchange proposes to 

reorganize Rule 11.24(g) into Rule 

11.24(g)(1) and (2). Proposed Rule 

11.24(g)(1) would contain the existing 

rule text that describes order priority 

with respect to RPI Orders, which the 

Exchange does not propose to amend. 

Proposed Rule 11.24(g)(2) would 

describe order priority with respect to 

Enhanced RPI Orders. 

An Enhanced RPI Order will be 

ranked and allocated according to its 

limit price then time of entry into the 

System. The Exchange proposes, 

however, that an Enhanced RPI Order 

will be granted price priority over 

orders resting on the BYX Book in the 

event that the Enhanced RPI Order is 

able to provide a greater amount of price 

improvement to an incoming contraside Retail Order by stepping up to the 

next half cent 24 or full cent (for 

securities priced at or above $1.00) or 

the next valid tick increment (for 

securities priced below $1.00). The stepup range of an Enhanced RPI Order will 

be utilized to determine price priority 

when: (1) the range is needed to gain 

priority over a resting order with higher 

order book priority that is not an 

Enhanced RPI Order; (2) in situations 

where: (a) a contra-side Retail Order is 

entered at a less aggressive price than 

the ranked price of the Enhanced RPI 

Order and all other resting liquidity and 

(b) the Enhanced RPI Order’s step-up 

range is equal to or more aggressively 

priced than the Retail Order’s limit 

price; and (3) to determine order book 

priority when multiple Enhanced RPI 

Orders are resting on the BYX Book and 

are eligible to trade ahead of higher 

priority orders resting on the BYX Book 

that are not Enhanced RPI Orders. The 

Exchange notes when multiple 

Enhanced RPI Orders are resting on the 

BYX Book. there are no other resting 

orders on the same side of the BYX 

Book with higher priority, and a contraside Retail Order is entered at a price 

equal to or more aggressive than the 

highest-priced Enhanced RPI Order 

resting on the BYX Book, the Enhanced 

RPI Orders will execute in standard 

price/time priority according to their 

limit price rather than utilize the stepup range to determine order book 

priority. 

The Exchange has included the 

examples below to show how order 

priority with an Enhanced RPI Order 

will be determined. In the examples 

below, the Retail Liquidity Identifier 

(discussed infra) is presumed to be 

displayed unless stated otherwise. 

Example 1 25

In order to illustrate priority of an 

Enhanced RPI Order over other nondisplayed orders resting on the BYX 

Book, consider the following example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters a Mid-Point Peg order 

to buy ABC at $10.03 for 100. User 1’s 

order is ranked at $10.025 as the User 

elected that the Mid-Point Peg order be 

pegged to the mid-point of the NBBO. 

Æ User 2 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 2’s step-up range is $10.03. User 

2’s order is ranked at $10.01. 

Æ User 3 enters a Retail Order to sell 

ABC at $10.00 for 100. 

• Result: User 3’s Retail Order for 100 

will execute against User 2’s Enhanced 

RPI Order at $10.03. While User 1’s 

order is ranked at a higher price 

($10.025) than User 2’s order ($10.01), 

User 2’s order includes a step-up range 

of $10.03, which provides additional 

price improvement to User 3’s Retail 

Order than User 1’s Mid-Point Peg 

Order. As User 2’s order provides an 

additional $0.005 of price improvement 

over User 1’s midpoint price, the 

Exchange gives priority to User 2’s 

Enhanced RPI Order. 

Example 2 26

If the best-priced resting order on the 

BYX Book is ranked at a whole cent, the 

Enhanced RPI Order may only need to 

step-up one-half cent in order to provide 

meaningful price improvement. 

Consider the following example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters a non-displayed order 

to buy ABC at $10.02 for 100. 

Æ User 2 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 2’s step-up range is $10.03. User 

2’s order is ranked at $10.01. 

Æ User 3 enters a Retail Order to sell 

ABC at $10.00 for 100. 

• Result: User 3’s Retail Order for 100 

will execute against User 2’s Enhanced 

RPI Order at $10.025. While User 1’s 

order is ranked at a higher price ($10.02) 

than User 2’s order ($10.01), User 2 has 

included a step-up range of $10.03 on 

its order and is willing to provide 

additional price improvement as 

compared to other orders resting on the 

BYX Book. Even though User 2’s order 

may execute up to a price of $10.03, it 

only needs to provide one-half cent 

price improvement over User 1’s ranked 

price of $10.02 in order to provide 

meaningful price improvement at the 

midpoint. 

Example 3 27

There are instances where an 

Enhanced RPI Order may need to stepup a full penny in order to provide 

meaningful price improvement. 

Consider the following: 

• The Protected NBBO for security 

ABC is $10.00 × $10.10. 

Æ User 1 enters a non-displayed order 

to buy ABC at $10.03 for 100. 

Æ User 2 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 2’s step-up range is $10.05. User 

2’s order is ranked at $10.01. 

Æ User 3 enters a Retail Order to sell 

ABC at $10.00 for 100. 

• Result: User 3’s Retail Order for 100 

will execute against User 2’s Enhanced 

RPI Order at $10.04. While User 1’s 

order is ranked at a higher price ($10.03) 

than User 2’s order ($10.01), User 2 has 

included a step-up range of $10.05 on 

its order and is willing to provide 

additional price improvement as 

compared to other orders resting on the 

BYX Book. Even though User 2’s order 

may execute up to a price of $10.05, it 

only needs to provide one penny of 

price improvement above User 1’s 

ranked price of $10.03 in order to 

provide meaningful price improvement. 


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28See proposed Rule 11.24(a)(4). 

29See proposed Rule 11.24(g)(2)(A). 

30See proposed Rule 11.24(a)(4). 

31See proposed Rule 11.24(g)(2). 

32See proposed Rule 11.24(g)(2)(B). 

33See proposed Rule 11.24(g)(2)(C). 

Example 4 28

There may be instances where there is 

no other liquidity resting on the BYX 

Book against which the Enhanced RPI 

Order can step up against. In these 

instances, the Enhanced RPI Order will 

trade at its ranked price. Consider the 

following example. 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 1’s step-up range is $10.025. User 

1’s order is ranked at $10.01. 

Æ User 2 enters a Retail Order to sell 

ABC at $10.00 for 100. 

• Result: User 2’s Retail Order for 100 

will execute against User 1’s Enhanced 

RPI Order at $10.01 as there are no 

better-priced orders resting on the BYX 

Book against which User 1 would need 

to provide greater price improvement to 

User 2. 

Example 5 29

Enhanced RPI Orders will only have 

priority against other better-priced 

liquidity resting on the BYX Book in the 

event that the Enhanced RPI Order can 

step-up to the next half cent or full cent. 

In the example below, the Enhanced RPI 

Order is unable to step up against the 

best priced order on the BYX Book but 

is able to step up against an order 

ranked at the next best price level. 

Consider the following example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters a non-displayed order 

to buy ABC at $10.04 for 100. 

Æ User 2 enters a non-displayed order 

to buy ABC at $10.02 for 100. 

Æ User 3 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 3’s step-up range is $10.04. User 

3’s order is ranked at $10.01. 

Æ User 4 enters a Retail Order to sell 

ABC at $10.00 for 150. 

• Result: User 4’s Retail Order will 

execute 100 shares first with User 1’s 

non-displayed order as User 1’s nondisplayed order has price priority over 

the orders submitted by Users 2 and 3. 

While User 3’s Enhanced RPI Order has 

a step-up range of $10.04, the step-up 

range does not provide greater price 

improvement for User 4’s Retail Order 

as compared to User 1’s non-displayed 

order and as such, User 3’s Enhanced 

RPI Order does not have priority over 

User 1’s non-displayed order. Once User 

4’s Retail Order executes against User 

1’s non-displayed order, 50 shares 

remain on User 4’s Retail Order. User 

4’s Retail Order will then execute its 

remaining 50 shares with User 3’s 

Enhanced RPI Order at a price of 

$10.025. While User 2’s non-displayed 

order is ranked at a higher price ($10.02) 

than User 3’s Enhanced RPI Order 

($10.01), User 3’s Enhanced RPI Order 

has a step-up range of $10.04 and User 

2’s non-displayed order does not 

contain a step-up range. As User 3’s 

Enhanced RPI Order is willing to 

provide greater price improvement as 

compared to a better-priced order 

resting on the same side of the BYX 

Book, it is given priority over User 2’s 

non-displayed order. User 3’s Enhanced 

RPI Order executes 50 shares against 

User 4’s non-displayed order at a price 

of $10.025 because it provides one-half 

cent of price improvement over User 2’s 

ranked price of $10.02. 

Example 6 30

Enhanced RPI Orders will execute 

within their step-up range when the 

incoming Retail Order’s price is not 

executable at the Enhanced RPI Order’s 

ranked price. Consider the following 

example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 1’s step-up range is $10.04. User 

1’s order is ranked at $10.01. 

Æ User 2 enters a Retail Order to sell 

ABC at $10.03 for 100. 

• Result: User 2’s Retail Order will 

execute with User 1’s Enhanced RPI 

Order at $10.03 as the limit price of 

User 2’s Retail Order ($10.03) is within 

User 1’s step-up range. 

Example 7 31

When there are multiple Enhanced 

RPI Orders resting on the BYX Book, no 

other same side liquidity with higher 

priority, and the contra-side Retail 

Order is priced more aggressively than 

the resting Enhanced RPI Orders, 

execution priority will be determined by 

the higher ranked price and not by the 

step-up ranges of the Enhanced RPI 

Orders. Consider the following example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 1’s step-up range is $10.05. User 

1’s order is ranked at $10.01. 

Æ User 2 enters an Enhanced RPI 

Order to buy ABC at $10.02 for 100. 

User 2’s step-up range is $10.04. User 

2’s order is ranked at $10.02. 

Æ User 3 enters a Retail Order to sell 

ABC at $10.00 for 100. 

• Result: User 3’s Retail Order will 

execute with User 2’s Enhanced RPI 

Order at $10.02 because User 2’s 

Enhanced RPI Order has price priority 

over User 1’s Enhanced RPI Order due 

to its higher ranked price of $10.02. 

Given that User 3’s Retail Order was 

priced more aggressively than the 

resting Enhanced RPI Orders at its time 

of entry, the Exchange believes that 

priority should be determined by using 

the ranked price of the Enhanced RPI 

Orders resting on the BYX Book at the 

time of User 3’s Retail Order entry. 

Example 8 32

The step-up range will be used to 

determine order book priority in 

situations where: (i) a contra-side Retail 

Order is entered at a less aggressive 

price than the Enhanced RPI Order’s 

limit price and all other resting liquidity 

in the same security and (ii) the 

Enhanced RPI Order’s step-up range is 

equal to or more aggressively priced 

than the Retail Order’s limit price. 

Consider the following example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 1’s step-up range is $10.05. User 

1’s order is ranked at $10.01. 

Æ User 2 enters a non-displayed order 

to buy ABC at $10.02 for 100. User 2’s 

order is ranked at $10.02. 

Æ User 3 enters a Retail Order to sell 

ABC at $10.03 for 100. 

• Result: User 3’s order will execute 

with User 1’s Enhanced RPI Order at 

$10.03 because (i) User 3’s Retail Order 

was entered at a less aggressive price 

than the ranked price of both User 1 and 

User 2’s orders; and (ii) the step-up 

range of User 1’s Enhanced RPI Order is 

more aggressively priced ($10.05) than 

the limit price of User 3’s Retail Order 

($10.03). Even though User 2’s ranked 

price is higher than User 1’s ranked 

price, User 2’s order is not marketable 

against User 3’s Retail Order. User 3’s 

Retail Order would otherwise be unable 

to execute if the Exchange did not look 

to the price improvement provided by 

User 1’s step-up range to permit an 

execution between User 1 and User 3. 

Example 9 33

The step-up range will be used to 

determine order book priority in 

situations where multiple Enhanced RPI 

Orders are resting on the BYX Book and 

are eligible to trade ahead of higher 

priority orders resting on the BYX Book. 

Consider the following example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 


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2998 Federal Register / Vol. 89, No. 11 / Wednesday, January 17, 2024 / Notices 

34See proposed Rule 11.24(g)(2)(A). 

35The Exchange notes that there may be 

situations in which an Enhanced RPI Order that is 

granted order book priority over an RPI Order will 

provide only $0.001 of price improvement over the 

RPI Order when stepping up to the next half cent 

or full cent. For example, the Protected NBBO is 

$10.00 × $10.05. Assume that a buy-side Enhanced 

RPI Order for 100 shares has a step-up range to 

$10.04 and is granted order book priority over a 

buy-side RPI Order for 100 shares with a limit price 

of $10.024. A sell-side Retail Order for 100 shares 

is entered at $10.00. In this instance, the buy-side 

Enhanced RPI Order steps-up to a price of $10.025 

to execute against the sell-side Retail Order. While 

the Enhanced RPI Order is only providing $0.001 

of price improvement as compared to the RPI Order 

with a limit price of $10.024, the Enhanced RPI 

Order provides a total of $0.025 of price 

improvement to the Retail Order as compared to the 

Retail Order’s limit price of $10.00. 

36See proposed Rule 11.24(g)(2)(A). 

Æ User 1 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 1’s step-up range is $10.05. User 

1’s order is ranked at $10.01. 

Æ User 2 enters an Enhanced RPI 

Order to buy ABC at $10.02 for 100. 

User 2’s step-up range is $10.04. User 

2’s order is ranked at $10.02. 

Æ User 3 enters a non-displayed order 

to buy ABC at $10.03 for 100. User 3’s 

order is ranked at $10.03. 

Æ User 4 enters a Retail Order to sell 

ABC at $10.03 for 100. 

• Result: User 4’s Retail Order will 

execute with User 1’s Enhanced RPI 

Order at $10.04 because the Exchange 

looks to the step-up range to determine 

order book priority when there are 

multiple Enhanced RPI Orders resting 

on the BYX Book that are willing to 

provide additional price improvement 

as compared to other orders resting on 

the BYX Book. While both User 1 and 

User 2 can execute at a price of $10.04, 

User 1’s Enhanced RPI Order has a 

higher step-up range ($10.05) as 

compared to the step-up range of User 

2’s Enhanced RPI Order ($10.04). As 

such, User 1’s Enhanced RPI Order is 

given priority ahead of User 2’s 

Enhanced RPI Order to execute against 

User 4’s Retail Order. In this instance, 

when there are multiple Enhanced RPI 

Orders that can provide price 

improvement to the contra-side Retail 

Order, the Exchange believes it is 

appropriate to use the highest step-up 

range to determine order book priority 

as it is encouraging Users to submit 

aggressively priced orders by granting 

order book priority to the User with the 

highest step-up range. As such, the 

Exchange believes it is appropriate to 

give priority to User 1’s Enhanced RPI 

Order in this instance because User 1’s 

step-up range is more aggressive than 

User 2’s step-up range and is therefore 

willing to provide additional price 

improvement to Retail Orders as 

compared to User 2’s Enhanced RPI 

Order. 

Example 10 34

Enhanced RPI Orders will have price 

priority over resting RPI orders (that do 

not contain a step-up range) on the BYX 

Book so long as the step-up range of the 

Enhanced RPI Order is greater than the 

limit price of the resting RPI order. 

Consider the following example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters an Enhanced RPI 

Order to buy ABC at $10.01 for 100. 

User 1’s step-up range is $10.05. User 

1’s order is ranked at $10.01. 

Æ User 2 enters an RPI Order to buy 

ABC at $10.02. 

Æ User 3 enters a Retail Order to sell 

ABC at $10.00 for 100. 

• Result: User 3’s Retail Order will 

execute with User 1’s Enhanced RPI 

Order at a price of $10.025 because User 

1’s Enhanced RPI Order containing a 

step-up range allows User 3’s Retail 

Order to receive an additional one-half 

cent price improvement as compared to 

the ranked price of User 2’s RPI Order. 

While User 2’s RPI Order had a higher 

ranked price ($10.02) than User 1’s 

Enhanced RPI Order ($10.01), User 2’s 

RPI Order did not contain a step-up 

range. Given that Enhanced RPI Orders 

are designed to provide meaningful 

price improvement against all resting 

orders on the BYX Book, the Exchange 

believes this factor favors using the 

price improvement provided by the 

step-up range in order to determine 

priority in situations where there are 

both resting RPI and Enhanced RPI 

Orders on the BYX Book. While RPI 

Orders do provide at least $0.001 of 

price improvement as compared to the 

Protected NBBO, Enhanced RPI Orders 

allow for price improvement to the next 

valid half cent or full cent as the 

transaction is priced above $1.00.35

Thus, using the step-up range to 

determine priority when RPI Orders are 

resting on the BYX Book results in an 

increased amount of price improvement 

for the contra-side Retail Order. 

Example 11 36

Enhanced RPI Orders may also 

improve against displayed orders resting 

on the BYX Book in order to provide 

price improvement to a contra-side 

Retail Order. Consider the following 

example: 

• The Protected NBBO for security 

ABC is $10.00 × $10.05. 

Æ User 1 enters an Enhanced RPI 

Order to buy ABC at $9.99 for 100. User 

1’s step-up range is $10.05. User 1’s 

order is ranked at $9.99. The Retail 

Liquidity Identifier is not displayed as 

the limit price of $9.99 is below the 

NBB and the Retail Liquidity Identifier 

will only display when there is RPI 

interest priced at least $0.001 better 

than the Protected NBB or Protected 

NBO. 

Æ User 2 enters a displayed order to 

buy ABC at $10.00 for 100. 

Æ User 3 enters a Retail Order to sell 

ABC at $10.00 for 100. 

• Result: User 3’s Retail Order will 

execute with User 1’s Enhanced RPI 

Order at a price of $10.01. While User 

2’s displayed order is displayed and 

ranked at a higher price ($10.00) than 

User 1’s Enhanced RPI Order ($9.99), 

User 1’s Enhanced RPI Order includes a 

step-up range on its order, which 

permits the order to execute up to a 

price of $10.05. In this instance, 

executing User 2’s displayed order at 

$10.00 does not provide any price 

improvement to the Retail Order when 

User 1’s Enhanced RPI Order is resting 

on the BYX Book and is willing to 

provide additional price improvement 

to Order 3 than Order 2 is willing to 

provide. User 1’s Enhanced RPI Order is 

willing to step up to the next full cent 

above $10.00 (in this case, $10.01), 

which provides a full penny of price 

improvement to User 3’s Retail Order., 

As such, this is the price at which User 

3’s Retail Order executes with User 1’s 

Enhanced RPI Order. 

As demonstrated in the examples 

above, the Exchange is proposing to 

grant an Enhanced RPI Order price 

priority over equal-priced or betterpriced resting orders on the BYX Book 

so long as the Enhanced RPI Order can 

provide meaningful price improvement 

over such resting orders. The Exchange 

believes that allowing liquidity 

providers to post orders outside of the 

range at which they are willing to 

execute yet maintain the opportunity to 

step-up against resting orders on the 

same side of the BYX Book in exchange 

for price priority will incentivize these 

liquidity providers to provide additional 

liquidity on the Exchange. As a result of 

additional, aggressively priced liquidity 

submitted to the Exchange designed 

specifically to interact with Retail 

Orders, RMOs will therefore be 

incentivized to submit additional retail 

order flow to the Exchange which has 

the potential to interact with an 

Enhanced RPI Order and receive 

meaningful price improvement. 

Retail Liquidity Identifier 

The Exchange currently disseminates 

an identifier pursuant to Rule 11.24(e) 

when RPI interest priced at least $0.001 

better than the Protected NBB or 

Protected NBO for a particular security 


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37The Exchange notes that the Retail Liquidity 

Identifier for Tape A and Tape B securities are 

disseminated pursuant to the CTA/CQ Plan. The 

identifier is also available through the consolidated 

public market data stream for Tape C securities. The 

processor for the Nasdaq UTP disseminates the 

Retail Liquidity Identifier and analogous identifiers 

from other market centers that operate programs 

similar to the RPI Program. 

38See 17 CFR 242.612 (‘‘Minimum pricing 

increment’’). 

39See Rule 1.5(n). The term ‘‘Member’’ shall 

mean ay registered broker or dealer that has been 

admitted to membership in the Exchange. A 

Member will have the status of a ‘‘member’’ of the 

Exchange as that term is defined in Section 3(a)(3) 

of the Act. Membership may be granted to a sole 

proprietor, partnership, corporation, limited 

liability company or other organization which is a 

registered broker or dealer pursuant to Section 15 

of the Act, and which has been approved by the 

Exchange. 

40Supra note 6. 

41The ‘‘SIP’’ refers to the centralized securities 

information processors. 

42See ‘‘How Subdollar Securities are Trading 

Now’’ (March 16, 2023). Available at https://

www.cboe.com/insights/posts/how-subdollarsecurities-are-trading-now/. 

43 Id. 

44Trade Reporting Facilities are facilities through 

which FINRA members report off-exchange 

transactions in NMS stocks, as defined in SEC Rule 

600(b)(47) of Regulation NMS. See Tick Size 

Proposal at 80315. 

45Supra note 42. 

46 Id. 

47Supra note 38. 

48 15 U.S.C. 78f(b). 

49 15 U.S.C. 78f(b)(5). 

is available in the System (‘‘Retail 

Liquidity Identifier’’ or ‘‘Identifier’’). 

The Identifier is disseminated through 

consolidated data streams (i.e., pursuant 

to the Consolidated Tape Association 

Plan/Consolidated Quotation Plan, or 

CTA/CQ, for Tape A and Tape B 

securities, and the Nasdaq UTP Plan for 

Tape C securities) as well as through 

proprietary Exchange data feeds.37 The 

Identifier reflects the symbol and the 

side (buy or sell) of the RPI interest, but 

does not include the price or size of the 

RPI interest. In particular, CQ and UTP 

quoting outputs include a field for codes 

related to the Retail Liquidity Identifier. 

The codes indicate RPI interest that is 

priced better than the Protected NBB or 

Protected NBO by at least the minimum 

level of price improvement as required 

by the Program. 

The Exchange proposes to continue to 

disseminate the Retail Liquidity 

Identifier in its current form should the 

Enhanced RPI Order be approved. For 

Enhanced RPI orders, the indicator will 

be based off of the ranked price only 

and the step-up range will not be used. 

The purpose of the Identifier is to 

provide relevant market information to 

RMOs that there is available RPI interest 

available on the Exchange, thereby 

incentivizing RMOs to send Retail 

Orders to the Exchange. The Exchange 

proposes to make clear in Rule 11.24(e) 

that both RPI Orders and Enhanced RPI 

Orders constitute RPI interest and that 

the Retail Liquidity Identifier shall be 

disseminated when RPI Interest (as 

defined in proposed Rule 11.24(e)) 

priced at least $0.001 better than the 

Protected NBB or Protected NBO for a 

particular security is available in the 

System. A separate liquidity identifier 

that identifies Enhanced RPI Order 

interest will not be disseminated. 

Because the proposed Enhanced RPI 

Order is an extension of the existing RPI 

Order, it will automatically offer at least 

$0.001 of price improvement over the 

Protected NBB or Protected NBO. As 

such, displaying the Retail Liquidity 

Identifier will provide an indication to 

RMOs that at least $0.001 of price 

improvement is available in the System, 

with the opportunity of potentially 

receiving additional price improvement 

should the RPI interest be in the form 

of an Enhanced RPI Order. 

As discussed below, the Exchange 

proposes to expand the Program to 

include securities priced below $1.00. 

Given that the minimum price variation 

(‘‘MPV’’) of a sub-dollar security is 

$0.0001,38 the Identifier for sub-dollar 

securities will be displayed when there 

is at least $0.0001 of price improvement 

over the Protected NBB or Protected 

NBO. The Exchange will not make any 

other changes to the Identifier for subdollar securities other than the 

minimum amount of price improvement 

required to display the Identifier. 

Securities Priced Below $1.00 

Rule 11.24(h) currently limits the 

Program to trades occurring at prices 

equal to or greater than $1.00 per share 

and the Exchange periodically notifies 

Members 39 regarding securities 

included in the Program through an 

information circular.40 Now, the 

Exchange proposes to expand the 

Program to all securities, including 

those priced below $1.00. The rationale 

behind expanding the Program to all 

securities regardless of execution price 

stems from the growth of sub-dollar 

trading (i.e., trading at prices below 

$1.00), both on- and off-exchange. As of 

March 2023, an analysis of SIP 41 data 

by the Exchange found that sub-dollar 

average daily volume has increased 

313% as compared to first quarter 

2019.42 In this period, sub-dollar onexchange average daily volume grew 

from 442 million shares per day to 1.8 

billion shares per day.43 An analysis of 

SIP and FINRA Trade Reporting Facility 

(‘‘TRF’’),44 data indicates that exchanges 

represented approximately 39.8% 

market share in sub-dollar securities, 

with a total of 1,638 securities trading 

below $1.00.45 As an exchange group, 

Cboe had approximately 13.3% of 

market share of sub-dollar securities in 

the first quarter of 2023.46

As trading in sub-dollar securities has 

grown steadily since 2020, the Exchange 

believes it is appropriate to expand the 

Program to include securities priced 

below $1.00. The Exchange notes, 

however, that the MPV for sub-dollar 

securities differs from the MPV for 

securities priced at or above $1.00. As 

provided for by Regulation NMS Rule 

612, for securities priced below $1.00, 

the MPV is $0.0001, whereas for 

securities priced at or above $1.00 the 

MPV is $0.01.47 The Exchange proposes 

that in order for an Enhanced RPI Order 

to gain queue priority ahead of resting 

orders on the same side of the BYX 

Book, the Enhanced RPI Order will be 

stepped-up to the nearest MPV 

($0.0001). This differs from the 

treatment of Enhanced RPI Orders for 

securities priced at or above $1.00, 

which are proposed to be stepped-up to 

the nearest half-cent midpoint or whole 

cent tick ahead of resting orders on the 

same side of the BYX Book. The 

Exchange believes that the different 

treatment of Enhanced RPI Orders for 

securities priced below $1.00 is 

appropriate given that the MPV for 

securities priced below $1.00 is 

significantly less than the MPV for 

securities priced at or above $1.00. The 

Exchange notes that it will announce to 

its Members via a Trade Desk Notice 

that the Program is expanding to all 

securities priced below $1.00 and will 

no longer provide periodic updates of 

securities included in the Program. 

Implementation 

The Exchange plans to implement the 

proposed rule change during the second 

half of 2024 and will announce the 

implementation date via Trade Desk 

Notice. 

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.48 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 49 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 


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50 Id. 

51See U.S. Securities and Exchange Commission, 

Strategic Plan, Fiscal Years 2018–2022, available at 

https://www.sec.gov/files/SEC_Strategic_Plan_

FY18-FY22_FINAL_0.pdf. 

52Supra notes 17–18. See also, Securities 

Exchange Act Release No. 96496 (December 14, 

2022), 88 FR 5440 (January 27, 2023) (‘‘Regulation 

Best Execution’’); Securities Exchange Act Release 

No. 96493 (December 14, 2022), 88 FR 3786 

(January 20, 2023) (‘‘Disclosure of Order Execution 

Information’’). 

53Adverse selection is the phenomenon where 

the price of a stock drops right after a liquidity 

provider purchases the stock. Marketable retail 

order flow is generally seen as more desirable by 

institutional liquidity providers as executions 

against retail orders are less prone to adverse 

selection. The Commission has previously opined 

that retail liquidity programs may be beneficial to 

institutional investors as they may be able to reduce 

their possible adverse selection costs by interacting 

with retail order flow. See Pilot Approval Order at 

71656. 

54 Id. 

55 Id. 

56Supra notes 7–8. 

57Nasdaq PSX, however, offers a price setter pro 

rata model that rewards liquidity providers that set 

the best price and then rewards other market 

participants that enter larger sized orders. See 

Securities Exchange Act Release No. 72250 (May 

23, 2014), 79 FR 31147 (May 30, 2014) (SR–Phlx– 

2014–24). 

58A review of internal Exchange data found that 

60% of retail orders across the Exchange and its 

affiliates executed at the NBBO year-to-date in 

2023. Similarly, 59% of retail orders across the 

Exchange and its affiliates executed at the NBBO in 

calendar year 2022. 

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) 50 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Commission has repeatedly 

emphasized that the U.S. capital 

markets should be structured with the 

interests of retail investors in mind 51

and has recently proposed a series of 

rules designed, in part, to attempt to 

bring order flow back to the exchanges 

from off-exchange trading venues.52 The 

Exchange believes its proposed 

enhancements to the Program are 

consistent with the Commission’s goal 

of ensuring that the equities markets 

continue to serve the needs of the 

investing public. Specifically, 

introducing the Enhanced RPI Order 

type would protect investors and the 

public interest by providing retail 

investors the ability to obtain 

meaningful price improvement on BYX, 

a national securities exchange. The 

Exchange is committed to innovation 

that improves the quality of the equities 

markets and believes that the proposed 

Enhanced RPI Order may increase the 

attractiveness of the Exchange for the 

execution of Retail Orders submitted on 

behalf of the millions of ordinary 

investors that rely on these markets for 

their investment needs. 

The Exchange believes the proposed 

Enhanced RPI Order promotes just and 

equitable principles of trade and is not 

unfairly discriminatory because the 

order type will be available for all Users, 

and is not limited to a certain subset of 

market participants. Even though 

Enhanced RPI Orders may be entered by 

any market participant, the Exchange 

believes that the majority of Enhanced 

RPI Orders will be entered by or on 

behalf of institutional investors that are 

willing to provide additional price 

improvement as a way to minimize their 

adverse selection costs.53 The Exchange 

does not believe that such segmentation 

is inconsistent with section 6(b)(5) of 

the Act, as it does not permit unfair 

discrimination. The Commission has 

previously stated that the markets 

generally distinguish between retail 

investors, whose orders are considered 

desirable by liquidity providers because 

such retail investors are presumed to be 

less informed about short-term price 

movements, and professional traders, 

whose orders are presumed to be more 

informed.54 The Commission has 

further stated that without opportunities 

for price improvement, retail investors 

may encounter wider spreads that are a 

consequence of liquidity providers 

interacting with more informed order 

flow.55 The Exchange believes that its 

proposed Enhanced RPI Order is 

reasonably designed to attract 

marketable retail order flow to the 

exchange as it will help to ensure that 

retail investors benefit from the better 

price that liquidity providers are willing 

to provide to retail orders in exchange 

for minimizing their adverse selection 

costs. 

Additionally, the Exchange believes 

that the proposed Enhanced RPI Order 

type is not unfairly discriminatory to 

institutional investors as it rewards the 

User that enters the most aggressively 

priced Enhanced RPI Order with order 

book priority. Ultimately, execution 

priority amongst orders resting on the 

BYX Book will be determined by the 

step-up range entered on each Enhanced 

RPI Order. If the step-up range for an 

Enhanced RPI Order provides a 

marketable, contra-side Retail Order 

with greater price improvement than 

would otherwise be available from other 

resting orders by stepping up to the next 

half cent or full cent (for securities 

priced at or above $1.00) or the valid 

tick increment (for securities priced 

below $1.00), then the Enhanced RPI 

Order will be granted order book 

priority. In the event that multiple 

Enhanced RPI Orders are resting on the 

BYX Book, the Enhanced RPI Order 

with the highest step-up range will be 

given order book priority. The Exchange 

believes rewarding the most 

aggressively priced step-up range will 

encourage Users to submit Enhanced 

RPI Orders with step-up ranges that are 

likely to provide meaningful price 

improvement to Retail Orders, which 

ultimately benefits both retail investors, 

who will receive price improvement 

over the NBBO, and the User entering 

the Enhanced RPI Order, who is able to 

execute against a marketable Retail 

Order to minimize its adverse selection 

costs and interact with retail order flow 

that they are currently unable to access 

on the Exchange given that such order 

flow is largely executed off-exchange. 

As noted in the Exchange’s initial RPI 

filings,56 most equities exchanges, 

including BYX, determine priority 

based on a price/time/display allocation 

model.57 This has contributed to deep 

and liquid markets for equity securities 

as liquidity providers compete to be the 

first to establish a particular price. 

While the price/time/display allocation 

model generally works well for 

institutional investors, retail investors 

are traditionally not able to compete 

with market makers and other 

automated liquidity providers to set an 

aggressive price on orders submitted to 

the Exchange. Importantly, retail 

investors, in contrast to institutional 

investors, tend to have longer 

investment time horizons, which means 

they are not in the business of 

optimizing queue placement under a 

time-based allocation model. Therefore, 

in order to facilitate the needs of retail 

investors, the Exchange believes an 

alternative approach—such as this 

Enhanced RPI Order proposal—would 

benefit the retail investor community. 

As discussed earlier, the proposed 

introduction of the Enhanced RPI Order 

is designed to provide retail investors 

with enhanced opportunities to obtain 

meaningful price improvement by 

providing them with potential 

opportunities to execute versus nondisplayed Enhanced RPI Orders that 

offer price improvement beyond that 

offered by resting orders on the 

Exchange. Marketable retail order flow 

is routinely executed in full on entry at 

the national best bid or offer or better,58

but many retail liquidity programs, 


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59See, e.g., IEX Rule 11.232; Nasdaq BX Rule 

4780; NYSE Arca Rule 7.44–E; NYSE Rule 7.44. 

60See EDGX Rule 11.9(a)(2)(A). 

61See Securities Exchange Act Release No. 87200 

(October 2, 2019), 84 FR 53788 (October 8, 2019), 

SR–CboeEDGX–2019–012 (‘‘EDGX Retail Priority 

Approval Order’’). 

62Supra note 8. See also Securities Exchange Act 

Release No. 67347 (July 3, 2012), 77 FR 40673 (July 

10, 2012) (SR–NYSE–2011–55; SR–NYSEAmex– 

2011–84) (‘‘RLP Approval Order’’) at 40679. 

including the Exchange’s current 

Program, are designed to offer at least 

$0.001 of price improvement over the 

Protected NBB or Protected NBO to 

Retail Orders.59 By introducing 

Enhanced RPI Orders, the Exchange is 

proposing to prioritize Enhanced RPI 

Orders ahead of other resting orders on 

the same side of the BYX Book in 

exchange for the Enhanced RPI Order 

offering meaningful price improvement 

to Retail Orders by stepping up to the 

next half cent or whole cent (for 

securities priced at or above $1.00) or 

the next valid tick increment (for 

securities priced below $1.00). The 

Exchange believes the ability to post an 

order at a price outside of the range at 

which it is willing to execute with the 

ability to gain priority in exchange for 

executing at a more aggressive price will 

(1) encourage Users to submit 

aggressively priced Enhanced RPI 

Orders, and (2) attract Retail Order flow 

to the Exchange, both of which will 

benefit all investors. Increased order 

flow will create a deeper pool of 

liquidity on the Exchange, which 

provides for greater execution 

opportunities for all Users and provides 

for overall enhanced price discovery 

and price improvement opportunities 

on the Exchange. If successful, the 

proposed rule change would benefit 

market participants by increasing the 

diversity of order flow with which they 

can interact on a national securities 

exchange, thereby increasing order 

interaction and contributing to price 

formation. 

Giving queue priority to certain order 

types is not a novel concept in the 

securities markets. In fact, on the 

Exchange’s affiliate, Cboe EDGX 

Exchange, Inc. (‘‘EDGX’’), the displayed 

portion of Retail Orders are given 

allocation priority ahead of all other 

available interest on the EDGX Book 

(‘‘EDGX Retail Priority’’).60 The 

Commission found that EDGX Retail 

Priority represented a reasonable effort 

to enhance the ability of bona fide retail 

trading interest to compete for 

executions with orders entered by other 

market participants that may be better 

equipped to optimize their place in the 

intermarket queue.61 The Exchange 

believes that grating queue priority to an 

Enhanced RPI Order as discussed in the 

Purpose section similarly reflects a 

reasonable effort by the Exchange to 

create additional price improvement 

opportunities for retail investors, as has 

been the standard identified by the 

Commission in several approval orders 

written in regards to RLPs.62 While the 

Exchange is not proposing to prioritize 

Retail Orders as EDGX has done, it is 

proposing to prioritize Enhanced RPI 

Orders that provide price improvement 

and may only interact with contra-side 

Retail Orders. 

The Exchange believes that the 

prioritization of Enhanced RPI Orders 

that offer meaningful price 

improvement over other resting orders 

on the same side of the BYX Book 

promotes just and equitable principles 

of trade and is consistent with Section 

6(b)(5) of the Act as it encourages Users 

to submit aggressively priced Enhanced 

RPI Orders in exchange for queue 

priority ahead of all resting orders on 

the same side of the BYX Book so long 

as meaningful price improvement is 

provided to a contra-side Retail Order. 

The Exchange proposes to provide 

queue priority for Enhanced RPI Orders 

over all other types of orders and is not 

limiting queue priority to a certain 

subset of order types. As previously 

stated, all Users are eligible to submit 

Enhanced RPI Orders. And while the 

Exchange believes that most Enhanced 

RPI Orders will be submitted by or on 

behalf of professional traders, retail 

investors will have the opportunity to 

receive better-priced executions should 

they choose to submit a marketable 

Retail Order to the Exchange. The 

Exchange believes the introduction of 

Enhanced RPI Orders will deepen the 

Exchange’s pool of available liquidity, 

increase marketable retail order flow to 

the Exchange and provide additional 

competition for marketable retail order 

flow, most of which is currently 

executed off-exchange in the OTC 

markets. Promoting competition for 

retail order flow among execution 

venues stands to benefit retail investors, 

who may be eligible to receive greater 

price improvement on the Exchange by 

interacting with an Enhanced RPI Order 

than they would if their order was 

internalized by a broker-dealer on the 

OTC market. 

Furthermore, the Exchange believes 

that its proposal to limit the use of the 

step-up range to determine order book 

priority is consistent with Section 

6(b)(5) of the Act because the use of the 

step-up range rather than limit price to 

determine order priority is limited to 

the following: (1) the range is needed to 

gain priority over a resting order with 

higher order book priority; (2) in 

situations where (i) a contra-side Retail 

Order is entered at a less aggressive 

price than the Enhanced RPI Order’s 

limit price and all other resting liquidity 

in the same security and (ii) the 

Enhanced RPI Order’s step-up range is 

equal to or more aggressively priced 

than the Retail Order’s limit price; and 

(3) to determine order book priority 

when multiple Enhanced RPI Orders are 

resting on the BYX Book and are eligible 

to trade ahead of higher priority orders. 

The primary use case of the Enhanced 

RPI Order identified in the first scenario 

listed above is to provide price 

improvement to marketable retail order 

flow. As previously discussed in the 

Statutory Basis section, the Exchange 

believes allowing the use of a step-up 

range in order to provide an additional, 

more aggressive price at which an 

Enhanced RPI Order may execute is 

essential in order to deepen the pool of 

liquidity available to retail investors. In 

exchange for providing aggressively 

priced orders, these liquidity providers 

will be rewarded with executions 

against marketable retail order flow, 

which is generally preferred over more 

informed order flow. Retail investors, on 

the other hand, will receive meaningful 

price improvement should their order 

execute against an Enhanced RPI Order. 

In the situation where (i) a contra-side 

Retail Order is entered at a less 

aggressive price than the Enhanced RPI 

Order’s limit price and all other resting 

liquidity in the same security and (ii) 

the Enhanced RPI Order’s step-up range 

is equal to or more aggressively priced 

than the limit price of the Retail Order, 

the Exchange believes using the step-up 

range to determine order priority 

promotes just and equitable principles 

of trade because it rewards the 

Enhanced RPI Order with the most 

aggressive step-up range rather than 

forego an execution due to the limit 

price of all orders resting on the BYX 

Book being ineligible to trade with the 

contra-side Retail Order. The intent of 

the Enhanced RPI Order is to reward 

aggressively priced liquidity with queue 

priority while simultaneously providing 

price improvement to Retail Orders. The 

Exchange believes that determining 

order priority using the step-up range in 

this limited situation is aligned with the 

intent of liquidity providers that choose 

to submit Enhanced RPI Orders and 

emphasizes a benefit of using the 

Enhanced RPI Order—the ability to 

enter an order at a less aggressive price 

yet also provide a step-up range that the 

liquidity provider is willing to execute 

in order to execute against marketable 

retail order flow rather than forego an 


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63For securities priced below $1.00, the 

minimum amount of price improvement as 

compared to the Protected NBB or Protected NBO 

is $0.0001. 

64Retail Orders may only receive $0.001 price 

improvement in certain situations, including where 

an Enhanced RPI Order steps up against the limit 

price of an RPI Order priced in sub-pennies. An 

Enhanced RPI Order would be given order book 

priority over RPI Orders in the event that the 

Enhanced RPI Order was priced equal to or less 

aggressive than the limit price of a resting RPI Order 

but had a step-up range that was priced more 

aggressive than the limit price of the resting RPI 

Order (supra note 20). 

65See RPI Approval Order at 53184. 

66Supra note 17 at 178. 

67 Id. 

68 Id. 

69Supra note 42. 

70 Id. 

execution and remain on the BYX Book. 

The Exchange seeks to encourage 

liquidity providers to submit order flow 

designed to interact with marketable 

retail order flow in an effort to increase 

the amount of Retail Order executions 

occurring on-exchange. By rewarding 

aggressively priced Enhanced RPI 

Orders in situations where the order 

would otherwise not execute, the 

Exchange believes its pool of liquidity 

available to marketable retail order flow 

will deepen, thus incentivizing RMOs to 

submit additional marketable retail 

order flow to the Exchange. 

Likewise, using the step-up range 

rather than the limit price of an 

Enhanced RPI Order in situations where 

multiple Enhanced RPI Orders are 

resting on the BYX Book and are eligible 

to trade ahead of higher priority orders 

promotes the use of the Enhanced RPI 

Order type as the Exchange seeks to 

encourage RMOs to submit marketable 

Retail Orders to the Exchange. 

Determining order priority of Enhanced 

Orders based on their step-up range over 

the limit price of all other higher 

priority orders rewards the Enhanced 

RPI Order that provides the most 

aggressive execution price. The 

Exchange believes that using the step-up 

range rather than the limit price in 

situations where there are multiple 

Enhanced RPI Orders will encourage 

Users to submit aggressively priced 

Enhanced RPI Orders to the Exchange, 

as they will be given priority to interact 

with more desirable marketable retail 

order flow based on their step-up range. 

Additionally, the Exchange believes that 

RMOs will be encouraged to direct 

marketable retail order flow to the 

Exchange knowing that the worst price 

they will receive is $0.001 better than 

the Protected NBB or Protected NBO for 

securities priced at or above $1.00 63 and 

there is potential to receive more 

meaningful price improvement should 

an Enhanced RPI Order be present on 

the opposite side of the BYX Book.64

An analysis of internal Exchange data 

found that the current Program provided 

approximately $33 million in price 

improvement to retail investors during 

calendar year 2022, which is a 

substantial increase from the 4.5 million 

provided to retail investors between 

January 2016 and June 2018.65 It is 

reasonable to believe that the proposed 

Enhanced RPI Order, by virtue of 

providing at least $0.005 of price 

improvement in exchange for execution 

priority, would only add to the 

Exchange’s ability to provide price 

improvement to retail investors. The 

Exchange does not believe that offering 

additional price improvement to retail 

investors through Enhanced RPI Orders 

would cause harm to the broader 

market. On the contrary, the Exchange 

believes that rewarding Enhanced RPI 

Orders with order book priority in 

exchange for price improvement would 

further the Commission’s goal of 

providing additional opportunities for 

retail investors to interact directly with 

a large volume of individual investor 

orders. The Exchange created the 

Enhanced RPI Order with the goal of 

encouraging liquidity providers to 

submit orders eligible to interact with 

marketable retail order flow with the 

competition from these liquidity 

providers resulting in a reasonable 

alternative for marketable retail order 

flow to receive executions at a price 

better than the Protected NBBO. As the 

Commission noted in its Order 

Competition Rule proposal, over 90% of 

marketable NMS retail stock orders are 

routed to wholesalers where the orders 

are not exposed to order-by-order 

competition.66 While wholesalers 

generally achieve price improvement 

relative to the NBBO, the Commission 

has indicated that exchanges often have 

liquidity available at the NBBO 

midpoint, which would be a more 

favorable price than a retail order 

receives when executed by a 

wholesaler.67 Here, the Exchange is 

proposing price improvement of at least 

$0.005, and in some cases $0.01, which 

the Exchange believes would further the 

Commission’s goal of ‘‘increasing 

competition and enhancing the direct 

exposure of individual investor orders 

to a broader spectrum of market 

participants’’ as set forth in section 11A 

of the Exchange Act.68

In addition to the proposed 

introduction of the Enhanced RPI Order, 

the Exchange also believes that 

expanding the Program to include 

securities priced below $1.00 is 

consistent with Section 6(b)(5) of the 

Act because it promotes just and 

equitable principles of trade by allowing 

liquidity providers to submit orders 

designed to interact with retail order 

flow in all securities, rather than only in 

securities priced at or above $1.00. As 

stated above, a significant majority of 

the increased volume in sub-dollar 

securities comes from executions 

occurring off-exchange.69 By permitting 

the Exchange to expand its Program to 

include securities priced below $1.00, 

the Exchange would be a more attractive 

venue for liquidity providers seeking to 

interact with retail order flow, which 

furthers the Commission’s goal of 

bringing retail order executions back onexchange. Further, the proposal to 

expand the Program to include 

securities priced below $1.00 is not 

unfairly discriminatory because all 

Users will be able to submit RPI Orders 

or Enhanced RPI Orders at prices below 

$1.00. As noted above, the Exchange, 

along with its affiliates, maintained a 

market share of 13.3% in sub-dollar 

securities during the first quarter of 

2023.70 The Exchange believes that its 

expansion of the Program to include 

sub-dollar securities would lead to more 

liquidity providers submitting order 

flow to the Exchange in an attempt to 

execute against Retail Orders. In turn, 

RMOs would submit additional Retail 

Order flow to the Exchange to interact 

with RPI Orders and Enhanced RPI 

Orders as there would be additional 

opportunities for price improvement in 

sub-dollar securities. The proposal 

removes impediments to and perfect the 

mechanism of a free and open market 

and a national market system and 

protects investors and the public 

interest by allowing executions in Retail 

Orders priced below $1.00 to receive 

price improvement by executing against 

RPI Orders or Enhanced RPI Orders, 

which are currently only available at 

prices at or above $1.00. In addition to 

the changes described above, the 

Exchange believes that the changes to 

certain existing rule text within Rule 

11.24 is consistent with Section 6(b)(5) 

of the Act because it provides additional 

certainty as to how Rule 11.24 is to be 

applied. The proposed revised 

definition of RPI Interest in Rule 

11.24(a)(5) is necessary in order to 

capture the proposed Enhanced RPI 

Order type, in addition to the existing 

RPI Order. Additionally, amending Rule 

11.24(e) and Rule 11.24(f)(1)–(2) to 

reflect the changes made in Rule 

11.24(a)(5) is necessary in order to 

ensure that RPI Interest is properly 

defined throughout Rule 11.24. The 

deletion of Rule 11.24(h) and 

renumbering of Rule 11.24(i) are 


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71Supra note 59. 72 17 CFR 200.30–3(a)(12). 

consistent with the Exchange’s proposal 

to expand the Program to securities 

priced below $1.00. The proposed 

changes to Rule 11.24(a)(2) are intended 

to: (i) clarify that a Retail Order must be 

submitted with a time-in-force of IOC; 

and (ii) introduce the ability for Users 

to submit Retail Orders as Mid-Point 

Peg Orders, both of which changes serve 

to provide additional guidance to Users 

of Retail Orders about the order 

modifiers permitted by the Exchange. 

The Exchange believes these changes 

are ministerial in nature and serve to 

ensure that Rule 11.24 is properly 

describing order behavior after the 

proposed introduction of the Enhanced 

RPI Order and proposed expansion of 

the Program to securities priced below 

$1.00. 

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 believes that the proposal 

does not impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Rather, the 

proposed rule change is designed to 

increase intramarket competition for 

retail order flow by introducing a new 

order type that is designed to provide 

price improvement to Retail Orders in 

exchange for price priority over resting 

orders on the same side of the BYX 

Book. The proposal, which seeks to 

provide an innovative form of price 

improvement to Retail Orders through 

the creation of the Enhanced RPI Order, 

represents an effort by the Exchange to 

encourage on-exchange liquidity an 

incentivize the trading of Retail Orders 

on a national securities exchange. 

The Exchange also believes the 

proposed rule change does not impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the Act. As discussed 

above, IEX, NYSE, NYSE Arca, and 

Nasdaq BX each operate RLPs and the 

Exchange believes that its proposed rule 

change will allow it to compete for 

additional retail order flow with the 

aforementioned exchanges.71

Furthermore, the Exchange’s proposal 

will promote competition between the 

Exchange and off-exchange trading 

venues where the majority of retail 

order flow trades today. The proposed 

Enhanced RPI Order is designed to 

foster innovation within the market and 

increase the quality of the national 

market system by allowing national 

securities exchanges to compete both 

with each other and with off-exchange 

venues for order flow. Expanding the 

program to include securities priced 

below $1.00 similarly would not impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the Act. The Exchange’s 

proposal is designed to increase 

competition for trading in all securities, 

including but not limited to securities 

priced below $1.00. Given the growth of 

trading in sub-dollar securities since 

2020, the Exchange believes that 

expanding the Program to include subdollar securities will make the Program 

an attractive option for retail investors 

seeking to trade in lower-priced 

securities, and as such is a competitive 

measure designed to compete directly 

with other exchanges for order flow. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be 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– 

CboeBYX–2023–020 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–CboeBYX–2023–020. 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–CboeBYX–2023–020 and 

should be submitted on or before 

February 7, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.72

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–00712 Filed 1–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–667, OMB Control No. 

3235–0745] 

Proposed Collection; Comment 

Request; Extension: Rule 18a–5 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 


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