Federal Register / Vol. 89, No. 26 / Wednesday, February 7, 2024 / Notices 8473 

5 15 U.S.C. 78s(b)(2). 

6 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

3The ‘‘SIP’’ refers to the centralized securities 

information processors. 

4See ‘‘How Subdollar Securities are Trading 

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

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

5 Id. 

6Trade 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 Securities 

Exchange Act Release No. 96494 (December 14, 

2022), 87 FR 80266 (December 29, 2022) (‘‘Tick Size 

Proposal’’) at 80315. 

7Supra note 4. 

8 Id. 

9See Rule 1.5(d). The EDGX Book means the 

System’s electronic file of orders. 

10See Rule 1.5(ee). The term ‘‘User’’ shall mean 

any Member or Sponsored Participant who is 

authorized to obtain access to the System pursuant 

to Rule 11.3. 

11Orders containing a Post Only instruction in 

securities priced at or above $1.00 remove contraside liquidity only if the value of such execution 

when removing liquidity equals or exceeds the 

value of such execution if the order instead posted 

to the EDGX Book and subsequently provided 

liquidity. The Exchange does not propose to change 

the functionality of orders containing a Post Only 

instruction in securities priced at or above $1.00. 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is February 5, 

2024. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change 

and the issues raised therein. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,5

designates March 21, 2024, as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–CboeBZX–2023–101). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–02416 Filed 2–6–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99459; File No. SR– 

CboeEDGX–2024–007] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

of a Proposed Rule Change To Amend 

Rule 11.6(n)(4) and Rule 11.10(a)(4)(D) 

To Permit the Use of the Post Only 

Order Instruction at Prices Below $1.00 

February 1, 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 January 

19, 2024, 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, 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 

Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) proposes to 

amend Rule 11.6(n)(4) and Rule 

11.10(a)(4)(D) to permit the use of the 

Post Only order instruction at prices 

below $1.00. 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 

Trading in sub-dollar securities both 

on- and off-exchange has grown 

significantly since early 2019. An 

analysis of SIP 3 data by the Exchange 

found that sub-dollar average daily 

volume has increased over 300% as 

compared to volumes in the first quarter 

of 2019.4 During this period, onexchange average daily volume in subdollar securities grew from 442 million 

shares per day to 1.8 billion shares per 

day.5 A separate analysis of SIP and 

FINRA Trade Reporting Facility 

(‘‘TRF’’) 6 data indicated that exchanges 

represented approximately 39.8% 

market share in sub-dollar securities, 

with a total of 1,638 securities trading 

below $1.00.7 As an exchange group, 

Cboe had approximately 13.3% of 

market share in sub-dollar securities in 

the first quarter of 2023.8 Additionally, 

an analysis of internal data showed that 

the Exchange has seen retail sub-dollar 

average daily volume grow from 

approximately $40 million during the 

first quarter of 2022 to over $100 million 

during the third quarter of 2023. 

As a result of the growth in sub-dollar 

trading, the Exchange proposes to 

amend Rule 11.6(n)(4) in order to permit 

an order containing a Post Only 

instruction to post to the EDGX Book 9

at prices below $1.00. As defined in 

Rule 11.6(n)(4), a Post Only instruction 

is ‘‘[a]n instruction that may be attached 

to an order that is to be ranked and 

executed on the Exchange pursuant to 

Rule 11.9 and Rule 11.10(a)(4) or 

cancelled, as appropriate, without 

routing away to another trading center 

except that the order will not remove 

liquidity from the EDGX Book . . .’’. 

Accordingly, an order containing a Post 

Only instruction does not remove 

liquidity, but rather posts to the EDGX 

Book to the extent permissible. 

Additionally, the Exchange proposes to 

amend Rule 11.10(a)(4)(D) to describe 

the manner in which bids or offers 

priced below $1.00 per share are 

executed against orders resting on the 

EDGX Book. The Exchange believes the 

proposed changes will provide Users 10

with an additional order type to utilize 

when submitting order flow to the 

Exchange in securities priced below 

$1.00, thereby contributing to a deeper 

and more liquid market, which benefits 

all market participants and provides 

greater execution opportunities on the 

Exchange. 

Currently, orders containing a Post 

Only instruction priced below $1.00 are 

automatically treated as orders that 

remove liquidity.11 In order to permit an 


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12The Exchange’s economic best interest 

calculation determines whether the value of price 

improvement associated with an order containing a 

Post Only instruction equals or exceeds the sum of 

fees charged for such execution and the value of 

any rebate that would be provided if the order 

posted to the EDGX Book and subsequently 

provided liquidity. The determination of whether 

an order containing a Post Only instruction will be 

allowed to post to the EDGX Book or be eligible to 

remove liquidity is based on the current fee 

schedule, the execution price, and the amount of 

price improvement received. 

13See Rule 11.6(e)(2). A User may attach a ‘‘NonDisplayed Order’’ instruction to an order stating 

that the order is not to be displayed by the System 

on the EDGX Book. 

14See Securities Exchange Act Release No. 75479 

(July 17, 2015), 80 FR 43810 (July 23, 2015), SR– 

EDGX–2015–33 (‘‘EDGX Order Handling Filing’’). 

See also Securities Exchange Act Release No. 64475 

(May 12, 2011), 76 FR 28830 (May 18, 2011), SR– 

BATS–2011–015 (‘‘Resting Order Execution 

Filing’’). The Resting Order Execution Filing 

introduced an order handling change for certain 

Non-Displayed Orders and orders subject to 

display-price sliding that are not executable at 

prices equal to displayed orders on the opposite 

side of the market (the ‘‘locking price’’) on the 

Exchange’s affiliate, BZX (BATS) Exchange in 2011 

and is incorporated by reference in the EDGX Order 

Handling Filing. The Resting Order Execution 

Filing permits Resting Orders priced at or above 

$1.00 to be executed at one-half minimum price 

variation less aggressive than the locking price (for 

bids) and one-half minimum price variation more 

aggressive than the locking price (for offers), under 

certain circumstances. 

15See Rule 11.10(a)(4)(D). 

16See Resting Order Execution Filing footnote 8. 

17See Rule 11.8(a). A ‘‘Market Order’’ is an order 

to buy or sell a stated amount of a security that is 

to be executed at the NBBO or better when the order 

reaches the Exchange. 

18See Rule 11.8(b). A ‘‘Limit Order’’ is an order 

to buy or sell a stated amount of a security at a 

specified price or better. 

19See Rule 1.5(cc). The term ‘‘System’’ shall 

mean the electronic communications and trading 

facility designated by the Board through which 

securities orders of Users are consolidated for 

ranked, executions and, when applicable, routing 

away. 

20See Rule 11.6(l)(1)(B)(i). An order instruction 

requiring that where an order would be a Locking 

Quotation or Crossing Quotation of an external 

market if displayed by the System on the EDGX 

Book at the time of entry, will be ranked at the 

Locking Price in the EDGX Book and displayed by 

the System at one Minimum Price Variation lower 

(higher) than the Locking Price for orders to buy 

(sell) (‘‘Display-Price Sliding’’). 

21The Exchange notes that the reference to 

‘‘temporarily’’ is meant to convey that for so long 

as the NBB is locked, Order 1 will be displayed at 

a price of $0.5001 pursuant to Rule 11.6(l)(1)(B)(i). 

In the event that the NBB moves so that Order 1 

is no longer locking the NBB, Order 1 will be 

displayed at the most aggressive permissible price. 

See also Rule 11.6(l)(1)(B)(ii). 

22 Id. 

23See Rule 11.6(l)(1)(B)(v). 

order containing a Post Only instruction 

to post to the EDGX Book at prices 

below $1.00, the Exchange proposes to 

amend Rule 11.6(n)(4) to remove 

language that states that an order 

containing a Post Only instruction will 

remove contra-side liquidity from the 

EDGX Book if the order is an order to 

buy or sell a security ‘‘priced below 

$1.00 . . .’’. While the Exchange’s 

economic best interest calculation 12

will remain the same as is currently inplace for securities priced at or above 

$1.00, the impact of this proposal will 

modify the outcome of orders 

containing a Post Only instruction in 

securities priced below $1.00 for Users 

who choose to utilize this particular 

order type. Under this proposal, orders 

containing a Post Only instruction 

priced below $1.00 will only remove 

liquidity if the value of the overall 

execution (taking into account all 

applicable fees and rebates) make it 

economically beneficial for the order to 

remove liquidity. The Exchange has 

received User feedback requesting the 

ability to utilize orders with a Post Only 

instruction in securities priced below 

$1.00 in order to allow Users to operate 

a single trading strategy for securities at 

all prices even though the execution 

cost economics for securities priced 

below $1.00 may only provide a slight 

economic benefit for Users who choose 

to utilize orders with a Post Only 

instruction in securities priced below 

$1.00. 

In addition to the proposed 

amendment to Rule 11.6(n)(4), the 

Exchange proposes an amendment to its 

order handling procedures in order to 

permit Non-Displayed Orders 13 and 

orders subject to display-price sliding 

(collectively, ‘‘Resting Orders’’) which 

are not executable at their most 

aggressive price due to the presence of 

a contra-side order containing a Post 

Only instruction to be executed at one 

minimum price variation less aggressive 

than the order’s most aggressive price.14

Currently, similar order handling 

behavior applies only to securities 

priced at or above $1.00.15 When 

proposed in 2011, the Resting Order 

Execution Filing stated that the order 

handling functionality was not 

necessary for securities priced below 

$1.00 as the Exchange did not have the 

ability to quote in sub-pennies and the 

system limitations that market 

participants may encounter if 

attempting to execute in increments 

finer than $0.0001.16 Given the rise in 

sub-dollar trading discussed above, the 

Exchange now proposes to expand the 

order handling functionality introduced 

by the Resting Order Execution Filing to 

securities priced below $1.00. 

Rule 11.10(a)(4)(D) states that for 

securities priced above $1.00, incoming 

orders that are Market Orders 17 or Limit 

Orders 18 priced more aggressively than 

an order displayed on the EDGX Book, 

the Exchange will execute the incoming 

order at, in the case of an incoming sell 

order, one-half minimum price variation 

less than the price of the displayed 

order, and, in the case of an incoming 

buy order, at one-half minimum price 

variation more than the price of the 

displayed order. The Exchange proposes 

that for securities priced below $1.00, 

incoming orders that are Market Orders 

or Limit Orders priced more 

aggressively than an order displayed on 

the EDGX Book, the Exchange will 

execute the incoming order at, in the 

case of an incoming sell order, one 

minimum price variation less than the 

price of the displayed order, and, in the 

case of an incoming buy order, at one 

minimum price variation more than the 

price of the displayed order. The 

different treatment of securities priced 

below $1.00 from securities priced at or 

above $1.00 arises from limitations 

within the System,19 which cannot 

process executions out to five decimal 

places. 

In order to demonstrate the proposed 

order handling behavior for securities 

priced below $1.00, the Exchange has 

included the following example: 

Example 1 

• Assume the NBB is $0.50 and the 

NBO is $0.53. There is no resting 

interest on the EDGX Book. 

Bid Offer 

National best ....... $0.50 × $0.53 

• Next, assume the Exchange received 

an incoming displayed offer (Order 1) to 

sell 100 shares at $0.50. Order 1 is 

eligible for display-price sliding 

pursuant to Rule 11.6(l).20 Pursuant to 

Rule 11.6(l)(1)(B)(i), Order 1 is 

temporarily slid to a displayed price of 

$0.5001 as it locked the NBB upon 

entry.21 Even though Order 1 is now 

temporarily displayed at a price of 

$0.5001, Order 1’s ranked price remains 

$0.50, as $0.50 is the locking price.22

• Next, assume the Exchange received 

an incoming bid containing a Post Only 

instruction (Order 2) to buy 100 shares 

at $0.50. The Exchange’s economic best 

interest calculation determined that it 

was more beneficial for Order 2 to post 

to the EDGX Book and display at a price 

of $0.50. Orders containing a Post Only 

instruction are permitted to post and be 

displayed opposite the ranked price of 

orders subject to Display-Price 

Sliding.23 The result would be depicted 

as follows: 

Bid Offer 

National best ....... $0.50 × $0.5001 

EDGA best .......... 0.50 × 0.5001 


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24See Rule 11.6(q)(1). ‘‘IOC’’ is an instruction the 

User may attach to an order stating the order is to 

be executed in whole or in part as soon as such 

order is received. The portion not executed 

immediately on the Exchange or another trading 

center is treated as cancelled and is not posted to 

the EDGX Book. 

25Orders subject to NMS price sliding (‘‘DisplayPrice Sliding’’) that are temporarily slid to one 

minimum price variation above (below) the NBO 

(NBB) will consist of a non-displayed ranked price 

that is equal to the locking price while 

simultaneously showing a displayed price that is 

one minimum price variation above (below) the 

NBO (NBB). Given that orders subject to DisplayPrice Sliding contain a non-displayed ranked price 

in addition to the order’s displayed price, the 

particular priority issue identified in the Resting 

Order Execution Filing with regard to NonDisplayed Orders is also present when an order 

subject to Display-Price Sliding is resting on the 

book opposite a displayed order. 

26Supra note 20. 

27See 17 CFR 242.612 (‘‘Minimum pricing 

increment’’). Given that the minimum pricing 

increment for securities priced below $1.00 is 

$0.0001, the Exchange believes that allowing orders 

to execute at one minimum price variation above 

(for offers) or below (for bids) the locking price is 

appropriate, as requiring executions to occur at onehalf minimum price variation above (for offers) or 

below (for bids) the locking price, which is the 

current behavior for securities priced at or above 

$1.00, would result in trades execution out to five 

decimal places, which is not supported by the 

System. 

28For example, if all facts from Example 1 remain 

the same except that Order 3 is an IOC buy order 

entered with a limit price of $0.5005, then Order 

3 will execute against Order 1 at a price of $0.5001 

and receive $0.0004 of price improvement. 

29See Resting Order Execution Filing at 28831. 

30 Id. 

• The Exchange then receives an 

IOC24 order to buy (Order 3) 100 shares 

at $0.5001. Order 3 executes against 

Order 1 in its entirety at a price of 

$0.5001. 

Consistent the Exchange’s rule 

regarding priority of orders, Rule 11.9, 

a Non-Displayed Order cannot be 

executed by the Exchange pursuant to 

Rule 11.10 when such order would be 

executed at the locking price. 

Specifically, if an incoming, marketable 

order was allowed to execute against the 

resting, non-displayed portion of Order 

1 at the locking price, such order would 

receive a priority advantage over Order 

2, a resting, displayed order at the 

locking price. The EDGX Order 

Handling Filing granted the Exchange 

the ability to execute Non-Displayed 

Orders and orders subject to NMS Price 

Sliding 25 priced at or above $1.00 at 

one-half minimum price variation more 

(less) than the locking price in the event 

that a bid (offer) submitted to the 

Exchange opposite such Resting Order 

is a market order or limit order priced 

more aggressive than the locking price. 

In the example above, Order 1, ranked 

at $0.50 upon entry, was slid to a 

displayed price of $0.5001 pursuant to 

Rule 11.6(l)(1)(B)(i) as it locked the 

NBB. Upon the arrival of Order 2, which 

is an order containing a Post Only 

instruction that is permitted to post to 

the EDGX Book and display opposite of 

Order 1,26 the Exchange’s current 

priority rule prohibits Order 1 from 

executing at a price of $0.50 in the event 

a subsequent contra-side incoming order 

is entered at a more aggressive price 

than the locking price. In the example 

above, Order 3 was entered at a more 

aggressive price ($0.5001) than the 

locking price ($0.50). Without the 

proposed changes to Rule 11.10(a)(4)(D), 

Order 3 would be cancelled upon entry 

at is cannot execute at a price of $0.50 

due to Order 2’s higher priority status. 

As discussed above, the Exchange is 

proposing that a Resting Order priced 

below $1.00 be permitted to execute at 

one minimum price variation above the 

locking price (in the event of a Resting 

Order offer) or one minimum price 

variation below the locking price (in the 

event of a Resting Order bid) in the 

event that an order submitted to the 

Exchange on the side opposite such 

Resting Order is a market or limit order 

priced more aggressively than the 

locking price.27 This behavior is 

substantially similar to the order 

handling functionality described in the 

EDGX Order Handling Filing, with one 

difference being that securities priced 

below $1.00 will execute at one full 

minimum price variation above (below) 

the locking price for offers (bids) rather 

than one-half minimum price variation 

above (below) the locking price for 

offers (bids) in securities priced at or 

above $1.00. While the example above 

shows a scenario in which only the 

Resting Order will receive $0.0001 of 

price improvement, rather than each 

side of the transaction as is the case in 

the scenarios described in the EDGX 

Order Handling Filing, the Exchange 

notes that if Order 3 in the example 

above was entered at any price more 

aggressive than $0.5001, Order 3 would 

continue to execute against Order 1 at 

a price of $0.5001 and Order 3 would 

receive price improvement equal to the 

difference between its limit price and 

$0.5001.28

The EDGX Order Handling Filing 

specifically introduced order handling 

behavior that would permit Resting 

Orders to be executed at one-half 

minimum price variation above (below) 

the locking price when an incoming, 

marketable offer (bid) would otherwise 

be prevented from executing due to the 

presence of an order containing a Post 

Only instruction in order to optimize 

available liquidity for incoming orders 

and to provide price improvement for 

market participants.29 This change to 

order handling behavior was required 

because, if incoming orders were 

allowed to execute against Resting 

Orders at the locking price, such 

incoming order would receive a priority 

advantage over the resting, displayed 

order at the locking price, contrary to 

the Exchange’s priority rule, Rule 

11.9.30 The Exchange recognizes that 

the order handling behavior for 

securities priced at or above $1.00 

described in the EDGX Order Handling 

Filing results in price improvement for 

both sides of an affected transaction and 

the Exchange’s proposed order handling 

change will result in $0.0001 of price 

improvement only for the Resting Order, 

however this situation is limited to 

instances where the incoming order is 

entered at a price equal to the displayed 

price of the Resting Order. While only 

the Resting Order will receive $0.0001 

of price improvement when an 

incoming order is entered at the Resting 

Order’s displayed price, the Exchange 

believes the incoming order is receiving 

the benefit of immediate execution 

rather than cancelling back or posting to 

the EDGX Book (depending on User 

instruction), which will result in higher 

overall market quality and likelihood of 

execution on EDGX for Users. In 

situations where the incoming order is 

entered at a more aggressive price than 

the displayed price of the Resting Order, 

however, each side of the transaction 

will be receiving at least $0.0001 of 

price improvement. 

Without the proposed order handling 

change for securities priced below 

$1.00, a Resting Order may be priced at 

the very inside of the market at a price 

below $1.00 but temporarily unable to 

execute at its full limit price due to the 

Exchange’s priority rule and current 

order handling procedures. The 

Exchange notes that by permitting a 

User’s Resting Order to rest at a locking 

price opposite a displayed order and 

receive an execution against an 

incoming order that is priced equal to or 

more aggressively than the displayed 

price, the Exchange is incentivizing 

Users to post aggressively priced 

liquidity on both sides of the market, 

rather than discouraging such liquidity 

by leaving orders unexecuted. In 

addition, if the EDGX Book changes so 

that such orders are no longer resting or 

ranked opposite a displayed order, then 

such orders will again be executable at 

their full limit price, and in the case of 

price slid orders, will be displayed at 

that limit price. 


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31 15 U.S.C. 78f(b). 32 15 U.S.C. 78f(b)(5). 33 Id. 

The Exchange is proposing a solution 

to address specific conditions that are 

present on the EDGX Book when an 

order with a Post Only instruction is 

displayed opposite the ranked price of 

orders subject to display-price sliding. 

The Exchange believes that such 

specific circumstances, without 

modification of Rule 11.10(a)(4), would 

be present upon the expansion of Post 

Only instruction functionality to 

securities priced below $1.00 and would 

result in Users receiving fewer 

executions than the Exchange could 

otherwise facilitate. The Exchange 

believes the proposed change to Rule 

11.10(a)(4)(D) is substantially similar to 

the order handling modification 

proposed and ultimately approved by 

the EDGX Order Handling Filing and 

does not introduce any novel order 

handling behavior that has not 

previously been proposed. While the 

Exchange is proposing to use a full 

minimum price variation rather than the 

one-half minimum price variation 

currently used for securities priced at or 

above $1.00 as detailed in the EDGX 

Order Handling Filing, the minimum 

price variation proposed for securities 

priced below $1.00 is commensurate 

with the standard minimum pricing 

increment for securities priced below 

$1.00. 

The Exchange believes the absence of 

price improvement for the incoming 

order is diminished by the incoming 

order’s ability to receive an execution 

on the Exchange against the Resting 

Order, rather than receive a cancellation 

or be posted to the EDGX Book 

(depending on User instruction). 

Further, the Exchange believes that 

Users who received increased execution 

rates on EDGX will be more likely to 

submit additional order flow to the 

Exchange. Additional increased order 

flow benefits all market participants by 

contributing to a deeper, more liquid 

market and provides even more 

execution opportunities for active 

market participants. Additionally, this 

difference is necessary due to System 

limitations that do not support 

executions out to five decimal places 

($0.00001) in securities priced below 

$1.00, which would occur should the 

Exchange utilize the same minimum 

price variation described in the EDGX 

Order Handling Filing. The proposal to 

amend Rule 11.10(a)(4)(D) is limited to 

certain circumstances that occur as a 

result of the presence of an order 

containing a Post Only instruction 

resting opposite a Non-Displayed Order 

or order subject to Display-Price Sliding 

and is designed to optimize available 

liquidity for incoming orders. 

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.31 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 32 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) 33 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

As discussed above, the Exchange is 

proposing to expand the use of its Post 

Only instruction to securities priced 

below $1.00. In conjunction with 

expanding the ability to utilize a Post 

Only instruction at prices below $1.00, 

the Exchange also proposes that a 

Resting Order priced below $1.00 be 

permitted to execute at one minimum 

price variation above the locking price 

(in the event of a Resting Order offer) or 

one minimum price variation below the 

locking price (in the event of a Resting 

Order bid) in the event that an order 

submitted to the Exchange on the side 

opposite such Resting Order is a market 

or limit order priced more aggressively 

than the locking price. This change in 

order handling behavior is necessary in 

order to address specific conditions that 

are present on the EDGX Book when an 

order containing a Post Only instruction 

is displayed opposite the ranked price 

of orders subject to display-price 

sliding. As discussed below, the 

Exchange believes its proposal is 

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

Act. 

In particular, the proposal to amend 

Rule 11.6(n)(4) to permit orders priced 

below $1.00 to utilize a Post Only 

instruction promotes just and equitable 

principles of trade and removes 

impediments to, and perfects the 

mechanism of a free and open market 

and a national market system because it 

will allow Users to enter orders with a 

Post Only instruction at any price, 

rather than being limited to securities 

priced above $1.00. The growth in 

trading of sub-dollar securities has 

expanded significantly since 2019 and 

as such, the Exchange believes that 

orders at all prices, not only securities 

priced above $1.00, should be permitted 

to utilize a Post Only instruction, which 

will permit orders to post on the 

Exchange without removing liquidity or 

routing to away to another trading 

center. A Post Only instruction allows 

Users to post aggressively priced 

liquidity, and such Users have certainty 

as to the fee or rebate they will receive 

from the Exchange if their order is 

executed. Without such ability, the 

Exchange believes that certain Users 

would simply post less aggressively 

priced liquidity, and prices available for 

market participants, including retail 

investors, would deteriorate. 

Accordingly, the Exchange believes that 

orders containing a Post Only 

instruction enhance the liquidity 

available to all market participants by 

allowing market makers and other 

liquidity providers to add liquidity to 

the Exchange at or near the inside of the 

market. Indeed, such market 

participants have asked the Exchange to 

implement such functionality in order 

to permit them to utilize a single trading 

strategy across securities at all prices. 

Allowing an order containing a Post 

Only instruction to be utilized at prices 

below $1.00 will deepen the Exchange’s 

pool of available liquidity in sub-dollar 

securities, which is a growing area of 

trading, particularly for retail investors. 

A deeper and more liquid market 

supports the quality of price discovery, 

promotes market transparency, and 

improves market quality for all 

investors. The Exchange does not 

believe that the proposed amendment to 

Rule 11.6(n)(4) is unfairly 

discriminatory as it will permit the Post 

Only instruction to be used by all Users 

at any price and the order instruction 

will no longer be limited to securities 

priced at or above $1.00. 

Similarly, the proposal to amend Rule 

11.10(a)(4)(D) to allow, under limited 

circumstances, a Resting Order priced 

below $1.00 that would otherwise be 

non-executable due to the presence of 

an order containing a Post Only 

instruction to execute at one minimum 

price variation above (below) the 

locking price upon the receipt of an 

incoming, marketable offer (bid) that 

would otherwise be prohibited from 

executing due to the presence of an 

order containing a Post Only instruction 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 89, No. 26 / Wednesday, February 7, 2024 / Notices 8477 

34Supra note 27. 

35See Nasdaq Equity 4, Rule 4702(b)(4) (‘‘PostOnly Order’’). See also NYSE Rule 7.31(e)(2) (‘‘ALO 

Order’’). 

36See ‘‘Off-Exchange Trends: Beyond Sub-dollar 

Trading’’ (May 17, 2023). Available at https:// 

www.cboe.com/insights/posts/off-exchange-trendsbeyond-sub-dollar-trading/. 

promotes just and equitable principles 

of trade and removes impediments to, 

and perfects the mechanism of a free 

and open market and a national market 

system because it extends functionality 

currently available to orders priced at or 

above $1.00 to orders priced below 

$1.00, with a slight difference in the 

minimum price variation to account for 

the System’s inability to display orders 

out to five decimal places ($0.00001). 

The proposed amendment to Rule 

11.10(a)(4)(D) is substantially similar to 

the order handling behavior change that 

was proposed (and later approved) by 

the Resting Order Execution Filing on 

the Exchange’s affiliate, BZX Exchange, 

and subsequently by the EDGX Order 

Handling Filing, and will only serve to 

improve execution quality for 

participants sending orders to the 

Exchange. 

The Exchange does not believe that 

the treatment of sub-dollar securities is 

unfairly discriminatory as the Exchange 

will be using the standard minimum 

pricing increment for sub-dollar 

securities in order to determine the 

price at which the Resting Order is 

eligible to execute.34 While the 

Exchange recognizes that under its 

proposal for securities priced below 

$1.00 results in a limited situation in 

which only the Resting Order will 

receive $0.0001 of price improvement 

(i.e., when an incoming order is entered 

at the same price as the displayed price 

of the Resting Order), the Exchange 

believes the incoming, contra-side order 

is receiving the benefit of immediate 

execution rather than cancelling or 

posting to the EDGX Book (depending 

on User instruction), which will result 

in higher overall market quality and 

likelihood of execution on EDGX for 

Users. In situations where the incoming 

order is entered at a more aggressive 

price than the displayed price of the 

Resting Order, however, each side of the 

transaction will be receiving at least 

$0.0001 of price improvement, which is 

substantially similar to how the order 

handling functionality works for 

securities priced at or above $1.00. The 

Exchange believes the proposed change 

to execute marketable orders that are 

currently not executed under specific 

scenarios will help provide price 

improvement to Resting Orders that, in 

these limited circumstances, otherwise 

would not receive an execution even 

though their order is priced at the inside 

of the market and would also provide 

increased execution opportunities to 

aggressively priced incoming orders 

rather than requiring these orders to be 

cancelled or post to the EDGX Book. 

Thus, the Exchange believes that its 

proposed order handling process in the 

limited scenario where a Resting Order 

is ineligible to execute due to the 

presence of a contra-side order 

containing a Post Only instruction will 

benefit market participants and their 

customers by allowing them greater 

flexibility in their efforts to fill orders 

and minimize trading costs. 

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 intramarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The proposed change to Rule 11.6(n)(4) 

will apply equally to all Users in that all 

Users will be eligible to utilize the Post 

Only instruction for securities priced 

below $1.00. Similarly, the proposed 

change to Rule 11.10(a)(4)(D) applies 

equally to all Users in that all Resting 

Orders will benefit from the proposed 

order handling behavior change that 

will execute Resting Orders at one 

minimum price variation above (below) 

the locking price upon the receipt of a 

marketable offer (bid) should a Resting 

Order be ineligible to execute due to the 

presence of a contra-side order 

containing a Post Only instruction. The 

proposed changes are designed to 

expand an existing Exchange order 

instruction and existing order handling 

behavior to securities priced below 

$1.00 due to the growth in sub-dollar 

trading that has been seen since 2019. 

Further, the Exchange does not believe 

that Users submitting incoming, contraside orders are burdened by virtue of 

not receiving price improvement in 

limited situations as they instead 

receive the benefit of an immediate 

execution as opposed to being cancelled 

back to the User or posting on the EDGX 

Book which results in increased overall 

market quality and a higher likelihood 

of execution on EDGX. 

The Exchange similarly does not 

believe that 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. In fact, the 

Exchange notes that other exchanges 

already offer the ability to submit an 

order that is not eligible for routing to 

away markets and posts to the relevant 

exchange book at prices below $1.00.35

The Exchange believes its proposal to 

expand the use of the Post Only 

instruction to securities priced below 

$1.00 will promote competition between 

the Exchange and other exchanges for 

volume in sub-dollar securities. 

Furthermore, the Exchange believes its 

proposal will promote competition 

between the Exchange and off-exchange 

trading venues, where a significant 

amount of sub-dollar trading occurs 

today.36 The Exchange similarly 

believes that its proposal to amend its 

order handling behavior in limited 

circumstances where a Resting Order 

cannot execute due to the presence of a 

contra-side order containing a Post Only 

instruction does not impose a burden on 

intermarket competition as the change is 

not designed to address any competitive 

issue, but rather to address order 

handling behavior in a substantially 

similar manner to how the Exchange 

treats Resting Orders priced at or above 

$1.00 in the limited scenario where a 

Resting Order is ineligible to execute 

against an incoming, marketable order 

due to the presence of a contra-side 

order containing a Post Only 

instruction. 

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: 


khammond on DSKJM1Z7X2PROD with NOTICES
8478 Federal Register / Vol. 89, No. 26 / Wednesday, February 7, 2024 / Notices 

37 17 CFR 200.30–3(a)(12). 

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–2024–007 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–2024–007. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CboeEDGX–2024–007 and should be 

submitted on or before February 28, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–02421 Filed 2–6–24; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 12320] 

Notice of Determinations; Culturally 

Significant Object Being Imported for 

Exhibition—Determinations: ‘‘New 

Worlds: Women to Watch 2024’’ 

Exhibition 

SUMMARY: Notice is hereby given of the 

following determinations: I hereby 

determine that a certain object being 

imported from abroad pursuant to an 

agreement with its foreign owner or 

custodian for temporary display in the 

exhibition ‘‘New Worlds: Women to 

Watch 2024’’ at the National Museum of 

Women in the Arts, Washington, 

District of Columbia, and at possible 

additional exhibitions or venues yet to 

be determined, is of cultural 

significance, and, further, that its 

temporary exhibition or display within 

the United States as aforementioned is 

in the national interest. I have ordered 

that Public Notice of these 

determinations be published in the 

Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Reed Liriano, Program Coordinator, 

Office of the Legal Adviser, U.S. 

Department of State (telephone: 202– 

632–6471; email: section2459@

state.gov). The mailing address is U.S. 

Department of State, L/PD, 2200 C Street 

NW (SA–5), Suite 5H03, Washington, 

DC 20522–0505. 

SUPPLEMENTARY INFORMATION: The 

foregoing determinations were made 

pursuant to the authority vested in me 

by the Act of October 19, 1965 (79 Stat. 

985; 22 U.S.C. 2459), Executive Order 

12047 of March 27, 1978, the Foreign 

Affairs Reform and Restructuring Act of 

1998 (112 Stat. 2681, et seq.; 22 U.S.C. 

6501 note, et seq.), Delegation of 

Authority No. 234 of October 1, 1999, 

Delegation of Authority No. 236–3 of 

August 28, 2000, and Delegation of 

Authority No. 523 of December 22, 

2021. 

Nicole L. Elkon, 

Deputy Assistant Secretary for Professional 

and Cultural Exchanges, Bureau of 

Educational and Cultural Affairs, Department 

of State. 

[FR Doc. 2024–02451 Filed 2–6–24; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF STATE 

[Public Notice: 12321] 

Notice of Determinations; Culturally 

Significant Objects Being Imported for 

Exhibition—Determinations: ‘‘Picture 

Worlds: Greek, Maya and Moche 

Pottery’’ Exhibition 

SUMMARY: Notice is hereby given of the 

following determinations: I hereby 

determine that certain objects being 

imported from abroad pursuant to 

agreements with their foreign owners or 

custodians for temporary display in the 

exhibition ‘‘Picture Worlds: Greek, 

Maya and Moche Pottery’’ at the J. Paul 

Getty Museum at the Getty Villa, Pacific 

Palisades, California; the Michael C. 

Carlos Museum, Emory University, 

Atlanta, Georgia; and at possible 

additional exhibitions or venues yet to 

be determined, are of cultural 

significance, and, further, that their 

temporary exhibition or display within 

the United States as aforementioned is 

in the national interest. I have ordered 

that Public Notice of these 

determinations be published in the 

Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Reed Liriano, Program Coordinator, 

Office of the Legal Adviser, U.S. 

Department of State (telephone: 202– 

632–6471; email: section2459@

state.gov). The mailing address is U.S. 

Department of State, L/PD, 2200 C 

Street, NW (SA–5), Suite 5H03, 

Washington, DC 20522–0505. 

SUPPLEMENTARY INFORMATION: The 

foregoing determinations were made 

pursuant to the authority vested in me 

by the Act of October 19, 1965 (79 Stat. 

985; 22 U.S.C. 2459), Executive Order 

12047 of March 27, 1978, the Foreign 

Affairs Reform and Restructuring Act of 

1998 (112 Stat. 2681, et seq.; 22 U.S.C. 

6501 note, et seq.), Delegation of 

Authority No. 234 of October 1, 1999, 

Delegation of Authority No. 236–3 of 

August 28, 2000, and Delegation of 

Authority No. 523 of December 22, 

2021. 

Nicole L. Elkon, 

Deputy Assistant Secretary for Professional 

and Cultural Exchanges, Bureau of 

Educational and Cultural Affairs, Department 

of State. 

[FR Doc. 2024–02502 Filed 2–6–24; 8:45 am] 

BILLING CODE 4710–05–P 


khammond on DSKJM1Z7X2PROD with NOTICES