78418 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(6). 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has fulfilled this requirement. 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). 

16For purposes only of accelerating the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 17 15 U.S.C. 78s(b)(2)(B). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 100337 

(June 14, 2024), 89 FR 52148 (‘‘Notice’’). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 10 and Rule 

19b–4(f)(6) thereunder.11 Because the 

proposed rule change does not (i) 

significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 12 and Rule 

19b–4(f)(6)(iii) thereunder.13

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),15 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may take effect as soon as 

the technology associated with the 

proposed change is available, which is 

anticipated to be less than 30 days from 

the date of this filing. The Commission 

believes that waiver of the operative 

delay is consistent with the protection 

of investors and the public interest 

because the proposal raises no novel 

issues and would allow use of the MTS 

Modifier with odd lot quantities without 

delay and promote clarity in Exchange 

rules as to the order types that may be 

designated with an MTS Modifier. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.16

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 17 of the Act 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– 

NYSEARCA–2024–78 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–NYSEARCA–2024–78. 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–NYSEARCA–2024–78 and should be 

submitted on or before October 16, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–21875 Filed 9–24–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101105; File No. SR– 

CboeBYX–2024–009] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing of 

Amendment No. 1 and Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Amend 

Exchange Rule 11.25(e) To Allow Users 

To Utilize the Exchange’s Match Trade 

Prevention Functionality When 

Entering Periodic Auction Orders Onto 

the Exchange for Execution 

September 19, 2024. 

On June 6, 2024, Cboe BYX Exchange, 

Inc. (‘‘Exchange’’ or ‘‘BYX’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’), 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to amend 

Exchange Rule 11.25(e) (‘‘Priority and 

Execution of Orders’’) to allow Users to 

utilize the Exchange’s Match Trade 

Prevention functionality when entering 

Periodic Auction Orders onto the 

Exchange for execution. The proposed 

rule change was published for comment 

in the Federal Register on June 21, 

2024.3 On August 5, 2024, the 

Commission extended the time period 

within which to approve, disapprove 

the proposed rule change, or institute 

proceedings to determine whether to 

approve or disapprove the proposed 


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4See Securities Exchange Act Release No. 100649 

(August 9, 2024), 89 FR 65420. The Commission has 

received no comment letters on the proposed rule 

change. 

5Amendment No. 1 modifies the proposed rule 

change by: (1) amending rule text relating to 

Exchange Match Trade Prevention functionality 

when entering Periodic Auction Orders onto the 

Exchange for execution; and (2) adding new rule 

text describing how the Exchange will handle 

Periodic Auction Orders entered as a Minimum 

Quantity Order with a Match Trade Prevention 

modifier. 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 100337 

(June 14, 2024), 89 FR 52148 (June 21, 2024) (SR– 

CboeBYX–2024–009). 

8The term ‘‘User’’ shall mean any Member or 

Sponsored Participant who is authorized to obtain 

access to the System pursuant to Rule 11.3. See 

Rule 1.5(cc), definition of ‘‘User’’. 

9The term ‘‘Periodic Auction Order’’ shall mean 

a ‘‘Periodic Auction Only Order’’ or ‘‘Periodic 

Auction Eligible Order’’ as those terms are defined 

in Rules 11.25(b)(1)–(2), and the term ‘‘Periodic 

Auction Book’’ shall mean the System’s electronic 

file of such Periodic Auction Orders. See Rule 

11.25(a)(6). Hereinafter, a Periodic Auction Only 

Order may be referred to as a ‘‘PAO Order’’, and a 

Periodic Auction Eligible Order may be referred to 

as a, ‘‘PAE Order’’. 

10The Exchange plans to implement the proposed 

rule change on a date that will be circulated in a 

notice from the Cboe Trade Desk to all Members. 

11The Exchange notes that previous proposals 

extending the functionality of MTP to other trading 

scenarios were effective upon filing with the 

Commission. See generally Securities and Exchange 

Act Release No. 53429 (December 3, 2010), 75 FR 

76763 (December 9, 2010) (SR–EDGX–2010–18); 

Securities and Exchange Act Release No. 34–96292 

(November 10, 20220), 87 FR 68766 (November 16, 

2022) (SR–CboeEDGX–2022–048). 

12See Rule 11.9(f)—Match Trade Prevention 

(‘‘MTP’’) Modifiers. 

13A ‘‘wash sale’’ is generally defined as a trade 

involving no change in beneficial ownership that is 

intended to produce the false appearance of trading 

and is strictly prohibited under both the federal 

securities laws and FINRA rules. See, e.g., 15 U.S.C. 

78i(a)(1); FINRA Rule 6140(b) (‘‘Other Trading 

Practices’’). 

14Self-trades are ‘‘transactions in a security 

resulting from the unintentional interaction of 

orders originating from the same firm that involve 

no change in beneficial ownership of the security.’’ 

FINRA requires members to have policies and 

procedures in place that are reasonably designed to 

review trading activity for, and prevent, a pattern 

or practice of self-trades resulting from orders 

originating from a single algorithm or trading desk, 

or related algorithms or trading desks. See FINRA 

Rule 5210, Supplementary Material .02, available 

at: https://www.finra.org/rules-guidance/rulebooks/ 

finra-rules/5210. 

15See Securities and Exchange Act Release No. 

34–91423 (March 26, 2021), 86 FR 17230 (April 1, 

2021) (SR–CboeBYX–2020–021). 

16The term ‘‘Continuous Book’’ shall mean an 

order on the BYX Book that is not a Periodic 

Auction Order, and the term ‘‘Continuous Book’’ 

shall mean the System’s electronic file of such 

Continuous Book Orders. See Rule 11.25(a)(2), 

definition of ‘‘Continuous Book Order’’. 

17 ‘‘A ‘Periodic Auction Eligible Order’ is a nondisplayed limit order eligible to trade on the 

Continuous Book that is entered with an instruction 

to also initiate a Periodic Auction, if possible . . . 

Periodic Auction Eligible Orders will be ranked as 

Non-Displayed Limit Orders consistent with the 

priority of order outlined in Rule 11.12(a). An 

incoming Periodic Auction Eligible Order that is 

eligible both to trade on the Continuous Book and 

initiate a Periodic Auction against a Periodic 

Auction Only Order at the same price will trade 

immediately with the Continuous Book. Incoming 

Periodic Auction Eligible Orders will upon entry 

Continued 

rule change to September 19, 2024.4 On 

September 18, 2024, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.5

The Commission is publishing this 

notice and to solicit comments on the 

proposed rule change, as modified by 

Amendment No. 1, from interested 

persons and to institute proceedings 

pursuant to Section 19(b)(2)(B) of the 

Act 6 to determine whether to approve 

or disapprove the proposed rule change, 

as modified by Amendment No. 1. 

I. Exchange’s Description of the 

Proposal, as Modified by Amendment 

No. 1 

Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) proposes to 

amend Exchange Rule 11.25(e) 

(‘‘Priority and Execution of Orders’’) to 

allow (1) Users to utilize the Exchange’s 

Match Trade Prevention (‘‘MTP’’) 

functionality when entering Periodic 

Auction Orders onto the Exchange for 

execution and (2) add new rule text 

providing that in the event a Periodic 

Auction Order is entered as a Minimum 

Quantity Order, as well as with an MTP 

modifier (e.g., Order 1), and such 

Periodic Auction Order could either 

trade with a contra-side Continuous 

Book Order or initiate a Periodic 

Auction with a contra-side Periodic 

Auction Order (e.g., Order 2), 

designated with an MTP modifier from 

the same Unique Identifier as Order 1, 

the System will apply MTP regardless of 

whether the Minimum Quantity is 

satisfied. This Amendment No. 1 

replaces SR–CboeBYX–2024–009 

(‘‘Initial Filing’’) 7 as originally filed and 

supersedes the Initial Filing its entirety. 

The text of the proposed rule changes is 

provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

equities/regulation/rule_filings/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 (1) amend 

Rule 11.25(e) to allow Users 8 to utilize 

the Exchange’s Match Trade Prevention 

(‘‘MTP’’) functionality when entering 

Periodic Auction Orders 9 onto the 

Exchange for execution,10 and (2) add 

new rule text providing that in the event 

a Periodic Auction Order is entered as 

a Minimum Quantity Order, as well as 

with an MTP modifier (e.g., Order 1), 

and such Periodic Auction Order could 

either trade with a contra-side 

Continuous Book Order or initiate a 

Periodic Auction with a contra-side 

Periodic Auction Order (e.g., Order 2), 

designated with an MTP modifier from 

the same Unique Identifier as Order 1, 

the System will apply MTP regardless of 

whether the Minimum Quantity is 

satisfied. 

By way of background, MTP is an 

existing process 11 through which Users 

can prevent their incoming orders 

designated with a MTP modifier from 

executing against a resting opposite side 

order also designated with an MTP 

modifier and originating from the same 

market participant identifier (‘‘MPID’’), 

Exchange Member identifier, trading 

group identifier, Exchange Sponsored 

Participant identifier, affiliate identifier, 

or Multiple Access identifier (any such 

identifier, a ‘‘Unique Identifier’’).12 Both 

the buy and the sell order must include 

the same Unique Identifier in order to 

prevent an execution from occurring 

and to effect a cancel instruction. MTP 

is a valuable tool for Exchange Users 

because it allows them to better manage 

order flow and prevent undesirable 

trading activity such as wash sales 13 or 

self-trades 14 that may occur because of 

the high-speed nature of trading in 

today’s marketplace. 

Currently, Rule 11.25(e) states that all 

MTP modifiers (as defined in Rule 

11.9(f)(1)–(5)) for Periodic Auction 

Orders will be ignored for executions 

occurring during a Periodic Auction. As 

part of the Exchange’s prior Periodic 

Auction Rule filings,15 the Exchange 

reasoned that MTP is mainly designed 

for use on the Continuous Book,16 and 

use of MTP for Periodic Eligible 

Orders 17 and Periodic Auction Only 


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78420 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices 

interact with Continuous Book Orders and other 

Periodic Auction Eligible Orders according to their 

rank under Rule 11.12(a). Periodic Auction Eligible 

Orders will not trade on the Continuous Book 

during a Periodic Auction Period in the security.’’ 

See 11.25(b)(2). 

18 ‘‘A ‘Periodic Auction Only Order’ is a nondisplayed limit order entered with an instruction to 

participate solely in Periodic Auctions pursuant to 

this Rule 11.25. Periodic Auction Only Orders are 

not eligible for executions on the Continuous 

Book.’’ See Rule 11.25(b)(1). Hereinafter, Periodic 

Auction Only Orders as, ‘‘PAO Orders.’’ 

19 ‘‘The term ‘Periodic Auction Book Price’ shall 

mean the price within the Collar Price Range at 

which the most shares from the Periodic Auction 

Book would match. In the event of a volume-based 

tied at multiple price-levels, the Periodic Auction 

Book Price will be the price that results in the 

minimum total imbalance. In the event of a volumebased tie and a tie in minimum total imbalance at 

multiple price levels, the Periodic Auction Book 

Price will be the price closest to the Volume Based 

Tie Breaker. The Periodic Auction Book Price will 

be expressed in the minimum increment for the 

security unless the midpoint of the NBBO 

establishes the Periodic Auction Book Price.’’ See 

11.25(a)(5), definition of ‘‘Periodic Auction Book 

Price’’. 

20The Exchange notes that previous proposals 

extending the functionality of MTP to other trading 

scenarios were effective upon filing with the 

Commission. See Securities and Exchange Act 

Release No. 53429 (December 3, 2010), 75 FR 76763 

(December 9, 2010) (SR–EDGX–2010–18); see also 

Securities and Exchange Act Release No. 34–96292 

(November 10, 20220), 87 FR 68766 (November 16, 

2022) (SR–CboeEDGX–2022–048). 

21For each example, assume that all trade prices 

are within the National Best Bid or National Best 

Offer (‘‘NBBO’’). Additionally, note that while 

Exchange Rule 11.9(f) provides for various MTP 

modifiers—including Cancel Newest, Cancel 

Oldest, Decrement and Cancel, Cancel Both, and 

Cancel Smallest—the Examples provided in this 

rule filing only demonstrate how certain of these 

modifiers will operate. Including examples for 

every possible MTP scenario would be difficult to 

efficiently demonstrate in a rule filing. 

Nevertheless, the MTP modifier exemplified in the 

provided Examples is not critical to understanding 

how the proposed functionality will operate 

because as demonstrated below, when a Periodic 

Auction is not in progress MTP will operate as it 

does today, and when a Periodic Auction is in 

progress, the System will, as described below, 

temporarily bypass an order’s MTP instruction. 

22MTP Cancel Oldest (‘‘MCO’’) is defined as ‘‘[a]n 

incoming order marked with the ‘‘MCO’’ modifier 

will not execute against opposite side resting 

interest marked with any MTP modifier originating 

from the same Unique Identifier. The resting order 

marked with the MCO modifier will be cancelled 

back to the originating User(s). The incoming order 

marked with the MCO modifier will remain on the 

BYX Book. See Rule 11.9(f)(2). 

23See Rule 11.9(f)—Match Trade Prevention 

(‘‘MTP’’) Modifiers. Any incoming order designated 

with an MTP modifier will be prevented from 

executing against a resting opposite side order also 

designated with an MTP modifier and originating 

from the same market participant identifier 

(‘‘MPID’’), Exchange Member identifiers, trading 

group identifier, Exchange Sponsored Participant 

identifier, affiliate identifier, or Multiple Access 

identifier (any such identifier, a ‘‘Unique 

Identifier’’). The order canceled by the System will 

depend on the incoming order’s MTP modifier, as 

described in 11.9(f)(1)–(5). 

24See Rule 11.9(f)(2). 

25As MTP action is controlled by the incoming 

order (‘‘. . . the MTP modifier on the incoming 

order controls the interaction between two orders 

marked with MTP modifiers.’’ See Rule 11.21(g)), 

Firm A’s Order 1 was correctly cancelled in this 

situation. Note, however, that if Firm A’s Order 2 

had included an MTP modifier of MTP Cancel 

Newest (‘‘MCN’’), the result would simply be that 

Order 2 is instead canceled. MTP Cancel Newest 

(‘‘MCN’’) is defined as ‘‘[a]n incoming order marked 

with the ‘‘MCN’’ modifier will not execute against 

opposite side resting interest marked with any MTP 

modifier originating from the same Unique 

Identifier. The incoming order marked with the 

MCN modifier will be cancelled back to the 

originating User(s). The resting order marked with 

an MTP modifier will remain on the BYX Book.’’ 

See Rule 11.9(f)(1). Similarly, if we changed Order 

1’s MTP Modifier to Cancel Newest and Order 2 

remained as MTP Cancel Oldest, Order 1 would be 

canceled as Order 2’s instruction controls MTP 

action. 

Orders 18 (collectively, Periodic Auction 

Orders) may complicate the execution of 

an auction that requires the pooling and 

matching of multiple orders against 

other orders at the Periodic Auction 

Book Price.19 Based on User feedback, 

however, Users of Periodic Auctions 

desire the ability to utilize MTP for their 

Periodic Auction Orders (when the 

Periodic Auction is not in progress) to 

help them manage their order flow and 

prevent undesirable executions against 

themselves. Users are not asking to 

utilize MTP for their Periodic Auction 

Orders when a Periodic Auction is 

occurring. 

Accordingly, the Exchange now seeks 

to allow Users to utilize MTP when 

entering Periodic Auction Orders onto 

the Exchange.20 Importantly, allowing 

Users to designate Periodic Auction 

Orders with MTP modifiers will not 

impact how the Periodic Auction itself 

is conducted, and the proposed MTP 

functionality will not prevent the 

completion of a Periodic Auction once 

it has been initiated. 

As proposed, however, there will be 

instances where the Exchange has 

elected to temporarily bypass a User’s 

MTP instruction. These instances are 

demonstrated in Examples 5 and 8, 

below, and generally involve scenarios 

where (i) a Periodic Auction is in 

progress, and the temporary bypassing 

of the MTP modifier on Firm A’s 

inbound Continuous Book Order is 

necessary to prevent the cancelation of 

Firm A’s Periodic Auction Order with 

an MTP modifier that is currently 

participating in the Periodic Auction, or 

(ii) a Periodic Auction is in progress, 

and the bypassing of Firm A’s MTP 

modifier on its inbound Periodic 

Auction Order is necessary to prevent— 

depending on the relevant MTP 

instruction—the cancelation of Firm A’s 

resting Continuous Book Order, or the 

cancelation of the inbound Periodic 

Auction Order itself, preventing such 

order from participating in the Periodic 

Auction. 

In each instance, the temporary 

bypassing of the inbound order’s MTP 

modifier is intended to prevent the 

cancelation of orders where an 

immediate execution would not occur. 

Importantly, the bypassing of an 

inbound order’s MTP modifier is 

temporary and occurs only upon entry 

of the inbound order. The Exchange 

believes this behavior is necessary and 

appropriate to help strike a responsible 

balance between providing Users with 

an optional risk tool to prevent 

undesirable executions and ensuring 

that Periodic Auctions will complete. 

Moreover, the current architecture and 

design of Exchange Systems require that 

MTP for Periodic Auctions function as 

described. 

Additionally, the Exchange proposes 

to add new rule text providing that in 

the event a Periodic Auction Order is 

entered as a Minimum Quantity Order, 

as well as with an MTP modifier (e.g., 

Order 1), and such Periodic Auction 

Order could either trade with a contraside Continuous Book Order or initiate 

a Periodic Auction with a contra-side 

Periodic Auction Order (e.g., Order 2), 

designated with an MTP modifier from 

the same Unique Identifier as Order 1, 

the System will apply MTP regardless of 

whether the Minimum Quantity is 

satisfied. 

To illustrate how Periodic Auction 

Orders designated with MTP modifiers 

will behave, the Exchange offers the 

following examples: 21

Example 1: Two PAE Orders 

Matching—MTP Action Occurs 

Example 1 illustrates how MTP will 

operate when Firm A’s resting PAE 

Order with an MTP modifier of MTP 

Cancel Oldest (‘‘MCO’’),22 interacts with 

a subsequent inbound PAE Order 

submitted by Firm A with an MTP 

modifier of MCO and a Periodic Auction 

is not in progress. Here, MTP operates 

in the same manner 23 as it would for 

Continuous Book Orders; i.e., because 

Firm A’s inbound PAE Order was 

entered with an MTP modifier of MCO, 

the System will cancel Firm A’s Order 

1,24 which is the ‘‘oldest’’ contra-side 

Firm A order that is marketable versus 

Firm A’s inbound PAE Order to sell. 

This MTP action prevents Firm A from 

potentially trading with itself either on 

the Continuous Book or during a 

Periodic Auction.25

• Order 1—Resting (Firm A): PAE Order 

(MTP = Cancel Oldest), Buy 100 @1.00 

• Order 2—Inbound order (Firm A): 

PAE Order (MTP = Cancel Oldest), 

Sell 200 @1.00 

• Result: Order 1 is canceled. 


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26Supra note 19. 

27See Rule 11.9(f)(1). 

28This iteration of Example 2 demonstrates the 

functionality described in proposed Rule 

11.25(e)(1)(B). 

29MTP Cancel Smallest (‘‘MCS’’) is defined as 

‘‘[a]n incoming order marked with the ‘‘MCS’’ 

modifier will not execute against opposite side 

resting interest marked with any MTP modifier 

originating from the same Unique Identifier. If both 

orders are equivalent in size, both orders will be 

cancelled back to the originating User(s). If the 

orders are not equivalent in size, the smaller of the 

two orders will be cancelled back to the originating 

User and the larger order will remain on the book. 

See Rule 11.9(f)(5). 

30Supra note 19. 

31See Rule 11.9(f)(5). 

32Supra note 19. 

33Supra note 31. 

34Supra note 14. 

35This iteration of Example 4 demonstrates the 

proposed functionality described in proposed Rule 

11.25(e)(1)(A). 

36See Rule 11.25(c), Initiation and Publication of 

Periodic Auction Information, ‘‘A Periodic Auction 

will be initiated in a security during Regular 

Trading Hours when one or more Periodic Auction 

Orders to buy become executable against one or 

more Periodic Auction Orders to sell pursuant to 

this Rule 11.25.’’ 

37The Exchange notes that the bypassing of the 

MTP modifiers in this scenario is temporary. 

Should the Periodic Auction complete and Order 1 

does not have the opportunity to trade with Order 

4 in the Periodic Auction, then Order 1 would 

remain posted on the Continuous Book with its 

MTP modifier and be afforded the protections of 

MTP. 

Example 2: Two PAO Orders 

Matching—MTP Action Occurs 

Example 2 illustrates how MTP will 

operate when Firm A’s resting PAO 

Order with an MTP Modifier of MCN, 

interacts with Firm A’s inbound PAO 

Order with an MCN modifier, and a 

Periodic Auction is not in progress. 

Here, MTP operates in the same 

manner 26 as it would for Continuous 

Book Orders; i.e., because Firm A has 

designated its inbound Order 2 with 

MCN, the System will cancel Firm A’s 

Order 2,27 which is Firm’s A’s newest 

contra-side order that is marketable 

versus Firm A’s resting Order 1. This 

MTP action prevents Firm A from 

potentially trading with itself during a 

Periodic Auction. 

• Order 1—Resting (Firm A): PAO 

Order (MTP = Cancel Newest), Buy 

100 @1.00 

• Order 2—Inbound order (Firm A): 

PAO Order (MTP = Cancel Newest), 

Sell 200 @1.00 

• Result: Order 2 is canceled 

For the sake of clarity, the Exchange 

also wishes to explain what would 

happen to Order 2 if a Periodic Auction 

was in progress when Order 2 arrived.28

To address this scenario, assume an 

inbound Periodic Auction Order from 

Firm B—Order X—arrived between 

Order 1 and Order 2, and initiated a 

Periodic Auction with Order 1. Here, 

when Order 2 arrives, and the Periodic 

Auction is in progress, Order 2 would 

still be canceled. When a Periodic 

Auction is in progress, and an inbound 

Periodic Auction Order is designated 

with an MTP modifier, and such order 

matches against a resting contra-side 

Periodic Auction Order originating from 

the same Unique Identifier that is also 

designated with a MTP modifier, the 

inbound Periodic Auction Order will be 

canceled. This behavior will enable 

Users to better manage their order flow 

and prevent undesirable executions in 

Periodic Auctions, just as they do today 

for their Continuous Book orders. 

Example 3: Incoming PAE Order 

Matching Against a PAO Order—MTP 

Action Occurs 

Example 3 illustrates how MTP will 

operate when Firm A’s resting PAO 

Order with a MTP modifier of MTP 

Cancel Smallest (‘‘MCS’’),29 interacts 

with Firm A’s inbound PAE Order with 

an MCS modifier, and an auction is not 

in progress. Here, MTP operates in the 

same manner 30 as it would for 

Continuous Book Orders; i.e., because 

Firm A has designated its orders with 

the MTP modifier, MCS, the System will 

cancel Firm A’s Order 1, which is Firm 

A’s small quantity order.31 This MTP 

action prevents Firm A from potentially 

trading with itself during a Periodic 

Auction. 

• Order 1—Resting (Firm A): PAO 

Order (MTP = Cancel Smallest), Buy 

100 @1.00 

• Order 2—Inbound order (Firm A): 

PAE Order (MTP = Cancel Smallest), 

Sell 200 @1.00 

• Result: Order 1 is canceled. 

Example 4: Incoming PAE Order 

Matching Against a Continuous Book 

Order—MTP Action Occurs 

Example 4 illustrates how MTP will 

operate when Firm A’s incoming PAE 

Order with a MCS modifier, matches 

against Firm A’s resting Continuous 

Book Order, and a Periodic Auction is 

not in progress. Here, MTP operates in 

the same manner 32 as it would for 

Continuous Book Orders; i.e., Firm’s A’s 

Order 1 is canceled 33 based on Firm A’s 

Order 2 MCS modifier because Order 1 

is smaller than Order 2. Because a PAE 

Order is eligible to receive an execution 

on the Continuous Book,34 and both 

Order 1 and Order 2 are designated with 

MTP modifiers, the System correctly 

cancels Order 1, thereby preventing 

Firm A from potentially trading with 

itself on the Continuous Book. 

• Order 1—Resting (Firm A): 

Continuous Book order (MTP = 

Cancel Smallest), Buy 100 @1.00 

• Order 2—Inbound order (Firm A): 

PAE Order (MTP = Cancel Smallest), 

Sell 200 @1.00 

• Result: Order 1 is canceled. 

Example 5: Incoming PAE Order 

Matching Against a Continuous Book 

Order When a Periodic Auction Is in 

Progress—No MTP Action Occurs 

For the sake of clarity, the Exchange 

wishes to describe what would happen 

to Order 1 if a Periodic Auction is in 

progress and an inbound Periodic 

Auction Order arrives (e.g., Order 4).35

First, note that a Continuous Book Order 

cannot initiate a Periodic Auction.36

Therefore, to initiate a Periodic Auction 

in this example, assume that two 

Periodic Auction Orders arrived, from 

Firm B and Firm C, prior to Order 1 and 

Order 4—e.g., Order X (Firm B) and 

Order Y (Firm C). Further assume that 

Order X and Order Y are marketable 

versus each other and initiated a 

Periodic Auction. Additionally, assume 

that Order 1, a Continuous Book Order 

is entered prior to Order 4, and that 

Order 1 and Order 4 are designated with 

MTP modifiers originating from the 

same Unique Identifiers. Upon the 

arrival of Order 4, a Periodic Auction 

Order, the System will temporarily 

bypass 37 Order 1’s and Order 4’s MTP 

instruction, and Order 4 will join the 

Periodic Auction. Order 1 will remain 

on the Book. If Order 1 did not execute 

in the Continuous Book while the 

Periodic Auction was in progress, then 

Order 1 could potentially execute with 

Order 4, provided that Order 1 has 

priority as determined by Rule 11.25(f). 

The bypassing of the MTP modifiers in 

this scenario occurs only upon entry of 

Order 4 to prevent the cancelation of 

orders in situations where an immediate 

execution would not occur. 

• NBBO: 10.00 x 10.05 

• Order X (Firm B): Buy 100 @10.03— 

Midpoint Peg PAO 

• Order Y (Firm C): Sell 100 @10.02— 

Midpoint Peg PAO 

• Auction is initiated between Order X 

and Order Y 

• Order 1 (Firm A): Buy 100 @10.03— 

Midpoint Peg Continuous Book 

Order—MTP = Cancel Oldest 

• Order 4 (Firm A): Sell 100 @10.02— 

Midpoint Peg PAE—MTP = Cancel 

Oldest 

• MTP would be bypassed when Order 

4 is entered and Order 4 would join 

the Periodic Auction in progress. 

• Result: Order X and Order Y trade 

100 @10.025 in Periodic Auction. 

Order 1 and Order 2 trade 100 @

10.025 in Periodic Auction 


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38Supra note 16 (‘‘Periodic Auction Only Orders 

are not eligible for execution on the Continuous 

Book.’’). 

39Example 7 demonstrates the proposed 

functionality described in 11.25(e)(1)(B).)(1)(B). 

40MTP Cancel Both (‘‘MCB’’) is defined as ‘‘[a]n 

incoming order marketed with the ‘‘MCB’’ modifier 

will not execute against opposite side resting 

interest marked with any MTP modifier originating 

from the same Unique Identifier. The entire size of 

both orders will be cancelled back to the originating 

User(s). See Rule 11.9(f)(4). demonstrates the 

proposed functionality described in proposed Rule 

11.25(e). 

41See Rule 11.9(f)(4). 

42The Exchange notes that the proposed MTP 

functionality is intended as a supplementary risk 

tool that Members may voluntarily use to help them 

manage their risk and compliance with applicable 

securities rules. As registered broker-dealers, 

Members are ultimately responsible for compliance 

with applicable securities rules, and should not rely 

on the proposed functionality as a sole means of 

compliance. As such, while the proposed MTP 

functionality will, in some instances, operate 

differently than it does outside of the context of 

Periodic Auctions, its design as a supplementary 

risk tool will still serve to benefit Members that 

choose to utilize this tool. 

43MTP Cancel Both is defined as ‘‘[a]n incoming 

order marked with the ‘‘MCB’’ modifier will not 

execute against the opposite side resting interest 

marked with any MTP modifier originating from the 

same Unique Identifier. The entire size of both 

orders will be cancelled back to the originating User 

(s). See Rule 11.9(f)(4). 

44The Exchange notes that the bypassing of the 

Continuous Book Order’s MTP modifier in this 

scenario is temporary. Should the Periodic Auction 

complete and Order 3 does not have the 

opportunity to trade with Order 1 in the Periodic 

Auction, then Order 3 would remain posted on the 

Continuous Book with its MTP modifier and be 

afforded the protections of MTP. 

45The Exchange notes that the bypassing of the 

Continuous Book Order’s MTP modifier in this 

scenario is temporary. Should the Periodic Auction 

complete and Order 3 does not have the 

Here, even though Order 1 and Order 

4 both originated from Firm A, and are 

designated with an MTP modifier, Order 

1 is not canceled upon Order 4’s arrival 

because Order 1 is a Continuous Book 

Order that may or may not end up 

trading with Order 4 once the Periodic 

Auction is complete. Because Order 1 

could receive an execution on the 

Continuous Book while the Periodic 

Auction is in progress, the Exchange 

temporarily bypasses Order 1’s MTP 

instruction upon Order 4’s arrival to 

prevent Order 1 from forfeiting a 

Continuous Book execution based on a 

possibility that Order 1 would be 

executable versus Order 4 at the 

completion of the Periodic Auction. 

Example 6: Incoming Continuous Book 

Order Matching Against a PAO Order— 

No MTP Action Occurs 

Example 6 illustrates how MTP will 

operate when Firm A’s incoming 

Continuous Book Order with an MCS 

modifier matches with Firm A’s resting 

PAO Order with an MCS modifier, and 

a Periodic Auction is not in progress. 

Here, MTP will not be applied because 

PAO Orders and Continuous Book 

Orders are not permitted to trade with 

one another.38 As such, MTP is not 

needed to prevent Firm A’s Order 1 

from trading with Firm A’s Order 2 and 

as such, Order 2 is permitted to post to 

the BYX Book. 

• Order 1—Resting (Firm A): PAO 

Order (MTP = Cancel Smallest), Buy 

100 @1.00 

• Order 2—Inbound order (Firm A): 

Continuous Book order (MTP = 

Cancel Smallest), Sell 200 @1.00 

• Result: Order 2 will rest in the 

Continuous Book, and there is no 

MTP action. 

Example 7: Incoming Order Is Canceled 

Due to ‘‘Periodic Auction in Progress’’ 

Involving a PAO Order 

Example 7 illustrates how an 

incoming order with a MTP modifier is 

canceled because a Periodic Auction is 

in progress.39 Here, Firm A’s inbound 

Order 2, a PAE Order to sell 200 @1.00, 

with a MTP modifier of MTP Cancel 

Both (‘‘MCB’’),40 immediately starts an 

auction with Firm B’s Order 1, a resting 

PAO Order to Buy 100 @1.00, that is 

participating in the Periodic Auction. 

While the Periodic Auction is in 

progress, Firm A enters Order 3, a PAE 

Order to Buy 200 @1.00 with an MCB 

instruction. 

The entry of Order 3 presents a 

scenario in which the Exchange seeks to 

implement MTP functionality that 

behaves differently than demonstrated 

in each of the preceding five examples. 

Specifically, if a Periodic Auction is in 

progress, and an inbound Periodic 

Auction is designated with an MTP 

modifier, and such order matches 

against a resting contra-side Periodic 

Auction Order, that is participating in 

the Periodic Auction, originating from 

the same Unique Identifier that is also 

designated with an MTP modifier, then 

the Periodic Auction Order will be 

cancelled. Importantly, this behavior is 

necessary to help ensure that once a 

Periodic Auction is initiated it will be 

completed. 

Applying this proposed behavior to 

Example 7’s fact pattern, when Firm A’s 

Order 3, a PAE Order with an MCB 

modifier is entered after Periodic 

Auction has been initiated and Order 3 

subsequently matches with Firm A’s 

Order 2 (a PAE Order with a MCB 

modifier), Order 3 will be cancelled. 

Without this proposed behavior, Order 

3 would otherwise be included in the 

Periodic Auction, and its MTP Cancel 

Both instruction would result in the 

cancelation of Order 2,41 preventing the 

Periodic Auction from completing, and 

denying Firm A an execution it would 

otherwise have expected to receive. The 

Exchange believes that this proposed 

behavior appropriately balances the 

dual goals of ensuring that Periodic 

Auctions complete once initiated and 

providing Members the ability to utilize 

MTP for their Periodic Auction Orders 

in each of the scenarios described in the 

preceding five examples.42

• Order 1—Resting (Firm B): PAO 

Order, Buy 100 @1.00 

• Order 2—Inbound Order (Firm A): 

PAE Order (MTP = Cancel Both 43), 

Sell 200 @1.00 

• Action: Order 2 initiates a Periodic 

Auction with Order 1 

• Order 3—Inbound order (Firm A): 

PAE Order (MTP = Cancel Both), Buy 

200 @1.00 

• Result: Order 3 is canceled in order to 

prevent Order 3 participating in the 

Periodic Auction, canceling Order 2, 

and disrupting the completion of the 

Periodic Auction. 

Example 8: Incoming Order Has MTP 

Temporarily Bypassed in a Periodic 

Auction 

Example 8 is another example of MTP 

being temporarily bypasses when a 

Periodic Auction is in progress, despite 

the Member adding MTP instructions to 

their Periodic Auction Order(s) and 

Continuous Book Order(s). Here, Firm 

B’s Order 2, a PAE Order with an MCO 

modifier, initiates a Periodic Auction 

upon entry with Firm A’s Order 1, a 

resting PAE Order with an MCO 

modifier. Firm A subsequently enters a 

Continuous Book Order (Hidden) with 

an MCO modifier. Here, the Exchange 

will temporarily bypass 44 an inbound 

Continuous Book Order’s MTP modifier 

when a Periodic Auction is in progress, 

and such Continuous Book Order would 

post to the Continuous Book, and be 

eligible to participate in the Periodic 

Auction, or alternatively receive an 

execution from the Continuous Book. In 

such instance, applying the Continuous 

Book Order’s MTP modifier and 

canceling such order based on the 

potential that the order could trade in 

the Periodic Auction, would be 

unnecessarily prohibitive. By posting to 

the Continuous Book, such order could 

still execute without violating its MTP 

instructions. 

Based on the proposed MTP 

functionality, Order 3 will post to the 

BYX Book prior to the end of the 

Periodic Auction as the MTP modifier is 

temporarily bypassed.45 Order 1 and 


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opportunity to trade with Order 1 in the Periodic 

Auction, then Order 3 would remain posted on the 

Continuous Book with its MTP modifier and be 

afforded the protections of MTP. 

46Example 8 demonstrates the proposed 

functionality described in proposed Rule 

11.25(e)(1)(C). 

47The Exchange notes that the proposed MTP 

functionality is intended as a supplementary risk 

tool that Members may voluntarily use to help them 

manage their risk and compliance with applicable 

securities rules. As registered broker-dealers, 

Members are ultimately responsible for compliance 

with applicable securities rules, and should not rely 

on the proposed functionality as a sole means of 

compliance. As such, while the proposed MTP 

functionality will, in some instances, operate 

differently than it does outside of the context of 

Periodic Auctions, its design as a supplementary 

risk tool will still serve to benefit Members that 

choose to utilize this tool. 

48Example 9 demonstrates the proposed 

functionality described in 11.25(e)(2). 

49Example 10 demonstrates the proposed 

functionality described in 11.25(e)(2). 

50 15 U.S.C. 78f(b). 

51 15 U.S.C. 78f(b)(5). 

52 Id. 

53 In addition to codifying the proposed 

functionality, the Exchange will send out a Member 

Continued 

Order 2 will trade in the Periodic 

Auction for 500 shares @10.02. After 

trading with Order 2, Order 1 still has 

500 shares remaining. Prior to the end 

of the Periodic Auction, Order 3 will be 

matched in the Periodic Auction and 

trade 200 shares with Order 1 @10.02, 

bypassing the MCO modifier assigned 

by Firm A to its Order 1 and Order 3. 

The Exchange believes that 

temporarily bypassing an MTP modifier 

in this scenario is necessary to ensure 

that a Periodic Auction completes once 

it is initiated.46 Additionally, bypassing 

Order 3’s MTP instruction is also 

necessary to avoid disrupting trading in 

the Continuous Book, because Order 3 

could perhaps post and trade while the 

Periodic Auction is in progress. The 

Exchange therefore believes cancelling 

Order 3 based on its potential to trade 

in the Periodic Auction would 

unnecessarily prevent a Member from 

potentially receiving a Continuous Book 

execution. While the proposed MTP 

functionality will explicitly and 

automatically temporarily bypass a 

Member’s MTP modifier when the 

scenario described in Example 8 is 

present, the Exchange believes that such 

behavior appropriately balances the 

dual goals of ensuring that Periodic 

Auctions operate as designed (i.e., once 

initiated they will complete, executing 

the maximum number of shares), and 

still provides Members the ability to 

utilize MTP for their Periodic Auction 

Orders in majority of instances 

described in each of the preceding six 

examples.47

• Order 1—Firm A: PAE Order (MTP = 

Cancel Oldest), Buy 1000 @10.02 

• Order 2—Firm B: PAE Order (MTP = 

Cancel Oldest), Sell 500, @10.02 

• Action: Order 2 initiates an auction 

with Order 1, because Firm A and 

Firm B are different entities. 

• Order 3—Inbound order (Firm A): 

Continuous Book Order (MTP = 

Cancel Oldest), Sell 200 @10.02 

• Action: MTP modifier on Order 3 is 

temporarily bypassed 

• Result: Order 3 posts to the BYX Book 

prior to the end of the auction; Order 

1 and Order 2 trade in the Periodic 

Auction for 500 @10.02; Order 3 then 

trades 200 @10.02 with Order 1 

(bypassing MTP). 

Example 9: Minimum Quantity Order 

Unable To Be Filled (PAE vs. PAE) 48

Example 9 illustrates how the System 

will ignore the Minimum Quantity 

instruction on a Periodic Auction Order 

that is also designated with an MTP 

modifier, when the Minimum Quantity 

cannot be satisfied. Specifically, in the 

event a Periodic Auction Order is 

entered as a Minimum Quantity Order, 

as well as with an MTP modifier (e.g., 

Order 1), and such Periodic Auction 

Order could initiate a Periodic Auction 

with a contra-side Periodic Auction 

Order or trade with a Continuous Book 

Order (e.g., Order 2), designated with an 

MTP modifier from the same Unique 

Identifier as Order 1, the System will 

apply ignore Order 1’s Minimum 

Quantity instruction, and apply MTP, 

regardless of whether the Minimum 

Quantity is satisfied. Here, upon entry 

of Order 2, the System will ignore Order 

1’s Minimum Quantity instruction, and 

instead apply MTP, resulting in the 

cancelation of Order 1. 

• Order 1 (Firm A): Buy 1000 @10.02— 

PAE—Min Quantity = 500 (MTP=any) 

• Order 2 (Firm A): Sell 400 @10.02— 

PAE order (MTP=Cancel Oldest) 

• Result: Order 2 cannot initiate an 

auction with Order 1 due to the MIN 

quantity on Order 1. ‘MIN’ on Order 

1 is ignored and Order 2 cancels 

Order 1. Order 2 posts to the book. 

Example 10: Minimum Quantity Order 

Able To Be Filled (PAE vs. PAE) 49

Example 10 illustrates how the 

System will ignore the Minimum 

Quantity instruction on a Periodic 

Auction Order that is also designated 

with a an MTP modifier, when the 

Minimum Quantity is satisfied. Here, 

even though the Minium Quantity for 

Order 1 can be satisfied by Order 2, the 

System will apply MTP resulting in the 

cancelation of Order 1. 

• Order 1 (Firm A): Buy 1000 @10.02— 

PAE—Min Quantity = 500 (MTP = 

any) 

• Order 2 (Firm 2): Sell 1000 @10.02— 

PAE (MTP = Cancel Oldest) 

Result: The System applies MTP, and 

cancels Order 1 

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.50 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 51 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) 52 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

that its proposed MTP functionality is 

designed to promote the just and 

equitable principles of trade, and to 

protect investors and the public interest, 

by enabling Users to better prevent 

undesirable trading activity such as 

wash sales or self-trades for not only 

their Continuous Book Orders, but their 

Periodic Auction Orders as well. 

Additionally, by providing Users with a 

supplemental risk tool that will better 

enable them to achieve compliance with 

applicable securities rules and 

regulations, the proposed rule change 

will help to further ensure that orders 

eligible for execution in the Periodic 

Auction indeed represent genuine 

trading interest from separate and 

distinct firms. While the proposed MTP 

functionality would not operate 

identically to MTP as it is used in nonPeriodic Auction scenarios, the 

Exchange believes that its proposal 

strikes an appropriate balance between 

ensuring Users receive executions in the 

Periodic Auction and providing Users’ 

the ability to utilize MTP in most 

trading situations involving Periodic 

Auctions. By making this clear to 

Users,53 they will be able to anticipate 


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notice that includes information about the proposed 

MTP functionality for Periodic Auctions. 

54See ‘‘Trade Big with Cboe U.S. Periodic 

Auctions,’’ available at: https://www.cboe.com/us/ 

equities/trading/offerings/periodic_auctions/. 

(‘‘Cboe created its patented Periodic Auctions to 

establish an on-exchange alternative to the growth 

of off-exchange liquidity. Most recently, the use of 

conditional order types on Alternative Trading 

Systems (ATSs) has reached new highs as a 

percentage of ATS volumes. Periodic Auctions 

would offer a new price forming auction for 

investors seeking liquidity, including but not 

limited to block size transactions, during the course 

of the trading day. These intraday auctions may be 

a useful tool to attract buyers and sellers in less 

liquid or wider spread names, and would create an 

equal and fair market for market participants and 

investors that wish to either initiate or respond to 

such auctions. Periodic Auctions will be available 

on Cboe’s BYXTM market center.’’). 

55 15 U.S.C. 78s(b)(2)(B). 

56 Id. 

57 15 U.S.C. 78f(b)(5). 

58 15 U.S.C. 78f(b)(8). 

how MTP modifiers will interact with 

their Periodic Auction Orders and 

mitigate any confusion that Users may 

have in using the proposed 

functionality. 

Similarly, by making clear to Users 

that when they enter their Periodic 

Auction Orders as Minimum Quantity 

Orders, and designate them with an 

MTP instruction, and such Periodic 

Auction Orders attempt to execute 

versus contra-side Periodic Auction 

Orders or Continuous Book orders with 

a MTP modifier originating from the 

same Unique Identifier, that the 

Minimum Quantity instruction will not 

be enforced, Users will be better 

informed as to how MTP operates in 

conjunction with Minimum Quantity 

restrictions, and will be better able to 

manage their Periodic Auction Orders 

and when it may be sensible to enter 

Periodic Auction Orders with both a 

Minimum Quantity restriction and an 

MTP modifier. 

Additionally, the Exchange believes 

that the proposed rule changes are 

designed to facilitate transactions in 

securities, and to remove impediments 

to and perfect the mechanism of a free 

and open market and a national market 

system. Based on User feedback, the 

lack of MTP functionality for Periodic 

Auction Orders may discourage Users 

from entering Periodic Auction Orders 

because they do not have an automated 

way to systematically prevent 

undesirable executions resulting from 

orders originating from a User’s 

algorithm or trading desk, or their 

related algorithms or trading desks. In 

this regard, the proposed rule changes 

may encourage Users to increase their 

Periodic Auction participation, thereby 

further enhancing the Periodic Auction 

liquidity pool and the ability of 

investors to execute larger orders that 

may otherwise be difficult to execute 

without market impact in the 

continuous market. Additionally, 

because Periodic Auctions are priceforming, the enhanced liquidity pools 

would indeed augment Periodic 

Auction’s valuable price discovery 

function, which may be particularly 

helpful for investors when trading 

securities that typically trade with 

wider spreads. 

Again, while the proposed MTP 

functionality may not apply a User’s 

MTP modifiers in all instances, the 

Exchange as well as its Users believe 

that some level of MTP protection is 

more beneficial than completely 

foregoing MTP protection in its entirety. 

By making clear to Users how MTP for 

Periodic Auction Orders will operate, 

Users can better manage their use of 

MTP modifiers, and anticipate how 

their Periodic Auction Orders will 

behave. Similarly, while Periodic 

Auction Orders entered as Minimum 

Quantity Orders, as well as an MTP 

Modifier, will in certain circumstances 

(discussed supra) cause the System to 

ignore a User’s Minimum Quantity 

requirements and instead apply MTP, 

Users have indicated that they would 

prefer that MTP apply consistently so as 

to prevent undesirable wash sales. 

Finally, the Exchange further believes 

that the proposed rule change does not 

unfairly discriminate amongst Users 

because the proposal will allow all 

Periodic Auction Users to utilize MTP 

just as all Users entering Continuous 

Book Orders may utilize MTP today. In 

this regard, the proposed amendment 

will avoid disparate treatment of Users. 

Furthermore, the bypassing or amending 

of MTP modifiers, as described in the 

Examples above, will apply equally to 

all Periodic Auction Users, regardless of 

their size. 

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. MTP is an 

optional functionality offered by the 

Exchange and Periodic Auction Users 

are free to decide whether to use MTP 

in their decision-making process when 

submitting Periodic Auction Orders to 

the Exchange. 

Similarly, the Exchange does not 

believe that the proposed amendment 

poses a burden on intermarket 

competition that is not necessary or 

appropriate in furtherance of the Act. 

Indeed, the proposed rule change is 

designed to increase competition by 

offering Periodic Auction Users the 

ability to better manage their order flow 

and prevent undesirable executions. In 

turn, Users may be further incentivized 

to send additional orders to BYX’s 

Periodic Auction mechanism, thereby 

fostering competition amongst 

exchanges, as well as with off-exchange 

venues (e.g., alternative trading systems) 

where Users that may otherwise utilized 

Periodic Auctions, typically seek to 

source block-sized liquidity.54

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. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

CboeBYX–2024–009 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 55 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of such proceedings is 

appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as described 

below, the Commission seeks and 

encourages interested persons to 

provide comments on the proposed rule 

change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,56 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with Section 

6(b)(5) of the Act, which requires, 

among other things, that the rules of a 

national securities exchange be 

‘‘designed to perfect the operation of a 

free and open market and a national 

market system’’ and ‘‘protect investors 

and the public interest,’’ and not be 

‘‘designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers,’’ 57 and 

Section 6(b)(8) of the Act, which 

requires that the rules of a national 

securities exchange ‘‘not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of [the Act].’’ 58


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59Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Act Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 60See supra note 4. 

61 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 

3(a)(57). 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5), 6(b)(8) or any other provision of 

the Act, or the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.59

In particular, the Commission seeks 

comment on the following: 

• Commenter’s views on whether or 

not the Exchange has adequately 

described how the proposed 

functionality would handle incoming 

Periodic Auction Orders with MTP 

modifiers and incoming Continuous 

Book Orders with MTP modifiers before, 

during and after the conclusion of a 

Periodic Auction; 

• Commenter’s views on whether or 

not the Exchange has adequately 

described how the proposed incoming 

Periodic Auction Orders with MTP 

modifiers and incoming Continuous 

Book Orders with MTP modifiers would 

impact other Continuous Book Orders or 

Periodic Auction Orders; 

• Commenter’s views on whether or 

not it is appropriate for the proposed 

functionality to, in certain 

circumstances, allow for the execution 

of orders originating from the same 

Unique Identifier, even if those orders 

have MTP modifiers, and whether or not 

the Exchange has adequately explained 

and justified this proposed 

functionality; and 

• Commenter’s views on whether or 

not the proposed functionality adds 

unnecessary complexity to the 

Exchange. 

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by October 16, 2024. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by October 30, 2024. The 

Commission asks that commenters 

address the sufficiency of the 

Exchange’s statements in support of the 

proposal, which are set forth in 

Amendment No. 1,60 in addition to any 

other comments they may wish to 

submit about the proposed rule change. 

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–2024–009 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–2024–009. 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–2024–009 and should be 

submitted on or before October 16, 

2024. Rebuttal comments should be 

submitted by October 30, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.61

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–21876 Filed 9–24–24; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #20574 and #20575; 

SOUTH CAROLINA Disaster Number SC– 

20009] 

Administrative Declaration of a 

Disaster for the State of South Carolina 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of South Carolina dated 09/ 

18/2024. 

Incident: Tropical Storm Debby. 

Incident Period: 08/04/2024 through 

08/22/2024. 

DATES: Issued on 09/18/2024. 

Physical Loan Application Deadline 

Date: 11/18/2024. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 06/18/2025. 

ADDRESSES: Visit the MySBA Loan 

Portal at https://lending.sba.gov to 

apply for a disaster assistance loan. 

FOR FURTHER INFORMATION CONTACT: 

Alan Escobar, Office of Disaster 

Recovery & Resilience, U.S. Small 

Business Administration, 409 3rd Street 

SW, Suite 6050, Washington, DC 20416, 

(202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

Administrator’s disaster declaration, 

applications for disaster loans may be 

submitted online using the MySBA 

Loan Portal https://lending.sba.gov or 

other locally announced locations. 

Please contact the SBA disaster 

assistance customer service center by 

email at disastercustomerservice@

sba.gov or by phone at 1–800–659–2955 

for further assistance. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Berkeley, Orangeburg 

Contiguous Counties: 

South Carolina: Aiken, Bamberg, 

Barnwell, Calhoun, Charleston, 


ddrumheller on DSK120RN23PROD with NOTICES1