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[Federal Register Volume 89, Number 196 (Wednesday, October 9, 2024)]
[Notices]
[Pages 81966-81968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23290]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101243; File No. SR-CboeBZX-2024-093]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend 
the Implementation Date of Functionality That Will Provide Members and 
Clearing Members With the Option To Utilize Additional Credit Risk 
Settings Under Interpretation and Policy .03 of Rule 11.13 (``Aggregate 
Credit Risk Checks'')

October 3, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 26, 2024, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I and II 
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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
extend the implementation date of functionality that will provide 
Members and Clearing Members with the option to utilize additional 
credit risk settings under Interpretation and Policy .03 or Rule 11.13 
(``Aggregate Credit Risk Checks'').
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The

[[Page 81967]]

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 is filing this proposal to extend the implementation 
date of functionality providing Members and Clearing Members with the 
option to utilize additional Aggregate Credit Risk Checks. The 
functionality relating to these additional risk settings was submitted 
by the Exchange on an immediately effective basis on May 29, 2024.\3\
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    \3\ See Securities Exchange Act Release No. 100308 (June 10, 
2024), 89 FR 50658 (June 14, 2024) (SR-CboeBZX-2024-043).
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    The Aggregate Credit Risk Checks offered under Interpretation and 
Policy .03 or Rule 11.13, provide Members and Clearing Members with 
additional, optional credit risk settings, at the Market Participant 
Identifier (``MPID'') level and/or to a subset of orders identified 
within the MPID level (the ``risk group identifier'' level) that 
authorizes the Exchange to take automated action if a designated limit 
for a Member is breached. These risk settings will provide Members and 
Clearing Members with enhanced abilities to manage their risk with 
respect to orders on the Exchange. Specifically, the Exchange intends 
to offer two aggregate credit risk settings as follows:
     The ``Aggregate Gross Credit Exposure Limit'', which 
refers to a pre-established maximum daily dollar amount for purchases 
and sales across all symbols, where both purchases and sales are 
counted as positive values. For purposes of calculating the Aggregate 
Gross Credit Exposure Limit, both executed and open orders are 
included; and
     The ``Aggregate Net Credit Exposure Limit'', which refers 
to a pre-established maximum daily dollar amount for purchases and 
sales across all symbols, where purchases are counted as positive 
values and sales are counted as negative values. For purposes of 
calculating the Aggregate Net Credit Exposure Limit, both executed and 
open orders are included.
    The Exchange initially proposed to implement the Aggregate Credit 
Risk Checks by October 31, 2024. While this date is not included in the 
relevant rule text codifying the Aggregate Credit Risk Checks, the 
Exchange separately notates in its rulebook when it plans to implement 
new functionality that was either immediately effective upon rule 
filing, or approved by the SEC. Estimated implementation dates are 
sometimes necessary so because implementing new functionality sometimes 
requires additional time to develop, test, and deploy, and such 
timeline may not always coincide with the statutory rule filing 
process. As such, the Exchange provides estimated implementation dates 
to make Members aware that certain rule text is subject to amendment 
post implementation of the new functionality, as well as to provide 
Members with sufficient notice so that they can make any necessary 
technological or operational adjustments to their systems (if 
applicable). However, more time is needed to design, test, and 
implement the Aggregate Credit Ris Checks. Accordingly, the Exchange 
proposes to implement the Aggregate Credit Risk Checks on or after 
November 22, 2024. The Exchange would issue a Trade Desk Notice 
announcing the exact implementation date to Users.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act''), in general, and 
furthers the objectives of Section 6(b) of the Act \4\ in particular, 
in that it is designed to promote just and equitable principles of 
trade, to remove impediments to and perfect the mechanism of a free and 
open market and a national market system, and, in general to protect 
investors and the public interest. The Exchange's proposal to delay the 
implementation of Aggregate Credit Risk Checks to on or after November 
22, 2024, is consistent with the Act and protection of investors and 
general public because it will permit the Exchange additional time to 
ensure the Exchange can properly develop, test, and deploy the 
Aggregate Credit Risk Checks. Moreover, the Aggregate Credit Risk 
Checks themselves were previously approved [sic] by the Commission,\5\ 
and this proposal does not change the substance of those 
functionalities. As noted, the Exchange would issue a Trade Desk Notice 
announcing the exact implementation date to members and member 
organizations.
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    \4\ 15 U.S.C. 78f(b).
    \5\ Supra note 3.
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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. As noted above, the purpose 
of this proposal is simply to extend the implementation date for the 
additional aggregate credit risk settings so that the Exchange has 
additional time for development, testing, and deployment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\ 
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) of the Act \8\ and Rule 19b-
4(f)(6)(iii) thereunder.\9\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ 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 become operative immediately upon filing. The Exchange states that 
more time is required to ensure optimal design, testing, and 
implementation for the Aggregate Credit Risk Checks, and thus, waiver 
of the operative delay will

[[Page 81968]]

provide Exchange with such additional time. As such, the Commission 
believes that waiver of the operative delay is consistent with the 
protection of investors and the public interest because it would ensure 
that the Exchange has extra time to properly deploy these new aggregate 
credit risk functionalities, which is to the benefit of market 
participants that will eventually utilize the Aggregate Credit Risk 
Checks. Accordingly, the Commission hereby waives the 30-day operative 
delay and designates the proposal operative upon filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of this 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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 15 U.S.C. 78s(b)(2)(B).
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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 [email protected]. Please include 
file number SR-CboeBZX-2024-093 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-CboeBZX-2024-093. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549 on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2024-093, and should 
be submitted on or before October 30, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-23290 Filed 10-8-24; 8:45 am]
BILLING CODE 8011-01-P
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