16296 Federal Register / Vol. 87, No. 55 / Tuesday, March 22, 2022 / Notices 

154 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on March 1, 2022 (SR–CboeEDGX–2022– 

009). On March 9, 2022, the Exchange withdrew 

that filing and submitted this proposal. 

4See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (February 27, 

2022), available at https://markets.cboe.com/us/ 

equities/market_statistics/. 

5See Exchange Rule 11.6(q)(2) 6See Exchange Rule 11.6(q)(6). 7See Exchange Rule 11.6(q)(5). 8Orders yielding Fee Code ‘‘B’’ are orders adding 

liquidity to EDGX (Tape B). 9Orders yielding Fee Code ‘‘V’’ are orders adding 

liquidity to EDGX (Tape A). 10Orders yielding Fee Code ‘‘Y’’ are orders 

adding liquidity to EDGX (Tape C). 11Orders yielding Fee Code ‘‘3’’ are orders adding 

liquidity to EDGX in the pre and post market (Tapes 

A or C). 12Orders yielding Fee Code ‘‘4’’ are orders adding 

liquidity to EDGX in the pre and post market (Tape 

B). 13 ‘‘Step-Up ADAV’’ means ADAV in the relevant 

baseline month subtracted from current ADAV. 14 ‘‘TCV’’ means total consolidated volume 

calculated as the volume reported by all exchanges 

By the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.154

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–05980 Filed 3–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94437; File No. SR– 

CboeEDGX–2022–013] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend its 

Fee Schedule 

March 16, 2022. 

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 March 9, 

2022, 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’’ or ‘‘EDGX 

Equities’’) proposes to amend its Fee 

Schedule. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

options/regulation/rule_filings/edgx/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fee Schedule applicable to its equities 

trading platform (‘‘EDGX Equities’’) as 

follows: (1) Amend fee code ZM so that 

it applies to applicable orders with a 

time-in-force of Good ‘til Extended Day 

(‘‘GTX’’); and (2) modify the criteria of 

Growth Tier 2. The Exchange proposes 

to implement these changes effective 

March 1, 2022.3

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 

16 registered equities exchanges, as well 

as a number of alternative trading 

systems and other off-exchange venues 

that do not have similar self-regulatory 

responsibilities under the Exchange Act, 

to which market participants may direct 

their order flow. Based on publicly 

available information,4 no single 

registered equities exchange has more 

than 17% of the market share. Thus, in 

such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow. 

The Exchange in particular operates a 

‘‘Maker-Taker’’ model whereby it pays 

rebates to members that add liquidity 

and assesses fees to those that remove 

liquidity. The Exchange’s Fee Schedule 

sets forth the standard rebates and rates 

applied per share for orders that provide 

and remove liquidity, respectively. 

Currently, for orders in securities priced 

at or above $1.00, the Exchange 

provides a standard rebate of $0.00160 

per share for orders that add liquidity 

and assesses a fee of $0.0030 per share 

for orders that remove liquidity. For 

orders in securities priced below $1.00, 

the Exchange provides a standard rebate 

of $0.00009 per share for orders that add 

liquidity and assesses a fee of 0.30% of 

total dollar value for orders that remove 

liquidity. Additionally, in response to 

the competitive environment, the 

Exchange also offers tiered pricing 

which provides Members opportunities 

to qualify for higher rebates or reduced 

fees where certain volume criteria and 

thresholds are met. Tiered pricing 

provides an incremental incentive for 

Members to strive for higher tier levels, 

which provides increasingly higher 

benefits or discounts for satisfying 

increasingly more stringent criteria. 

As noted under the Fee Codes and 

Associated Fees section of the Fee 

Schedule, fee code ZM is appended to 

retail orders with a time-in-force of 

Day 5/Regular Hours Only (‘‘RHO’’) 6

that remove liquidity on arrival and 

provides a fee/rebate of free. Now the 

Exchange proposes to amend fee code 

ZM so that is appended to retail with a 

time-in-force of Day/RHO or GTX 7 that 

remove liquidity on arrival. Currently, 

retail orders with a time-in-force of GTX 

that remove liquidity upon arrival are 

appended fee code ZR which are 

assessed a fee of $0.00300 per share in 

securities at or above $1.00 and 0.30% 

of dollar value to securities below $1.00. 

Therefore, the proposal would decrease 

the fee associated with retail orders with 

a time-in-force of GTX that remove 

liquidity upon arrival by $0.00300. 

Further, the Growth Volume Tiers 

Volume Tiers set forth in footnote 1 of 

the Fee Schedule (Add/Remove Volume 

Tiers) provide Members an opportunity 

for qualifying orders (i.e., orders 

yielding fee code B,8 V,9 Y,10 3 11 or 4 12) 

to receive an enhanced rebate and are 

designed to encourage growth in order 

flow by providing specific criteria in 

which Members must increase their 

relative liquidity each month over a 

predetermined baseline. Growth Tier 2, 

for example, provides an opportunity 

for qualifying orders (i.e., orders 

yielding fee code B, V, Y, 3 or 4) to 

receive an enhanced rebate of $0.0027 

per share to Members that (1) add a 

Step-Up ADAV 13 from June 2021 

greater than or equal to 0.10% of the 

TCV 14 or Members that add a Step-Up 


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Federal Register / Vol. 87, No. 55 / Tuesday, March 22, 2022 / Notices 16297 

and trade reporting facilities to a consolidated 

transaction reporting plan for the month for which 

the fees apply. 15 15 U.S.C. 78f. 16 15 U.S.C. 78f(b)(4). 17 15 U.S.C. 78f.(b)(5). 

18See Securities Exchange Release No. 86375 

(July 15, 2019), 84 FR 34960 (SRCboeEDGX–2019– 

045). 

ADAV from June 2021 equal to or 

greater than 8 million shares; and (2) 

Members that have a total remove ADV 

equal to or greater than 0.70% of TCV. 

The Exchange now proposes to modify 

the criteria in the second prong of 

Growth Tier 2 to require that Members 

(i) have a total remove ADV equal to or 

greater than 0.70% of TCV, or 

alternatively, (ii) have a total remove 

ADV equal to or greater than 60,000,000 

shares. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the 

Securities and Exchange Act of 1933 

(the ‘‘Act’’),15 in general, and furthers 

the objectives of Section 6(b)(4),16 in 

particular, as it is designed to provide 

for the equitable allocation of reasonable 

dues, fees and other charges among its 

Members and issuers and other persons 

using its facilities. The Exchange also 

believes that the proposed rule change 

is consistent with the objectives of 

Section 6(b)(5) 17 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, and, 

particularly, is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

As described above, the Exchange 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. The 

proposed rule changes reflect a 

competitive pricing structure designed 

to incentivize market participants to 

direct their order flow to the Exchange, 

which the Exchange believes would 

enhance market quality to the benefit of 

all Members. 

Regarding the proposed amendment 

to fee code ZM, the Exchange notes that 

the competition for retail order flow is 

particularly intense, especially as it 

relates to exchange versus off-exchange 

venues, as prominent retail brokerages 

tend to route a majority of their limit 

orders to off-exchange venues.18

Accordingly, competitive forces compel 

the Exchange to use exchange 

transaction fees and credits, particularly 

as they relate to competing for retail 

order flow, because market participants 

can readily trade on competing venues 

if they deem pricing levels at those 

other venues to be more favorable. 

The Exchange believes that its 

proposed change to amend fee code ZM 

is reasonable, equitable and not unfairly 

discriminatory. First, the Exchange 

notes that the current fee applied to 

retail orders with a time-in-force of GTX 

that remove liquidity upon arrival is 

$0.00300 per share in securities at or 

above $1.00 and 0.30% of dollar value 

to securities below $1.00. Therefore, the 

proposal would decrease the fee 

associated with retail orders with a 

time-in-force of GTX that remove 

liquidity upon arrival. Second, while 

the proposed fee/rebate applies only to 

retail orders, the Exchange does not 

believe this application is 

discriminatory as the Exchange offers 

similar rebates or reduced fees to nonretail order flow. The Exchange notes 

that, like all other fee codes, ZM and the 

accompanying fee (which is free) will be 

automatically and uniformly applied to 

all Members’ qualifying orders as 

applicable. 

The Exchange believes its proposal to 

amend the criteria of the Growth Tier 2 

is reasonable because the tier is and will 

continue to be available to all Members 

and provides Members an alternative 

opportunity to meet the required criteria 

in order to receive an enhanced rebate. 

The Exchange notes that relative 

volume-based incentives and discounts 

have been widely adopted by 

exchanges, including the Exchange, and 

are reasonable, equitable, and nondiscriminatory because they are open to 

all Members on an equal basis and 

provide additional discounts that are 

reasonably related to (i) the value to an 

exchange’s market quality and (ii) 

associated with higher levels of market 

activity, such as higher levels of 

liquidity provision and/or growth 

patterns. The proposed amendment to 

Growth Tier 2 is designed to give 

Members an alternative opportunity to 

meet the second prong of the required 

criteria, and therefore the tier may be 

more easily achieved by Members. The 

Exchange believes that the existing 

rebates under Growth Tier 2 continues 

to be commensurate with the proposed 

criteria. That is, the rebate reasonably 

reflects the difficulty in achieving the 

corresponding criteria as amended. 

The Exchange believes that the 

changes Growth Tier 2 will benefit all 

market participants by incentivizing 

continuous liquidity and, thus, deeper 

more liquid markets as well as increased 

execution opportunities. Particularly, 

the proposal is designed to incentivize 

liquidity, which further contributes to a 

deeper, more liquid market and provide 

even more execution opportunities for 

active market participants at improved 

prices. This overall increase in activity 

deepens the Exchange’s liquidity pool, 

offers additional cost savings, supports 

the quality of price discovery, promotes 

market transparency and improves 

market quality, for all investors. 

The Exchange also believes that the 

proposed amendment to the Growth 

Tier 2 represents an equitable allocation 

of rebates and are not unfairly 

discriminatory because all Members are 

eligible for the tiers and would have the 

opportunity to meet the tier’s criteria 

and would receive the proposed rebate 

if such criteria is met. Without having 

a view of activity on other markets and 

off-exchange venues, the Exchange has 

no way of knowing whether this 

proposed rule change would definitely 

result in any Members qualifying for the 

tier. While the Exchange has no way of 

predicting with certainty how the 

proposed tier will impact Member 

activity, based on trading activity on the 

Exchange during the prior month, the 

Exchange anticipates that at least one 

Member will be able to compete for and 

reach the proposed criteria in Growth 

Tier 2. The Exchange also notes that 

proposed change will not adversely 

impact any Member’s ability to qualify 

for other reduced fee or enhanced rebate 

tiers. Should a Member not meet the 

proposed criteria under the tier, as 

amended, the Member will merely not 

receive the corresponding enhanced 

rebate. 

As noted above, the Exchange 

operates in a highly competitive market. 

The Exchange is only one of 16 equity 

venues to which market participants 

may direct their order flow, and it 

represents a small percentage of the 

overall market. It is also only one of 

several maker-taker exchanges. 

Competing equity exchanges offer 

similar rates and tiered pricing 

structures to that of the Exchange, 

including schedules of rebates and fees 

that apply based upon members 

achieving certain volume thresholds. 


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16298 Federal Register / Vol. 87, No. 55 / Tuesday, March 22, 2022 / Notices 

19Supra note 4. 

20See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 

21NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

22 15 U.S.C. 78s(b)(3)(A). 

23 17 CFR 240.19b–4(f). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. Rather, as 

discussed above, the Exchange believes 

that the proposed changes would 

encourage the submission of additional 

order flow to a public exchange, thereby 

promoting market depth, execution 

incentives and enhanced execution 

opportunities, as well as price discovery 

and transparency for all Members. As a 

result, the Exchange believes that the 

proposed changes further the 

Commission’s goal in adopting 

Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 

The Exchange believes the proposed 

rule changes do not impose any burden 

on intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Particularly, 

the proposed tier change will apply to 

Members equally in that all Members 

are eligible for Growth Tier 2, have a 

reasonable opportunity to meet the tier’s 

criteria and will receive the enhanced 

rebate on their qualifying orders if such 

criteria is met. Further, the fee code ZM 

is and will continue to be available to 

all Members equally. The Exchange 

does not believe the proposed changes 

burdens competition, but rather, 

enhances competition as it is intended 

to increase the competitiveness of EDGX 

by amending an existing pricing 

incentive in order to attract order flow 

and incentivize participants to increase 

their participation on the Exchange, 

providing for additional execution 

opportunities for market participants 

and improved price transparency. 

Greater overall order flow, trading 

opportunities, and pricing transparency 

benefits all market participants on the 

Exchange by enhancing market quality 

and continuing to encourage Members 

to send orders, thereby contributing 

towards a robust and well-balanced 

market ecosystem. 

Next, the Exchange believes the 

proposed rule change does not impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

As previously discussed, the Exchange 

operates in a highly competitive market. 

Members have numerous alternative 

venues that they may participate on and 

direct their order flow, including other 

equities exchanges, off-exchange 

venues, and alternative trading systems. 

Additionally, the Exchange represents a 

small percentage of the overall market. 

Based on publicly available information, 

no single equities exchange has more 

than 17% of the market share.19

Therefore, no exchange possesses 

significant pricing power in the 

execution of order flow. Indeed, 

participants can readily choose to send 

their orders to other exchange and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 20 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’.21 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act 22 and paragraph (f) of Rule 

19b–4 23 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeEDGX–2022–013 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-2022–013. 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 (http://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 


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Federal Register / Vol. 87, No. 55 / Tuesday, March 22, 2022 / Notices 16299 

24 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. 67090 

(May 31, 2012), 77 FR 33531 (June 6, 2012) (SR– 

BATS–2011–038; SR–BYX–2011–025; SR–BX– 

2011–068; SR–CBOE–2011–087; SR–C2–2011–024; 

SR–CHX–2011–30; SR–EDGA–2011–31; SR–EDGX– 

2011–30; SR–FINRA–2011–054; SR–ISE–2011–61; 

SR–NASDAQ–2011–131; SR–NSX–2011–11; SR– 

NYSE–2011–48; SR–NYSEAmex–2011–73; SR– 

NYSEArca–2011–68; SR–Phlx–2011–129) (‘‘Pilot 

Rules Approval Order’’). 

4The rules of the equity options exchanges 

similarly provide for a halt in trading if the cash 

equities exchanges invoke a MWCB Halt. See, e.g., 

Options 3, Section 9(e). 5See Securities Exchange Act Release No. 67091 

(May 31, 2012), 77 FR 33498 (June 6, 2012). The 

LULD Plan provides a mechanism to address 

extraordinary market volatility in individual 

securities. 6See Securities Exchange Act Release Nos. 67090 

(May 31, 2012), 77 FR 33531 (June 6, 2012) (SR– 

BX–2011–068) (Approval Order); and 68815 

(February 1, 2013), 78 FR 9752 (February 11, 2013) 

(SR–BX–2013–009) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to Delay the 

Operative Date). 7See Securities Exchange Act Release No. 85623 

(April 11, 2019), 84 FR 16086 (April 17, 2019). 8See Securities Exchange Act Release No. 85585 

(April 10, 2019), 84 FR 15643 (April 16, 2019) (SR– 

BX–2019–008). 9See Securities Exchange Act Release No. 87208 

(October 3, 2019), 84 FR 54213 (October 9, 2019) 

(SR–BX–2019–034). 

10See Securities Exchange Act Release No. 90145 

(October 9, 2020), 85 FR 65462 (October 15, 2020) 

(SR–BX–2020–029). 

11See Securities Exchange Act Release No. 93287 

(October 12, 2021), 86 FR 57712 (October 18, 2021) 

(SR–BX–2021–045). 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeEDGX–2022–013 and 

should be submitted on or before April 

12, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–05986 Filed 3–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94434; File No. SR–BX– 

2022–005] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the MarketWide Circuit Breaker Pilot to April 18, 

2022 

March 16, 2022. 

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 March 10, 

2022, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to extend the 

pilot related to the market-wide circuit 

breaker in Equity 4, Rule 4121 to the 

close of business on April 18, 2022. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, at the principal office 

of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

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 extend the 

pilot related to the market-wide circuit 

breaker in Equity 4, Rule 4121 to the 

close of business on April 18, 2022. 

Background 

The market-wide circuit breaker 

(‘‘MWCB’’) rules, including the 

Exchange’s Rule 4121 under Equity 4, 

provide an important, automatic 

mechanism that is invoked to promote 

stability and investor confidence during 

periods of significant stress when cash 

equities securities experience extreme 

market-wide declines. The MWCB rules 

are designed to slow the effects of 

extreme price declines through 

coordinated trading halts across both 

cash equity and equity options 

securities markets. 

The cash equities rules governing 

MWCBs were first adopted in 1988 and, 

in 2012, all U.S. cash equity exchanges 

and FINRA amended their cash equities 

uniform rules on a pilot basis (the ‘‘Pilot 

Rules,’’ i.e., Equity 4, Rule 4121).3 The 

Pilot Rules currently provide for trading 

halts in all cash equity securities during 

a severe market decline as measured by 

a single-day decline in the S&P 500 

Index (‘‘SPX’’).4 Under the Pilot Rules, 

a market-wide trading halt will be 

triggered if SPX declines in price by 

specified percentages from the prior 

day’s closing price of that index. The 

triggers are set at three circuit breaker 

thresholds: 7% (Level 1), 13% (Level 2), 

and 20% (Level 3). A market decline 

that triggers a Level 1 or Level 2 halt 

after 9:30 a.m. and before 3:25 p.m. 

would halt market-wide trading for 15 

minutes, while a similar market decline 

at or after 3:25 p.m. would not halt 

market-wide trading. (Level 1 and Level 

2 halts may occur only once a day.) A 

market decline that triggers a Level 3 

halt at any time during the trading day 

would halt market-wide trading for the 

remainder of the trading day. 

The Commission approved the Pilot 

Rules, the term of which was to 

coincide with the pilot period for the 

Plan to Address Extraordinary Market 

Volatility Pursuant to Rule 608 of 

Regulation NMS (the ‘‘LULD Plan’’),5

including any extensions to the pilot 

period for the LULD Plan.6 In April 

2019, the Commission approved an 

amendment to the LULD Plan for it to 

operate on a permanent, rather than 

pilot, basis.7 In light of the proposal to 

make the LULD Plan permanent, the 

Exchange amended Equity 4, Rule 4121 

to untie the pilot’s effectiveness from 

that of the LULD Plan and to extend the 

pilot’s effectiveness to the close of 

business on October 18, 2019.8 The 

Exchange subsequently filed to extend 

the Pilot Rules’ effectiveness for an 

additional year to the close of business 

on October 18, 2020,9 and later, on 

October 18, 2021.10 The Exchange last 

extended the pilot to the close of 

business on March 18, 2022.11

The Exchange now proposes to amend 

Equity 4, Rule 4121 to extend the pilot 


lotter on DSK11XQN23PROD with NOTICES1