Federal Register / Vol. 87, No. 68 / Friday, April 8, 2022 / Notices 20895 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 93888 

(December 30, 2021), 87 FR 532. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 94238, 

87 FR 9399 (February 18, 2022). The Commission 

designated April 5, 2022, as the date by which the 

Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6On March 31, 2022, the Exchange submitted 

Amendment No. 1 to the proposed rule change, and 

on April 1, 2022, the Exchange withdrew 

Amendment No. 1 to the proposed rule change. 

Amendment No. 2 is available on the Commission’s 

website at: https://www.sec.gov/comments/srcboebzx-2021-086/srcboebzx2021086-20122189-

278229.pdf. 

7 15 U.S.C. 78s(b)(2)(B). 

8The Exchange filed Amendment No. 1 March 

31, 2022, which amended the proposal as originally 

submitted on December 31, 2022 [sic]. On April 1, 

2022, the Exchange withdrew that amendment and 

submitted this Amendment No. 2. 

9As provided in Rule 11.23(a)(23), an NBBO is a 

Valid NBBO where: (i) There is both a NBB and 

NBO for the security; (ii) the NBBO is not crossed; 

and (iii) the midpoint of the NBBO is less than the 

Maximum Percentage away from both the NBB and 

the NBO. See Exchange Rule 11.23(a)(23). The 

Maximum Percentage will vary depending on the 

price of the NBBO midpoint. Currently, the 

Maximum Percentages are as follows: For a NBBO 

midpoint price less than or equal to $25, the 

Maximum Percentage is 5%; for a NBBO midpoint 

price greater than $25 but less than or equal to $50, 

the Maximum Percentage is 2.5%; for a NBBO 

midpoint price greater than $50, the Maximum 

Percentage is 1.5%. See Section 1.5 (Definitions) of 

the US Equities Auction Process at https://

cdn.cboe.com/resources/membership/Cboe_US_

Equities_Auction_Process.pdf. 

10The term ‘‘Indicative Price’’ shall mean the 

price at which the most shares from the Auction 

Book and the Continuous Book would match. In the 

event of a volume based tie at multiple price levels, 

the Indicative Price will be the price which results 

in the minimum total imbalance. In the event of a 

volume based tie and a tie in minimum total 

imbalance at multiple price levels, the Indicative 

Price will be the price closest to the Volume Based 

Tie Breaker. See Exchange Rule 11.23(a)(10). 

11See Exchange Rule 11.23(a)(6). 

12The SIP links the U.S. markets by processing 

and consolidating all protected bid/ask quotes and 

trades from every trading venue into a single data 

feed. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94601; File No. SR– 

CboeBZX–2021–086] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

Amendment No. 2 and Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change, as Modified by 

Amendment No. 2, To Amend the 

Opening Auction Process Provided 

Under Rule 11.23(b)(2)(B) 

April 4, 2022. 

On December 21, 2021, Cboe BZX 

Exchange, Inc. (‘‘BZX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘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 to amend the Opening 

Auction process under BZX Rule 

11.23(b)(2)(B). The proposed rule 

change was published for comment in 

the Federal Register on January 5, 

2022.3 On February 14, 2022, pursuant 

to Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 On April 1, 

2022, the Exchange filed Amendment 

No. 2 to the proposed rule change, 

which amended and superseded the 

proposed rule change as originally 

filed.6 The Commission is publishing 

this notice and order to solicit 

comments on the proposed rule change, 

as modified by Amendment No. 2, from 

interested persons and to institute 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 7 to determine 

whether to approve or disapprove the 

proposed rule change, as modified by 

Amendment No. 2. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposal to amend 

the Opening Auction process provided 

under Rule 11.23(b)(2)(B) to better align 

the Opening Auction Process with 

current market conditions, and, where 

certain market conditions are not 

optimal, to delay the Opening Auction 

from occurring until those market 

conditions have improved. 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/ 

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 

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 

This Amendment No. 2 to SR– 

CboeBZX–2021–086 amends and 

replaces in its entirety the proposal 

amended March 31, 2022 8 and as 

originally submitted on December 21, 

2022 [sic]. The Exchange submits this 

Amendment No. 2 in order to clarify 

certain points and add additional details 

to the proposal. 

The Exchange proposes to amend 

Rule 11.23(b)(2)(B) to make the Opening 

Auction process more dynamic by, 

under certain circumstances delaying 

the Opening Auction in order to 

incorporate additional information into 

the determination of the Opening 

Auction price. Specifically, as proposed 

the Rule would provide that when there 

is no Valid NBBO 9 in a BZX-listed 

security and there is an Indicative 

Price 10 that is not within the Collar 

Price Range,11 the Opening Auction will 

be delayed until market conditions 

improve or the delay period has lapsed, 

as further described below. The 

Exchange notes that the official opening 

price disseminated by the primary 

listing market provides market 

participants valuable information which 

in most cases is used to calculate the 

initial limit up-limit down (‘‘LULD’’) 

bands and also may serve as the basis 

for trading strategies for that trading 

day. However, the official opening price 

is not as important or time sensitive as 

the official closing price disseminated 

by the primary listing market, which is 

used for the pricing and valuation of 

certain indices, funds and derivative 

products. As such, the Exchange 

believes that the proposal strikes an 

appropriate balance by providing 

additional time for the Opening Auction 

process to occur so that under such 

circumstances BZX-listed securities 

have an opportunity for more 

meaningful price formation that is more 

representative of current market 

conditions, but does not delay the 

determination of the BZX Official 

Opening Price so as to impact the 

processes that use the official opening 

price, such as the dissemination of 

certain data by the Securities 

Information Processor (‘‘SIP’’).12


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13See Exchange Rule 11.23(a)(5). 

14See Exchange Rule 11.23(a)(7). 

15See Exchange Rule 11.23(a)(1). 

16The Volume Based Tie Breaker is the midpoint 

of the NBBO for a particular security where the 

NBBO is a Valid NBBO. Where the NBBO is not a 

Valid NBBO, the price of the FLSET is used as the 

Volume Based Tie Breaker. See Exchange Rule 

11.23(a)(23). 

17See Exchange Rule 11.23(a)(9). 

18The Exchange estimates that there is no Valid 

NBBO for approximately 5.81% of the Exchange’s 

Opening Auctions. 

19For purposes of this example, there are no 

orders on the Continuous Book. 

20As noted above, the Maximum Percentage for 

a NBBO midpoint price greater than $25 but less 

than or equal to $50 is 2.5%. 

21As provided in Rule 11.23(a)(6), the Collar 

Midpoint is the Volume Based Tie Breaker for 

Opening Auctions. 

22The Collar Price Range is always double the 

Maximum Percentage. Therefore, the Collar Price 

Range in Example 1 is 5%. 

23See Exchange Rule 11.23(b)(3)(C). 

Background 

As noted above, the Exchange is 

proposing that under limited 

circumstances its current Opening 

Auction process would be amended to 

delay the process such that additional 

information could be incorporated into 

the determination of the Opening 

Auction price. Currently, Rule 

11.23(b)(2)(B) sets forth the process by 

which the BZX Official Opening Price 13

is determined for BZX-listed securities 

during the Opening Auction Process. 

Specifically, as provided in Rule 

11.23(b)(2)(B), the Opening Auction 

price will be the price level within the 

Collar Price Range that maximizes the 

number of shares executed between the 

Continuous Book 14 and Auction Book 15

in the Opening Auction. In the event of 

a volume based tie at multiple price 

levels, the Opening Auction price will 

be the price which results in the 

minimum total imbalance. In the event 

of a volume based tie and a tie in 

minimum total imbalance at multiple 

price levels, the Opening Auction price 

will be the price closest to the Volume 

Based Tie Breaker.16

The Volume Based Tie Breaker for an 

Opening Auction will be the midpoint 

of the NBBO where there is a Valid 

NBBO. Where there is no Valid NBBO, 

the Final Last Sale Eligible Trade 

(‘‘FLSET’’) 17 will be used as the Volume 

Based Tie Breaker.18 Because the FLSET 

is typically based on the most recent 

execution in a security during Regular 

Trading Hours, its value may be 

significantly away from the Indicative 

Price at the time of the Opening Auction 

process, especially in more thinly 

traded securities. As a result, the 

Exchange has observed instances where 

auction eligible orders priced in-line 

with the Indicative Price were not 

executed in the Opening Auction 

because they were outside the Collar 

Price Range established using the 

FLSET. Based on analysis by the 

Exchange and feedback from market 

participants, certain of these instances 

resulted in orders not receiving 

executions in the Opening Auction that 

would have otherwise occurred at prices 

that would have been acceptable to both 

parties to the execution. To illustrate 

this point, the Exchange presents the 

following example. 

Example 1 

Consider a security with a prevailing 

NBBO at 9:30:00 a.m. of $27.10 × $29.54 

and two Limit-On-Open orders on the 

Auction Book—a buy for 1,000 shares at 

$27.90 and a sell for 1,500 shares at 

$27.90.19 The Indicative Price, which is 

the price at which the most shares from 

the Auction Book and the Continuous 

Book would match, would be $27.90 

because the only crossed interest comes 

from the two orders on the Auction 

Book. Therefore, there is crossed 

interest willing to execute at a price 

within the NBBO. However, because the 

midpoint of the NBBO (i.e., $28.32) is 

more than the Maximum Percentage 20

away from both the NBB and NBO, the 

NBBO is not a Valid NBBO and thus the 

NBBO midpoint would not be used as 

the Volume Based Tie Breaker. Instead, 

the Volume Based Tie Breaker would be 

the FLSET, which would, by definition, 

be the BZX Official Closing Price from 

the previous business day, which was 

$26.52. Using the FLSET as the Collar 

Midpoint,21 the Collar Price Range 

would be $25.19 × $27.85.22 Because the 

Indicative Price is outside of the Collar 

Price Range and there is no crossed 

interest within the Collar Price Range, 

there would be no execution as part of 

the Opening Auction. Therefore, crossed 

interest from the Auction Book that was 

priced equal to or more aggressive than 

the Indicative Price and was within the 

NBBO would be canceled without 

execution.23

Proposal 

Based on the scenario described 

above, the Exchange is proposing to 

change its Opening Auction 

functionality only in circumstances 

where (i) there is an Indicative Price, (ii) 

there is not a Valid NBBO, and/or (iii) 

the Indicative Price is not within the 

FLSET-established Collar Price Range. 

As proposed and described in further 

detail below, the Opening Auction 

would occur pursuant to the Standard 

Opening Auction Process if the NBBO 

becomes a Valid NBBO (i.e., the spread 

narrows as markets open such that the 

midpoint of the NBBO is less than the 

Maximum Percentage away from both 

the NBB and the NBO) before 9:30:05, 

or if the Indicative Price moves within 

the Collar Price Range set by the FLSET 

(i.e., orders on the Auction Book and/or 

non-displayed orders on the Continuous 

Book change the price level at which the 

most shares from the Auction Book and 

the Continuous Book would match to be 

within the Collar Price Range) prior to 

9:34:30. 

Proposed Rule 11.23(b)(2)(B)(i) would 

set forth the ‘‘Standard Opening 

Process’’, which mirrors the current 

process described in Rule 11.23(b)(2)(B). 

Proposed Rule 11.23(b)(2)(B)(ii) would 

provide that if there is no Valid NBBO 

and the Indicative Price is within the 

Collar Price Range, the Opening Auction 

price will be established pursuant to the 

Standard Opening Process. Proposed 

Rule 11.23(b)(2)(B)(iii) would delay and 

set forth an alternative Opening Auction 

Process in the event there is no Valid 

NBBO and the Indicative Price is not 

within the Collar Price Range. The 

proposal is designed to prevent the 

cancellation of auction eligible orders 

priced equally or more aggressive than 

the Indicative Price which the Exchange 

believes will facilitate the presence of 

sufficient liquidity and information to 

make the Opening Auction a meaningful 

price formation event in BZX-listed 

securities. 

Proposed Rule 11.23(b)(2)(B)(iii) 

would provide that the Opening 

Auction price will be delayed as set 

forth in subparagraphs (a) and (b) as 

follows: 

(a) If after the one-second delay there 

is a Valid NBBO or the Indicative Price 

is within the Collar Price Range, the 

Opening Auction price will be 

established pursuant to the Standard 

Opening Auction Process. If there is no 

Valid NBBO and the Indicative Price is 

not within the Collar Price Range after 

the one-second delay, the Opening 

Auction will be delayed by one 

additional second, at which point if 

there is a Valid NBBO or the Indicative 

Price is within the Collar Price Range, 

the Opening Auction price will be 

established pursuant to the Standard 

Opening Process. If after the additional 

one-second delay there is a Valid NBBO 

or the Indicative Price is not within the 

Collar Price Range, the process 

described in this paragraph (a) will 

continue to be applied in one-second 

increments until either the Opening 

Auction occurs or until five seconds has 

lapsed (i.e., 9:30:05 a.m.). 

(b) If the Opening Auction has not 

occurred by 9:30:05, the System will 

widen the Collar Price Range in the 

direction of the Indicative Price by 5% 


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24The Exchange notes that Widening Amount 

will be locked-in as of 9:30:05, and will not change 

between 9:30:05 and 9:34:30 even in the event that 

a round lot trade reported to the consolidated tape 

was received by the Exchange during that time (i.e., 

a FLSET). 

25See Exchange Rule 1.5(w). 

26See Securities and Exchange Act no. 79410 

(November 28, 2016) 81 FR 87114 (December 2, 

2016) (Notice of Filing of the Twelfth Amendment 

to the National Market System Plan To Address 

Extraordinary Market Volatility (‘‘Amendment 

12’’)). 

27The Exchange notes that the BZX Official 

Opening Price will be the price of the FLSET, 

which will be the previous BZX Official Closing 

Price unless an FLSET occurred after 9:30:00. 

28For purposes of the Plan, ‘‘opening price’’ shall 

mean the price of a transaction that opens trading 

on the primary listing exchange. If the primary 

listing exchange opens with quotations, the 

‘‘opening price’’ shall mean the closing price of the 

NMS Stock on the primary listing exchange on the 

previous trading day, or if no such closing price 

exists, the last sale on the primary listing 

exchange.See section I(I) of the Plan. 

29For purposes of the plan, ‘‘reference price’’ 

shall have the meaning provided in Section V of the 

Plan. See section I(R) of the Plan. Section V of the 

Plan provides that the LULD price bands are based 

on a reference price for each NMS Stock that, for 

purposes of the first reference price for a trading 

day shall be the opening price on the primary 

listing exchange in an NMS Stock if such opening 

price occurs less than five minutes after the start of 

Regular Trading Hours. If the opening price on the 

primary listing exchange in an NMS Stock does not 

occur within five minutes after the start of Regular 

Trading Hours, the first reference price for a trading 

day shall be the arithmetic mean price of eligible 

reported transactions for the NMS Stock over the 

preceding five minute time period. If there is no 

opening price on the primary listing exchange in an 

NMS Stock and no trades have occurred by 9:35:00, 

the previous reference price shall remain in effect. 

30See Exchange Rule 11.23(a)(8). 

of the Volume Based Tie Breaker, which 

will be Final Last Sale Eligible Trade as 

of 9:30:05 a.m. (the ‘‘Widening 

Amount’’).24 If the Indicative Price is 

within the widened Collar Price Range, 

the Opening Auction price will be 

established pursuant to the Standard 

Opening Auction Process. If the 

Indicative Price is not within the 

widened Collar Price Range, the 

Opening Auction will be further 

delayed, as discussed below. 

In sum, the process described in 

proposed paragraph Rule 

11.23(b)(2)(B)(iii)(a) would simply allow 

for the Opening Auction to occur using 

the Standard Opening Process described 

in paragraph 11.23(b)(2)(B)(i), the only 

difference between the current process 

being that such Opening Auction could 

instead occur within the first five 

seconds of Regular Trading Hours 25

based on whether there is a Valid NBBO 

or the Indicative Price is within the 

Collar Price Range. If, after each onesecond delay, there is no longer an 

Indicative Price (i.e., there is no longer 

crossed interest), the Opening Auction 

would occur immediately pursuant to 

proposed Rule 11.23(2)(B)(v). After the 

first five seconds of Regular Trading 

Hours, the System will only check for 

whether the Indicative Price is within 

the Collar Price Range and will not 

check for a Valid NBBO because the 

process described in Proposed Rules 

11.23(b)(2)(B)(iii)(b)(1) through (4) is 

intended to closely follow the reopening 

process that is described in the Twelfth 

Amendment of the Plan to Address 

Extraordinary Market Volatility 26 (the 

‘‘Plan’’) and corresponding Exchange 

Rules, as described in further detail 

below. 

Proposed Rules 

11.23(b)(2)(B)(iii)(b)(1) through (4) 

would set forth the delay of the Opening 

Auction if no auction has occurred 

between 9:30:05 and 9:34:30. 

Specifically, the proposed Rules would 

provide: 

(1) The System will check to see 

whether the Indicative Price is inside 

the widened Collar Price Range every 

second between 9:30:05 and 9:30:30 

a.m. If an Indicative Price is inside the 

widened Collar Price Range during a 

check, the Opening Auction price will 

be established pursuant to the Standard 

Opening Auction Process. 

(2) If by 9:30:30 a.m. the Indicative 

Price is not within the widened Collar 

Price Range, the Collar Price Range will 

again widen by the Widening Amount. 

The System will check to see whether 

the Indicative Price is inside the 

widened Collar Price Range every 

second between 9:30:30 and 9:31:30 

a.m. If an Indicative Price is inside the 

widened Collar Price Range during a 

check, the Opening Auction price will 

be established pursuant to the Standard 

Opening Auction Process. 

(3) If by 9:31:30 a.m. the Indicative 

Price is not within the widened Collar 

Price Range, the System will check to 

see whether the Indicative Price is 

inside the widened Collar Price Range 

every second between 9:31:30 and 

9:34:30 a.m. If an Indicative Price is 

inside the widened Collar Price Range 

during a check, the Opening Auction 

price will be established pursuant to the 

Standard Opening Auction Process. 

Unless the Opening Auction has 

occurred, the Collar Price Range will 

widen in the direction of the Indicative 

Price by the Widening Amount each 

minute from 9:31:30 to 9:34:30. 

(4) If no Opening Auction has 

occurred by 9:34:30 a.m., the Opening 

Auction will occur pursuant to the 

Standard Opening Auction Process 

using the expanded Collar Price Range 

as of 9:34:30. 

The Exchange first notes that if, 

during after each one-second delay, 

there is no longer an Indicative Price 

(i.e., there is no longer crossed interest), 

the Opening Auction would occur 

immediately pursuant to proposed Rule 

11.23(2)(B)(v).27 The Exchange is also 

proposing to stop extending the 

Opening Auction Process at 9:34:30 a.m. 

in part to ensure that the Exchange is 

able to disseminate the BZX Official 

Opening Price with sufficient time to be 

used in the determination of the 

opening price 28 pursuant to the Plan, 

from which the reference price 29 is used 

to calculate the LULD bands. 

Specifically, the reference price for 

trading is typically the opening price on 

the primary listing exchange in an NMS 

Stock if such opening price occurs less 

than five minutes after the start of 

Regular Trading Hours. Therefore, 

because under the proposal the Opening 

Auction Process would occur no later 

than 9:34:30, the LULD bands would be 

determined based on the BZX Official 

Opening Price. While the LULD bands 

for BZX-listed securities could be 

determined pursuant to the Plan 

without a BZX Official Opening Price, 

the Exchange believes that the inclusion 

of such price provides for LULD bands 

that more accurately reflect current 

market conditions. 

The Exchange also proposes to move 

the last two sentences of existing Rule 

11.23(b)(2)(B) to proposed Rules 

11.23(b)(2)(B)(iv) and (v), respectively, 

with certain modifications to Rule 

11.23(b)(2)(B)(v). Specifically, proposed 

Rule 11.23(b)(2)(B)(iv) would provide 

that the Opening Auction Price will be 

the BZX Official Opening Price. 

Proposed Rule 11.23(b)(2)(B)(v) would 

provide that in the event that there is no 

Opening Auction for an issue, the BZX 

Official Opening Price will be the price 

of the FLSET. The Exchange proposes to 

eliminate the provision that states that 

the FLSET will be the previous BZX 

Official Closing Price as it is possible 

that an FLSET may occur between 

9:30:00 and 9:34:30. 

Based on the above proposed 

amendments, the Exchange proposes to 

amend Rules 11.23(b)(1)(A) and (B) to 

reflect that the Opening Auction may 

occur at a time other than 9:30 a.m. 

Specifically, the Exchange proposes to 

amend paragraph (A) to provide the 

following: Users may submit orders to 

the Exchange as set forth in Rule 11.1. 

Any Eligible Auction Orders 30

designated for the Opening Auction will 

be queued for participation in the 

Opening Auction. Users may submit 

limit-on-open (‘‘LOO’’) and market-onopen (‘‘MOO’’) orders until 9:28 a.m., at 

which point any additional LOO and 

MOO orders submitted to the Exchange 


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31See Exchange Rule 11.9(b)(7). 

32See Exchange Rule 11.23(a)(12). 

33For purposes of this example, there are no 

orders on the Continuous Book. 

34For purposes of this example, assume there are 

no orders on the BZX Continuous Book. 

will be rejected. Regular Hours Only 31

(‘‘RHO’’) market orders will also be 

rejected from 9:28 a.m. until the 

Opening Auction has concluded. Users 

may submit late-limit-on-open 32

(‘‘LLOO’’) orders from 9:28 a.m. until 

the Opening Auction has concluded. 

Any LLOO orders submitted before 9:28 

a.m. or after the Opening Auction has 

concluded will be rejected. RHO limit 

orders submitted from 9:28 a.m. until 

the Opening Auction has concluded 

will be treated as LLOO orders. 

The Exchange proposes to amend 

Rule 11.23(b)(1)(B) to provide that 

Eligible Auction Orders designated for 

the Opening Auction may not be 

cancelled or modified from 9:28 a.m. 

until the Opening Auction has 

concluded except that RHO limit orders 

designated for the Opening Auction may 

be modified, but not cancelled, from 

9:28 a.m. until the time the Opening 

Auction has concluded. Any such RHO 

limit orders modified from 9:28 a.m. 

until the Opening Auction has 

concluded will be treated as LLOO 

orders. 

To illustrate the proposed 

functionality, consider the following 

examples. 

Example 2 

Applying the same facts from 

Example 1 related to current 

functionality above, assume a security 

has a prevailing NBBO at 9:30:00 a.m. 

of $27.10 × $29.54 and two Limit-OnOpen orders on the Auction Book—a 

buy for 1,000 shares at $27.90 and a sell 

for 1,500 shares at $27.90.33 The 

Indicative Price, which is the price at 

which the most shares from the Auction 

Book and the Continuous Book would 

match, would be $27.90 because the 

only crossed interest comes from the 

two orders on the Auction Book. 

Because there was no Valid NBBO 

and the Indicative Price was outside of 

the Collar Price Range, the System 

would check at each second starting at 

9:30:00 and ending at 9:30:05 for a Valid 

NBBO and for the Indicative Price that 

is within the Collar Price Range. 

Assuming that these checks did not find 

a Valid NBBO or an Indicative Price 

within the Collar Price Range, after the 

check at 9:30:05 the Collar Price Range 

is widened in the direction of the 

Indicative Price by 5% of the FLSET 

(i.e., $26.52) as of 9:30:05, or $1.33, 

resulting in a Collar Price Range of 

$25.19 × $29.18. Upon the first one 

second check thereafter, the Indicative 

Price of $27.90 is within the widened 

Collar Price Range and the auction 

occurs immediately pursuant to the 

Standard Opening Auction Process. 

Example 3 

Applying the facts from Example 2 

above, but also considering that another 

two orders exist on the Auction Book 

including a buy order for 2,000 shares 

at $30.50 and a sell order for 500 shares 

at $30.50.34 The additional orders 

entered to the Auction Book would 

move the Indicative Price to $30.50 

because $30.50 would be the price at 

which the most shares would match 

(i.e., 2,000 shares). Given that the 

Indicative Price ($30.50) is not within 

the widened Collar Price Range 

calculated above ($25.19 × $29.18), the 

Opening Auction would not occur after 

the first collar widening. As such, the 

System would check at each second 

starting at 9:30:05 and ending at 9:30:30 

for an Indicative Price that is within the 

Collar Price Range. Assuming that the 

Indicative Price did not change and thus 

the checks would not find an Indicative 

Price within the Collar Price Range, 

after the check at 9:30:30 the Collar 

Price Range would once again be 

widened in the direction of the 

Indicative Price by the same 5% amount 

used for the initial collar widening at 

9:30:05 ($1.33). The Collar Price Range 

from 9:30:30 to 9:31:30 would then be 

$25.19 × $30.51. Upon the first one 

second check thereafter, the Indicative 

Price of $30.50 is within the widened 

Collar Price Range and the auction 

would occur immediately pursuant to 

the Standard Opening Auction Process. 

Example 4 

Applying the facts from Example 3 

above, but replacing the two additional 

orders to the Auction Book a buy order 

for 2,000 shares at $34.75 and a sell 

order for 500 shares at $34.75. The 

orders entered to the Auction Book 

would move the Indicative Price to 

$34.75 because $34.75 would be the 

price at which the most shares would 

match (i.e., 2,000 shares). Given that the 

Indicative Price ($34.75) is not within 

the widened Collar Price Range 

calculated above at 9:30:30 ($25.19 × 

$30.51), the Opening Auction would not 

occur after the second collar widening. 

As such, the System would check at 

each second starting at 9:30:30 and 

ending at 9:31:30 for the Indicative Price 

being within the Collar Price Range. 

Assuming that the Indicative Price did 

not change and thus the checks would 

not find an Indicative Price within the 

Collar Price Range, after the check at 

9:31:30 the Collar Price Range would 

again widen in the direction of the 

Indicative Price by the same 5% amount 

used for the initial collar widening at 

9:30:05 (i.e., $1.33). Therefore, the 

Collar Price Range would be $25.19 × 

$31.84 for the period between 9:31:30 

and 9:32:30. Again, assuming there is no 

change to the Indicative Price, at 9:32:30 

the Collar Price Range would widen by 

$1.33 in the direction of the Indicative 

Price, which would be $25.19 × $33.17 

for the period between 9:32:30 and 

9:33:30. Again, assuming there is no 

change to the Indicative Price, at 9:33:30 

the Collar Price Range would widen by 

$1.33 in the direction of the Indicative 

Price, which would be $25.19 × $34.50 

for the period between 9:33:30 and 

9:34:30. At this point, the Indicative 

Price (i.e., $34.75) remains higher than 

the top end of the Collar Price Range 

(i.e., $34.50). As such, the Opening 

Auction would occur at 9:34:30, but 

would occur within the final Collar 

Price Range at $27.91, which is the price 

level tied for the most volume (i.e., 

1,500 shares), lowest imbalance (i.e., 

500 shares), and closest to the Volume 

Based Tie Breaker (i.e., the FLSET of 

$26.52), instead of at the Indicative 

Price. 

As described above, the current 

functionality described in Example 1 

would result in no opening auction 

because all crossed interest was outside 

the Collar Price Range set using the 

FLSET. Examples 2 and 3 demonstrate 

scenarios in which the proposed 

functionality of delaying the Opening 

Auction Process and widening the 

Collar Price Range would allow 

participants to execute in an opening 

auction that would occur at a price more 

reflective of current market conditions, 

and that would permit the greatest 

volume of crossed interest to execute. 

Alternatively, Example 4 demonstrates 

that even with the proposed delay and 

widened Collar Price Range, the 

Opening Auction may not occur at a 

price for which any or all crossed 

interest may execute. The Exchange 

includes Example 4 in order to illustrate 

that not all crossed interest in an 

auction should necessarily be executed 

and that at some point the benefit of 

continuing to delay the Opening 

Auction would be outweighed by the 

need to establish the BZX Official 

Opening Price, in particular to ensure 

that it is reported to the SIP in advance 

of 9:35 a.m. so that it can be used as the 

reference price from which the LULD 

bands are calculated. 

Under the proposal, the Opening 

Auction would be delayed until either 

(1) the NBBO becomes a Valid NBBO, 


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35 15 U.S.C. 78f(b). 

36 15 U.S.C. 78f(b)(5). 

37 15 U.S.C. 78f(b)(1). 

38A ‘‘trading pause’’ refers to a function of the 

LULD mechanism provided under the Plan. 

Specifically, the Plan sets for procedures that 

provide for market-wide LULD requirements that 

prevent trades in individual NMS stocks from 

occurring outside of the specified price bands and 

provides for trading pauses to accommodate more 

fundamental price moves. 

39See Securities Exchange Act No. 75879 

(October 26, 2016) 81 FR 75875 (November 1, 2016) 

(SR–BatsBZX–2016–61) (Notice of Filing of a 

Proposed Rule Change To Amend Exchange Rule 

11.23, Auctions, To Enhance the Reopening 

Auction Process Following a Trading Halt Declared 

Pursuant to the Plan To Address Extraordinary 

Market Volatility Pursuant to Rule 608 of 

Regulation NMS). See also Securities Exchange Act 

No. 79885 (January 26, 2017) 82 FR 8968 (February 

1, 2017) (SR–BatsBZX–2016–61) (Order Granting 

Approval of Proposed Rule Change, as Modified by 

Amendment No. 1, To Amend Exchange Rule 11.23, 

Auctions, To Enhance the Reopening Auction 

Process Following a Trading Halt Declared Pursuant 

to the Plan To Address Extraordinary Market 

Volatility Pursuant to Rule 608 of Regulation NMS). 

40 ‘‘Quote-Only Period’’ is defined as ‘‘a 

designated period of time prior to a halt auction, 

a Volatility Closing Auction, or an IPO Auction 

during which Users may submit orders to the 

Exchange for participation in the auction.’’ See 

Exchange Rule 11.23(a)(17). 

41See Rule 11.9(a)(2). 

42Under 11.23(d)(2)(B)(i), the Quote-Only Period 

may be extended where there are unmatched 

Market Orders on the Auction Book associated with 

the auction. 

(2) the Indicative Price is within the 

Collar Price Range (i.e., if the Opening 

Auction occurred between 9:30:01 and 

9:30:05) or within the widened Collar 

Price Range (i.e., if the Opening Auction 

occurred between 9:30:06 and 9:34:30), 

or (3) the delay period of four minutes 

and 30 seconds lapsed. While the 

proposal does not guarantee that certain 

orders priced equally or more aggressive 

to the Indicative Price will execute in 

the Opening Auction, it provides for 

additional time for the market to 

develop at the beginning of the trading 

day before conducting the Opening 

Auction. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act.35 Specifically, 

the proposed change is consistent with 

Section 6(b)(5) of the Act, 36 because it 

would promote just and equitable 

principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest. The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(1) of the Act, which 

provides that the Exchange be organized 

and have the capacity to be able to carry 

out the purposes of the Act and to 

enforce compliance by the Exchange’s 

Members and persons associated with 

its Members with the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange.37 Generally, the Exchange 

believes that the proposed changes will 

improve the price discovery process in 

the Opening Auction for securities 

listed on the Exchange along with 

additional benefits set forth below. 

First, the Exchange believes proposed 

Rules 11.23(b)(2)(B)(i) and (ii) are 

consistent with the Act as the proposed 

paragraphs are substantially similar to 

existing Rule 11.23(b)(2)(B) and involve 

no change in the Opening Auction 

functionality. Second, the Exchange 

believes proposed Rule 

11.23(b)(2)(B)(iii) would promote just 

and equitable principles of trade, 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest. The proposal is designed to 

increase the likelihood that auction 

eligible orders that are priced equally or 

more aggressive than the Indicative 

Value of the security are able to 

participate in the Opening Auction 

instead of being canceled because they 

are priced outside the Collar Price 

Range established using the FLSET. As 

stated above, current Rule 11.23(b)(2)(B) 

provides that in the event there is no 

Valid NBBO, the FLSET will be used as 

the Volume Based Tie Breaker and basis 

for calculating the Collar Price Range. 

Because the current Opening Auction 

process occurs at 9:30:00 a.m., such a 

Collar Price Range is based on an FLSET 

that may not have occurred recently or 

may not otherwise be reflective of 

current market conditions. As a result, 

the Exchange has observed instances 

where auction eligible orders priced 

equally or more aggressive than the 

Indicative Price were canceled without 

execution because they were outside the 

Collar Price Range established using the 

FLSET. While these observed instances 

have been infrequent, the Exchange 

believes it is important to ensure that 

the BZX Opening Process is designed to 

maximize the greatest volume of 

executions so that the BZX Official 

Opening Price accurately reflects 

current market conditions. As a result, 

the Exchange believes that the proposal 

would promote just and equitable 

principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest. Furthermore, the Exchange 

believes the proposal strikes a balance 

of providing additional execution 

opportunities for auction eligible orders 

priced equally or more aggressive than 

the Indicative Price of the security while 

also limiting any such delay so that the 

BZX Official Opening Price is reported 

to the SIP by 9:35 a.m. and is therefore 

used as the reference price for which the 

LULD bands are established. 

The Exchange notes that the concept 

of delaying an auction and widening the 

Collar Price Range as provided in 

proposed paragraphs 

11.23(b)(2)(B)(iii)(b)(1) through (4) is 

similar to the Twelfth Amendment of 

the Plan and corresponding 

amendments by the primary listing 

exchanges. Specifically, Amendment 12 

was created to improve re-openings 

following a trading pause,38 with an eye 

towards carefully balancing halt auction 

price quality and the speed with which 

continuous trading can be resumed. 

Amendment 12 provided that auction 

halt periods would be extended if either 

the auction price at which the most 

shares would be traded is outside the 

range of the pre-defined price threshold 

collars (the ‘‘price threshold collars’’) or 

there is a market order share imbalance. 

Further, Amendment 12 provided that 

the price threshold collars would be 

widened in the event that the auction’s 

halt period is extended. In its approval 

of Amendment 12, the Commission 

stated that it is appropriate in the public 

interest, for the protection of investors 

and the maintenance of a fair and 

orderly market to provide that a trading 

pause continue until the primary listing 

exchange has reopened trading using its 

established reopening procedures, even 

if such reopening is more than 10 

minutes after the beginning of a trading 

pause, and to require that trading 

centers may not resume trading in an 

NMS Stock following a trading pause 

without price bands in such NMS Stock. 

The Commission stated that these two 

provisions together support a more 

standardized process for reopening 

trading after a trading pause has been 

declared. 

As a primary listing exchange, the 

Exchange amended Rule 11.23(d) to 

incorporate the provisions of 

Amendment 12.39 Specifically, under 

Rule 11.23(d)(1)(A) the Quote-Only 

Period 40 with respect to a halt auction 

commences five (5) minutes prior to 

such halt auction. Adopted Rule 

11.23(d)(2)(C) provides for the QuoteOnly Period to be extended an 

additional five (5) minutes should a halt 

auction be unable to be performed due 

to Market Order 41 imbalance under 

11.23(d)(2)(B)(i) 42 or if the indicative 

price, before being adjusted for halt 

auction collars, is outside the halt 


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43Rule 11.23(d)(2)(C)(i) provides for the initial 

halt auction collar calculations. 

44Rule 11.23(d)(2)(C)(ii) provides for the 

widening of the halt auction collars. 

45Supra note 26. 46 15 U.S.C. 78s(b)(2)(B). 

47 Id. 

48 15 U.S.C. 78f(b)(5). 

49 15 U.S.C. 78f(b)(8). 

auction collars set forth in adopted 

subparagraphs (i) 43 and (ii) 44 to 

Exchange Rule 11.23(d)(2)(C) (either, an 

‘‘Impermissible Price’’) (‘‘Initial 

Extension Period’’). Similar to the 

proposal, Rule 11.23(d)(2)(C)(ii) 

provides that at the beginning of the 

Initial Extension Period the upper 

(lower) halt auction collar shall be 

increased (decreased) by five (5) percent 

in the direction of the Impermissible 

Price, rounded to the nearest minimum 

price variation. For securities with a 

halt auction reference price of $3.00 or 

less, the halt auction collar shall be 

increased (decreased) in $0.15 

increments in the direction of the 

Impermissible Price. At the beginning of 

each additional extension period, the 

halt auction collar shall be widened in 

accordance with this paragraph by the 

same amount as the Initial Extension 

Period. In its approval order, 45 the 

Commission stated that ‘‘extending the 

Trading Pause and widening the halt 

auction collar on the side of the 

Impermissible Price would be a 

measured approach to provide 

additional time to attract offsetting 

interest, to help to address an imbalance 

that may not be resolved within the 

prior halt auction collars, and to reduce 

the potential for triggering another 

Trading Pause.’’ 

The Exchange notes that the purpose 

of Amendment 12 and corresponding 

Exchange amendment was intended to 

delay a halt auction to attract offsetting 

interest, while the purpose of this 

proposal is intended to delay the 

Opening Auction Process in order to 

provide the Opening Auction price 

additional time to reflect current market 

conditions. Nonetheless, the Exchange 

believes the purposes of each is 

designed to balance auction price 

quality and the speed with which an 

auction can occur and thus continuous 

trading can be resumed, in the case of 

a halt auction, or when the BZX Official 

Opening Price is determined and 

reported to the SIP, in the case of an 

Opening Auction. Therefore, the 

Exchange believes the proposal is 

appropriate, in the public interest, for 

the protection of investors and the 

maintenance of a fair and orderly 

market. 

The Exchange also believes its 

proposal to the last two sentences of 

existing Rule 11.23(b)(2)(B) to 

paragraphs 11.23(b)(2)(B)(iv) and (v), 

respectively, will improve clarity and 

readability of the rule. Further, the 

proposal to remove the provision of 

paragraph 11.23(b)(2)(B)(v) that states 

the FLSET will be the previous BZX 

Official Closing Price is consistent with 

the new proposed functionality, which 

would allow for an FLSET to occur 

between 9:30 and 9:34:30. 

Finally, the Exchange believes its 

proposed clarifications to Rules 

11.23(b)(1)(A) and (B) to reflect that the 

Opening Auction may occur at a time 

other than 9:30 a.m. will allow the 

Exchange to more easily administer its 

rules, and Members can more clearly 

understand how the Opening Auction 

Process may occur. Specifically, the 

proposed amendments to Rules 

11.23(b)(1)(A) and (B) will add clarity, 

transparency and internal consistency to 

Exchange rules making them easier to 

navigate, in light of the other proposed 

Rule changes described herein. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. To the 

contrary, allowing the Exchange to make 

the above proposed modifications will 

allow the Exchange to better compete 

with other exchanges as a listing venue 

by improving the Exchange’s auction 

process by allowing more executions to 

occur at more reasonable prices that are 

based on the current value of the 

security. As mentioned above, the 

Exchange has received feedback from 

market participants regarding the issue 

under the current process, and the 

proposed amendments will both address 

this feedback and improve the 

Exchange’s auction process, allowing it 

to better compete as both a listing and 

execution venue. 

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– 

CboeBZX–2021–086, as Modified by 

Amendment No. 2, and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 46 to determine 

whether the proposed rule change, as 

modified by Amendment No. 2, should 

be approved or disapproved. Institution 

of proceedings is appropriate at this 

time in view of the legal and policy 

issues raised by the proposal. 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 additional comment on the 

proposed rule change, as modified by 

Amendment No. 2. 

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

Act,47 the Commission is providing 

notice of the grounds for disapproval 

under consideration. As described 

above, the Exchange has proposed to 

amend the Opening Auction Process 

Provided Under Rule 11.23(b)(2)(B). In 

certain cases, the proposed Opening 

Auction Process would result in a delay 

in the calculation of the BZX Official 

Opening Price, which in most cases is 

the reference price for LULD price 

bands. 

The Commission is instituting 

proceedings to allow for additional 

analysis of, and input from commenters 

with respect to, the consistency of the 

proposal with Sections 6(b)(5) 48 and 

6(b)(8) 49 of the Act. Section 6(b)(5) of 

the Act requires that the rules of a 

national securities exchange be 

designed, among other things, 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, and 

not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. Section 

6(b)(8) of the Act requires that the rules 

of a national securities exchange not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their data, views, 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 

proposed rule change, as modified by 

Amendment No. 2, is consistent with 

Section 6(b)(5), 6(b)(8), or any other 

provision of the Act, or the rules and 


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50 17 CFR 240.19b–4. 

51Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants to 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 Acts Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

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

(1975). 

52 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 

3(a)(57). 

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

2 17 CFR 240.19b–4. 

3See Rule 1.1, definition of ‘‘Unit and ETF’’. 

4See Rules 4.3.06(a)(1)-(3) and (5), which, 

respectively, include Units that represent interests 

in registered investment companies (or series 

thereof) organized as open-end management 

investment companies, unit investment trusts or 

similar entities that hold portfolios of securities 

Continued 

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 

data, views, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4 under the Act, 50 any request 

for an opportunity to make an oral 

presentation.51

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change, as modified by 

Amendment No. 2, should be approved 

or disapproved by April 29, 2022. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal May 13, 2022. 

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. 2, and any other issues 

raised by the proposed rule change 

under the Act. In this regard, the 

Commission seeks commenters’ views 

regarding whether a delay in the 

calculation of the BZX Official Opening 

Price would affect the trading of BZXlisted securities on other national 

securities exchanges or other trading 

venues or otherwise impact any 

processes that rely on the calculation of 

the BZX Official Opening Price, 

including the calculation and 

dissemination of LULD price bands. 

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 No. SR– 

CboeBZX–2021–086 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 No. 

SR–CboeBZX–2021–086. The 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 

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 No. 

SR–CboeBZX–2021–086 and should be 

submitted by April 29, 2022. Rebuttal 

comments should be submitted by May 

13, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.52

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–07464 Filed 4–7–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94594; File No. SR–CBOE– 

2022–009] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend Rule 

4.3.06 To Allow the Exchange To List 

and Trade Options on the Goldman 

Sachs Physical Gold ETF 

April 4, 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 

25, 2022, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

Rule 4.3.06 to allow the Exchange to list 

and trade options on the Goldman Sachs 

Physical Gold ETF (‘‘AAAU’’). 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://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), at the Exchange’s Office of 

the Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 4.3.06 to allow the Exchange to list 

and trade options on the Goldman Sachs 

Physical Gold ETF (‘‘AAAU’’ or the 

‘‘Trust’’) as a Unit deemed appropriate 

for options trading on the Exchange. 

Rule 4.3.06(a) provides that securities 

deemed appropriate for options trading 

include Units (also referred to as 

Exchange-Traded Funds (‘‘ETFs’’)) 3 that 

represent certain types of interests,4 and 


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