Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 22963 

12 15 U.S.C. 78mm. 

13 17 CFR 200.30–3(a)(76). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See 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’’). 

6The rules of the equity options exchanges 

similarly provide for a halt in trading if the cash 

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

NYSE Arca Rule 6.65–O(d)(4). 

7See 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. 

8See Securities Exchange Act Release Nos. 67090 

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

EDGA–2011–31) (Approval Order); and 68806 

(February 1, 2013), 78 FR 8670 (February 6, 2013) 

(SR–EDGA–2013–05) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

to Delay the Operative Date of Changes to the Rule 

Continued 

Exchanges from the rule filing 

requirements under Section 19(b) of the 

Exchange Act with respect to the abovedescribed rules they have incorporated 

by reference. 

Accordingly, it is ordered, pursuant to 

Section 36 of the Exchange Act,12 that 

the Nasdaq Exchanges are exempt from 

the rule filing requirements of Section 

19(b) of the Exchange Act with respect 

to changes to their rules on arbitration 

resulting solely from changes made to 

the FINRA Arbitration Rules or the 

Nasdaq General 6 Rules (as applicable) 

that are incorporated by reference into 

the Nasdaq Exchanges’ rules without the 

need for each Nasdaq Exchange to 

separately file, pursuant to Section 19(b) 

of the Exchange Act, a proposed rule 

change similar to the one filed by 

FINRA or Nasdaq, provided that the 

Nasdaq Exchanges promptly provide 

written notice to their members 

whenever a change is proposed to the 

FINRA Arbitration Rules or the Nasdaq 

General 6 Rules, and provided that they 

inform their members in writing when 

the Commission approves any such 

proposed change. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–08181 Filed 4–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94701; File No. SR– 

CboeEDGA–2022–008] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Adopt on a 

Permanent Basis the Pilot Program for 

Market-Wide Circuit Breakers, 

Currently Codified in Rule 11.16 

April 12, 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 April 11, 

2022, Cboe EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) is filing with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) a 

proposal to adopt on a permanent basis 

the pilot program for Market-Wide 

Circuit Breakers, currently codified in 

Rule 11.16(a)–(d), (f) and (g). The text of 

the proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is available on the Exchange’s website 

(https://markets.cboe.com/us/equities/ 

regulation/rule_filings/edga/), 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 

Exchange Rule 11.16 to make permanent 

the Market-Wide Circuit Breaker 

(‘‘MWCB’’) pilot program. The proposal 

is substantively identical to New York 

Stock Exchange LLC (‘‘NYSE’’) Rule 

7.12 and NYSE American LLC (‘‘NYSE 

American’’) Rule 7.12E. 

The Pilot Rules 

The MWCB rules, including the 

Exchange’s Rule 11.16(a)–(d), (f) and (g), 

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., Rule 11.16(a)–(d), (f) and 

(g)).5 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’’).6

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 marketwide 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’’),7

including any extensions to the pilot 

period for the LULD Plan.8 In April 


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for Halting Trading in All Stocks Due to 

Extraordinary Market Volatility). 

9See Securities Exchange Act Release No. 85623 

(April 11, 2019), 84 FR 16086 (April 17, 2019). 

10See Securities Exchange Act Release No. 85668 

(April 11, 2019), 84 FR 16743 (April 22, 2019) (SR– 

CboeEDGA–2019–006). 

11See Securities Exchange Act Release No. 87335 

(October 17, 2019), 84 FR 56858 (October 23, 2019) 

(SR–CboeEDGA–2019–016). 

12See Securities Exchange Act Release No. 90127 

(October 8, 2020), 85 FR 65085 (October 14, 2020) 

(SR–CboeEDGA–2020–026). 

13See Securities Exchange Act Release No. 93366 

(October 15, 2021), 86 FR 58330 (October 21, 2021) 

(SR–CboeEDGA–2021–023). 

14See Securities Exchange Act Release No. 94463 

(March 18, 2022), 87 FR 16775 (March 24, 2022) 

(SR–CboeEDGA–2022–006). 

15See Report of the Market-Wide Circuit Breaker 

(‘‘MWCB’’) Working Group Regarding the March 

2020 MWCB Events, submitted March 31, 2021 (the 

‘‘Study’’), available at https://www.nyse.com/ 

publicdocs/nyse/markets/nyse/Report_of_the_

Market-Wide_Circuit_Breaker_Working_Group.pdf. 

16 Id at 46. 

17See Securities Exchange Act Release No. 92428 

(July 16, 2021), 86 FR 38776 (July 22, 2021) (SR– 

NYSE–2021–40). 

18See Securities Exchange Act Release No. 94441 

(March 16, 2022), 87 FR 16286 (March 22, 2022) 

(SR–NYSE–2021–40) (Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 1 To Adopt on a Permanent 

Basis the Pilot Program for Market-Wide Circuit 

Breakers in Rule 7.12). 

2019, the Commission approved an 

amendment to the LULD Plan for it to 

operate on a permanent, rather than 

pilot, basis.9 In light of the proposal to 

make the LULD Plan permanent, the 

Exchange amended Rule 11.16 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, 2019.10 The Exchange then 

filed to extend the pilot to the close of 

business on October 18, 2020,11 October 

18, 2021,12 March 18, 2022,13 and April 

18, 2022.14

The MWCB Working Group Study 

Beginning in February 2020, at the 

outset of the COVID–19 pandemic, the 

markets experienced increased 

volatility, culminating in four MWCB 

Level 1 halts on March 9, 12, 16, and 18, 

2020. In each instance, pursuant to the 

Pilot Rules, the markets halted as 

intended upon a 7% drop in SPX and 

did not start the process to resume 

trading until the prescribed 15-minute 

halt period ended. 

On September 17, 2020, the Director 

of the Commission’s Division of Trading 

and Markets asked the SROs to conduct 

a study of the design and operation of 

the Pilot Rules and the LULD Plan 

during the period of volatility in March 

2020. In response to the request, the 

SROs created a MWCB ‘‘Working 

Group’’ composed of SRO 

representatives and industry advisers 

that included members of the advisory 

committees to both the LULD Plan and 

the NMS Plans governing the collection, 

consolidation, and dissemination of 

last-sale transaction reports and 

quotations in NMS Stocks. The Working 

Group met regularly from September 

2020 through March 2021 to consider 

the Commission’s request, review data, 

and compile its study. 

On March 31, 2021, the MWCB 

Working Group submitted its study (the 

‘‘Study’’) to the Commission.15 The 

Study included an evaluation of the 

operation of the Pilot Rules during the 

March 2020 events and an evaluation of 

the design of the current MWCB system. 

In the Study, the Working Group 

concluded: (1) The MWCB mechanism 

set out in the Pilot Rules worked as 

intended during the March 2020 events; 

(2) the MWCB halts triggered in March 

2020 appear to have had the intended 

effect of calming volatility in the 

market, without causing harm; (3) the 

design of the MWCB mechanism with 

respect to reference value (SPX), trigger 

levels (7%/13%/20%), and halt times 

(15 minutes) is appropriate; (4) the 

change implemented in Amendment 10 

to the LULD Plan did not likely have 

any negative impact on MWCB 

functionality; and (5) no changes should 

be made to the mechanism to prevent 

the market from halting shortly after the 

opening of regular trading hours at 9:30 

a.m. 

In light of those conclusions, the 

MWCB Working Group also made 

several recommendations, including 

that (1) the Pilot Rules should be made 

permanent without any changes, and (2) 

SROs should adopt a rule requiring all 

designated Regulation SCI firms to 

participate in at least one Level 1/Level 

2 MWCB test each year and to verify 

their participation via attestation.16

Proposal To Make the Pilot Rules 

Permanent 

On July 16, 2021, NYSE proposed a 

rule change to make the Pilot Rules 

permanent, consistent with the Working 

Group’s recommendations.17 On March 

16, 2022, the Commission approved 

NYSE’s proposal.18

Consistent with the Commission’s 

approval of NYSE’s proposal, the 

Exchange now proposes that the Pilot 

Rules (i.e., paragraphs (a)–(d), (f) and (g) 

of Rule 11.16) be made permanent. To 

accomplish this, the Exchange proposes 

to remove the preamble to Rule 11.16, 

which currently provides that the rule is 

in effect during a pilot period that 

expires at the close of business on April 

18, 2022. The Exchange does not 

propose any changes to paragraphs 

(a)–d), (f) or (g) of the Rule. 

Consistent with the Commission’s 

approval of NYSE’s proposal, the 

Exchange proposes to add new 

paragraphs (h), (i), and (j) to Rule 11.16 

as follows: 

(h) Market-Wide Circuit Breaker 

(‘‘MWCB’’) Testing. 

(1) The Exchange will participate in 

all industry-wide tests of the MWCB 

mechanism. Members designated 

pursuant to paragraph (b) of Rule 2.4 to 

participate in Mandatory Participation 

in Testing of Backup Systems are 

required to participate in at least one 

industry-wide MWCB test each year and 

to verify their participation in that test 

by attesting that they are able to or have 

attempted to: 

(A) Receive and process MWCB halt 

messages from the securities 

information processors (‘‘SIPs’’); 

(B) receive and process resume 

messages from the SIPs following a 

MWCB halt; 

(C) receive and process market data 

from the SIPs relevant to MWCB halts; 

and 

(D) send orders following a Level 1 or 

Level 2 MWCB halt in a manner 

consistent with their usual trading 

behavior. 

(2) To the extent that an Member 

participating in a MWCB test is unable 

to receive and process any of the 

messages identified in paragraph 

(h)(1)(A)–(D) of this Rule, its attestation 

should notify the Exchange which 

messages it was unable to process and, 

if known, why. 

(3) Members not designated pursuant 

to standards established in paragraph (b) 

of Rule 2.4 are permitted to participate 

in any MWCB test. 

(i) In the event that a halt is triggered 

under this Rule following a Level 1, 

Level 2, or Level 3 Market Decline, the 

Exchange, together with other SROs and 

industry representatives (the ‘‘MWCB 

Working Group’’), will review such 

event. The MWCB Working Group will 

prepare a report that documents its 

analysis and recommendations and will 

provide that report to the Commission 

within 6 months of the event. 

(j) In the event that there is (1) a 

Market Decline of more than 5%, or (2) 

an SRO implements a rule that changes 

its reopening process following a 

MWCB Halt, the Exchange, together 

with the MWCB Working Group, will 

review such event and consider whether 

any modifications should be made to 

this Rule. If the MWCB Working Group 

recommends that a modification should 

be made to this Rule, the MWCB 

Working Group will prepare a report 

that documents its analysis and 


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19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 21 See 17 CFR 240.17a–1. 

recommendations and provide that 

report to the Commission. 

2. Statutory Basis 

The Exchange believes that the 

proposal to make the Pilot Rules 

permanent is consistent with Section 

6(b) of the Act,19 in general, and furthers 

the objectives of Section 6(b)(5) of the 

Act,20 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 Pilot Rules set out in Rule 

11.16(a)–(d), (f) and (g) are an important, 

automatic mechanism that is invoked to 

promote stability and investor 

confidence during periods of significant 

market stress when securities markets 

experience broad-based declines. The 

four MWCB halts that occurred in 

March 2020 provided the Exchange, the 

other SROs, and market participants 

with real-world experience as to how 

the Pilot Rules actually function in 

practice. Based on the Working Group’s 

Study and the Exchange’s own analysis 

of those events, the Exchange believes 

that making the Pilot Rules permanent 

would benefit market participants, 

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 protect investors and the 

public interest. 

Specifically, the Exchange believes 

that making the Pilot Rules permanent 

would benefit market participants, 

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 protect investors and the 

public interest, because the Pilot Rules 

worked as intended during the March 

2020 events. As detailed above, the 

markets were in communication before, 

during, and after each of the MWCB 

Halts that occurred in March 2020. All 

9,000+ equity symbols were 

successfully halted in a timely manner 

when SPX declined 7% from the 

previous day’s closing value, as 

designed. The Exchange believes that 

market participants would benefit from 

having the Pilot Rules made permanent 

because such market participants are 

familiar with the design and operation 

of the MWCB mechanism set out in the 

Pilot Rules, and know from experience 

that it has functioned as intended on 

multiple occasions under real-life stress 

conditions. Accordingly, the Exchange 

believes that making the Pilot Rules 

permanent would enhance investor 

confidence in the ability of the markets 

to successfully halt as intended when 

under extreme stress. 

The Exchange further believes that 

making the Pilot Rules permanent 

would benefit market participants, 

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 protect investors and the 

public interest, because the halts that 

were triggered pursuant to the Pilot 

Rules in March 2020 appear to have had 

the intended effect of calming volatility 

in the market without causing harm. As 

detailed above, after studying a variety 

of metrics concerning opening and 

reopening auctions, quote volatility, and 

other factors, the Exchange concluded 

that there was no significant difference 

in the percentage of securities that 

opened on a trade versus on a quote for 

the four days in March 2020 with 

MWCB Halts, versus the other periods 

studied. In addition, while the postMWCB Halt reopening auctions were 

smaller than typical opening auctions, 

the size of those post-MWCB Halt 

reopening auctions plus the earlier 

initial opening auctions in those 

symbols was on average equal to 

opening auctions in January 2020. The 

Exchange believes this indicates that the 

MWCB Halts on the four March 2020 

days did not cause liquidity to 

evaporate. Finally, the Exchange 

observes that while quote volatility was 

generally higher on the four days in 

March 2020 with MWCB Halts as 

compared to the other periods studied, 

quote volatility stabilized following the 

MWCB Halts at levels similar to the 

January 2020 levels, and LULD Trading 

Pauses worked as designed to address 

any additional volatility later in the day. 

From this evidence, the Exchange 

concludes that the Pilot Rules actually 

calmed volatility on the four MWCB 

Halt days in March 2020, without 

causing liquidity to evaporate or 

otherwise harming the market. As such, 

the Exchange believes that making the 

Pilot Rules permanent would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest. 

The Exchange believes that that 

making the Pilot Rules permanent 

without any changes would benefit 

market participants, 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 

protect investors and the public interest, 

because the current design of the MWCB 

mechanism as set out in the Pilot Rules 

remains appropriate. As detailed above, 

the Exchange considered whether SPX 

should be replaced as the reference 

value, whether the current trigger levels 

(7%/13%/20%) and halt times (15 

minutes for Level 1 and 2 halts) should 

be modified, and whether changes 

should be made to prevent the market 

from halting shortly after the opening of 

regular trading hours at 9:30 a.m., and 

concluded that the MWCB mechanism 

set out in the Pilot Rules remains 

appropriate, for the reasons cited above. 

The Exchange believes that public 

confidence in the MWCB mechanism 

would be enhanced by the Pilot Rules 

being made permanent without any 

changes, given investors’ familiarity 

with the Pilot Rules and their successful 

functioning in March 2020. 

The Exchange believes that proposed 

paragraph (h) regarding MWCB testing 

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 Working Group 

recommended that all cash equities 

exchanges adopt a rule requiring all 

designated Regulation SCI firms to 

participate in MWCB testing and to 

attest to their participation. The 

Exchange believes that these 

requirements would promote the 

stability of the markets and enhance 

investor confidence in the MWCB 

mechanism and the protections that it 

provides to the markets and to investors. 

The Exchange further believes that 

requiring firms participating in a MWCB 

test to identify any inability to process 

messages pertaining to such MWCB test 

would contribute to a fair and orderly 

market by flagging potential issues that 

should be corrected. The Exchange 

would preserve such attestations 

pursuant to its obligations to retain 

books and records of the Exchange.21

The Exchange believes that proposed 

paragraph (i) would benefit market 

participants, 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 

protect investors and the public interest. 

Having the MWCB Working Group 

review any halt triggered under Rule 

11.16(a)–(d), (f) and (g) and prepare a 

report of its analysis and 

recommendations would permit the 

Exchange, along with other market 


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

23 17 CFR 240.19b–4(f)(6). 

24 17 CFR 240.19b–4(f)(6). 

25 17 CFR 240.19b–4(f)(6)(iii). 

26 For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

participants and the Commission, to 

evaluate such event and determine 

whether any modifications should be 

made to Rule 11.16(a)–(d), (f) and (g) in 

the public interest. Preparation of such 

a report within 6 months of the event 

would permit the Exchange, along with 

the MWCB Working Group, sufficient 

time to analyze such halt and prepare 

their recommendations. 

The Exchange believes that proposed 

paragraph (j) would benefit market 

participants, 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 

protect investors and the public interest. 

Having the MWCB Working Group 

review instances of a Market Decline of 

more than 5% or an SRO implementing 

a rule that changes its reopening process 

following a MWCB Halt would allow 

the MWCB Working Group to identify 

situations where it recommends that 

Rule 11.16(a)–(d), (f)–(j) be modified in 

the public interest. In such situations 

where the MWCB Working Group 

recommends that a modification should 

be made to Rule 11.16(a)–(d), (f)–(j), the 

MWCB Working Group would prepare a 

report that documents its analysis and 

recommendations and provide that 

report to the Commission, thereby 

removing impediments to and 

perfecting the mechanism of a free and 

open market and a national market 

system while protecting investors and 

the public interest. 

For the foregoing reasons, the 

Exchange believes that the proposed 

change is consistent with the Act. 

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. The 

proposed change is not intended to 

address competition, but rather, makes 

permanent the current MWCB Pilot 

Rules for the protection of the markets. 

The Exchange believes that making the 

current MWCB Pilot Rules permanent 

would have no discernable burden on 

competition at all, since the Pilot Rules 

have already been in effect since 2012 

and would be made permanent without 

any changes. Moreover, because the 

MWCB mechanism contained in the 

Pilot Rules requires all exchanges and 

all market participants to cease trading 

at the same time, making the Pilot Rules 

permanent would not provide a 

competitive advantage to any exchange 

or any class of market participants. 

Further, the Exchange understands 

that the other SROs will submit 

substantively identical proposals to the 

Commission. Thus, the proposed rule 

change will help to ensure consistency 

across SROs without implicating any 

competitive issues. 

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 

Because the foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 22 and Rule 19b–4(f)(6) 23

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 24 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),25 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange asked that the 

Commission waive the 30 day operative 

delay so that the proposal may become 

operative immediately upon filing. 

Waiver of the 30-day operative delay 

would allow the Exchange to 

immediately provide the protections 

included in this proposal in the event of 

a MWCB halt, which is consistent with 

the protection of investors and the 

public interest. Therefore, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposed rule change as operative upon 

filing.26

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 shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeEDGA–2022–008 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-CboeEDGA–2022–008. 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 

10:00 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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 22967 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See 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’’). 

6The rules of the equity options exchanges 

similarly provide for a halt in trading if the cash 

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

NYSE Arca Rule 6.65–O(d)(4). 

7See 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. 

8See Securities Exchange Act Release Nos. 67090 

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

EDGX–2011–30) (Approval Order); and 68787 

(February 1, 2013), 78 FR 8615 (February 6, 2013) 

(SR–EDGX–2013–05) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

to Delay the Operative Date of Changes to the Rule 

for Halting Trading in All Stocks Due to 

Extraordinary Market Volatility). 

9See Securities Exchange Act Release No. 85623 

(April 11, 2019), 84 FR 16086 (April 17, 2019). 

10See Securities Exchange Act Release No. 85667 

(April 16, 2019), 84 FR 16736 (April 22, 2019) (SR– 

CboeEDGX–2019–023). 

11See Securities Exchange Act Release No. 87339 

(October 17, 2019), 84 FR 56882 (October 23, 2019) 

(SR–CboeEDGX–2019–061). 

publicly. All submissions should refer 

to File Number SR-CboeEDGA–2022– 

008 and should be submitted on or 

before May 9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–08176 Filed 4–15–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94699; File No. SR– 

CboeEDGX–2022–023] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Adopt on a 

Permanent Basis the Pilot Program for 

Market-Wide Circuit Breakers, 

Currently Codified in Rule 11.16 

April 12, 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 April 11, 

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 and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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’’) is filing with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) a 

proposal to adopt on a permanent basis 

the pilot program for Market-Wide 

Circuit Breakers, currently codified in 

Rule 11.16(a)–(d), (f) and (g). 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 (https://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 

Exchange Rule 11.16 to make permanent 

the Market-Wide Circuit Breaker 

(‘‘MWCB’’) pilot program. The proposal 

is substantively identical to New York 

Stock Exchange LLC (‘‘NYSE’’) Rule 

7.12 and NYSE American LLC (‘‘NYSE 

American’’) Rule 7.12E. 

The Pilot Rules 

The MWCB rules, including the 

Exchange’s Rule 11.16(a)–(d), (f) and (g), 

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., Rule 11.16(a)–(d), (f) and 

(g)).5 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’’).6

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 marketwide 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’’),7

including any extensions to the pilot 

period for the LULD Plan.8 In April 

2019, the Commission approved an 

amendment to the LULD Plan for it to 

operate on a permanent, rather than 

pilot, basis.9 In light of the proposal to 

make the LULD Plan permanent, the 

Exchange amended Rule 11.16 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, 2019.10 The Exchange then 

filed to extend the pilot to the close of 

business on October 18, 2020,11 October 


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