Document ID: SEC-2021-0282-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe EDGX Exchange, Inc.
Posted Date: 2021-03-01T05:00Z

[Federal Register Volume 86, Number 38 (Monday, March 1, 2021)]
[Notices]
[Pages 12047-12052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04090]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91191; File No. SR-CboeEDGX-2021-010]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Order Start Times During Its Early Trading Session

February 23, 2021.
    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 February 11, 2021, Cboe EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') 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 Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to 
amend order start times during its Early Trading Session. The text of 
the

[[Page 12048]]

proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange proposes to amend Rule 11.1 to allow Users to 
designate their orders to become eligible for execution at 7:00 a.m. 
Eastern Time (``ET'') during the new Early Trading Session extended 
hours.
    The Exchange currently offers four distinct trading sessions where 
the Exchange accepts orders for potential execution: (1) The ``Early 
Trading Session,'' which begins at 4:00 a.m. ET and continues until 
8:00 a.m. ET,\3\ (2) the ``Pre-Opening Session,'' which begins at 8:00 
a.m. ET and continues until 9:30 a.m. ET,\4\ (3) ``Regular Trading 
Hours,'' which begin at 9:30 a.m. ET and continue until 4:00 p.m. 
ET,\5\ and (4) the ``Post-Closing Trading Session,'' which begins at 
4:00 p.m. ET and continues until 8:00 p.m. ET.\6\
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    \3\ ``Early Trading Session'' means the time between 4:00 a.m. 
and 8:00 a.m. ET. See Rule 1.5(ii).
    \4\ ``Pre-Opening Session'' means the time between 8:00 a.m. and 
9:30 a.m. ET. See Rule 1.5(s).
    \5\ ``Regular Trading Hours'' means the time between 9:30 a.m. 
and 4:00 p.m. ET. See Rule 1.5(y).
    \6\ ``Post-Closing Trading Session'' means the time between 4:00 
p.m. and 8:00 p.m. ET. See Rule 1.5(r).
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    The Exchange recently submitted an immediately effective rule 
filing which amended the Early Trading Session to extend its hours from 
a 7:00 a.m. ET start to a 4:00 a.m. ET start, and to allow Users to 
begin entering orders into the System prior to the Early Trading 
Session at 3:30 a.m. ET.\7\ The Exchange intends to launch the new 
Early Trading Session extended hours on March 8, 2021.\8\ As amended, 
Rule 11.1 now provides that the Exchange will not accept the following 
orders prior to 4:00 a.m. ET: Orders with a Post Only instruction, 
ISOs, Market Orders other than those with a TIF instruction of Regular 
Hours Only or a Stop Price, orders with a Minimum Execution Quantity 
instruction that also include a TIF instruction of Regular Hours Only, 
and all orders with a TIF instruction of IOC or FOK. Further, at the 
commencement of the Early Trading Session, orders entered between 3:30 
a.m. and 4:00 a.m. ET will be handled in time sequence, beginning with 
the order with the oldest time stamp, and will be placed on the EDGX 
Book, routed, cancelled, or executed in accordance with the terms of 
the order.
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    \7\ See Securities Exchange Act Release No. 90509 (November 24, 
2020), 85 FR 77310 (December 1, 2020) (SR-CboeEDGX-2020-056).
    \8\ The Exchange will announce the implementation of the 
extended Early Trading Session to Members in advance via Trade Desk 
Notice.
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    In light of the planned extension of the Early Trading Session, the 
Exchange seeks to continue to provide Users with the option to submit 
orders that become eligible for execution during the Early Trading 
Session beginning at 7:00 a.m. ET. In particular, the proposed rule 
change amends Rule 11.1 to provide that at the commencement of the 
Early Trading Session, orders entered between 3:30 a.m. and 4:00 a.m. 
ET, will become eligible for execution (``4:00 a.m. Start''), unless 
designated as eligible for execution during the Early Trading Session 
beginning at 7:00 a.m. ET (``7:00 a.m. Start''). Orders with a 7:00 
a.m. Start designation may be entered between 3:30 a.m. and 7:00 a.m. 
ET. At each Start time that orders may become eligible for execution in 
the Early Trading Session (4:00 a.m. or 7:00 a.m. ET), orders will be 
handled in time sequence, beginning with the order with the oldest time 
stamp, and will be placed on the EDGX Book, routed, cancelled, or 
executed in accordance with the terms of the order.\9\ The Exchange 
will not accept the following orders prior to 4:00 a.m. Eastern Time or 
prior to 7:00 a.m. Eastern Time for orders eligible for a 7:00 a.m. 
Start: Orders with a Post Only instruction, ISOs, Market Orders other 
than those with a TIF instruction of Regular Hours Only or a Stop 
Price, orders with a Minimum Execution Quantity instruction that also 
include a TIF instruction of Regular Hours Only, and all orders with a 
TIF instruction of IOC or FOK.
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    \9\ A User will be able to designate orders with a 7:00 a.m. 
Start through the use of a port setting. See also infra note 14.
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    The proposed rule change allows Users to continue to be able to 
choose to submit orders that become eligible for execution during the 
Early Trading Session beginning at 7:00 a.m. ET, as they may today in 
connection with the current Early Trading Session hours.\10\ As the 
Exchange's Early Trading Session currently begins at 7:00 a.m. ET and 
other equities exchanges, including the Exchange's affiliated equities 
exchanges,\11\ have early trading sessions that begin at 7:00 a.m. 
ET,\12\ the Exchange understands that many market participants have 
configured their systems for trading beginning at 7:00 a.m. ET and find 
7:00 a.m. ET to be a time at which there are additional opportunities 
across the industry to access and source liquidity. For example, the 
Exchange understands that retail brokerage firms generally have 
standard agreements in place with their retail customers which provide 
that retail customer orders may not become eligible for execution until 
a specific time, and is aware of at least one such firm on the Exchange 
that has standard agreements in place with their retail customers that 
limit this time to 7:00 a.m. ET. The Exchange also understands that 
multiple liquidity providers wish to continue to participate in the 
Early Trading Session beginning at 7:00 a.m. given the particular 
liquidity and activity present across the U.S. equity markets at this 
specific time.\13\ Without a 7:00 a.m. Start designation available, 
certain retail investors may be limited in their ability to source 
liquidity that is available at this time during the Exchange's Early 
Trading Session, and liquidity providers may similarly choose not to 
participate in this trading session, thereby reducing liquidity 
available to other market participants and investors.\14\
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    \10\ The Exchange notes that the extended hours are intended to 
provide market participants with additional opportunities to source 
and access liquidity for their orders on the Exchange. See supra 
note 7.
    \11\ The Exchange's affiliated equities exchange are Cboe BZX 
Exchange, Inc. (``BZX''), Cboe BYX Exchange, Inc. (``BYX''), and 
Cboe EDGA Exchange, Inc. (``EDGA'').
    \12\ See e.g., BZX Rule 1.5(ee), BYX Rule 1.5(ee), EDGA Rule 
1.5(ii), NYSE Rule 7.34(a)(1), NYSE American Rule 7.34E, and Nasdaq 
BX Rule 4120(b)(4), each of which provide that their respective 
early trading sessions open at 7:00 a.m. ET.
    \13\ See id.
    \14\ The Exchange is aware are at least one liquidity provider 
that has expressed that it will not participate in the Early Trading 
Session without a 7 a.m. Start feature.

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[[Page 12049]]

    As such, the proposed rule change is intended to alleviate 
potential difficulty for Users that generally begin participating in 
the markets beginning at 7:00 a.m. ET, and to facilitate a fair and 
orderly market on the Exchange where retail investors and other market 
participants can benefit from trading opportunities present in the 
Exchange's Early Trading Session. As such, the proposed 7:00 a.m. Start 
designation will provide Users with greater control over their orders 
and more flexibility to carry out their investment strategies and 
manage their needs based on market conditions. In turn, Users may 
continue to provide meaningful liquidity and benefit from trading 
opportunities present on the Exchange throughout the duration of the 
Early Trading Session.
    The Exchange notes that, as proposed, orders eligible for execution 
beginning at 7:00 a.m. ET will function in the same manner as they 
currently do today upon the 7:00 a.m. ET commencement of the Early 
Trading Session (and as they will upon the 4:00 a.m. ET commencement 
for the extended Early Trading Session hours). That is, Users will 
submit orders eligible for a 7:00 a.m. ET Start during the Early 
Trading Session in the same manner as they may currently submit orders 
eligible for execution during the Early Trading Session, and will 
continue to be able to submit all such orders at the beginning of the 
early order acceptance period. As orders with a 7:00 a.m. Start 
designation will not be activated until 7:00 a.m., Users will have 
through 7:00 a.m. to submit such orders. The Exchange will continue not 
to accept the same order types listed in Rule 11.1 prior to the 
commencement of an order's eligible start time in the Early Trading 
Session. The proposed rule change makes it clear that orders with a 
Post Only instruction, ISOs, Market Orders other than those with a TIF 
instruction of Regular Hours Only or a Stop Price, orders with a 
Minimum Execution Quantity instruction that also include a TIF 
instruction of Regular Hours Only, and all orders with a TIF 
instruction of IOC or FOK will continue to be rejected prior to an 
order's eligible start time in the Early Trading Session, as they are 
today. Additionally, the System will continue to handle all orders 
eligible for execution during the Early Trading Session, including 
those with a 7:00 a.m. Start designation, pursuant to Rule 11.1. In 
particular, the proposed rule language makes it clear that all orders 
eligible for execution during the Early Trading Session will continue 
to be handled in time sequence, beginning with the order with the 
oldest time stamp, and will be placed on the EDGX Book, routed, 
cancelled, or executed in accordance with the terms of the order, 
beginning at the Start time (either 4:00 a.m. or 7:00 a.m. ET) at which 
they become eligible for execution in the Early Trading Session.\15\ At 
7:00 a.m., orders with a 7:00 a.m. Start designation will simply be 
handled as any incoming order is handled during the Early Trading 
Session, and merge, in time sequence, onto the already active EDGX 
Order Book for the Early Trading Session. A User must continue to 
select the appropriate TIF to allow the order to execute in the Early 
Trading and a port setting will merely permit a User to designate an 
order that is already marked for the Early Trading Session to become 
active later in the Early Trading Session. The Exchange notes that the 
proposal does not extend or otherwise modify any trading hours during 
which trading is currently permissible on the Exchange but simply 
permits a User to activate an order at a specific time during an 
ongoing trading session.
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    \15\ The System may delay the release of 7:00 a.m. Start orders 
if the System is experiencing an unusually significant amount of 
orders with a 7:00 a.m. Start designation that would potentially 
impact other System performance and processing functions during the 
Early Trading Session. The Exchange does not anticipate an occasion 
in which the System would have to implement a delayed release for 
orders with a 7:00 a.m. Start during the Early Trading Session. As 
the System does not have unlimited capacity, the proposed System 
flexibility to delay the release of orders with a 7:00 a.m. Start 
designation is a reasonable preventative measure to ensure that the 
System has the capacity to maintain fair and orderly markets in the 
event that there is an unusually significant amount of orders queued 
for 7:00 a.m. ET activation.
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    Additionally, the Exchange notes that permitting Users to designate 
a 7:00 a.m. ET Start for which orders may become active during an early 
trading session that begins at 4:00 a.m. is consistent with the rules 
currently in place on Nasdaq Stock Market LLC (``Nasdaq''). Nasdaq's 
early trading session currently begins at 4:00 a.m. and continues until 
the 9:30 a.m. commencement of Nasdaq's regular trading hours.\16\ 
Nasdaq Rule 4703(a) allows participants to designate a time at which 
certain orders \17\ may become active and includes 7:00 a.m. ET as an 
available time at which participants may activate such orders entered 
prior to 7:00 a.m. ET.\18\
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    \16\ See Nasdaq Rule 4701(g).
    \17\ Orders using the SCAN or RTFY routing strategy available on 
Nasdaq.
    \18\ The Exchange notes that the designation for orders to 
become active at 7:00 a.m. ET on Nasdaq is similarly a port level 
setting. See Securities Exchange Act Release No. 83125 (April 27, 
2018), 83 FR 19586 (May 3, 2018) (SR-NASDAQ-2017-088).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\19\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \20\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \21\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
    \21\ Id.
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    In particular, the proposed rule change to allow Users to submit 
orders that become eligible for execution beginning at 7:00 a.m. ET, 
once the Exchange extends its Early Trading Session hours to begin at 
4:00 a.m. ET, will remove impediments to and perfect the mechanism of a 
free and open market and national market system and will benefit 
investors by continuing to provide Users with the option to activate 
their orders for execution beginning at 7:00 a.m. ET and thus the 
opportunity to continue to source and access liquidity at a specific 
time in which there are additional trading opportunities in the 
markets. The Exchange does not believe that the proposed rule change 
will present any unique or novel issues nor affect the maintenance of a 
fair and orderly market, as many market participants have configured 
their systems for trading beginning at 7:00 a.m. ET in line with the 
commencement of the early trading sessions on other equities exchanges, 
including the Exchange's affiliated equities exchanges.\22\ Rather, the 
proposed rule change is designed to benefit investors, as well as 
overall liquidity in the Early Trading Session, by providing Users with 
the option to continue to activate their orders for execution during 
the Early Trading

[[Page 12050]]

Session beginning at 7:00 a.m. ET when the Exchange extends its Early 
Trading Session hours. As described above, certain market participants, 
such as retail investors and liquidity providers, may be limited in 
their ability to source liquidity that is available in the Exchange's 
Early Trading Session or choose not to participate in the Early Trading 
Session without the availability of a 7:00 a.m. Start designation, 
thereby reducing liquidity available to other market participants and 
investors. Thus, the proposed rule change will alleviate potential 
difficulties for Users that generally begin participating in in the 
markets at 7:00 a.m. ET (as these Users would not have to time the 
entry of their orders to occur as close to 7:00 a.m. ET as possible), 
and will facilitate a fair and orderly market on the Exchange by 
allowing retail investors and other market participants to benefit from 
trading opportunities present at this specific time during the 
Exchange's Early Trading Session. Overall, the proposed rule change 
will serve to protect investors and the public interest by providing 
Users with greater control over their orders and more flexibility to 
carry out their investment strategies and manage their needs based on 
market conditions, thereby allowing them to continue to provide 
meaningful liquidity and benefit from trading opportunities present on 
the Exchange throughout the duration of the Early Trading Session.
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    \22\ See supra note 12.
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    The proposed rule change will not affect the protection of 
investors as it would simply provide Users with the opportunity to 
choose whether orders entered for potential execution in the Early 
Trading Session will become active at the new 4:00 a.m. ET commencement 
of that trading session, or will instead continue to become active at 
7:00 a.m. ET, as they do today. The System will continue to accept all 
orders eligible for execution during the Early Trading Session 
beginning at the early acceptance time, will continue to reject the 
same list of order types prior to the time an order is eligible to 
start trading in the Early Trading Session, and will continue to 
process all orders that are queued for participation in the Early 
Trading Session in time priority pursuant to Rule 11.1.\23\ That is, 
orders with a 7:00 a.m. Start designation will be handled as any 
incoming order is handled during the Early Trading Session, and merge, 
in time sequence, onto the already active EDGX Order Book for the Early 
Trading Session. As described above, a User must continue to select the 
appropriate TIF to allow the order to execute in the Early Trading 
Session and a port setting step will just permit an order already 
marked for execution in the Early Trading Session to become active 
later in the Early Trading Session. The proposed rule change does not 
extend or otherwise modify any trading hours during which trading is 
currently permissible on the Exchange but simply permits Users to 
choose to activate their orders at a specific time during an ongoing 
trading session.
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    \23\ See also supra note 15.
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    The Exchange also notes that, as with any order eligible for 
trading in the Early Trading Session, market participants must monitor 
market conditions to ensure compliance with best execution obligations 
\24\ for their orders with a 7:00 a.m. Start designation and will be 
able to cancel or modify their orders with a 7:00 a.m. Start time 
designation at any time prior to their activation, thus allowing them 
to react to market conditions that may cause them to violate their best 
execution obligations. FINRA Rule 5310(a)(1) provides that a member 
must use reasonable diligence to ascertain the best market for a 
security and buy or sell in such market so that the resultant price to 
the customer is as favorable as possible under prevailing market 
conditions. FINRA Rule 5310(a)(1)(A) states that one of the factors 
that will be considered in determining whether a member has used 
``reasonable diligence'' is ``the character of the market for the 
security (e.g., price, volatility, relative liquidity, and pressure on 
available communication).'' \25\ The Exchange believes that Users are 
accustomed to this additional analysis and will continue to apply such 
in determining whether to designate an activation at 7:00 a.m. ET. The 
regulatory guidance with respect to best execution anticipates the 
continued evolution of execution venues:
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    \24\ A member's best execution obligation may also include 
cancelling an order when market conditions deteriorate and could 
result in an inferior execution or informing customers where the 
execution of their order may be delayed intentionally as the member 
utilizes reasonable diligence to ascertain the best market for the 
security. See FINRA Rule 5130. See also FINRA Regulatory Notice 15-
46, Best Execution. Guidance on Best Execution Obligations in 
Equity, Options, and Fixed Income Markets, (November 2015).
    \25\ These characteristics are reflected in the disclosure 
requirements mandated by Exchange Rule 3.21 before a Member may 
accept an order from a customer for execution in the Pre-Opening, 
Post-Closing, and proposed Early Trading Sessions.

    [B]est execution is a facts and circumstances determination. A 
broker-dealer must consider several factors affecting the quality of 
execution, including, for example, the opportunity for price 
improvement, the likelihood of execution . . ., the speed of 
execution and the trading characteristics of the security, together 
with other non-price factors such as reliability and service.\26\
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    \26\ See Securities Exchange Act Release No. 43950 (November 17, 
2000), 65 FR 75414 (December 1, 2000) (``Disclosure of Order 
Execution and Routing Practices release'').

    To the extent there may be best execution obligations at issue, 
they are no different than the best execution obligations faced by 
brokers in the current market structure, including the current use of 
orders that become eligible for execution at the start of the Early 
Trading Session, Pre-Opening Session or Regular Trading Hours, 
depending on the TIF selected by the User. A User may use continue to 
use TIF instructions to forgo a possible execution at the start of one 
trading session, or at a 7 a.m. Start time, as proposed, if they 
believe doing so is consistent with their best execution obligations as 
they anticipate that the market for the security may improve upon the 
start of another trading session, or at 7:00 a.m. ET, as proposed. 
Applicable best execution guidance contains no formulaic mandate as to 
whether or how brokers should direct orders. The optionality created by 
the proposed rule change simply represents one tool available to User 
to meet their best execution obligations.
    The Exchange also notes that Users are required to implement 
regulatory risk management controls and procedures that are reasonably 
designed to prevent the entry of orders that fail to comply with 
regulatory requirements that apply on a pre-order entry basis pursuant 
to the Market Access Rule under 15c3-5of the Act.\27\ These pre-trade 
controls must, for example, be reasonably designed to assure compliance 
with Exchange trading rules and Commission rules under Regulation SHO 
\28\ and Regulation NMS.\29\ In accordance with the Market Access Rule, 
a User's procedures must be reasonably designed to ensure compliance 
with their applicable regulatory requirements, not just at the time the 
order is routed to the Exchange, but also at the time the order becomes 
eligible for execution.
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    \27\ See Securities Exchange Act Release No. 63241 (November 3, 
2010), 75 FR 69792 (November 15, 2010) (File no. S7-03-10).
    \28\ See e.g., Question 2.6 of the Division of Trading and 
Markets: Response to Frequently Asked Questions Concerning 
Regulations SHO, available at https://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm.
    \29\ 17 CFR 240.610-611.
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    In addition to this, the proposed rule change will not affect the 
protection of investors as it is generally consistent

[[Page 12051]]

with Nasdaq Rule 4703(a), as previously approved by the Commission,\30\ 
which allows participants to designate 7:00 a.m. ET as a time in which 
certain orders entered prior to 7:00 a.m. ET may become active during 
Nasdaq's early trading session, which likewise commences at 4:00 a.m. 
ET. Unlike Nasdaq Rule 4703(a), which limits the types of orders that 
may be designated to begin at 7:00 a.m. ET, the proposal will provide 
Users with the control and flexibility to designate a 7 a.m. Start time 
for any of their same orders currently eligible to execute in the Early 
Trading Session, thereby providing the opportunity for all orders 
eligible for the Early Trading Session to access the additional 
liquidity and execution opportunities present in the markets at this 
particular time, as they may today.
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    \30\ See supra note 16.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Particularly, the Exchange 
does not believe that the proposed rule change will impose any burden 
on intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because all Users will be able 
to designate their orders to become eligible for execution during the 
Early Trading Session beginning at 7:00 a.m. ET. All Users' orders 
submitted with a 7:00 a.m. Start designation will become eligible for 
execution at 7:00 a.m. ET in the same time sequence as they are today 
and will be subject to the same order type restrictions as are 
currently in place. The Exchange also does not believe that the 
proposed rule change will impose any burden on intermarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act, and may promote competition, because the proposed activation 
time is substantially similar to that which is currently in place on 
Nasdaq, as previously approved by the Commission, and other equities 
exchanges currently begin their early trading sessions at 7:00 a.m. ET. 
Therefore, the proposal will also allow the Exchange to compete with 
those exchanges that allow for a 7:00 a.m. ET start time.

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

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

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \31\ and Rule 19b-4(f)(6) thereunder.\32\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \33\ and Rule 19b-
4(f)(6) thereunder.\34\
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    \31\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \32\ 17 CFR 240.19b-4(f)(6).
    \33\ 15 U.S.C. 78s(b)(3)(A).
    \34\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \35\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\36\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative immediately. This will allow the 
Exchange to implement the proposal at the same time as the Exchange's 
new extended Early Trading Session hours, which the Exchange plans to 
launch on March 8, 2021. In seeking this waiver, the Exchange asserts 
that this proposal neither introduces any new or novel issues nor 
extends or otherwise modifies trading hours during which trading is 
currently permissible on the Exchange. Rather, the Exchange states that 
this proposal will allow market participants and investors to continue 
to submit orders that become eligible for execution at 7:00 a.m. ET, as 
they already do today, once the Exchange extends its Early Trading 
Session hours to begin at 4:00 a.m. ET. Based on the foregoing, the 
Commission believes that allowing this proposed rule change to become 
operative upon filing is consistent with the protection of investors 
and the public interest. The Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\37\
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    \35\ 17 CFR 240.19b-4(f)(6).
    \36\ 17 CFR 240.19b-4(f)(6)(iii).
    \37\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of 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 change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CboeEDGX-2021-010 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CboeEDGX-2021-010. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the

[[Page 12052]]

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 offices of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-CboeEDGX-2021-010, and should be 
submitted on or before March 22, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\38\
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    \38\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04090 Filed 2-26-21; 8:45 am]
BILLING CODE 8011-01-P