Document ID: SEC-2019-0973-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe EDGX Exchange, Inc.
Posted Date: 2019-07-09T04:00Z

[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Notices]
[Pages 32808-32816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14490]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86280 ; File No. SR-CboeEDGX-2019-012]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing of Amendment No. 1 and Order Instituting Proceedings To 
Determine Whether To Approve or Disapprove of a Proposed Rule Change, 
as Modified by Amendment No. 1, To Introduce Order Book Priority for 
Equity Orders Submitted on Behalf of Retail Investors

July 2, 2019.
    On March 18, 2019, Cboe EDGX Exchange, Inc. (``Exchange'' or 
``EDGX'') 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 introduce order book priority for equity orders 
submitted on behalf of retail investors. The proposed rule change was 
published for comment in the Federal Register on April 5, 2019.\3\ The 
Commission received four comment letters on the proposed rule 
change.\4\ On May 16, 2019, the Commission extended the time period 
within which to approve, disapprove the proposed rule change, or 
institute proceedings to determine whether to approve or disapprove the 
proposed rule change to July 4, 2019.\5\ On June 18, 2019, the Exchange 
filed Amendment No. 1 to the proposed rule change.\6\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 85482 (April 2, 
2019), 84 FR 13729 (``Notice'').
    \4\ See letters to Vanessa Countryman, Acting Secretary, 
Commission, from Sean Paylor, Trader, AJO, L.P., dated April 25, 
2019 (``AJO Letter''); Joseph Saluzzi and Sal Arnuk, Partners, 
Themis Trading LLC, dated May 8, 2019 (``Themis Letter''); T. Sean 
Bennett, Principal Associate General Counsel, Nasdaq, dated May 9, 
2019 (``Nasdaq Letter''); letter to Eduardo A. Aleman, Deputy 
Secretary, Commission from Stephen John Berger, Global Heady of 
Government & Regulatory Policy, Citadel Securities, dated April 26, 
2019 (``Citadel Letter''). All comments received by the Commission 
on the proposed rule change are available at: https://www.sec.gov/comments/sr-cboeedgx-2019-012/srcboeedgx2019012.htm.
    \5\ See Securities Exchange Act Release No. 85879, 84 FR 23591 
(May 16, 2019).
    \6\ Amendment No. 1 modifies the proposed rule change by: (1) 
Adding a proposed definition of ``Retail Priority Order''; (2) 
applying the proposed enhanced priority to ``Retail Priority 
Orders'' instead of ``Retail Orders''; (3) imposing certain 
requirements on Retail Member Organizations that enter ``Retail 
Priority Orders''; (4) removing the proposed requirement that 
``Retail Orders'' must be identified as such on the EDGX Book Feed; 
and (5) requiring that all ``Retail Priority Orders'' be identified 
as such on the EDGX Book Feed. Amendment No. 1 is available at: 
https://www.sec.gov/comments/sr-cboeedgx-2019-012/srcboeedgx2019012-5705327-185928.pdf.
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    The Commission is publishing this notice and to solicit comments on 
the proposed rule change, as modified by Amendment No. 1, 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. 1.
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    \7\ 15 U.S.C. 78s(b)(2)(B).
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I. Exchange's Description of the Proposal, as Modified by Amendment No. 
1

    The Exchange proposes to introduce order book priority for equity 
orders submitted on behalf of retail investors.
    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.

[[Page 32809]]

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

1. Purpose
    The purpose of the proposed rule change is to introduce order book 
priority for equity orders submitted on behalf of retail investors. 
Forty three million U.S. households hold a retirement or brokerage 
account,\8\ and these investors are increasingly turning to the 
equities markets to fund important life goals. It is therefore critical 
that our markets are sensitive to the needs of the investing public. 
The Exchange continuously strives to innovate and improve market 
structure in ways that facilitate ordinary investors achieving their 
investment goals. The proposed introduction of retail priority is 
designed with this objective in mind. The Exchange believes that 
introducing retail priority may provide retail investors with better 
execution quality and better position the Exchange as the ``home'' for 
retail limit orders. This, in turn, will further allow retail liquidity 
to contribute to overall price formation and attract more market 
participants to the Exchange, creating a richer and more diverse 
ecosystem with deeper liquidity. Retail priority would therefore be 
consistent with the goals of the Commission to encourage markets that 
are structured to benefit ordinary investors,\9\ while facilitating 
order interaction and price discovery to the benefit of all market 
participants.
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    \8\ See The Evolving Market for Retail Investment Services and 
Forward-Looking Regulation--Adding Clarity and Investor Protection 
while Ensuring Access and Choice, Chairman Jay Clayton, Commission 
(May 2, 2018), available at https://www.sec.gov/news/speech/speech-clayton-2018-05-02.
    \9\ See e.g., U.S. Securities and Exchange Commission, Strategic 
Plan, Fiscal Years 2018-2022, available at https://www.sec.gov/files/SEC_Strategic_Plan_FY18-FY22_FINAL_0.pdf (``Commission 
Strategic Plan'').
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Background
    As defined in EDGX Rule 11.21, a ``Retail Order'' is an agency or 
riskless principal order that meets the criteria of FINRA Rule 5320.03 
\10\ that originates from a natural person and is submitted to the 
Exchange by a Retail Member Organization, provided that no change is 
made to the terms of the order with respect to price or side of market 
and the order does not originate from a trading algorithm or any other 
computerized methodology.\11\ A ``Retail Member Organization'' or 
``RMO'' is a Member (or a division thereof) that has been approved by 
the Exchange under EDGX Rule 11.21 to submit Retail Orders. Pursuant to 
EDGX Rule 11.21(b), which describes the qualification and application 
process for becoming a Retail Member Organization, any member may 
qualify as a Retail Member Organization if it conducts a retail 
business or routes retail orders on behalf of another broker-dealer.
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    \10\ FINRA Rule 5320.03 clarifies that an RMO may enter Retail 
Orders on a riskless principal basis, provided that (i) the entry of 
such riskless principal orders meet the requirements of FINRA Rule 
5320.03, including that the RMO maintains supervisory systems to 
reconstruct, in a time[hyphen]sequenced manner, all Retail Orders 
that are entered on a riskless principal basis; and (ii) the RMO 
submits a report, contemporaneously with the execution of the 
facilitated order, that identifies the trade as riskless principal.
    \11\ Retail Member Organizations are able to designate their 
orders as Retail Orders on either an order-by-order basis using FIX 
ports or by designating certain of their FIX ports at the Exchange 
as ``Retail Order Ports.'' Unless otherwise instructed by the Retail 
Member Organization, a Retail Order will be identified as Retail 
when routed to an away Trading Center. See EDGX Rule 11.21(d).
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    Today, the Exchange operates based on a price/display/time priority 
execution algorithm that is similar to those employed by most other 
U.S. equities exchanges.\12\ As such, the first Displayed \13\ order 
resting on the EDGX Book \14\ at a particular price has priority over 
the next order and so on based on the time of order entry. Non-
Displayed \15\ orders at that price are further categorized into a 
number of priority bands, with orders within each priority band 
prioritized again based on the time of order entry, as provided in EDGX 
Rule 11.9. The generally applicable allocation bands for orders 
executed on the Exchange are described in EDGX Rule 11.9(a)(2)(A), and 
similar allocation bands applicable to orders executed at the midpoint 
of the NBBO are described in EDGX Rule 11.9(a)(2)(B).\16\ The price 
time allocation model has provided significant benefits to the equities 
markets as it encourages increased efficiency by rewarding market 
participants that are the first to provide liquidity at a particular 
price. At the same time, because this allocation methodology 
preferences speed, retail investors may have a more limited ability to 
secure an execution for their non-marketable orders under this model. 
The Exchange believes that retail priority would improve trading 
outcomes for retail investors and could perhaps encourage even more 
retail order flow to be entered into the displayed market.
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    \12\ See EDGX Rule 11.12.
    \13\ ``Displayed'' is an instruction the User may attach to an 
order stating that the order is to be displayed by the System on the 
EDGX Book. See EDGX Rule 11.6(e)(1).
    \14\ ``EDGX Book'' means the System's electronic file of orders. 
See EDGX Rule 1.5(d)
    \15\ ``Non-Displayed'' is an instruction the User may attach to 
an order stating that the order is not to be displayed by the System 
on the EDGX Book. See EDGX Rule 11.6(e)(2).
    \16\ In addition, EDGX Rule 11.9(a)(2)(C) describes the sequence 
in which orders are timestamped when re-ranked by the System upon 
clearance of a locking quotation.
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Retail Priority Orders
    The Exchange would offer priority benefits exclusively to Retail 
Orders that are entered on behalf of retail investors that enter a 
limited number of equity orders each trading day. As such, the Exchange 
would define a new term, ``Retail Priority Order'' to designate Retail 
Orders that are eligible for priority on the EDGX Book. Specifically, a 
``Retail Priority Order'' would be defined as a Retail Order, as 
defined in Rule 11.21(a)(2), that is entered on behalf of a person that 
does not place more than 390 equity orders per day on average during a 
calendar month for its own beneficial account(s). The selected 390 
orders per day threshold to qualify as a Retail Priority Order is 
similarly used for the options industry Priority Customer 
definition,\17\ and represents one order entered each minute during 
regular trading hours--i.e., from 9:30 a.m. ET to 4:00 p.m. ET. All 
orders entered on behalf of the retail customer would be counted to 
determine whether a customer's Retail Orders could be identified as 
Retail Priority Orders. This would therefore include both orders routed 
to other exchanges and orders that are not entered as Retail Orders 
(e.g., because the price of such orders is modified by a broker-dealer 
algorithm). The Exchange believes that limiting the Retail Orders that 
would be priority eligible, as described, would assist in ensuring that 
these benefits flow only to retail investors that are not engaged in 
trading activity akin to that of a professional.
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    \17\ See e.g., EDGX Rule 16.1(a)(46),(47).
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    Similar to the rules of the Exchange's options trading platform 
(``EDGX Options''),\18\ the EDGX Equities rules would describe how to 
count parent/child orders and cancel/replace orders when determining 
whether the 390 order per day threshold has been exceeded. As proposed, 
parent/child orders would be counted as a single order--i.e., a 
``parent'' order that is broken into multiple ``child'' orders by

[[Page 32810]]

a broker or dealer, or by an algorithm housed at a broker or dealer or 
by an algorithm licensed from a broker or dealer, but which is housed 
with the customer, would count as one order even if the ``child'' 
orders are routed across multiple exchanges. Similarly, with one 
exception for parent/child orders, any order that cancels and replaces 
an existing order would count as a separate order. An order that 
cancels and replaces any ``child'' order resulting from a ``parent'' 
order that is broken into multiple ``child'' orders, would not count as 
a new order. The Exchange believes that this guidance would assist RMOs 
in determining whether Retail Orders entered on behalf of a particular 
retail customer would qualify to be entered as Retail Priority Orders. 
Similar to the implementation of the Priority Customer designation in 
the options industry,\19\ RMOs that enter Retail Priority Orders would 
also be required to have reasonable policies and procedures in place to 
ensure that such orders are appropriately represented on the Exchange. 
Such policies and procedures should provide for a review of retail 
customers' activity on at least a quarterly basis. Retail Orders for 
any retail customer that had an average of more than 390 orders per day 
during any month of a calendar quarter would not be eligible to be 
entered as Retail Priority Orders for the next calendar quarter. RMOs 
would be required to conduct a quarterly review and make any 
appropriate changes to the way in which they are representing orders 
within five business days after the end of each calendar quarter. While 
RMOs would only be required to review their accounts on a quarterly 
basis, if during a quarter the Exchange identifies a retail customer 
for which orders are being represented as Retail Priority Orders but 
that has averaged more than 390 orders per day during a month, the 
Exchange would notify the RMO, and the RMO would be required to change 
the manner in which it is representing the retail customer's orders 
within five business days.
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    \18\ See Interpretations and Policies .01 to EDGX Rule 16.1. Due 
to differences between equities and options trading there are some 
differences between the proposed methodology and the methodology 
used by options exchanges. For example, EDGX Options rules contain 
provisions related to complex orders and pegged orders, and 
differentiate between parent orders that are broken up into multiple 
child orders on the same side and series or both sides and/or 
multiple series.
    \19\ See Securities Exchange Act Release No. 78221 (July 1, 
2016), 81 FR 44353 (July 7, 2016) (SR-BatsEDGX-2016-28).
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Retail Priority Proposal
    The Exchange proposes to introduce retail priority in order to 
ensure that non-marketable orders submitted on behalf of retail 
investors can more readily compete for execution with orders entered by 
sophisticated market participants that may be better equipped to 
optimize their place in the intermarket queue. Retail priority would be 
in place during all trading sessions, and would also be available to 
orders entered for participation in the Exchange's opening process and 
the re-opening process following a halt.
    As proposed, the portion of a Retail Priority Order with a 
Displayed instruction would be given allocation priority ahead of all 
other available interest on the EDGX Book. This would be true of both 
orders executed pursuant to the regular priority bands described in 
EDGX Rule 11.9(a)(2)(A), and orders priced at the midpoint of the NBBO 
pursuant to EDGX Rule 11.9(a)(2)(B) where Retail Priority Orders 
subject to Display-Price Sliding \20\ would have priority ahead of 
limit orders entered with such an instruction as well as any other 
orders resting at the midpoint of the NBBO.\21\ In addition, since 
Reserve Orders contain a Displayed instruction but include both 
Displayed and Non-Displayed shares, the Reserve Quantity \22\ of Retail 
Priority Orders would be given priority ahead of the Reserve Quantity 
of other limit orders on the EDGX Book.
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    \20\ Display-Price Sliding is an order instruction provided for 
compliance with Rule 610(d) of Regulation NMS. See EDGX Rule 
11.6(l)(B). While a significant majority of Retail Orders are 
entered into the EDGX Book with a routing instruction, an RMO may 
choose to perform its own routing, in which case those orders may be 
handled pursuant to the Display-Price Sliding process, which is the 
default handling unless Price Adjust or Cancel Back is elected. See 
EDGX Rule 11.8(b)(10).
    \21\ Orders entered with Display-Price Sliding are ranked at the 
locking price and are therefore given priority when executed at the 
midpoint of the NBBO pursuant to current EDGX Rule 11.9(a)(2)(B).
    \22\ ``Reserve Quantity'' is the portion of an order that 
includes a Non-Displayed instruction in which a portion of that 
order is also displayed on the EDGX Book. See EDGX Rule 11.6(m).
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    Retail Priority Orders that are not willing to be displayed, or are 
only willing to be displayed at a less aggressive price than the 
execution price, would not receive any special priority. For example, a 
Retail Priority Order that is entered as a MidPoint Peg Order,\23\ 
which by definition is Non-Displayed, would be prioritized along with 
all other MidPoint Peg Orders notwithstanding the fact that it is a 
Retail Priority Order. Similarly, a MidPoint Discretionary Order 
(``MDO'') \24\ executed within its Discretionary Range would receive 
the same priority as other orders entered with a Discretionary Range 
instruction, regardless of whether the MDO is displayed at its pegged 
price.
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    \23\ A ``MidPoint Peg Order'' is a non-displayed Market Order or 
Limit Order with an instruction to execute at the midpoint of the 
NBBO, or, alternatively, pegged to the less aggressive of the 
midpoint of the NBBO or one minimum price variation inside the same 
side of the NBBO as the order. See EDGX Rule 11.8(d).
    \24\ A ``MidPoint Discretionary Order'' is a Limit Order that is 
executable at the NBB for an order to buy or the NBO for an order to 
sell while resting on the EDGX Book, with discretion to execute at 
prices to and including the midpoint of the NBBO. See EDGX Rule 
11.8(g).
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    The following examples illustrate the proposed implementation of 
retail priority: \25\
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    \25\ In each example, orders are shown in the order in which 
they are entered.
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Example 1: Displayed Retail Priority Order Has Priority at a Given 
Price
NBBO: $10.00 x $10.10
Order 1: Buy 100 shares @$10.00--Displayed, Non-Retail Priority Order
Order 2: Buy 100 shares @$10.00--Displayed, Retail Priority Order
Order 3: Sell 100 shares @$10.00

    A Retail Priority Order entered with a Displayed instruction would 
have priority over Non-Retail Priority Orders at the same price. As a 
result, Order 3 would trade with Order 2 for 100 shares @$10.00, 
securing a timely execution for the retail investor.
Example 2: Better Priced Non-Retail Priority Order Has Priority
NBBO: $10.00 x $10.10
Order 1: Buy 100 shares @$10.00--Retail Priority Order
Order 2: Buy 100 shares @$10.01--Non-Retail Priority Order
Order 3: Sell 100 shares @$10.00

    Allocations would continue to be prioritized based on price. 
Although Retail Priority Orders entered with a Displayed instruction 
would have priority over Non-Retail Priority Orders at the same price, 
they would not have priority over Non-Retail Priority Orders at a 
better price. As a result, Order 3 would trade with the better priced 
Order 2 for 100 shares @$10.01.
Example 3: No Retail Priority for Non-Displayed Orders
NBBO: $10.00 x $10.10
Order 1: Buy 100 shares @$10.01--Non-Displayed, Non-Retail Priority 
Order
Order 2: Buy 100 shares @$10.01--Non-Displayed, Retail Priority Order
Order 3: Sell 100 shares @$10.00

    A Retail Priority Order entered with a Non-Displayed instruction is 
not eligible for retail priority. As a result, Order 3 trades with 
Order 1 for 100 shares @$10.01 based on time priority. Retail Priority 
Orders would need to be submitted with a Displayed or Reserve 
instruction to qualify for the benefits of retail priority, which 
should encourage displayed retail liquidity.
Example 4: No Retail Priority in Discretionary Range
NBBO: $10.00 x $10.10

[[Page 32811]]

Order 1: Buy 100 shares @$10.00 + $0.03 Discretion--Non-Retail Priority 
Order
Order 2: Buy 100 shares @$10.00 + $0.03 Discretion--Retail Priority 
Order
Order 3: Sell 100 shares @$10.02

    Retail Priority Orders would only have priority if willing to be 
displayed at the execution price. Although orders entered with a 
Discretionary Range instruction may be displayed at their ranked price, 
the execution would occur at a non-displayed price within the 
Discretionary Range. As a result, Order 3 trades with Order 1 for 100 
shares @$10.02 based on time priority.\26\
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    \26\ If Order 3 was to sell 100 shares @$10.00 then retail 
priority would be observed at the displayed price and Order 3 would 
trade with Order 2 for 100 shares @$10.00.
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Example 5: Retail Priority Reserve Order has Displayed and Non-
Displayed Priority
NBBO: $10.00 x $10.10
Order 1: Buy 500 @$10.00--Non-Retail Priority Reserve Order, 100 shares 
displayed
Order 2: Buy 500 @$10.00--Retail Priority Reserve Order, 100 shares 
displayed
Order 3: Sell 300 @$10.00

    A Retail Priority Order entered as a Reserve Order would have 
retail priority for both displayed and non-displayed size. However, any 
Reserve Quantity would be executed after other orders with a higher 
priority, including the displayed size available from Non-Retail 
Priority Orders. As a result, Order 3 would trade 100 shares @$10.00 
with Order 2 based on retail priority, then would trade 100 shares 
@$10.00 with Order 1. After exhausting the available displayed size, 
Order 3 would trade the remaining 100 shares @$10.00 with Order 2 based 
on retail priority.
Example 6: Display-Price Sliding Retail Priority Orders are Eligible 
for Priority at Midpoint
NBBO: $10.00 x $10.01
EDGX BBO: $10.00 x $10.02
Order 1: Buy 100 shares @$10.01--Book Only, Display-Price Sliding, Non-
Retail Priority Order
Order 2: Buy 100 shares @$10.01--Book Only, Display-Price Sliding, 
Retail Priority Order
Order 3: Sell 100 shares @$10.01--Post Only
Order 4: Sell 100 shares @$10.00

    Due to the Display-Price Sliding instruction, both Order 1 and 
Order 2 are ranked at $10.01 and displayed at $10.00 to avoid locking 
the National Best Offer at $10.01.\27\ Then, because of the Post Only 
instruction, Order 3 posts and displays on the EDGX Book at $10.01. 
Since there is displayed interest now resting on the same side of the 
order book, Order 4 is eligible for execution on entry at the midpoint 
price of $10.005--i.e., one-half minimum price variation better than 
Order 3.\28\ At the midpoint of the NBBO, a Retail Priority Order 
subject to Display-Price Sliding that is willing but unable to display 
at or better than the execution price would have priority over other 
orders. As a result, Order 4 would trade with Order 2 for 100 shares 
@$10.005, securing a timely execution for the retail investor.
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    \27\ An order with a Display-Price Sliding instruction that 
would be a locking quotation on entry is instead ranked at the 
locking price and displayed at a price that is one minimum price 
variation less aggressive than the locking price. See EDGX Rule 
11.6(l)(B).
    \28\ See EDGX Rule 11.6(l)(1)(B)(v); EDGX Rule 11.10(a)(4)(D).
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Example 7: Reserve and Other Orders on EDGX Book
NBBO: $10.00 x $10.01
EDGX BBO: $10.00 x $10.02
Order 1: Buy 100 shares @$10.00--Non-Retail Priority Order
Order 2: Buy 500 @$10.00--Non-Retail Priority Reserve Order, 100 shares 
displayed
Order 3: Buy 500 @$10.00--Retail Priority Reserve Order, 100 shares 
displayed
Order 4: Buy 100 shares @$10.01--Book Only, Display-Price Sliding, Non-
Retail Priority Order
Order 5: Sell 500 shares @$10.00

    Due to the Display-Price Sliding instruction, Order 4 is displayed 
at $10.00 to avoid locking the National Best Offer at $10.01, but 
ranked and executable at its $10.01 limit price. Since allocations 
would continue to be prioritized based on price, Order 5 would first 
trade 100 shares @$10.01 with Order 4. At any given price, the 
displayed size of a Retail Priority Order would have priority over Non-
Retail Priority Orders at the same price. As such, Order 5 would next 
trade 100 shares @$10.00 with Order 3. Next, the displayed size of Non-
Retail Priority Orders would trade in time priority. Order 5 would 
therefore trade 100 shares @$10.00 with Order 1, followed by 100 shares 
@$10.00 with Order 2. Finally, after exhausting the available displayed 
size, the Reserve Quantity of the remaining Reserve Orders would trade, 
with Retail Priority Orders being eligible for retail priority. As a 
result, Order 5 would trade the remaining 100 shares @$10.00 with Order 
3.
Example 8: Display-Price Sliding and Midpoint Peg Orders on EDGX Book
NBBO: $10.00 x $10.01
EDGX BBO: $10.00 x $10.02
Order 1: Buy 100 shares @$10.01--Book Only, Display-Price Sliding, Non-
Retail Priority Order
Order 2: Buy 500 shares @$10.01--Book Only, Display-Price Sliding, 
Retail Priority Reserve Order, 100 shares displayed
Order 3: Buy 100 shares @$10.01--MidPoint Peg, Non-Retail Priority 
Order
Order 4: Sell 100 shares @$10.01--Post Only
Order 5: Sell 500 shares @$10.00

    Due to the Display-Price Sliding instruction, both Order 1 and 
Order 2 are ranked at $10.01 and displayed at $10.00 to avoid locking 
the National Best Offer at $10.01. Order 3, meanwhile is ranked at the 
midpoint price of $10.005. Then, because of the Post Only instruction, 
Order 4 posts and displays on the EDGX Book at $10.01. Since there is 
displayed interest now resting on the same side of the order book, 
Order 5 is eligible for execution on entry at the midpoint price of 
$10.005--i.e., one-half minimum price variation better than Order 4. At 
the midpoint of the NBBO, a Retail Priority Order subject to Display-
Price Sliding that is willing but unable to display at or better than 
the execution price would have priority over other orders. As a result, 
Order 5 would first trade with Order 2 for 100 shares @$10.005. Non-
Retail Priority Orders with Display-Price Sliding would be next in 
priority, and Order 5 would therefore next trade 100 shares @$10.005 
with Order 1. Finally, Order 5 would trade the remaining 300 shares 
@10.005 with Order 2. Order 3 would not receive an execution since its 
ranked price of $10.005 is worse than the ranked price of Orders 1 and 
2, which are both ranked at the locking price of $10.01.\29\
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    \29\ Pursuant to EDGA Rule 11.9(a)(1), the best-priced orders to 
buy or sell have priority on the EDGA Book in all cases. Although 
executable at the midpoint, Orders 1 and 2 are the highest-priced 
buy orders based on the $10.01 ranked price. As such, the full size 
of those orders would trade before orders that are both ranked and 
executable at the midpoint.
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Retail Attribution
    A Retail Member Organization on EDGX has the option of designating 
Retail Orders to be identified as such on the EDGX Book Feed,\30\ which 
may increase potential execution opportunities for that order. Today, 
pursuant to EDGX Rule 11.21(f), this designation may be made on either 
an

[[Page 32812]]

order-by-order or port-by-port basis,\31\ thereby giving members 
flexibility in how they would like their Retail Orders attributed on 
the Exchange. To support the introduction of retail priority, the 
Exchange proposes to provide that Retail Priority Orders will always be 
designated as such on the EDGX Book Feed--i.e., Retail Priority Orders 
would be identified as having been entered with a priority 
designation.\32\ Retail Orders that are not designated as Retail 
Priority Orders could continue to be attributed, or not, at the 
discretion of the RMO entering the order. Although RMOs have the choice 
to determine which Retail Orders would be marked as retail on market 
data, the Exchange believes that it is important to ensure that Retail 
Priority Orders would be attributable as priority eligible. Designating 
Retail Priority Orders on the EDGX Book Feed will increase transparency 
by informing market participants when there is priority eligible retail 
investor interest available to trade on the Exchange, thereby allowing 
market participants to make informed routing decisions, including the 
decision to route contra-side interest to trade with such orders. Based 
on the Exchange's experience with Retail Order attribution, this 
approach has the potential to increase execution opportunities for 
Retail Priority Orders (and other non-marketable orders) by encouraging 
additional order flow to be routed to the Exchange to trade with 
resting Retail Priority Orders.\33\
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    \30\ See EDGX Rule 13.8.
    \31\ A Retail Member Organization that instructs the Exchange to 
identify all its Retail Orders as Retail on a Retail Order Port is 
able to override such setting and designate any individual Retail 
Order from that port as Attributable or as Non-Attributable, as set 
forth in Rule 11.6(a). See EDGX Rule 11.21(f).
    \32\ The retail indicator on the EDGX Book Feed would indicate 
that the order is a Retail Priority Order and would not provide the 
market participant identifier (``MPID'') of the entering firm. 
Members may separately include an Attributable instruction on their 
orders pursuant to Rule 11.6(a) if they would also like MPID 
attribution.
    \33\ Prior to the original introduction of retail attribution, 
the Exchange conducted a study that found that Retail Orders 
received an 18% higher execution rate when members used Attributable 
Orders to include their MPID in the published quote on the EDGX Book 
Feed. See Securities Exchange Act Release No. 72016 (April 24, 
2014), 79 FR 24463 (April 30, 2014) (SR-EDGX-2014-13).
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    In addition, since only Retail Priority Orders would be required to 
be attributed, RMOs would retain the option of not attributing Retail 
Orders entered into the EDGX Book. While Retail Orders not entered with 
the Retail Priority Order designation would not be eligible for 
priority, they would retain all other benefits associated with Retail 
Orders today, including the materially enhanced rebates that are made 
available to such orders.\34\ The purpose of requiring attribution of 
Retail Priority Orders is, first and foremost, to ensure that market 
participants can ascertain their priority on the order book. Although 
the Exchange believes that RMOs are comfortable attributing their 
orders, if a specific RMO would prefer not to have one or more of their 
orders attributed, the member would be able to choose not to enter such 
orders as Retail Priority Orders without losing any of the benefits 
that they are provided today. Customer indicators are widely-used in 
the options industry, and the Exchange believes that they would be 
equally appropriate on EDGX with the introduction of retail priority.
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    \34\ The equities industry is highly competitive, and 
competition for retail order flow is particularly fierce as the 
equities exchanges compete vigorously with each other, and with 
wholesale market makers that execute this order flow off-exchange. 
As a result, the Exchange provides a rebate of $0.0032 per share to 
all Retail Orders. This rebate applies irrespective of whether the 
RMO attributes Retail Orders on the EDGX Book Feed.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b) of the Act,\35\ in general, and 
Section 6(b)(5) of the Act,\36\ in particular, in that it is designed 
to remove impediments to and perfect the mechanism of a free and open 
market and a national market system, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest and not to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \35\ 15 U.S.C. 78f(b).
    \36\ 15 U.S.C. 78f(b)(5).
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    The Commission has consistently emphasized the need to ensure that 
the U.S. capital markets are structured with the interests of retail 
investors in mind, and recently highlighted its focus on the ``long-
term interest of Main Street Investors'' as the agency's number one 
strategic goal for fiscal years 2018 to 2022.\37\ The Exchange believes 
that retail priority is consistent with the goals of the Commission to 
ensure that the equities markets continue to serve the needs of the 
investing public. Specifically, introducing retail priority would 
protect investors and the public interest by giving retail investors 
the tools needed to compete for executions on non-marketable order flow 
submitted to a national securities exchange. The Exchange is committed 
to innovation that improves the quality of the equities markets, and 
believes that retail priority may increase the attractiveness of the 
Exchange for the execution of orders submitted on behalf of the 
millions of ordinary investors that rely on these markets for their 
investment needs.
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    \37\ See Commission Strategic Plan, supra note 4.
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    Although the Commission has approved other allocation methodologies 
for equities trading,\38\ most equities exchanges, including EDGX, 
continue to determine priority based on a price/display/time allocation 
model today. This has contributed to deep and liquid markets for equity 
securities as liquidity providers compete to be the first to establish 
a particular price. At the same time, ordinary investors may not be 
able to compete with market makers and other automated liquidity 
providers to be the first to set a new price. Importantly, retail 
investors, in contrast to their professional counterparts, tend to have 
longer investment time horizons and are not in the business of 
optimizing queue placement under a time based allocation model. Thus, 
in order to facilitate the needs of these ordinary investors, the 
Exchange believes that an alternative approach is needed.
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    \38\ Nasdaq PSX, for example, operates with a price setter pro 
rata model that rewards liquidity providers that set the best price 
and then rewards other market participants that enter larger sized 
orders. See Securities Exchange Act Release No. 72250 (May 23, 
2014), 79 FR 31147 (May 30, 2014) (SR-Phlx-2014-24).
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    The proposed introduction of retail priority is designed, first and 
foremost, to benefit retail investors by increasing both the likelihood 
and speed with which their non-marketable orders are executed. Unlike 
marketable retail order flow that is routinely executed in full on 
entry at the national best bid or offer or better, non-marketable 
retail order flow has to compete for execution with orders entered by 
sophisticated market participants that may be quicker to establish a 
new price. As shown in the chart below,\39\ the Exchange has found that 
in 2018, of volume executed from retail limit orders, 28.3% joined the 
national best bid or offer (``NBBO'') on entry, 17.8% were priced 
better than the inside, and 49.4% were priced worse than the inside.
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    \39\ Based on Retail Orders entered by members that have 
completed a retail attestation.

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[[Page 32813]]

[GRAPHIC] [TIFF OMITTED] TN09JY19.000

    Although potentially beneficial for all Retail Priority Orders that 
do not trade immediately on entry, the Exchange believes that retail 
priority would be particularly beneficial to Retail Priority Orders 
that join the NBBO, as there would often already be a queue at this 
price. Introducing retail priority would thus give retail investors the 
ability to compete for an execution for these orders, and may therefore 
improve trading outcomes. As such, the Exchange believes that the 
proposed rule change is consistent with the goals of the Exchange, and 
of the Commission, to ensure that market structure evolves in ways that 
protect ordinary investors that participate in the capital markets. 
Furthermore, since retail priority is designed to improve trading 
outcomes for ordinary investors, the Exchange also believes that it may 
encourage retail brokers to route additional non-marketable retail 
order flow to the EDGX Book, which may broaden execution opportunities 
for other market participants. If successful in attracting retail order 
flow to the Exchange, the proposed rule change would benefit market 
participants by increasing the diversity of order flow with which they 
can interact on a national securities exchange, thereby increasing 
order interaction and contributing to price formation.
    Giving queue priority to ordinary investors is not a novel concept 
in the securities markets. In fact, customer priority has a long 
tradition in the options market where orders entered on behalf of non-
broker dealer public customers have historically been afforded priority 
over orders submitted by registered broker dealers. Today, most options 
exchanges, including the Exchange's equity options platform (``EDGX 
Options''),\40\ employ a customer priority execution algorithm where 
orders submitted by a subset of public customers with more limited 
trading activity (i.e., ``Priority Customers'') \41\ are provided order 
book priority ahead of orders submitted by broker-dealers or other 
market professionals at the same price. This allocation model, which 
was first introduced by the International Securities Exchange LLC 
(``ISE'') in its current retail focused form a decade ago,\42\ ensures 
that orders from Priority Customers are executed ahead of similarly 
priced interest from sophisticated market participants. The Exchange 
believes that the time has come to introduce a similar concept for the 
equities market in order to facilitate the needs of retail investors 
that increasingly rely on these markets.
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    \40\ See EDGX Rule 21.8(d)(1).
    \41\ The term ``Priority Customer'' refers to any person or 
entity that is not a broker or dealer in securities and does not 
otherwise qualify as a ``Professional'' by virtue of placing more 
than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s). See e.g., EDGX 
Rules 16.1(a)(46),(47).
    \42\ See Securities Exchange Act Release No. 59287 (January 23, 
2009), 74 FR 5694 (January 30, 2009) (SR-ISE-2006-26).
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    Similar to the options market Priority Customer definition, the 
Exchange proposes to introduce a new definition of ``Retail Priority 
Orders'' that would allow the Exchange to differentiate between more 
and less active retail investors. Although the Exchange currently has a 
robust regulatory program for Retail Orders that includes a number of 
safeguards to prevent misuse,\43\ some equities market participants 
have expressed concerns that the current definition of Retail Order 
could provide market structure advantages to a subset of investors that 
are more akin to market professionals. The Exchange believes that 
limiting retail priority to Retail Orders that are entered on behalf of 
less active investors would alleviate any potential concerns while 
ensuring that retail investors would be able to reap the proposed 
priority benefits. As such, Retail Orders entered on the EDGX Book 
would be priority eligible only if the end investor submits fewer than 
390 orders per day on average, or the equivalent of one order per 
minute during regular trading hours. The Exchange believes that this 
approach is consistent with the public interest and the protection of 
investors as an investor that enters more than one order per minute is 
effectively engaged in active trading activity that is more akin to a 
professional trader. A similar approach is used to differentiate 
between Priority and Professional Customers in the options industry 
today. Thus, identifying Retail Priority Orders based on the average 
number of orders entered for a beneficial account

[[Page 32814]]

is both a familiar and appropriately objective approach that would 
reasonably distinguish between ordinary retail investors from more 
active traders that may compete with market professionals.
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    \43\ The current Retail Order definition is enforced through an 
established process for approving the RMOs that are permitted to 
enter Retail Orders; an attestation that such RMOs must provide 
about the retail quality of their order flow; policies and 
procedures to ensure the effectiveness of that attestation; 
surveillance conducted by Exchange staff; and an exam process 
implemented by the Financial Industry Regulatory Authority.
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    The Commission has approved other equities proposals to introduce 
meaningful market structure benefits for retail investors in recent 
years. For example, in 2012, the Commission approved proposals filed by 
the New York Stock Exchange LLC (``NYSE'') and its affiliate NYSE Amex 
LLC (``Amex'') to introduce retail price improvement programs.\44\ 
Those programs were designed to provide price improvement opportunities 
for retail investors on a national securities exchange by allowing 
liquidity providers to give sub-penny price improvement to their orders 
pursuant to an exemption granted from Rule 612 of Regulation NMS. 
Similar programs now exist on a number of exchanges, including the 
Exchange's affiliate, Cboe BYX Exchange, Inc. (``BYX''),\45\ and have 
provided millions of dollars of price improvement to ordinary 
investors.\46\ When approving such retail price improvement programs on 
a pilot basis, the Commission consistently found that the pilots were 
consistent with the Act because they were ``reasonably designed to 
benefit retail investors'' and could ``promote competition for retail 
order flow among execution venues.'' The benefits to retail investors 
in the form of meaningful price improvement opportunities similarly 
animated the Commission's recent approval of the NYSE retail liquidity 
program on a permanent basis.\47\ Although retail priority is designed 
to increase fill rates and speed of execution rather than price 
improvement, the Exchange believes that it could have a similarly 
meaningful impact on execution quality for ordinary investors that 
trade in the public market. Furthermore, retail priority would 
complement existing retail price improvement programs by offering 
market structure benefits to non-marketable retail order flow that 
cannot participate in those programs.
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    \44\ See Securities Exchange Act Release No. 67347 (July 3, 
2012), 77 FR 40673 (July 10, 2012) (SR-NYSE-2011-55; SR-NYSEAmex-
2011-84).
    \45\ See Securities Exchange Act Release No. 68303 (November 27, 
2012), 77 FR 71652 (December 3, 2012) (SR-BYX-2012-019). Nasdaq BX 
Inc. (``BX'') similarly operates its own retail price improvement 
program. See Securities Exchange Act Release No. 73702 (November 28, 
2014), 79 FR 72049 (December 4, 2014) (SR-BX-2014-048).
    \46\ See, e.g., Securities Exchange Act Release No. 83831 
(August 13, 2018), 83 FR 41128 (August 17, 2018) (SR-CboeBYX-2018-
014).
    \47\ See Securities Exchange Act Release No. 85160 (February 15, 
2019), 84 FR 5754 (February 22, 2019) (SR-NYSE-2018-28).
---------------------------------------------------------------------------

    Similarly, in 2017, the Commission approved a proposed rule change 
by The Nasdaq Stock Market LLC (``Nasdaq'') to introduce the ``Extended 
Life Priority Order Attribute'' for Retail Orders that were willing to 
remain on the book unaltered for a period of one second (``Retail 
Extended Life Order'' or ``Retail ELO'').\48\ As proposed, displayed 
orders entered on Nasdaq with the Retail ELO attribute were to be 
provided a higher priority than other orders resting on the Nasdaq 
order book. When the Commission approved this proposed rule change, it 
opined that the proposal ``should benefit retail investors by providing 
enhanced order book priority to retail order flow that is not 
marketable upon entry,'' and that ``[s]uch enhanced order book priority 
could result in additional or more immediate execution opportunities on 
the [e]xchange for resting retail orders that otherwise would be 
farther down in the order book queue, and thereby enhance execution 
opportunities for retail investors.'' \49\ The same is true of the 
Exchange's retail priority proposal, which would provide similar 
benefits to retail investors without the additional complexity of 
requiring that the order be willing to exist unaltered on the order 
book for a specified period of time. While the Exchange believes that 
the majority of retail investors have a longer investment time horizon 
and therefore do not actively manage their trading interest at sub-
second time intervals, the Exchange believes that giving retail 
priority broadly to orders entered on behalf of less active retail 
investors may be more effective in encouraging retail brokers to route 
order flow to the Exchange.
---------------------------------------------------------------------------

    \48\ See Securities Exchange Act Release No. 81097 (July 7, 
2017), 82 FR 32386 (July 13, 2017) (SR-NASDAQ-2016-161) (``Retail 
ELO Approval''). Nasdaq ultimately decided not to implement Retail 
ELO following Commission approval, and has since introduced a 
``Midpoint Extended Life Order'' that is not limited to retail 
participation.
    \49\ Id.
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    The Exchange also believes that it is appropriate and not unfairly 
discriminatory to provide enhanced priority benefits solely to retail 
investor orders as the proposal is designed specifically to ensure that 
retail investors can compete for executions with sophisticated market 
participants. In today's highly automated and efficient market, retail 
investors have a more limited opportunity to compete for an execution 
based purely on the time an order is placed. While sophisticated, 
latency sensitive market participants can compete to be the first at 
any particular price, retail investors with longer investment horizons 
cannot compete in the same fashion. The proposed introduction of retail 
priority would ensure that non-marketable Retail Priority Orders get 
filled first when there is available contra-side interest, and thereby 
improve investment outcomes for ordinary investors. The Commission has 
consistently held that it is consistent with the Act to offer certain 
advantages to retail customers,\50\ and the proposal follows a line of 
other initiatives to improve the retail investor experience in the 
public markets. The Exchange believes that it is an important goal of 
both the Exchange and the Commission to ensure that our market 
structure continues to benefit retail investors by providing the tools 
that they need to invest in the capital markets. Although there are 
many ways to achieve that goal, the Exchange believes that doing so 
requires innovation in how retail investor orders are handled on the 
national securities exchanges in order to attract that order flow back 
to the displayed market.
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    \50\ Where the interest of long-term investors, such as the 
retail investors whose experience this filing is attempting to 
improve, diverges from that of short-term professional traders, the 
Commission ``repeatedly has emphasized that its duty is to uphold 
the interests of long-term investors.'' See Securities Exchange Act 
Release No. 61358 (January 14, 2010), 75 FR 3593 (January 21, 2010) 
(File No. S7-02-10) (``Concept Release on Equity Market 
Structure'').
---------------------------------------------------------------------------

    The Exchange also believes that it is consistent with the public 
interest and the protection of investors to provide retail priority 
exclusively to those orders that contain a Displayed or Reserve 
instruction. The goals of the proposed rule change are twofold. First, 
the proposed change is designed to facilitate better trading outcomes 
for retail investors, which may encourage retail brokers to send 
additional retail order flow to the Exchange. Second, the proposed 
change is designed to encourage additional displayed retail liquidity, 
which could contribute to price discovery and encourage additional 
order flow and liquidity from other market participants. Although the 
first purpose could be achieved without limiting retail priority to 
orders that contain a Displayed component at a particular price, the 
second is only achieved when such orders are displayed to the broader 
market. For that reason, recent priority enhancements for retail 
investors, such as Nasdaq's Retail ELO, have also focused on displayed 
interest that could improve quote quality and contribute to a vibrant 
market.

[[Page 32815]]

    Finally, the Exchange believes that it is consistent with just and 
equitable principles of trade to require that Retail Priority Orders be 
attributable as this would allow other market participants to gauge the 
available size in orders that would be eligible for retail priority. 
Although RMOs would not have the option to submit eligible Retail 
Priority Orders as non-attributable, the transparency achieved by so 
designating these orders is important to the proper functioning of a 
market where such orders would be eligible for priority. As explained 
in the purpose section of this proposed rule change, RMOs would retain 
the ability to enter an order without a priority designation, and in 
doing so would ultimately retain the ability to control which orders 
are publicly attributed to retail investors. Priority Customer orders 
entered on the EDGX Options platform are similarly designated as such 
on the Exchange's market data feeds today, and the Exchange believes 
that this has contributed positively to the overall market environment.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Rather, the proposed rule 
change is designed to increase inter-market competition for retail 
order flow, and intra-market competition for orders as market 
participants compete to transact with retail investor orders entered on 
the EDGX Book. The proposed rule change represents an effort by the 
Exchange to enhance the ability for retail investors to participate 
effectively on a national securities exchange without unnecessarily 
burdening competition. Although retail priority would be limited to 
retail investors, the Exchange does not believe that this produces an 
unnecessary burden on competition as these changes are necessary to 
attract retail order flow to a national securities exchange where they 
may interact with a wide range of market participants. If successful, 
the Exchange believes that retail priority would enhance competition by 
encouraging retail brokers to route increased order flow to the public 
markets, creating a more vibrant and competitive trading environment 
that benefits all market participants.

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

    No comments were solicited or received on the proposed rule change.

III. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeEDGX-2019-012 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Act \51\ to determine whether the proposed rule 
change should be approved or disapproved. Institution of such 
proceedings is appropriate at this time in view of the legal and policy 
issues raised by the proposed rule change. 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 comments 
on the proposed rule change.
---------------------------------------------------------------------------

    \51\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\52\ the Commission is 
providing notice of the grounds for disapproval under consideration. 
The Commission is instituting proceedings to allow for additional 
analysis of the proposed rule change's consistency with Section 6(b)(5) 
of the Act, which requires, among other things, that the rules of a 
national securities exchange be ``designed to perfect the operation of 
a free and open market and a national market system'' and ``protect 
investors and the public interest,'' and not be ``designed to permit 
unfair discrimination between customers, issuers, brokers, or 
dealers,'' \53\ and Section 6(b)(8) of the Act, which requires that the 
rules of a national securities exchange ``not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of [the Act].'' \54\
---------------------------------------------------------------------------

    \52\ Id.
    \53\ 15 U.S.C. 78f(b)(5).
    \54\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, 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 proposal is 
consistent with Section 6(b)(5), 6(b)(8) or any other provision of the 
Act, or the rules and 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 views, data, and arguments, 
the Commission will consider, pursuant to Rule 19b-4, any request for 
an opportunity to make an oral presentation.\55\
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    \55\ Section 19(b)(2) of the Act, as amended by the Securities 
Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants 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 Act Amendments of 1975, Senate Comm. on 
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st 
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposal should be approved or 
disapproved by July 30, 2019. Any person who wishes to file a rebuttal 
to any other person's submission must file that rebuttal by August 13, 
2019. 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. 1,\56\ in addition to any other comments they 
may wish to submit about the proposed rule change.
---------------------------------------------------------------------------

    \56\ See supra note 6.
---------------------------------------------------------------------------

    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-2019-012 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-2019-012. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written

[[Page 32816]]

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 Number SR-
CboeEDGX-2019-012 and should be submitted on or before July 30, 2019. 
Rebuttal comments should be submitted by August 13, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\57\
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    \57\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-14490 Filed 7-8-19; 8:45 am]
BILLING CODE 8011-01-P