Document ID: SEC-2020-1915-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe EDGX Exchange, Inc.
Posted Date: 2020-12-01T05:00Z

[Federal Register Volume 85, Number 231 (Tuesday, December 1, 2020)]
[Notices]
[Pages 77310-77312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26406]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90509; File No. SR-CboeEDGX-2020-056]

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

November 24, 2020.
    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 November 16, 2020, Cboe EDGX Exchange, Inc. (the ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II, 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 
extend its Early Trading Session. The text of the proposed rule change 
is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to extend its Early Trading Session 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 7:00 a.m. Eastern Time (``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\ Users 
\7\ may designate when their orders are eligible for execution by 
selecting their desired Time-in-Force instruction.\8\ The proposed rule 
change amends Rule 1.5(ii), which defines the Early Trading Session, to 
allowing trading to begin at 4:00 a.m. ET. In addition to this, the 
proposed rule change amends the time when orders may start to be 
entered into the System prior to the Early Trading Session in Rule 
11.1(a)(1), from 6:00 a.m. ET to 3:30 a.m. ET. The proposed rule change 
also updates Rule 11.1(a)(1) and Rule 14.1(c)(2) to reflect the 
proposed Early Trading Session and order acceptance times, where 
applicable. Orders entered for participation in the Early Trading 
Session will continue to be handled in the same manner as they are 
today. The proposed rule change merely permits the Exchange to begin 
order acceptance and commence trading at earlier times, thereby 
providing additional time for market participants to source and access 
liquidity on the Exchange outside of Regular Trading Hours. The 
Exchange

[[Page 77311]]

therefore believes that amending Rule 1.5(ii) to extend the Exchange's 
trading hours will be benefit investors that will now be able to trade 
on the Exchange earlier in the day.
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    \3\ ``Early Trading Session'' means the time between 7:00 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).
    \7\ ``User'' means any Member or Sponsored Participant who is 
authorized to obtain access to the System pursuant to Rule 11.3. See 
Rule 1.5(ee).
    \8\ See Rule 11.8.
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    The Exchange notes that the extended Early Trading Session hours 
are consistent with the early trading session hours currently in place 
on other equities exchanges. For example, NYSE Arca Rule 7.34-E (a)(1) 
provides that NYSE Arca's early trading session begins 4:00 a.m. ET and 
concludes at the commencement of NYSE Arca's regular trading hours at 
9:30 a.m. ET, and Nasdaq Stock Market LLC (``Nasdaq'') Rule 4701(g) 
provides that Nasdaq's early trading session begins at 4:00 a.m. and 
continues until the 9:30 a.m. commencement of Nasdaq's regular trading 
hours. Additionally, NYSE Arca Rule 7.34-E(a)(1) provides that the 
exchange begins accepting orders 30 minutes before its early trading 
session (i.e., 3:30 a.m. ET).
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.\9\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \10\ 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) \11\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ Id.
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    In particular, the proposed rule change to extend the Exchange's 
Early Trading Session hours will remove impediments to and perfect the 
mechanism of a free and open market and national market system and will 
benefit investors by providing market participants with additional 
opportunities to source and access liquidity for their orders on the 
Exchange. All orders entered during the proposed acceptance period and 
extended Early Trading Session hours will continue to be handled in the 
same manner as they are today. In addition to this, the proposed rule 
change will not affect the protection of investors as it is consistent 
with early trading session hours, as well as the System acceptance 
time, already in place under the rules of other equities exchanges, as 
previously filed with the Commission. Finally, the Exchange notes that 
updating the references to Early Trading Session operation times in 
Rule 11.1 and 14.1 will also remove impediments to and perfect the 
mechanism of a free and open market and national market system and 
benefit investors because the updates ensure that the Exchange Rules 
properly reflect the proposed changes to the Early Trading Session 
hours.

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 Members will be able 
to enter orders earlier in the day for System acceptance and for 
execution in the lengthened Early Trading Session. As stated, the 
proposed rule change does not alter the manner in which a User's orders 
are handled. 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 trading hours are 
identical to those of early trading sessions currently in place on 
other equities exchanges.

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 \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ 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. The Exchange asserts that 
the proposed rule change does not introduce any new or novel issues. 
Rather, the Exchange states that it is proposing extend its Early 
Trading Session hours to the same as those on other equities exchanges. 
The Exchange represents that this proposal would not alter the manner 
in which Users' orders will be handled for acceptance or execution in 
the Early Trading Session. The Exchange further states that waiving the 
operative delay will allow it to implement these extended hours as soon 
as practicable, with a target implementation date of December 7, 2020. 
Based on the foregoing, the Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Accordingly, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ 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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[[Page 77312]]

    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-2020-056 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-2020-056. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and 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-2020-056, and should be 
submitted on or before December 22, 2020.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-26406 Filed 11-30-20; 8:45 am]
BILLING CODE 8011-01-P