[Federal Register Volume 85, Number 125 (Monday, June 29, 2020)]
[Notices]
[Pages 38958-38960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13870]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89126; File No. SR-CboeBZX-2020-050]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Content of the Cboe One Feed Under Rule 11.22(j) to Identify the 
Primary Listing Market's Official Opening and Closing Price

June 23, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 10, 2020, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Exchange 
filed the proposal as a ``non-controversial'' proposed rule change 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (the ``Commission'') a 
proposed rule change to amend the content of the Cboe One Feed under 
Rule 11.22(j) to identify the primary listing market's official opening 
and closing price. The text of the proposed rule change is provided in 
Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend the content of the Cboe One Feed 
under Rule 11.22(j) to identify the primary listing market's official 
opening and closing price. Additionally, the Exchange proposes to amend 
Rules 11.22(i) and (j) to make an administerial change so that the 
Rules reference Cboe rather than Bats.
    The Cboe One Feed is a data feed that disseminates, on a real-time 
basis, the aggregate best bid and offer (``BBO'') of all displayed 
orders for securities traded on BZX and its affiliated exchanges.\5\ 
Among other things, the Cboe One Feed also includes consolidated volume 
for all listed equity securities regardless of where the transaction 
was executed and the Cboe One Opening Price and the Cboe One Closing 
Price.\6\
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    \5\ BZX's affiliated exchanges are the Cboe BYX Exchange, Inc. 
(``BYX''), Cboe EDGA Exchange, Inc. (``EDGA''), and Cboe EDGX 
Exchange, Inc. (``EDGX'', and together with BZX, BYX, and EDGA, the 
``Cboe Equity Exchanges''). See Securities Exchange Act Release No. 
73918 (December 23, 2014), 79 FR 78920 (December 31, 2014) (File 
Nos. SR-EDGX-2014-25; SR-EDGA-2014-25; SR-BATS-2014-055; SR-BYX-
2014-030) (Notice of Amendments No. 2 and Order Granting Accelerated 
Approval to Proposed Rule Changes, as Modified by Amendments Nos. 1 
and 2, to Establish a New Market Data Product called the Cboe 
(formerly Bats) One Feed) (``Cboe One Approval Order'').
    \6\ For securities listed on Cboe BZX Exchange, Inc. (``BZX''), 
the Cboe One Opening Price shall be the BZX Official Opening Price 
as defined in BZX Rule 11.23(a)(5) and the Cboe One Closing Price 
shall be the BZX Official Closing Price as defined in BZX Rule 
11.23(a)(3). For securities not listed on BZX, the Cboe One Opening 
Price shall be the first last sale eligible trade that occurred on 
the Exchange or any of its affiliates after 9:30 a.m. Eastern Time, 
and the Cboe One Closing Price shall be the final last sale eligible 
trade to occur on the Exchange or any of its affiliates prior to 
4:00 p.m. Eastern Time. See Exchange Rule 11.22(j).

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[[Page 38959]]

    Now, in addition to the information currently provided in the Cboe 
One Feed, the Exchange is proposing to include the primary listing 
market's official opening and closing price for all listed equity 
securities as obtained directly from the securities information 
processors. Such information would supplement the existing consolidated 
volume and Cboe One Opening/Closing Price information included in the 
Cboe One Feed by providing additional consolidated trade information. 
The official opening and closing price for all listed equity securities 
would be disseminated via the Cboe One Feed after the Consolidated Tape 
Association (``CTA'') and Unlisted Trading Privileges (``UTP'') Plan 
Securities Information Processor (``SIP'') delay period, which is 
currently 15 minutes.
    Additionally, the Exchange proposes to amend Rules 11.22(i) and (j) 
to eliminate any reference to Bats and replace such references with 
Cboe.
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.\7\ Specifically, the 
Exchange believes the proposed rule changes are consistent with the 
Section 6(b)(5) \8\ 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. The Exchange 
also believes that the proposed rule changes are consistent with 
Section 11(A) of the Act \9\ in that it supports (1) fair competition 
among brokers and dealers, among exchange markets, and between exchange 
markets and markets other than exchange markets and (2) the 
availability to brokers, dealers, and investors of information with 
respect to quotations for and transactions in securities. Furthermore, 
the proposed rule changes are consistent with Rule 603 of Regulation 
NMS,\10\ which provides that any national securities exchange that 
distributes information with respect to quotations for or transactions 
in an NMS stock do so on terms that are not unreasonably 
discriminatory. In adopting Regulation NMS, the Commission granted 
self-regulatory organizations and broker-dealers increased authority 
and flexibility to offer new and unique market data products to the 
public. It was believed that this authority would expand the amount of 
data available to consumers, and also spur innovation and competition 
for the provision of market data.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78k-1.
    \10\ See 17 CFR 242.603.
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    The proposed change to Exchange Rule 11.22(j) is designed to 
promote just and equitable principles of trade and remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system by identifying the primary listing market's official 
opening and closing price. Significant volumes typically occur in the 
primary listing market auctions, and the prices derived from those 
auctions are used as a reference price for various other instruments, 
including options and exchange-traded products. Therefore, official 
opening and closing price information would provide meaningful 
information to investors. The Exchange also believes this proposal is 
consistent with Section 6(b)(5) of the Act because it protects 
investors and the public interest and promotes just and equitable 
principles of trade by providing investors with new options for 
receiving such information. The Exchange also notes that the primary 
listing market's official opening and closing price is currently 
included in a competing market data products offered by the New York 
Stock Exchange (``NYSE'').\11\ Therefore, the Exchange believes the 
proposed rule change removes impediments to and perfects the mechanism 
of a free and open market and a national market system, and, in 
general, protects investors and the public interest as it would provide 
an additional avenue for investors to receive this information from a 
competing product. The proposal would not permit unfair discrimination 
because the primary listing market's official opening and closing price 
will be available to all of the Exchange's customers and market data 
vendors on an equivalent basis. In addition, any customer that wishes 
to receive this information via a different source will be able to do 
so.
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    \11\ Specifically, the NYSE BQT (Best Quote and Trade) 
proprietary feed includes the primary listing market's official 
opening and closing price. See https://www.nyse.com/publicdocs/nyse/data/NYSE_BQT_Client_Specification_v2.3a.pdf.
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    The proposed administerial amendments to Exchange Rules 11.22(i) 
and (j) are designed remove impediments to and perfect the mechanism of 
a free and open market by accurately referencing Cboe rather than Bats. 
Further, a consistent reference to Cboe rather than Bats will help 
avoid potential investor confusion.

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

    The Exchange does not believe that the proposed change to Rule 
11.22(j) will impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. Rather, the 
Exchange believes that the proposed rule change will enhance 
competition because it would enable the Exchange to include primary 
listing market's official opening and closing price as part of the Cboe 
One Feed, thereby enabling it to better compete with similar market 
data products currently offered by NYSE that include such 
information.\12\ The Exchange is not the exclusive distributor of the 
primary listing market's official opening and closing price, and a 
vendor seeking to offer a similar product that includes this 
information would be able to do so on the same terms as the Exchange. 
Specifically, a competing vendor could receive the primary listing 
market's official opening and closing price from the securities 
information processors and include that information as part of their 
market data products to be disseminated to customers pursuant to the 
same terms and policies as the Exchange.\13\ Therefore, the Exchange 
believes the inclusion of the primary listing market's official opening 
and closing price in the Cboe One Feed would not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act.
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    \12\ Id.
    \13\ See CTA Consolidated Volume Display Policy with FAQ, supra 
note 6.
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    The Exchange does not believe the proposed administerial changes to 
Exchange Rules 11.22(i) and (j) will have any impact on competition as 
it is merely designed to consistently and accurately refer to Cboe 
rather than Bats.

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.

[[Page 38960]]

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

    Because the foregoing 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, it 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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    \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 a self-regulatory organization to give the Commission 
written notice of its 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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    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-CboeBZX-2020-050 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-CboeBZX-2020-050. 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 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-CboeBZX-2020-050, and should be 
submitted on or before July 20, 2020.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13870 Filed 6-26-20; 8:45 am]
BILLING CODE 8011-01-P


