[Federal Register Volume 86, Number 1 (Monday, January 4, 2021)]
[Notices]
[Pages 158-159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-29021]



[[Page 158]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90804; File Nos. SR-CboeBYX-2020-032, SR-CboeBZX-2020-
083, SRCboeEDGA-2020-029, SR-CboeEDGX-2020-055]


Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Cboe BZX 
Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.; 
Order Granting Approval of Proposed Rule Changes To Revise Each 
Exchange's Process for Re-Opening Trading of NYSE-Listed Securities 
Outside of Regular Trading Hours

December 28, 2020.

I. Introduction

    On November 5, 2020, Cboe BYX Exchange, Inc. (``CboeBYX''), Cboe 
BZX Exchange, Inc. (``CboeBZX''), Cboe EDGA Exchange, Inc. 
(``CboeEDGA'') and Cboe EDGX Exchange, Inc. (``CboeEDGX,'' and 
collectively, the ``Exchanges'') 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\ proposed rule changes to revise each Exchange's process 
for re-opening trading of a security listed on the New York Stock 
Exchange LLC (``NYSE'') outside of regular trading hours. The proposed 
rule changes were published for comment in the Federal Register on 
November 19, 2020.\3\ The Commission received no comments on the 
proposed rule changes. This order approves the proposed rule changes.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release Nos. 90421 (Nov. 13, 
2020), 85 FR 73826 (Nov. 19, 2020) (SR-CboeBYX-2020-032); 90420 
(Nov. 13, 2020), 85 FR 73832 (Nov. 19, 2020) (SR-CboeBZX-2020-083); 
90419 (Nov. 13, 2020), 85 FR 73829 (Nov. 19, 2020) (SR-CboeEDGA-
2020-029); 90422 (Nov. 13, 2020), 85 FR 73816 (Nov. 19, 2020) (SR-
CboeEDGX-2020-055). The proposed rule changes are nearly identical.
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II. Description of the Proposed Rule Changes

    Outside of regular trading hours, the Exchanges' operate extra-
hours sessions from 7:00 a.m. to 8:00 a.m. Eastern Time (``ET''),\4\ 
8:00 a.m. to 9:30 a.m. ET,\5\ and from 4:00 p.m. to 8:00 p.m. ET.\6\ 
The Exchanges have proposed to change the manner by which they re-open 
trading of an NYSE-listed security on their respective markets if NYSE 
lifts the halt, suspension, or pause in that security during an extra-
hours session.\7\ Under the Exchanges' current rules and procedures, 
the only way to re-open trading in an extra-hours session of an NYSE-
listed security that has been halted, suspended, or paused by NYSE is 
for Exchange staff to manually re-open the market for that security.\8\ 
The Exchanges have represented that, under their current procedures, 
Exchange staff would have the authority to re-open their markets for 
trading an NYSE-listed security during an extra-hours session if two 
conditions are met: (1) NYSE lifts the halt, suspension, or pause in 
that security; and (2) one or more other exchanges resumes quoting the 
security.\9\ Furthermore, under current procedures, Exchange staff 
would ascertain whether these two conditions had been met and, if so, 
re-open the market manually. The Exchanges believe that this manual 
process is inefficient, and state that members have requested that the 
Exchanges replace this process with a more efficient automated process.
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    \4\ See CboeBYX Rule 1.5(ee); CboeBZX Rule 1.5(ee); CboeEDGA 
Rule 1.5(ii); CboeEDGX Rule 1.5(ii).
    \5\ See CboeBYX Rule 1.5(r); CboeBZX Rule 1.5(r); CboeEDGA Rule 
1.5(s); CboeEDGX Rule 1.5(s).
    \6\ See CboeBYX Rule 1.5(c); CboeBZX Rule 1.5(c); CboeEDGA Rule 
1.5(r); CboeEDGX Rule 1.5(r).
    \7\ If NYSE lifts the halt, suspension, or pause in one of its 
listed securities during regular trading hours, existing rules of 
the Exchanges--which the Exchanges are not proposing to change--
would apply. See CboeBYX Rule 11.23(e)(1); CboeBZX Rule 11.24(e)(1); 
CboeEDGA Rule 11.7(e)(1); CboeEDGX Rule 11.7(e)(1).
    \8\ See CboeBYX Rule 11.23(e)(2); CboeBZX Rule 11.24(e)(2); 
CboeEDGA Rule 11.7(e)(2); CboeEDGX Rule 11.7(e)(2).
    \9\ See Email from Adrian Griffiths, Assistant General Counsel, 
Cboe Global Markets, to Michael Gaw, Kathleen Gross, and Marlene 
Olsen, Division of Trading and Markets, Commission (Dec. 14, 2020).
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    The Exchanges have proposed to reconfigure their systems such that, 
when NYSE has halted, suspended, or paused trading in one of its listed 
securities and subsequently lifts the halt, suspension, or pause during 
an extra-hours session, the Exchanges would re-open their respective 
markets in that security automatically when those two conditions are 
present, thereby eliminating the need for manual intervention. The 
Exchanges are not proposing any changes to the conditions for re-
opening their markets, only the mechanism for doing so. The new 
automated procedures would automatically resume trading after one 
second has passed following the Exchanges' receipt of the first NBBO 
following the resumption of trading after the halt, suspension, or 
pause. This change would allow each Exchange to avoid the need for its 
staff to monitor for resumption messages, and would allow members' 
orders to be automatically reflected in the market, while continuing to 
ensure that the Exchanges' re-opening is tied to the existence of a 
market in the security on one or more national securities exchanges.
    If there is no available NBBO in the security, the proposed 
automated procedures would not resume trading on the Exchanges. 
However, each Exchange would retain the ability to manually resume 
trading at its discretion pursuant to an existing rule.\10\ Each 
Exchange also has proposed to amend the existing rule to specifically 
provide that that discretion exists only when a security has not 
otherwise been re-opened for trading on the Exchange pursuant to the 
new automated procedures. The Exchanges believe that modifying the 
rules in this manner would increase transparency by specifically 
identifying the times when this discretion is not relevant due to the 
fact that the Exchange has successfully re-opened the security using 
its automated procedures. The Exchanges have represented that these 
additional changes would not substantively modify the scope of the 
discretion provided under the existing rules.
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    \10\ See CboeBYX Rule 11.23(e)(2); CboeBZX Rule 11.24(e)(2); 
CboeEDGA Rule 11.7(e)(2); CboeEDGX Rule 11.7(e)(2) (providing that, 
where neither of the conditions required for re-opening has 
occurred, the security may be opened for trading at the discretion 
of the Exchange).
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
changes are consistent with the requirements of the Act and the rules 
and regulations thereunder applicable to a national securities 
exchange.\11\ In particular, the Commission finds that the proposed 
rule changes are consistent with Section 6(b)(5) of the Act,\12\ which 
requires, among other things, that the rules of a national securities 
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 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.
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    \11\ In approving these proposed rule changes, the Commission 
has considered the proposed rules' impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(5).
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    As noted above, the Exchanges have proposed to reconfigure their 
systems such that, when NYSE has halted, suspended, or paused trading 
in one of its listed securities and subsequently

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lifts the halt, suspension, or pause during an extra-hours session, the 
Exchanges would re-open their markets in that security automatically 
when the two aforementioned conditions are met, thereby eliminating the 
need for manual intervention. The Exchanges have narrowly tailored this 
new automated process to be invoked only when both conditions are met. 
The Exchanges have stated that, currently, Exchange personnel would 
confirm that the security is no longer halted and identify that there 
are quotes in the security available on other exchanges, and that the 
Exchanges believe that an automated process would be more consistent 
and reliable. By setting forth a clear, rules-based approach to re-
opening trading in a narrow set of circumstances, the proposals are 
reasonably designed to increase the consistency and efficiency of the 
re-opening process in these circumstances. Therefore, the Commission 
finds that the proposals are consistent with the Act. As noted above, 
the Commission received no comments opposing the proposed rule changes.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule changes (SR-CboeBYX-2020-032, SR-
CboeBZX-2020-083, SR-CboeEDGA-2020-029, and SR-CboeEDGX-2020-055) be, 
and hereby are, approved.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-29021 Filed 12-31-20; 8:45 am]
BILLING CODE 8011-01-P


