[Federal Register Volume 87, Number 141 (Monday, July 25, 2022)]
[Notices]
[Pages 44174-44178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15773]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95321; File No. SR-CboeEDGX-2022-033]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Its Rules Regarding Complex Orders

July 19, 2022.
    Pursuant to the provisions of 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 July 14, 2022, Cboe EDGX Exchange, Inc. (the 
``Exchange'' or ``EDGX'') filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to 
amend its Rules regarding complex orders. 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
    Currently, the definition of complex order in Rule 21.20(a) 
provides that the term ``complex order'' means any order involving the 
concurrent purchase and/or sale of two or more different series in the 
same class (the ``legs'' or ``components'' of the complex order), for 
the same account, in a ratio equal to or greater than one-to-three 
(.333) and less than or equal to three-to-one (3.00) and for the 
purposes of executing a particular investment strategy. As such, only 
complex orders with a ratio equal to or greater than one-to-three 
(.333) and less than or equal to three-to-one (3.00) may currently be 
submitted for trading on the Exchange. The proposed rule change amends 
the definition of complex order in Rule 21.20(a) to provide that a 
``complex order'' is any order involving the concurrent purchase and/or 
sale of two or more different series in the same class (the ``legs'' or 
``components'' of the complex order), for the same account, in any 
ratio and for the purposes of executing a particular investment 
strategy. The Exchange notes that its affiliated options exchange, Cboe 
Options, recently amended its complex order rules in the same manner as 
proposed herein to permit complex orders with ratios less than one-to-
three and greater than three-to-one to be eligible for electronic 
processing.\3\ The Exchange proposes to accept complex orders with 
ratios larger than three-to-one or smaller than one-to-three for 
execution in order to provide execution opportunities for all complex 
orders, including those with investment strategies that do not fit 
within the three-to-one ratio requirement (which opportunities are 
afforded to those complex orders submitted to Cboe Options today).
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    \3\ See Securities Exchange Act Release No. 94204 (February 9, 
2022), 87 FR 8625 (February 15, 2022) (SR-CBOE-2021-046). The Cboe 
Options' filing SR-CBOE-2021-046 also amended Cboe Option's complex 
order rules to allow the minimum increment for bids and offers on 
complex orders with any ratio to be in $0.01 or greater (legs were 
already permitted to be executed in pennies on Cboe Options). The 
Exchange notes that Rule 21.20(f)(1) currently provides that the 
minimum increment for bids and offers on a complex order is $0.01, 
and the components of a complex order may be executed in $0.01 
increments, regardless of the minimum increments otherwise 
applicable to the individual components of the complex order. As a 
result, all complex orders (including those with larger ratios as 
proposed in this filing) and their legs will be able to execute in 
pennies, and all bids and offers on all complex orders (including 
those with larger ratios, as proposed) will be able to be expressed 
in a minimum increment of $0.01.
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    While the proposed rule change will allow complex orders of any 
ratio to be traded on the Exchange, the Exchange does not propose to 
extend the complex order priority in Rule 21.20(f)(2)(A) afforded to 
complex orders with ratios equal to or greater than one-to-three and 
less than or equal to three-to-one to complex orders with larger 
ratios. Instead, the proposed rule change amends Rule 21.20(f)(2)(A) to 
provide that, if a complex order has a ratio less than one-to-three 
(.333) or greater than three-to-one (3.00), the component(s) of the 
complex order for the leg(s) with a Priority Customer order at the Best 
Bid or Offer (``BBO'') must execute at a price that improves the price 
of that Priority Customer order(s) on the Simple Book (the Exchange 
notes that this proposed rule change is described below in further 
detail). The proposed rule change also makes certain nonsubstantive 
changes to the complex priority rule. The Exchange notes that execution 
of complex orders with any ratio will continue to be required [sic] at 
net prices: (i) that would cause any component of the complex strategy 
to be executed at a price of zero; (ii) worse than the Synthetic Best 
Bid or Offer (``SBBO'') or equal to the SBBO when there is a Priority 
Customer order at the SBBO (except all-or-none (``AON''); (iii) that 
would cause any component of the complex strategy to be executed at a

[[Page 44175]]

price worse than the individual component prices on the Simple Book; or 
(iv) worse than the price that would be available if the complex order 
legged into the Simple Book.
    Specifically, regarding the nonsubstantive changes to Rule 
21.20(f)(2)(A), the proposed rule change combines subparagraph (ii) 
with (v) (and renumbers the subparagraphs), as the provisions 
ultimately mean the same thing. Specifically, Rule 21.20(f)(2)(A)(ii) 
provides that the System does not execute a complex order pursuant to 
Rule 21.20 at a net price worse than the SBBO or equal to the SBBO when 
there is a Priority Customer order at the SBBO, except all-or-none 
(``AON'') complex orders may only execute at prices better than the 
SBBO. Therefore, if there is a Priority Customer Order comprising part 
of the SBBO, a complex order could only execute by improving the SBBO, 
which would require improvement of component prices. This is what 
current Rule 21.20(f)(2)(A)(v) requires. Specifically, that provision 
states that the System does not execute a complex order pursuant to 
Rule 21.20 at a net price that would cause any component of the complex 
strategy to be executed at a price ahead of a Priority Customer Order 
on the Simple Book without improving the BBO of at least one component 
of the complex strategy. Because these two provisions are interrelated, 
the Exchange believes it is appropriate to combine them into proposed 
Rule 21.20(f)(2)(A)(iv).\4\ The proposed rule change amends language in 
proposed Rule 21.20(f)(2)(A)(iv) to provide that the System does not 
execute a complex order at a net price worse than the SBBO or equal to 
the SBBO when there is a Priority Customer order on any leg comprising 
the SBBO and adds subparagraph (a) to additionally provide that if a 
complex order has a ratio equal to or greater than one-to-three (.333) 
and less than or equal to three-to-one (3.00), at least one component 
of the complex order must execute at a price that improves the BBO for 
that component, which is consistent with current functionality for 
complex orders in ratios that may currently be submitted on the 
Exchange. The proposed nonsubstantive rule changes to restructure Rule 
21.20(f)(2)(A) have no impact on complex order priority and are 
consistent with and align the Exchange's complex order priority rule 
with Cboe Options Rule 5.33(f)(2), which governs Cboe Options complex 
order priority.\5\
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    \4\ The proposed rule change makes other nonsubstantive changes 
to the sentence structure as a result of the combination of 
provisions, as well as other nonsubstantive changes to the 
formatting and paragraph structure for added clarity and consistency 
with the structure of corresponding Cboe Options Rule 5.33(f)(2).
    \5\ See Cboe Options Rule 5.33(f)(2)(A); and see Securities 
Exchange Act Release No. 95006 (May 31, 2022), 87 FR 34334 (June 6, 
2022) (SR-CBOE-2022-024).
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    Regarding the proposed rule change to incorporate complex orders 
with larger-ratios, as proposed, into the complex order priority 
provision, the proposed rule change adds subparagraph (b) to Rule 
21.20(f)(2)(A)(iv), as proposed. As described above, Rule 
21.20(f)(2)(A)(iv), as proposed, provides that the System does not 
execute a complex order at a net price worse than the SBBO or equal to 
the SBBO when there is a Priority Customer order on any leg comprising 
the SBBO, and, as proposed subparagraph (b) provides, if the complex 
order has a ratio less than one-to-three (.333) or greater than three-
to-one (3.00), the component(s) of the complex order for the leg(s) 
with a Priority Customer order at the BBO must execute at a price that 
improves the price of that Priority Customer order(s) on the Simple 
Book. As a result, to the extent a complex order with a ratio of four-
to-one (for example) is submitted for electronic execution, the complex 
order may be executed at a net debit or credit price only if each leg 
of the order betters the corresponding bid (offer) of a priority 
customer order(s) in the Simple Book. Therefore, the complex order 
priority rules will continue to protect Priority Customer interest on 
the Simple Book. The proposed rule change regarding complex order 
priority for complex order ratios less than one-to-three (.333) or 
greater than three-to-one (3.00) is consistent with the corresponding 
complex priority rule on Cboe Options \6\ as it applies to complex 
order ratios less than one-to-three (.333) or greater than three-to-one 
(3.00) electronically submitted to Cboe Options, as previously approved 
by the Commission.\7\
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    \6\ See Cboe Options Rule 5.33(f)(2)(A)(iv).
    \7\ See Securities Exchange Act Release No. 94204 (February 9, 
2022), 87 FR 8625 (February 15, 2022) (SR-CBOE-2021-046). SR-CBOE-
2021-046 did not make any changes to complex orders with ratios 
equal to or greater than one-to-three (.333) and less than or equal 
to three-to-one (3.00) available on Cboe Options and Cboe Options 
continues to allow trading in such complex orders with smaller 
ratios today. Likewise, the Exchange notes that this proposal does 
not make any changes to currently permissible complex order ratios 
(equal to or greater than one-to-three (.333) and less than or equal 
to three-to-one (3.00)) and such complex orders with smaller ratios 
will continue to be available for trading on the Exchange, 
consistent with Cboe Options.
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    The proposed rule change next corrects an error in the introductory 
paragraph of Rule 21.20(b) and the definition of COA-eligible and Do-
Not-COA orders in Rule 21.20(b). Regarding the introductory paragraph 
to Rule 21.20(b), there is a stray clause (including a bracket) that 
was inadvertently left in this provision upon a previous rule change to 
harmonize the Exchange's complex order rule with the complex order 
rules of its affiliated options exchanges, Cboe C2 Exchange Inc. 
(``C2'') and Cboe Options.\8\ Therefore, the proposed rule change 
removes the stray clause and corrects language within the provision to 
be consistent with corresponding C2 Rule 5.33(b) and Cboe Options Rule 
5.33(b), as intended.
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    \8\ See Securities Exchange Act Release Nos. 86353 (July 11, 
2019), 84 FR 34230 (July 7, 2019) (SR-CboeEDGX-2019-039); and 87015 
(September 19, 2019), 84 FR 50504 (September 25, 2019) (SR-CBOE-
2019-060).
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    Regarding the definition of COA-eligible and Do-Not-COA orders in 
Rule 21.20(b), the Exchange's System currently determines whether an 
order is ``COA-eligible'' by comparing the price of an order to resting 
interest on the same side as the order in the Simple Book and in the 
Complex Order Book (``COB''). However, the current definition 
inadvertently inversed the relevant terms and compares the price of a 
buy complex order to the synthetic best offer (``SBO'') and sell 
complex orders and compares the price of a sell complex order to the 
synthetic best bid (``SBB'') and buy complex orders, which would be 
opposite-side interest. The proposed rule change corrects this error 
and revises the definition to provide that whether a complex order is 
COA-eligible will be determined by comparing the order's price to same-
side interest, which is consistent with current System functionality. 
Specifically, a ``COA-eligible'' complex order is a buy (sell) complex 
order with User instructions to (or which default to) initiate a COA 
that is priced (A) equal to or higher (lower) than the SBB (SBO) 
(provided that if any of the bids or offers on the Simple Book that 
comprise the SBB (SBO) is represented by a Priority Customer order, the 
complex order must be priced at least $0.01 higher (lower) than the SBB 
(SBO) and (B) higher (lower) than the price of buy (sell) complex 
orders resting at the top of the COB. This is consistent with the 
provisions that will cause a COA to terminate early, pursuant to which 
a COA will end early because of incoming same-side interest.\9\ 
Additionally, the

[[Page 44176]]

proposed rule change is consistent with the Exchange's affiliated 
options exchanges', Cboe Options and C2, definitions of ``COA-
eligible'' order.\10\
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    \9\ Specifically, Rule 21.20(d)(3) provides that the COA 
response time interval terminates early (A) when the System receives 
a non-COA-eligible order on the same side as the COA-eligible order 
that initiated the COA but with a price better than the COA price, 
in which case the System terminates the COA and processes the COA-
eligible order pursuant to Rule 21.20(d)(5) and posts the new order 
to the COB; (B) when the System receives an order in a leg of the 
complex order that would improve the SBBO on the same side as the 
COA-eligible order that initiated the COA to a price equal to or 
better than the COA price, in which case the System terminates the 
COA and processes the COA-eligible order pursuant to Rule 
21.20(d)(5), posts the new order to the Simple Book, and updates the 
SBBO; or (C) if the System receives a Priority Customer Order that 
would join or improve the SBBO on the same side as the COA in 
progress to a price equal to or better than the COA price, in which 
case the System terminates the COA and processes the COA-eligible 
order pursuant to Rule 21.20(d)(5), posts the new order to the 
Simple Book, and updates the SBBO.
    \10\ See Cboe Options Rule 5.33(b)(5), and C2 Rule 5.33(b)(2); 
and see Securities Exchange Act Release No. 95006 (May 31, 2022), 87 
FR 34334 (June 6, 2022) (SR-CBOE-2022-024).
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    Finally, the proposed rule change updates Rule 21.20(g) to reflect 
that the System accepts for electronic processing complex orders with 
more than four legs. Current Rule 21.20(g) states that a complex order 
may execute against orders and quotes resting in the Simple Book 
pursuant to Rule 21.20(d)(5)(A) and (e) if it can execute in full or in 
a permissible ratio and if it has no more than a maximum number of legs 
(which the Exchange determines on a class-by-class basis and may be 
two, three or four) subject to certain restrictions, including that 
non-Customer complex orders with two option legs that are both buy or 
both sell and that are both calls or both puts may not leg into the 
Simple Book and all complex orders with three or four option legs that 
are all buy or all sell may not leg into the Simple Book. The proposed 
rule change modifies the parenthetical regarding legging restrictions 
to indicate that the maximum number the Exchange may determine on a 
class-by-class basis may be up to 16, as the Exchange's System 
currently accepts complex orders with up to that many legs for 
electronic processing.\11\ The proposed rule change makes no changes to 
which or how complex orders may leg into the Simple Book but rather 
updates this provision to reflect current functionality. This proposed 
rule change, too, is consistent with the corresponding Cboe Options 
rule.\12\
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    \11\ See Cboe Notice C2021060800, Cboe Options Introduces 16-Leg 
Maximum for Non-FLEX Complex Orders (June 8, 2021), available at 
Cboe Options Introduces 16-Leg Maximum for Non-FLEX Complex Orders; 
see also Cboe US Options Complex Book Process (technical 
specifications last updated June 3, 2022), Section 2.3.2, available 
at US Options Complex Book Process.
    \12\ See Cboe Options Rule 5.33(g); and see Securities Exchange 
Act Release No. 95006 (May 31, 2022), 87 FR 34334 (June 6, 2022) 
(SR-CBOE-2022-024).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\13\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \14\ 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) \15\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ Id.
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    In particular, the Exchange believes the proposed rule change will 
remove impediments to and perfect the mechanism of a free and open 
market and benefit investors, because it will provide market 
participants with execution opportunities on the Exchange for all their 
complex trading and hedging strategies, regardless of ratio. Market 
participants may determine that investment and hedging strategies with 
ratios greater than three-to-one or less than one-to-three are 
appropriate for their investment purposes, and the Exchange believes it 
will benefit market participants if they have the flexibility to submit 
their investment and hedging strategies on the Exchange to achieve 
their desired investment results. The proposed rule change will further 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, as it will allow complex orders to 
be submitted on the Exchange in the same manner as complex orders may 
already be submitted on its affiliated options exchange, Cboe 
Options,\16\ which currently permits orders of any ratio to be 
submitted to the exchange, as previously approved by the 
Commission.\17\
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    \16\ The Exchange notes that its affiliated options exchange, 
C2, also intends to file a similar rule filing to allow complex 
orders of any ratio to be submitted on C2.
    \17\ See supra note 9. Prior to the Commission's approval of SR-
CBOE-2022-046, larger ratio complex orders were already permitted to 
be submitted to Cboe Options' trading floor for execution in open 
outcry. The Commission's approval of SR-CBOE-2022-046 allowed larger 
ratio complex orders to be submitted for electronic trading.
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    Additionally, the proposed rule change will continue to protect 
priority customer order interest on the Simple Book, as all complex 
orders with a ratio greater than three-to-one or less than one-to-three 
will be executed only if each leg of the order improves the price of a 
priority customer order on the Simple Book on each leg. Again, as noted 
above, the proposed rule change regarding complex order priority for 
complex order ratios less than one-to-three (.333) or greater than 
three-to-one (3.00) is consistent with the corresponding complex 
priority rule on Cboe Options as it applies to larger ratio orders 
submitted for electronic trading on Cboe Options.\18\
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    \18\ See supra note 8.
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    The proposed nonsubstantive rule changes make no changes to how 
complex orders are processed or executed, but rather update the Rules 
to reflect more accurately current System functionality and to make 
clarifying and simplifying changes, which the Exchange believes will 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, protect investors 
and the public interest. The proposed change to the introductory 
paragraph to Rule 21.20(b) removes a stray clause, inadvertently left 
in the rules, and replaces it with language that is consistent with 
corresponding C2 and Cboe Options rules, as intended.\19\ The proposed 
amendments to the definition of COA-eligible order in Rule 21.20(b) 
corrects an inadvertent error in the definition. Specifically, the 
System compares the price of the order to same-side interest rather 
than opposite-side interest but the current language inadvertently 
inverts the terms. As such, the proposed rule change corrects this 
inadvertent error, and thus provides additional transparency in the 
Rules, ultimately benefiting investors. This is consistent with the 
provisions that will cause a COA to terminate early, pursuant to

[[Page 44177]]

which a COA will end early because of incoming same-side interest.\20\ 
Additionally, the proposed rule change is consistent with Cboe Option's 
definition of ``COA-eligible'' order.\21\
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    \19\ See supra note 10.
    \20\ Specifically, Rule 21.20(d)(3) provides that the COA 
response time interval terminates early (A) when the System receives 
a non-COA-eligible order on the same side as the COA-eligible order 
that initiated the COA but with a price better than the COA price, 
in which case the System terminates the COA and processes the COA-
eligible order pursuant to Rule 21.20(d)(5) and posts the new order 
to the COB; (B) when the System receives an order in a leg of the 
complex order that would improve the SBBO on the same side as the 
COA-eligible order that initiated the COA to a price equal to or 
better than the COA price, in which case the System terminates the 
COA and processes the COA-eligible order pursuant to Rule 
21.20(d)(5), posts the new order to the Simple Book, and updates the 
SBBO; or (C) if the System receives a Priority Customer Order that 
would join or improve the SBBO on the same side as the COA in 
progress to a price equal to or better than the COA price, in which 
case the System terminates the COA and processes the COA-eligible 
order pursuant to Rule 21.20(d)(5), posts the new order to the 
Simple Book, and updates the SBBO.
    \21\ See supra note 12.
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    The other nonsubstantive proposed rule change to the provisions 
regarding complex order priority in Rule 21.20(f)(2)(A) is intended to 
simplify the rule text regarding when legs of complex orders must 
improve prices of orders on the Simple Book, while adding clarity to 
the rule text through an update in its formatting and aligning such 
provision with Cboe Option's corresponding complex priority rule. This 
proposed rule change has no impact on electronic complex order priority 
while still increasing investor understanding.
    Finally, the proposed rule change to the provision regarding 
complex order legging in Rule 21.20(g) will protect investors, as it 
merely updates the provision to reflect that the System accepts for 
electronic processing complex orders with more than four legs. The 
proposed rule change makes no changes to which or how complex orders 
may leg into the Simple Book but rather updates this provision to 
reflect current functionality and align with Cboe Options corresponding 
rule.\22\
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    \22\ See supra note 9.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe the proposed rule change to allow for complex orders in any 
ratio to be submitted to the Exchange will impose any burden on 
intramarket competition, as the proposed rule change will apply in the 
same manner to all Options Members. Options Members will have the 
discretion to submit complex orders with any ratio for trading on the 
Exchange. The Exchange does not believe the proposed rule change will 
impose any burden on intermarket competition as it relates to the 
execution of orders on the Exchange and will continue to protect 
Priority Customer Orders on the Simple Book. The Exchange believes the 
proposed rule change may promote competition, as market participants 
will have additional flexibility to execute their trading and hedging 
strategies in any ratio, and in the same manner that is already 
permitted on the Exchange's affiliated options exchange, Cboe Options. 
Also, other options exchanges are welcome to modify their systems to 
permit higher/lower ratio orders to execute electronically or on their 
trading floors.
    The proposed nonsubstantive rule changes are not intended for 
competitive purposes, but rather to clarify certain provisions and 
correct certain language. The Exchange does not believe that the 
proposed nonsubstantive rule changes will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, because all changes will apply 
in the same manner to all investors. The proposed nonsubstantive rule 
changes have no impact on trading and thus will not change how any 
investors' complex orders are processed or executed on the Exchange. As 
noted above, the proposed rule change makes no changes to electronic 
complex order priority, which orders can initiate a COA, or how complex 
orders may leg into the Simple Book. The Exchange does not believe that 
the proposed nonsubstantive rule changes will impose any burden on 
intermarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, because the proposed rule 
changes have no impact on how complex orders trade, as they make 
primarily clarifying updates, corrections, and other nonsubstantive 
changes.

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

    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)(iii) of the Act \23\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\24\
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    \23\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \24\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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) \25\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\26\ 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. The Exchange notes 
that complex orders with any ratio currently are eligible for 
electronic processing on Cboe Options, and that the proposal does not 
introduce any new or novel functionality.\27\ The Exchange states that 
waiver of the operative delay will benefit investors by providing them 
with the flexibility to submit bona-fide multi-legged trading or 
hedging strategies in any ratio to the Exchange. In addition, the 
Exchange states that the proposed non-substantive rule changes clarify 
certain provisions and correct certain language, and that waiver of the 
operative delay with respect to these changes will protect investors 
and the public interest by providing investors with additional 
transparency regarding the Exchange's rules as soon as possible.
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    \25\ 17 CFR 240.19b-4(f)(6).
    \26\ 17 CFR 240.19b-4(f)(6)(iii).
    \27\ See supra note 3.
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    The Commission believes that waiver of the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
The Commission believes that the proposal will benefit investors by 
providing investors with an additional venue for trading complex orders 
with any ratio, including complex orders with a ratio less than one-to-
three or greater than three-to-one. As discussed above, the

[[Page 44178]]

Commission approved a Cboe Options proposal allowing complex orders 
with any ratio to trade electronically and to be quoted, as well as 
executed, in $0.01 increments.\28\ The Commission notes that the 
priority provisions in proposed Exchange Rule 21.20(f)(2)(A)(iv)(b) for 
complex orders with a ratio less than one-to-three or greater than 
three-to-one--which require each component leg of such an order with a 
Priority Customer order at the BBO to execute at a price that improves 
the price of the Priority Customer order(s) on the Simple Book--is 
consistent with Cboe Options Rule 5.33(f)(2)(A)(iv)(b). Accordingly, 
the Exchange's proposal to allow market participants to submit complex 
orders with any ratio to the Exchange does not raise new or novel 
regulatory issues. The Commission believes that the proposed non-
substantive changes to Exchange Rules 21.20(b), 21.20(f)(2)(A), and 
21.20(g) will clarify and help to ensure the accuracy of the Exchange's 
rules by correcting, updating, and streamlining the Exchange's rules. 
The Commission notes that these proposed changes are consistent with 
the rules of Cboe Options.\29\ Accordingly, the Commission waives the 
operative delay and designates the proposed rule change operative upon 
filing.\30\
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    \28\ See supra note 3.
    \29\ See Cboe Options Rules 5.33(b), 5.33(f)(2)(A), and 5.33(g).
    \30\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule 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 [email protected]. Please include 
File Number SR-CboeEDGX-2022-033 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-2022-033. 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-CboeEDGX-2022-033, and should be 
submitted on or before August 15, 2022.

    For the Commission, by the Division of Trading and Markets, pant 
to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-15773 Filed 7-22-22; 8:45 am]
BILLING CODE 8011-01-P


