90 FR 103 pgs. 23081-23084 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rules 11.13(b) and 11.26(a)
Type: NOTICEVolume: 90Number: 103Pages: 23081 - 23084
Pages: 23081, 23082, 23083, 23084Docket number: [Release No. 34-103119; File No. SR-CboeBZX-2025-070]
FR document: [FR Doc. 2025-09763 Filed 5-29-25; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103119; File No. SR-CboeBZX-2025-070]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rules 11.13(b) and 11.26(a)
May 23, 2025.
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 May 15, 2025, 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
Footnotes:
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 BZX Exchange, Inc. (the "Exchange" or "BZX") proposes to amend Rule 11.26(a) regarding the public disclosure of the sources of data that the Exchange utilizes when performing: (i) order handling; (ii) order routing; (iii) order execution; and (iv) related compliance processes to reflect the name change of NYSE Chicago, Inc. to NYSE Texas, Inc. The Exchange also proposes to amend Rule 11.13(b)(3)(M) and Rule 11.13(b)(3)(N) to remove the list of primary listing markets shown in the rule text. 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 update Rule 11.26(a) regarding the public disclosure of the sources of data that the Exchange utilizes when performing: (i) order handling; (ii) order routing; (iii) order execution; and (iv) related compliance processes to reflect the recent name change of NYSE Chicago, Inc. ("NYSE Chicago") to NYSE Texas, Inc. ("NYSE Texas"). The Exchange also proposes to amend Rule 11.13(b)(3)(M) and Rule 11.13(b)(3)(N) to remove the list of primary listing markets.
On February 28, 2025, NYSE Chicago filed with the Commission a proposal to convert from a corporation organized under the laws of the state of Delaware to one organized under the laws of the state of Texas and changed its name from NYSE Chicago, Inc. to NYSE Texas, Inc. 3 The Exchange accordingly proposes a conforming change to its rules to replace the name of NYSE Chicago, Inc. with NYSE Texas, Inc. Specifically, the Exchange proposes to replace one reference to "Chicago" in Rule 11.26(a) with "Texas." The proposed changes are conforming and non-substantive in nature.
Footnotes:
3 ? See Securities Exchange Act Release No. 102507 (February 28, 2025), 90 FR 11445 (March 6, 2025) (SR-NYSECHX-2025-01) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Repeal the Exchange's Certification of Incorporation; Adopt the Certificate of Formation of NYSE Texas, Inc.; Amend the Exchange's By-Laws, Rules, and Certain Fee Schedules; and Amend the Certification of Incorporation and By-Laws of the Exchange's Holding Company To Reflect the Conversion of the Exchange to a Texas Corporation and the Renaming of NYSE Chicago Holdings, Inc.).
In addition to its proposal to become a Texas corporation and change its name to NYSE Texas, NYSE Chicago filed and received approval to amend its rules to permit the qualification, listing and trading of certain exchange traded products. 4 The Exchange currently lists names of venues that are also primary listing markets in Rule 11.13(b)(3)(M)? 5 and Rule 11.13(b)(3)(N), which provide information about the ROOC routing strategy and associated port attribute offered by the Exchange, respectively. Pursuant to Rule 11.13(b)(3)(N), the Exchange offers the ROOC routing strategy, which allows orders that the entering firm wishes to designate for participation in the opening, re-opening (following a halt, suspension, or pause), or closing process of a primary listing market other than the Exchange (IEX, NYSE, Nasdaq, NYSE American, or NYSE Arca) if received before the opening/re-opening/closing time of such market. If shares remain unexecuted after attempting to execute in the opening, re-opening, or closing process, they are either posted to the BZX Book, 6 executed, or routed to destinations on the System? 7 routing table. Rule 11.13(b)(3)(M) provides that a User? 8 may designate their order for participation in the reopening (following a halt, suspension, or pause) of a primary listing market other than the Exchange (IEX, NYSE, Nasdaq, NYSE American, or NYSE Arca) if received before the reopening time of such market. If shares remain unexecuted after attempting to execute in the re-opening process, they are either posted to the BZX Book, executed, or routed to destinations on the System routing table. Rule 11.13(b)(3)(M) supplements Rule 11.13(b)(3)(N) by describing the port attribute that is associated with the ROOC routing option described in Rule 11.13(b)(3)(N).
Footnotes:
4 ? See Securities Exchange Act Release No. 102957 (April 29, 2025), 90 FR 19054 (May 5, 2025) (SR-NYSECHX-2025-04) ("NYSE Texas Listing Venue Filing").
5 ?Rule 11.13(b)(3)(M) does not describe an individual routing strategy, but rather supplements Rule 11.13(b)(3)(N) by detailing how a firm may designate its orders using port settings. By way of background, a physical port is utilized by a Member or non-Member to connect to the Exchange at the data centers where the Exchange's servers are located.
6 ? See Rule 1.5(e). The term BZX Book shall mean the System's electronic file of orders.
7 ? See Rule 1.5(aa). The term System shall mean the electronic communications and trading facility designated by the Board through which securities orders of Users are consolidated for ranking, execution and, when applicable, routing away.
8 ? See Rule 1.5(cc). The term User shall mean any Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3.
[top] The Exchange now proposes to remove the list of primary listing markets that is currently listed in Rule 11.13(b)(3)(M) and Rule 11.13(b)(3)(N). While the Exchange notes that having a list of primary listing markets provides additional specificity to market participants, the Exchange also notes that confusion may occur if this list is not maintained in a timely fashion and believes that market participants will not be harmed by the removal of the list of primary listing markets as it does not affect the functionality of the ROOC routing strategy. Notably, there are many places throughout the Exchange's rulebook where the term "primary listing market" is used without including the list of primary listing markets that is shown under Rule 11.13(b)(3)(M) and Rule 11.13(b)(3)(N). 9 Similarly, the term "primary listing market" is used throughout the rulebook of NYSE Arca, Inc. ("NYSE Arca") and The Nasdaq Stock Market LLC ("Nasdaq") without reference to a list of exchanges that currently serve as primary listing markets. 10 Given that the term "primary listing market" is commonly used throughout the industry and its meaning is well understood by market participants, the Exchange believes that Users are not harmed by
Footnotes:
9 ? See, e.g. , Rule 11.8(d)(1)(B) (Obligations of Market Makers-Quotation Requirements and Obligations); Rule 11.17(c)(1)(B) (Clearly Erroneous Executions-Clearly erroneous review); Rule 11.18(c) (Trading Halts Due to Extraordinary Market Volatility); Rule 11.22(j) (Data Products-Cboe Aggregated Market "Cboe One" Feed); Rule 11.28 (Cboe Market Close, a closing Match Process for Non-BZX-Listed Securities).
10 ? See, e.g. , NYSE Arca Rule 7.31-E(f)(1) (Primary Only Order); NYSE Arca Rule 7.34-E(c)(1)(D) (Trading Sessions-Orders Permitted in Each Session); NYSE Arca Rule 7.37-E(a)(5) (Order Execution and Routing). See also, Nasdaq Equity 2, Section 5 (Market Maker Obligations); Nasdaq Equity 4, Rule 4120 (Limit Up-Limit Down Plan and Trading Halts); Nasdaq Equity 4, Rule 4758(a)(1)(x) (Order Routing).
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. 11 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)? 12 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.
Footnotes:
11 ?15 U.S.C. 78f(b).
12 ?15 U.S.C. 78f(b)(5).
The Exchange believes that its proposal to update Exchange Rule 11.26(a) to reference NYSE Texas will ensure that the Rule correctly identifies and publicly states on a market-by-market basis all of the specific network processor and proprietary data feeds that the Exchange utilizes for the handling, routing, and execution of orders, and for performing the regulatory compliance checks related to each of those functions. In addition, the proposed amendments would reduce potential investor and market participant confusion and therefore remove impediments to and perfect the mechanism of a free and open market and a national market system by ensuring that investors and market participants can more easily navigate, understand, and comply with the Exchange's rules. The Exchange also believes that the proposed amendments remove impediments to and perfects the mechanism of a free and open market by ensuring that persons subject to the Exchange's jurisdiction, regulators, and the investing public can more easily navigate and understand the Exchange's rules. The proposed amendments would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the increased transparency and clarity, thereby reducing potential confusion.
Additionally, the Exchange believes that its proposal to update Rule 11.13(b)(3)(M) and Rule 11.13(b)(3)(N) removes impediments to and perfects the mechanism of a free and open market by harmonizing the rule text found in Rule 11.13(b)(3)(M) and Rule 11.13(b)(3)(N) with other rules throughout the Exchange's rulebook that also reference primary listing markets without naming each primary listing market within the rule text. In addition, the proposed amendments would reduce potential investor and market participant confusion by simplifying the Exchange's rule text without changing the applicability of the rule or the function of the applicable routing strategy and corresponding port attribute, therefore removing impediments to and perfecting the mechanism of a free and open market and a national market system by ensuring that investors and market participants receive accurate information that is easily understood. The proposed amendments would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the simplified language within the rule text, thereby reducing potential confusion.
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 proposed rule change is not intended to address competitive issues but rather is concerned solely with updating Rule 11.26(a) to reflect the name change associated with a source of data utilized to when performing: (i) order handling; (ii) order routing; (iii) order execution; and (iv) related compliance processes and update Rule11.13(b)(3)(M) and Rule 11.13(b)(3)(N) to remove the list of primary listing markets found within the rule text in order to simplify the rule text without amending the meaning or functionality of the rule as well as harmonize the rule text with that of other rules within the Exchange's rulebook.
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) of the Act? 13 and Rule 19b-4(f)(6)? 14 thereunder. 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; or (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? 15 and Rule 19b-4(f)(6)? 16 thereunder.
Footnotes:
13 ?15 U.S.C. 78s(b)(3)(A).
14 ?17 CFR 240.19b-4(f)(6).
15 ?15 U.S.C. 78s(b)(3)(A).
16 ?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 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.
A proposed rule change filed under Rule 19b-4(f)(6)? 17 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii), 18 the Commission may designate a shorter time if such action is consistent with 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 upon filing. The Commission believes that the proposed rule change raises no novel issues because it proposes a non-substantive conforming change to reflect the name change of NYSE Chicago to NYSE Texas and removes an outdated list of primary listing markets; therefore, waiver of the operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission designates the proposed rule change to be operative upon filing. 19
Footnotes:
17 ?17 CFR 240.19b-4(f)(6).
18 ?17 CFR 240.19b-4(f)(6)(iii).
19 ?For purposes only of waiving the 30-day operative delay, the Commission also has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).
[top] 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
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 ( https://www.sec.gov/rules/sro.shtml ); or
• Send an email to rule-comments@sec.gov. Please include file number SR-CboeBZX-2025-070 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-2025-070. 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 ( https://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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR-CboeBZX-2025-070 and should be submitted on or before June 20, 2025.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 20
Footnotes:
20 ?17 CFR 200.30-3(a)(12) and (59).
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09763 Filed 5-29-25; 8:45 am]
BILLING CODE 8011-01-P