2022-15773. 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.

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).

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 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]

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]

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.

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 proposed rule change is consistent with the Exchange's affiliated options exchanges', Cboe Options and C2, definitions of “COA-eligible” order.^[10]

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]

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.

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]

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]

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 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]

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]

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]

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.

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 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]

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 [e-mail]. 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]

J. Matthew DeLesDernier,

Deputy Secretary.

Footnotes

1.  15 U.S.C. 78s(b)(1).

2.  17 CFR 240.19b-4.

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.

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).

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.

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).

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).

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).

13.  15 U.S.C. 78f(b).

14.  15 U.S.C. 78f(b)(5).

15.   Id.

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.

18.   See supra note 8.

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.

22.   See supra note 9.

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.

25.  17 CFR 240.19b-4(f)(6).

26.  17 CFR 240.19b-4(f)(6)(iii).

27.   See supra note 3.

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. See15 U.S.C. 78c(f).

31.  17 CFR 200.30-3(a)(12).