[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Notices]
[Pages 30282-30294]
[FR Doc No: 2019-13537]

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SECURITIES AND EXCHANGE COMMISSION

[Release No 34-86168; File No. SR-CboeEDGA-2019-012]

Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing of a Proposed Rule Change To Introduce a Liquidity Provider
Protection on EDGA

June 20, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 7, 2019, Cboe EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III 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 EDGA Exchange, Inc. (``EDGA'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (the ``Commission'') a
proposed rule change to introduce a Liquidity Provider Protection on
EDGA. The text of the proposed rule change is attached [sic] as 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/edga/), 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 purpose of the proposed rule change is to introduce a delay
mechanism on EDGA that is designed to protect liquidity providers and
thereby enable those liquidity providers to make better markets in
equity securities traded on the Exchange. The Liquidity Provider
Protection (``LP\2\'') delay mechanism would function similarly to
delay mechanisms adopted by the Investors Exchange LLC (``IEX'') and
NYSE American LLC (``NYSE American'') in that it is an intentional
access delay applied to a subset of order messages in order to allow
resting orders to be updated before opportunistic traders can trade
with them at stale prices.\3\ The LP\2\ delay mechanism, however, is
unique in that it is designed primarily to enhance market quality by
promoting price forming displayed liquidity in addition to the non-
displayed liquidity encouraged by both IEX and NYSE American. Liquidity
provision is critical to the proper functioning of the equities
markets, and finding ways to enhance

the ability of firms to provide that liquidity to investors is one of
the central functions of a national securities exchange. The LP\2\
delay mechanism would provide a market structure that has the potential
to increase market quality and provide a fair and orderly market for
all market participants that choose to trade on EDGA.
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    \3\ See Securities Exchange Act Release Nos. 78101 (June 17,
2016), 81 FR 41141 (June 23, 2016) (File No. 10-222) (``IEX Exchange
Approval''); 80700 (May 16, 2017), 82 FR 23381 (May 22, 2017) (SR-
NYSEMKT-2017-05) (``MKT Approval Order'').
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I. Background
    The increasing speed and efficiency of trading in the U.S. equities
markets over the last several years has resulted in significant gains
to market participants and investors. These gains in speed, however,
are not entirely without cost as they have facilitated certain latency
arbitrage techniques that act as a tax on liquidity provision. In
adopting Regulation NMS, the Commission emphasized the need to promote
greater depth and liquidity in NMS Stocks.\4\ While the Commission
sought to achieve this result largely through the adoption of the Rule
611, i.e., the ``Order Protection Rule,'' changes in the market since
the adoption of Regulation NMS also warrant innovation by the exchanges
that are tasked with promoting liquidity in today's high speed market.
The Exchange is therefore proposing to introduce a delay mechanism that
is specifically designed to encourage liquidity provision by reducing
the ability for firms to engage in latency arbitrage, in general, and
cross-asset latency arbitrage, in particular.\5\
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    \4\ The Commission has stated that ``increased displayed
liquidity [is] a principal goal of the Order Protection Rule.'' See
Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR
37496, 37514 (June 29, 2005) (``Regulation NMS Adopting Release'').
The Commission has also stated that ``[t]o the extent that
competition among orders is lessened, the quality of price discovery
for all sizes of orders can be compromised. Impaired price discovery
could cause market prices to deviate from fundamental values, reduce
market depth and liquidity, and create excessive short-term
volatility that is harmful to long-term investors and listed
companies. More broadly, when market prices do not reflect
fundamental values, resources will be misallocated within the
economy and economic efficiency--as well as market efficiency--will
be impaired.'' Id. at 37499.
    \5\ The Chicago Stock Exchange, Inc. (``CHX'') also recently
received approval for a delay mechanism that was designed to
encourage liquidity provision. See Securities Exchange Act Release
No. 81913 (October 19, 2017), 82 FR 49433 (October 25, 2017) (SR-
CHX-2017-04) (Approval Order). CHX withdrew that filing after the
Commission determined to review the Staff's approval by delegated
authority, and as a result the original Approval Order was set
aside. See Securities Exchange Act Release No. 84337 (October 2,
2018), 83 FR 50720 (October 9, 2018) (SR-CHX-2017-04) (Order Setting
Aside).
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    Today, liquidity providers are frequently unable to adjust their
displayed quotes based on changes in market information, including
cross-asset class signals, before the fastest trading firms can trade
against their stale quotes. Market makers and other liquidity providers
use sophisticated pricing algorithms to determine how to price
securities in the often hundreds or thousands of equity securities that
they quote. A single tick of an index futures contract thus often
requires firms to adjust their quotes in a number of related equity
securities at once.\6\ The potential for trading at stale prices
increases risk for firms that wish to provide liquidity to the market,
and harms market quality by causing liquidity providers to enter quotes
that are wider or for a smaller size than they may otherwise be willing
to trade.
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    \6\ For example, a tick in S&P 500 Index futures on the Chicago
Mercantile Exchange (``CME'') may result in liquidity providers
updating quotes in the SPDR S&P 500 ETF and each of the five hundred
underlying securities in the S&P 500 Index.
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    At the same time, existing delay mechanisms do not provide any
protection to market makers and other participants that primarily post
displayed, two-sided markets, despite the critical function that these
participants play in the equities markets. The Exchange believes that
reducing cross-market latency arbitrage would enable liquidity
providers to increase market quality by maintaining tighter spreads,
longer inside quote durations, and posting larger size. Furthermore,
the expected improvements in market quality have the potential to
benefit all market participants, and contribute to the maintenance of a
fair and orderly market.
II. Delay Mechanism
    The proposed rule change would introduce the LP\2\ delay mechanism,
which seeks to promote liquidity provision by reducing the opportunity
for cross-asset latency arbitrage. Other equities exchanges, i.e., IEX
and NYSE American, have recently introduced delay mechanisms that slow
down certain incoming and outbound messages. These ``speed bumps'' are
a market reaction to the increased prevalence of opportunistic traders
that can react to market signals before slower market participants can
update their quoted prices. Both IEX and NYSE American have market
structures that are designed to benefit resting non-displayed orders
that are pegged to the national best bid or offer (``NBBO'') as updates
to the prices of these orders do not go through their respective delay
mechanisms.\7\ As a result, market participants that enter pegged
orders can avoid unwanted executions at stale prices because their
orders are pegged to new market prices before opportunistic traders are
able to ``pick off'' these orders at the stale price. While delay
mechanisms like those currently available on these exchanges are
beneficial to a particular subset of market participants, the Exchange
believes that there is room for additional improvement. Specifically,
the Exchange believes that there is an opportunity to use a similar
delay mechanism to promote market quality by excluding all orders that
add liquidity from the speed bump. The paragraphs that follow describe
the proposed delay mechanism, and how it would be applied to different
incoming/outbound messages processed by the System: \8\
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    \7\ See IEX Exchange Approval, supra note 3, 81 FR at 41157; MKT
Approval Order, supra note 3, 82 FR at 23384.
    \8\ The term ``System'' refers to 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. See EDGA Rule 1.5(cc).
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    Liquidity Removing Orders. The proposed LP\2\ delay mechanism would
subject all incoming executable orders that would remove liquidity from
the EDGA Book on entry to a short intentional access delay.\9\ As
mentioned above, this delay is designed to provide an opportunity for
liquidity providers to process cross-asset class signals, and update
their published quotations accordingly, before trading at stale prices
with orders submitted by opportunistic trading firms that benefit from
a latency advantage. So as to avoid unnecessarily queueing orders that
are not executable when entered, order instructions that could prevent
an incoming order from being executed and removing liquidity on entry
(e.g., Minimum Quantity and Post Only) would be considered prior to
subjecting the order to the delay mechanism. The one exception to this
would be the EdgeRisk Self Trade Protection (``ERSTP'') Modifiers,
which are an optional risk protection that prevents the execution of
orders originating from the same market participant identifier
(``MPID''), Exchange Member identifier

or ERSTP Group identifier. ERSTP Modifiers would be applied after the
order is delayed, and would not be considered in evaluating whether an
incoming order is deemed executable and therefore subject to the delay
mechanism.
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    \9\ The term ``EDGA Book'' refers to the System's electronic
file of orders. See EDGA Rule 1.5(d). An order that, by its terms,
is not eligible to be executed on entry would be evaluated for delay
when such order is ultimately entered into the EDGA Book for
processing. For example, orders entered with a Stop Price or Stop
Limit Price are not executable until elected, and would therefore
only be eligible for delay after the order is converted to a Market
Order or Limit Order, as applicable. Similarly, orders entered with
a time-in-force instruction of Regular Hours Only would only be
evaluated for delay when entered into the EDGA Book after the
opening or re-opening process pursuant to EDGA Rule 11.7.
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    Based on the geographical latencies currently experienced between
the Chicago Mercantile Exchange (``CME'') data center in Aurora, IL and
the Exchange's primary data center in Secaucus, NJ, the Exchange
proposes that the intentional access delay applied to incoming
executable orders be four milliseconds. The Exchange believes that this
delay would negate the advantages that opportunistic trading firms that
use the latest microwave connections have over liquidity providers
using traditional fiber connections.\10\ Once a liquidity taking order
enters the LP\2\ delay mechanism it would wait the full four
milliseconds before trading with resting orders on the order book but
would be released early if resting orders are cancelled or modified
such that the incoming order is no longer executable against such
orders.\11\
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    \10\ Quincy Data advertises a latency of 4.005 milliseconds for
its high speed microwave connection, or about half the 7.75
milliseconds of latency experienced over a fiber connection provided
by ICE Global Network. See https://www.quincy-data.com/product-page/#latencies; https://www.theice.com/publicdocs/ICE_Data_Services_Topology.pdf.
    \11\ After the delay period, incoming orders, cancel, and
cancel/replace messages that have been delayed by the delay
mechanism would be processed after the System has processed, if
applicable, all messages in the security received by the Exchange
during such delay period. As a result, a message may be delayed for
longer than four milliseconds depending on the volume of messages
being processed by the Exchange.
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    Liquidity Providing Orders. In order to encourage liquidity
provision from the widest range of possible market participants, the
proposed delay would not apply to any non-executable orders that would
add liquidity. These orders would instead be immediately ranked on the
EDGA Book without executing against resting liquidity. Furthermore,
market participants would be able to interact with their resting orders
(e.g., by cancelling the order or modifying the order's size) without
being subject to the delay mechanism. As a result, the LP\2\ delay
mechanism would benefit traditional market makers that post price
forming displayed liquidity, as well as a range of other market
participants, including investors that use hidden pegged orders similar
to those that account for a significant portion of volume traded on IEX
and NYSE American.
    Cancel and Cancel/Replace Messages. The LP\2\ delay mechanism is
designed to protect orders that add liquidity to the EDGA Book by
giving Users the opportunity to adjust their quotes based on market
signals before trading at a stale price. As such, orders resting on the
EDGA Book would be eligible for immediate cancellation without being
subjected to a delay. Cancel messages for liquidity taking orders that
are being processed by the delay mechanism would instead be queued and
applied to the remaining quantity of the order after the order has
exited the delay mechanism and executed against any resting orders on
the EDGA Book. If a User submits a cancel/replace message,\12\ the
cancel portion of that instruction would be applied to the order based
on whether the order is resting on the EDGA Book or is being processed
by the delay mechanism. Specifically, the cancel portion would be
applied immediately in the case of a resting order, or queued in the
case of an order that has not exited the delay mechanism. The replace
portion would subsequently be handled subject to the same logic as the
entry of a new order--i.e., re-evaluated and delayed only if the
amended order is executable against the EDGA Book. If a User enters
multiple cancel or cancel/replace messages for a liquidity taking order
during the four millisecond delay period, the first such cancel or
cancel/replace message entered would be queued and all subsequent
messages would be ignored.
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    \12\ See EDGA Rule 11.10(e).
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    Routable Orders. Since the LP\2\ delay mechanism is designed to
protect resting orders on EDGA, incoming executable orders are
processed by the delay mechanism when the order would remove liquidity
from the EDGA Book. As such, orders that are routed on entry would not
be eligible for delay until entered for execution with resting orders
on the EDGA Book. The unrouted balance of a routable order that is
entered into the EDGA Book would be treated as a new incoming order and
evaluated as such by the delay mechanism.
    Market Data. The LP\2\ delay mechanism would not apply to inbound
or outbound market data. As such, the System would use current, un-
delayed data, for all purposes including regulatory compliance (e.g.,
trade-through) and pricing of orders pegged to the NBBO. In addition,
quotation and trade data would be disseminated to the applicable
securities information processor (``SIP'') and direct market data feeds
immediately without being processed by the delay mechanism, thereby
ensuring that the most up to date information about orders and
executions on the EDGA Book is shared with investors and other market
participants. As described in the section below on protected market
status, the Exchange is proposing to disseminate quotation information
to the SIP as a ``manual'' rather than ``automated'' quotation under
Regulation NMS. Manual quotations are not protected pursuant to the
Order Protection Rule but are included in the NBBO disseminated by the
SIP to ensure that the best available prices for a security are made
available to broker-dealers and investors.\13\
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    \13\ See Regulation NMS Adopting Release, 70 FR at 37537.
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    Examples. The examples that follow illustrate the operation of the
LP\2\ delay mechanism:
    Example 1:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares @$10.00
--Order 2: Sell 100 shares @$10.00, t = 12:00:00:000
--The incoming sell order, i.e., Order 2, is executable against the
EDGA Book and therefore delayed for 4 milliseconds.
--Order 2 would execute against Order 1, selling 100 shares at $10.00,
after it exits the delay mechanism at 12:00:00:004.

    Example 2:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares @$10.02, Non-Displayed
--Order 2: Sell 100 shares @$10.00, t = 12:00:00:000
--The incoming sell order, i.e., Order 2, is executable against the
EDGA Book and therefore delayed for 4 milliseconds.
--Order 2 would execute against Order 1, selling 100 shares at $10.02,
after it exits the delay mechanism at 12:00:00:004.\14\
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    \14\ The System delays all liquidity taking orders, regardless
of whether such orders would trade with displayed or non-displayed
interest on the EDGA Book.

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    Example 3:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares @$10.00
--Order 2: Sell 100 shares @$10.04, t = 12:00:00:000
--The incoming sell order, i.e., Order 2, is not executable against the
EDGA Book and therefore posts to the EDGA Book immediately at
12:00:00:000.

    Example 4:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares @$10.00
--Order 2: Sell 100 shares @$10.00, Post Only, t = 12:00:00:000

--The incoming sell order, i.e., Order 2, is not executable against the
EDGA Book because of the Post Only instruction and is cancelled
immediately at 12:00:00:000.\15\
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    \15\ This example is based on amended Post Only behavior
described later in this proposal that would prevent a Post Only
Order from removing liquidity, including in circumstances where
doing so may be economically beneficial for the entering party.

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    Example 5:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares @$10.01
--Order 2: Sell 100 shares @$10.01, t = 12:00:00:000
--Cancel Order 1: t = 12:00:00:001
--The incoming sell order, i.e., Order 2, is executable against the
EDGA Book and therefore delayed for 4 milliseconds.
--One millisecond after Order 2 enters the delay mechanism, a
cancellation message is entered to cancel Order 1. Cancellation
messages for resting orders are not delayed so as to permit sufficient
time for liquidity providers to update stale quotes, and therefore
Order 1 is immediately cancelled at 12:00:00:001.
--As Order 2 is no longer executable against any resting orders on the
EDGA Book it would be released early from the delay mechanism, and
posted to the EDGA Book immediately after the cancellation message for
Order 1 is processed.

    Example 6:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares @$10.00
--Order 2: Sell 200 shares @$10.00, t = 12:00:00:000
--Cancel Order 2: t = 12:00:00:001
--The incoming sell order, i.e., Order 2, is executable against the
EDGA Book and therefore delayed for 4 milliseconds.
--While Order 2 is being processed by the delay mechanism, the entering
firm submits a cancellation message. This message is not processed
until the order exits the speed bump and trades against resting orders.
--Order 2 would execute against Order 1, selling 100 shares at $10.00,
after it exits the delay mechanism at 12:00:00:004, at which point the
cancellation message would be processed and the remaining quantity of
Order 2 would be cancelled.

    Example 7:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares @$10.00
--Order 2: Sell 100 shares @$10.04
--Cancel/Replace Order 1: Buy 100 shares @$10.04, t = 12:00:00:000
--The cancel portion of the cancel/replace message is immediately
applied to Order 1 at 12:00:00:000 but since the modified price would
be executable against Order 2, which is resting on EDGA Book, Order 1
would be delayed for 4 milliseconds.
--Order 1 would then execute against Order 2, buying 100 shares at
$10.04, after it exits the delay mechanism at 12:00:00:004.

    Example 8:

--Protected NBBO: $10.00 x $10.05
--Order 1: Buy 100 shares, Midpoint Peg
--Order 2: Sell 100 shares @$10.02, t = 12:00:00:000
--Protected NBBO: $9.98 x 10.02, t = 12:00:00:001
--The incoming sell order, i.e., Order 2, is executable against the
Midpoint Peg Order on the EDGA Book, which is ranked at $10.025, and
therefore delayed for 4 milliseconds.
--One millisecond after Order 2 enters the delay mechanism, the System
receives an NBBO update, which is processed immediately to allow
resting orders to be re-priced before trading at stale prices. Order 1
is now ranked at $10.00--i.e., the new midpoint.
--As Order 2 is no longer executable against any resting orders on the
EDGA Book it would be released early from the delay mechanism, and
posted to the book immediately after the re-pricing for Order 1 is
processed.
III. Protected Market Status
    Rule 611 of Regulation NMS provides intermarket protection against
trade-throughs for automated quotations of NMS stocks. Under Regulation
NMS, an ``automated'' quotation is one that, among other things, can be
executed ``immediately and automatically'' against an incoming
immediate-or-cancel order.\16\ The Commission has interpreted the word
``immediate'' in this context as not precluding a de minimis
intentional delay--i.e., a delay so short so as to not frustrate the
purposes of Rule 611 by impairing fair and efficient access to an
exchange's quotations.\17\ Although the Commission refused to enumerate
a numeric latency threshold for a delay that is sufficiently de minimis
for the purposes of Rule 611,\18\ the Staff of the Division of Trading
and Markets has issued guidance stating the Staff's belief that delays
of less than one millisecond would qualify as de minimis.\19\ Based on
the Staff's concern about granting protected market status to an
exchange with an intentional delay exceeding this threshold, the
Exchange has determined to begin disseminating a manual, un-protected,
quotation in conjunction with the proposed implementation of its delay
mechanism.\20\
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    \16\ See Rule 600(a)(3).
    \17\ See Securities Exchange Act Release No. 78102 (June 17,
2016), 81 FR 40785 (June 23, 2017) (File No. S7-03-16) (``Commission
Interpretation'').
    \18\ Id.
    \19\ See Staff Guidance on Automated Quotations under Regulation
NMS (June 17, 2016), available at https://www.sec.gov/divisions/marketreg/automated-quotations-under-regulation-nms.htm.
    \20\ Rule 600(a)(37) defines a ``manual quotation'' as any
quotation other than an automated quotation.
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    In addition to no longer being eligible for protected market
status, marking the EDGA quotation manual instead of automated, would
also mean that other Regulation NMS rules on locked and crossed markets
would apply differently to EDGA's disseminated quotations.
Specifically, Rule 610(d)(1)(ii) would require that EDGA avoid locking
or crossing any quotation in an NMS stock disseminated pursuant to an
effective national market system (``NMS'') plan instead of only
protected quotations as required pursuant to Rule 610(d)(1)(i). The
Exchange believes that this restriction is unintended and unwarranted
when an otherwise automated market is disseminating a manual quotation
due solely to its introduction of a short intentional access delay on
incoming orders. Concurrent with the submission of this proposed rule
change the Exchange is therefore submitting a request for an exemption
pursuant to Rule 610(e) of Regulation NMS. The requested exemption
would permit the Exchange to continue to lock or cross potentially
stale manual quotations disseminated by the New York Stock Exchange LLC
(``NYSE'') pursuant to an effective NMS plan.\21\ Broadly, the
exemption would permit EDGA to continue to operate in the manner that
it does today with respect to locked and crossed markets,
notwithstanding the proposed dissemination of a manual, un-protected,
quotation.
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    \21\ NYSE operates a trading floor that may disseminate manual
quotations, and is the only equities exchange that does so today.
The Exchange expects to file additional exemption requests in the
future if other equities exchanges begin disseminating manual
quotations.
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    In light of the requested exemption, and the fact that EDGA would
begin disseminating a manual quotation, the Exchange proposes to amend
Rule 11.10(f), which deals with locking or crossing quotations in NMS
Stocks. First, Rule 11.10(f)(1) describes the current prohibition on
dissemination of locking or crossing quotations. Specifically, the rule
discusses the dissemination and display of quotations

that lock or cross a Protected Quotation, or manual quotations that
lock or cross quotations previously disseminated pursuant to an NMS
plan during Regular Trading Hours. The Exchange proposes to instead
reference the dissemination and display of ``Locking Quotations or
Crossing Quotations'' as defined in EDGA rules.\22\ This change would
increase the clarity of the rule given the Exchange's exemption
request, and the fact that all quotations disseminated by the Exchange
would be manual quotations.\23\
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    \22\ A ``Locking Quotation'' is the display of a bid for an NMS
stock at a price that equals the price of an offer for such NMS
stock previously disseminated pursuant to an effective national
market system plan, or the display of an offer for an NMS stock at a
price that equals the price of a bid for such NMS stock previously
disseminated pursuant to an effective national market system plan in
violation of Rule 610(d) of Regulation NMS. See EDGA Rule 11.6(g). A
``Crossing Quotation'' is the display of a bid (offer) for an NMS
stock at a price that is higher (lower) than the price of an offer
(bid) for such NMS stock previously disseminated pursuant to an
effective national market system plan in violation of Rule 610(d) of
Regulation NMS. See EDGA Rule 11.6(c).
    \23\ For example, as described in the paragraphs that follow, a
quotation would not be considered a Locking Quotation or Crossing
Quotation if the quotation being locked or crossed is a manual
quotation of NYSE that is permitted to be locked or crossed pursuant
to the Exchange's requested exemption pursuant to Rule 610(e) of
Regulation NMS.
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    Second, EDGA Rule 11.10(f)(2) explains that, if a User displays a
manual quotation that locks or crosses a quotation previously
disseminated pursuant to an effective national market system plan, such
User shall promptly either withdraw the manual quotation or route an
ISO to execute against the full displayed size of the locked or crossed
quotation. As EDGA Rule 11.10(f)(1) would already prohibit displaying a
Locking Quotation or Crossing Quotation, subject to the exception
provided in EDGA Rule 11.10(f)(iv), as amended below, the Exchange
proposes to eliminate the redundant language contained in this
paragraph.
    Third, the Exchange proposes to eliminate EDGA Rule
11.10(f)(3)(iii), which applies to automated quotations, and amend EDGA
Rule 11.10(f)(3)(iv) to remove specific references to manual
quotations, and specify that a User displaying a Locking Quotation or
Crossing Quotation would only qualify for this exception if the User
simultaneously routed an ISO to execute against the full displayed size
of the Locking Quotation or Crossing Quotation, instead of the current
language which references only clearing locked or crossed manual
quotations.
    Finally, the Exchange proposes to introduce another exception under
proposed EDGA Rule 11.10(f)(3)(v) that applies when the quotation
displayed by the User is not a Locking Quotation or Crossing Quotation
in violation of Rule 610(d) of Regulation NMS because the quotation
being locked or crossed is a manual quotation that may be locked or
crossed under an exemption granted pursuant to Rule 610(e) of
Regulation NMS. Locking Quotations and Crossing Quotations are defined
in Rule 11.6(c), (g), and reference the display of bids and offers that
lock or cross quotations disseminated pursuant to an NMS Plan ``in
violation of Rule 610(d).'' The proposed language being introduced as
EDGA Rule 11.10(f)(3)(v) is meant to codify the requested exemption by
making clear that a quotation would not be considered a Locking
Quotation or Crossing Quotation if the quotation being locked or
crossed is a manual quotation that is allowed to be locked or crossed
pursuant to the Exchange's exemption request.
    In addition, the Order Protection Rule requires trading centers to
establish, maintain, and enforce written policies and procedures that
are reasonably designed to prevent trade-throughs on that trading
center of protected quotations in NMS stocks, unless an exception
applies. Rule 611(b)(4) provides such an exception that applies when
the markets are crossed but this exception applies solely to situations
where a Protected Bid is crossed with a Protected Offer. It does not
apply to situations where a Protected Bid or Protected Offer is crossed
with the published bid or offer of a manual market. As a result, if an
automated quotation were to cross EDGA's disseminated manual quotation
without also crossing another market's protected quotation, the
Exchange would not be permitted to execute incoming orders against its
displayed quotation even though that quotation establishes the best
price available in the market. The Exchange believes that this could be
a disincentive to both providing and accessing liquidity on EDGA as the
published quotation may not be executable in such circumstances solely
due to the Exchange disseminating a quotation that has been marked
``manual.'' Furthermore, the quotations that would be impacted are the
ones that actually set the best available prices in a security--i.e.,
the type of liquidity that the proposed delay mechanism is actively
seeking to encourage.
    Based on the Exchange's analysis, crossed market scenarios are
infrequent in today's highly efficient market, and tend to be short
lived, with 99% of crossed markets being resolved within 25
milliseconds or less.\24\ As a result, the Exchange is proposing to
implement delayed cancellation behavior to allow an aggressively priced
order to remain posted at its limit price for as long as it is
executable pursuant to Rule 611(b)(8)--i.e., the ``Flickering Quote
Exception.'' As proposed, a bid (offer) on the EDGA Book would be
eligible to remain posted to the EDGA Book for one second after such
bid (offer) is crossed by a Protected Offer (Protected Bid). Such bid
(offer) would be executable during this one second period pursuant to
Rule 611(b)(8) of Regulation NMS, notwithstanding the fact that it is
higher (lower) than a Protected Offer (Protected Bid). In turn, the bid
(offer) on the EDGA Book would be cancelled if it continues to be
higher (lower) than a Protected Offer (Protected Bid) after this one
second period. The following example illustrates the proposed behavior.
---------------------------------------------------------------------------

    \24\ Based on crossed markets occurring in SPY, IWM, AAPL, GE,
C, GS, and XOM on October 5, 2018. Crossed markets present an
effective arbitrage opportunity because in a crossed market the
spread is inverted and it is therefore possible to purchase a
security at a price below the prevailing price to sell.
---------------------------------------------------------------------------

    Example 9:

--Market is $10.00 x $10.03 (EDGA, BZX, Nasdaq).
--Liquidity provider on EDGA tightens quote to $10.02 x $10.03
improving the bid by two cents.
--Nasdaq subsequently updates its offer price to $10.01.
--Incoming sell order on EDGA seeks to trade with the EDGA bid at
$10.02.
--The EDGA bid at $10.02 would remain posted at this price for one
second, during which time it would be executable against incoming sell
orders seeking an execution at the best posted bid price in the market.
As is the case today, an incoming sell order would be eligible trade
with the EDGA bid at $10.02, securing a favorable execution for the
investor seeking liquidity. In the unlikely event that the EDGA bid is
still crossed with Nasdaq's offer after one second, it would be
cancelled.

    Since the proposed flickering quote delayed cancellation behavior
would allow bids and offers on EDGA to remain posted and executable for
up to one second if crossed by a Protected Bid or Protected Offer of
another market, the Exchange would also amend Rule 11.10(a)(2) to
ensure that the crossed market collars defined in that rule continue to
apply to such aggressively priced bids and offers. Specifically, Rule
11.10(a)(2) generally provides that if a Protected Bid is crossing a
Protected Offer, the Exchange will not execute any

portion of a bid or offer at a price that is more than the greater of
five cents or 0.5 percent through the lowest Protected Offer or highest
Protected Bid, as applicable. This crossed market collar is designed to
constrain the price of executions when there is a crossed market, and
the Exchange believes that this protection should continue to be
available when EDGA begins disseminating a manual quotation. As a
result, the Exchange proposes to amend Rule 11.10(a)(2) to provide that
protection is available when a bid (offer) on the EDGA Book is crossed
by a Protected Offer (Bid) pursuant to proposed EDGA Rule 11.10(a)(6).
As is the case today, a User would be able to instruct the Exchange to
cancel an incoming order in such a scenario. The Exchange would
therefore also amend the portion of the rule dealing with such an
instruction to make clear that it would continue to apply when a bid
(offer) on the EDGA Book is crossed by a Protected Offer (Bid).
IV. Order Types
    The Exchange is also proposing a number of changes to the order
types currently offered on EDGA. The proposed changes are designed to
ensure that order types offered by the Exchange are consistent with the
goals and operation of the LP\2\ delay mechanism, and would therefore
encourage continued participation by members and investors on EDGA. In
many cases, the Exchange has decided to eliminate, or adjust the
operation of, certain rarely used order types and instructions that
could increase System complexity if offered alongside the proposed
delay mechanism. In addition, the Exchange has proposed changes to
certain order types that the Exchange believes would be desirable for
market participants after the implementation of the delay mechanism.
The proposed amendments are detailed below: \25\
---------------------------------------------------------------------------

    \25\ The changes discussed in this section are reflected in EDGA
Rules 11.6 and 11.8, which describe the order types and instructions
being eliminated or amended, and where those order types or
instructions are referenced in other parts of the rulebook,
including EDGA Rule 11.7, Opening Process, EDGA Rule 11.9, Priority
of Orders, and EDGA Rule 11.21, Compliance with Regulation NMS Plan
to Implement a Tick Size Pilot Program.
---------------------------------------------------------------------------

    Discretionary Range. Discretionary Range is an optional instruction
that a User may attach to an order to buy (sell) a stated amount of a
security at a specified, displayed or non-displayed ranked price with
discretion to execute up (down) to another specified, non-displayed
price.\26\ Determining whether an incoming order with this instruction
is executable on entry, and hence subject to the delay mechanism, would
therefore require the System to take into account both the order's
ranked limit price and its discretionary price. The Exchange believes
that this may add unnecessary complexity to the System, and is
therefore proposing to eliminate the Discretionary Range instruction.
In addition, the Exchange offers MidPoint Discretionary Orders
(``MDO'') that utilize the Discretionary Range instruction.\27\
Specifically, a Midpoint Discretionary Order is a limit order to buy
that is pegged to the NBB, with discretion to execute at prices up to
and including the midpoint of the NBBO, or a limit order to sell that
is pegged to the NBO, with discretion to execute at prices down to and
including the midpoint of the NBBO. The Exchange also proposes to
eliminate MidPoint Discretionary Orders.
---------------------------------------------------------------------------

    \26\ See EDGA Rule 11.6(d).
    \27\ See EDGA Rule 11.8(e).
---------------------------------------------------------------------------

    Pegged Orders. Pegged is an instruction to automatically re-price
an order in response to changes in the NBBO. A Pegged Order can be
entered as either a Market Peg or Primary Peg.\28\ A Market Peg is an
order entered with an instruction to peg to the NBB, for a sell order,
or the NBO, for a buy order.\29\ A Primary Peg is as an order entered
with an instruction to peg to the NBB, for a buy order, or the NBO, for
a sell order.\30\ The Exchange proposes to eliminate both Market Pegs
and Primary Pegs. MidPoint Pegged Orders (discussed separately) would
continue to be offered with minor changes to a few rarely used
instructions.
---------------------------------------------------------------------------

    \28\ See EDGA Rule 11.8(b)(9).
    \29\ See EDGA Rule 11.6(j)(1).
    \30\ See EDGA Rule 11.6(j)(2).
---------------------------------------------------------------------------

    The LP\2\ delay mechanism is designed to delay inbound executable
orders to allow liquidity providers sufficient time to adjust their
quotes. Orders subject to the delay mechanism would be delayed once on
entry, and would not be subject to any additional delays thereafter
unless the entering firm were to change the price of the order such
that a resting order becomes executable. Pegged Orders automatically
re-price based on changes to the NBBO, and the Exchange believes that
it is preferable not to subject these orders to another delay every
time that the order is re-priced to an executable price, as doing so
may hinder the ability of such orders to obtain an execution. At the
same time, the Exchange believes that automatic re-pricing, without any
delay, could enable firms using these order types to obtain an
execution against a stale quote before the liquidity provider has been
provided sufficient time to update their quote, thereby frustrating the
goals of the delay mechanism. The Exchange has therefore determined to
eliminate Market Pegs and Primary Pegs, which are lightly used, while
retaining MidPoint Pegged Orders that the Exchange believes would
continue to be useful to market participants seeking to trade at the
midpoint.
    Supplemental Peg Orders. A Supplemental Peg Order is a non-
displayed Limit Order that is eligible for execution at the NBB for a
buy order and NBO for a sell order against an order that is in the
process of being routed to an away Trading Center if such order that is
in the process of being routed away is equal to or less than the
aggregate size of the Supplemental Peg Order interest available at that
price.\31\ Although Supplemental Peg Orders differ from the Pegged
Orders described above in that they do not remove liquidity,\32\ the
Exchange proposes to eliminate it in conjunction with the proposed
changes described above for Pegged Orders.
---------------------------------------------------------------------------

    \31\ See EDGA Rule 11.8(g).
    \32\ Id.
---------------------------------------------------------------------------

    MidPoint Peg Orders. A MidPoint Peg Order is a non-displayed market
order or limit order with an instruction to execute at the midpoint of
the NBBO, or, alternatively, pegged to the less aggressive of the
midpoint of the NBBO or one minimum price variation inside the same
side of the NBBO as the order. Although a number of order types that
contain re-pricing logic would be eliminated with the introduction of
the LP\2\ delay mechanism, the Exchange would continue to offer
MidPoint Peg Orders on EDGA as these orders are valuable to a range of
market participants seeking an execution at the midpoint of the
NBBO.\33\ MidPoint Peg Orders are the most widely used pegging
instruction by a wide margin today. Furthermore, the Exchange believes
that MidPoint Peg Orders may be even more useful once the LP\2\ delay
mechanism is implemented as they would be protected from being executed
at stale prices when the midpoint is about to change.
---------------------------------------------------------------------------

    \33\ As discussed earlier in this proposed rule change, the NBBO
calculated by the Exchange would include EDGA quotes. As a result,
MidPoint Peg Orders would be pegged to the midpoint of the NBBO,
including EDGA's disseminated quotation.
---------------------------------------------------------------------------

    Notwithstanding the general usefulness of MidPoint Peg Orders,
however, the Exchange proposes to eliminate two optional features that
account for a small amount of usage today. First, in addition to
regular midpoint logic that automatically adjusts the price of a
MidPoint Peg Order to the midpoint, the Exchange

currently offers alternative logic that pegs the order to the less
aggressive midpoint or one minimum price variation inside the same side
of the NBBO.\34\ The Exchange proposes to amend the operation of this
order type such that MidPoint Peg Orders entered on EDGA would not be
permitted to alternatively peg to one minimum price variation inside
the same side of the NBBO. Second, by default the MidPoint Peg Orders
do not execute when the NBBO is locked or crossed, but Users may
alternatively specify that they would prefer a MidPoint Peg Order to be
executed in a locked market. The Exchange proposes to eliminate the
optional feature that would allow a MidPoint Peg Order to be executed
in a locked market.
---------------------------------------------------------------------------

    \34\ See EDGA Rule 11.9(c)(9).
---------------------------------------------------------------------------

    Multiple Price Adjust and Multiple Display-Price Sliding. The
Exchange offers two instructions that are designed to re-price orders
in a manner that complies with Rule 610(d) of Regulation NMS--i.e.,
locking or crossing quotations. Price Adjust is an order instruction
requiring that where an order would be a locking quotation or crossing
quotation of an external market if displayed by the System on the EDGA
Book at the time of entry, the order will be displayed and ranked at a
price that is one minimum price variation lower (higher) than the
locking price for orders to buy (sell).\35\ Similarly, Display-Price
Sliding is an order instruction requiring that where an order would be
a locking quotation or crossing quotation of an external market if
displayed by the System on the EDGA Book at the time of entry, will be
ranked at the locking price in the EDGA Book and displayed by the
System at one minimum price variation lower (higher) than the locking
price for orders to buy (sell).\36\ Both Price Adjust and Display-Price
Sliding instructions allow the User to instruct the Exchange to adjust
the order to a more aggressive price either once, or multiple times, in
response to changes to the prevailing NBBO.\37\ The Exchange now
proposes to modify these instructions to only permit their default
operation, which is to adjust the order on entry and once following a
change to the prevailing NBBO.\38\
---------------------------------------------------------------------------

    \35\ See EDGA Rule 11.6(l)(1)(A).
    \36\ See EDGA Rule 11.6(l)(1)(B). A User may elect to have the
System only apply the Display-Price Sliding instruction to the
extent a display-eligible order at the time of entry would be a
Locking Quotation. For Users that select this portion of the
Display-Price Sliding instruction, any order will be cancelled if,
upon entry, such order would be a Crossing Quotation of an external
market. Id.
    \37\ See EDGA Rule 11.6(l)(1)(A)(i),(B)(iii).
    \38\ EDGA Rule 11.6(l)(1)(B)(2) currently provides that in the
event the NBBO changes such that an order subject to the Display-
Price Sliding instruction would not be a Locking Quotation or
Crossing Quotation, the order will receive a new timestamp, and will
be displayed at the ``most aggressive permissible price.'' While the
most aggressive permissible price would be up to the original limit
price of the order in the case of Multiple Display-Price Sliding,
orders subject to Single Display-Price Sliding are limited to being
displayed at the original locking price. As such, the Exchange
proposes to amend EDGA Rule 11.6(l)(1)(B)(2) to reference the
original locking price.
    Similarly, EDGA Rule 11.6(l)(1)(B)(4) currently provides that in
the event the NBBO changes such that an order with a Post Only
instruction subject to Display-Price Sliding instruction would be
ranked at a price at which it could remove displayed liquidity from
the EDGA Book, the order will be executed as set forth in Rule
11.6(n)(4) or cancelled. Orders subject to Single Display-Price
Sliding, as opposed to Multiple Display-Price Sliding, are not re-
ranked when displayed orders at the original locking price are on
the opposite side of the EDGA Book. This scenario is thus impossible
for orders subject to Single Display-Price Sliding and the Exchange
proposes to delete this text from the rule.
---------------------------------------------------------------------------

    Post Only. Post Only is an instruction that may be attached to an
order that is to be ranked and executed on the Exchange or cancelled,
as appropriate, without routing away to another trading center except
that the order will not remove liquidity from the EDGA Book, other than
in instances where economically beneficial to the firm entering the
order with a Post Only instruction.\39\ Specifically, an order with a
Post Only instruction and a Display-Price Sliding or Price Adjust
instruction will remove contra-side liquidity from the EDGA Book if the
order is an order to buy or sell a security priced below $1.00, or if
the value of such execution when removing liquidity equals or exceeds
the value of such execution if the order instead posted to the EDGA
Book and subsequently provided liquidity, including the applicable fees
charged or rebates provided.\40\ With the introduction of the LP\2\
delay mechanism, the Exchange believes that a more straightforward
variant of the Post Only instruction that would never remove liquidity,
and would therefore never be subject to the delay mechanism, would be
valuable to liquidity providers on EDGA. The Exchange therefore
proposes to amend the Post Only instruction such that a Post Only order
would never be eligible to remove liquidity.\41\ Furthermore, to
encourage liquidity providers to use this instruction to provide
displayed liquidity, the Post Only instruction would be limited to
displayed orders, or MidPoint Peg Orders, that, while non-displayed
would provide price improvement all the way up to the midpoint of the
NBBO.
---------------------------------------------------------------------------

    \39\ See EDGA Rule 11.6(n)(4).
    \40\ Id. To determine at the time of a potential execution
whether the value of such execution when removing liquidity equals
or exceeds the value of such execution if the order instead posted
to the EDGA Book and subsequently provided liquidity, the Exchange
will use the highest possible rebate paid and highest possible fee
charged for such executions on the Exchange.
    \41\ The Exchange also proposes conforming changes to other
rules that reference Post Only functionality that would cause an
incoming Post Only Order to be executed on entry. See e.g., EDGA
Rule 11.6(l)(A)(4), (B)(4) and EDGA Rule 11.8(c)(5).
---------------------------------------------------------------------------

    Non-Displayed Swap and Super Aggressive. The Exchange offers two
order instructions that contain a liquidity swap component--i.e., Non-
Displayed Swap (``NDS'') and Super Aggressive. When an order entered
with an NDS or Super Aggressive instruction is locked by an incoming
order with a Post Only instruction that would not remove liquidity
based on the economic impact of removing liquidity on entry compared to
resting on the order book and subsequently providing liquidity, the
order with the NDS or Super Aggressive instruction is converted to an
executable order and will remove liquidity against such incoming
order.\42\ An order entered with an NDS instruction is not eligible for
routing pursuant to EDGA Rule 11.11,\43\ whereas an order entered with
a Super Aggressive instruction would be routed if an away trading
center locks or crosses the limit price of the order resting on the
EDGA Book.\44\ NDS and Super Aggressive are used by market participants
that are very aggressively seeking liquidity and are therefore willing
to liquidity swap with an incoming Post Only order, generating an
execution when a trade would otherwise not occur by changing the
economics for the incoming order. As mentioned in the paragraphs above,
the Exchange is proposing to amend its handling of Post Only orders
such that an order entered with a Post Only instruction would not trade
on entry, regardless of the economics associated with such an
execution. As such, the Exchange proposes to eliminate the NDS and
Super Aggressive instructions. The Exchange would continue to offer the
Aggressive instruction, which does not contain a liquidity swap
component but is otherwise identical to the Super Aggressive
instruction in that it directs the System to route the order if an away
trading center locks or crosses the limit

price of the order resting on the EDGA Book.\45\
---------------------------------------------------------------------------

    \42\ See EDGA Rule 11.6(n)(2), (n)(7). If an order that does not
contain a Super Aggressive instruction maintains higher priority
than one or more Super Aggressive eligible orders, the Super
Aggressive eligible order(s) with lower priority will not be
converted and the incoming order with a Post Only instruction will
be posted or cancelled in accordance with Rule 11.6(n)(4). This does
not apply to orders entered with an NDS instruction.
    \43\ See EDGA Rule 11.6(n)(7).
    \44\ See EDGA Rule 11.6(n)(2).
    \45\ See EDGA Rule 11.6(n)(1).
---------------------------------------------------------------------------

    Market Maker Peg Orders. A Market Maker Peg Order is a limit order
that is automatically priced by the System at the Designated Percentage
away from the then current NBB (in the case of an order to buy) or NBO
(in the case of an order to sell), or if there is no NBB or NBO at such
time, at the Designated Percentage away from the last reported sale
from the responsible single plan processor. This automated pricing is
done to assist market makers in maintaining compliance with their
continuous quoting obligations, and happens both when the order becomes
active in the System, i.e., upon entry or at the beginning of regular
trading hours, and at any time the price of the order reaches the
Defined Limit or moves a specified number of percentage points away
from the Designated Percentage toward the then current NBB or NBO, as
applicable. Since this order type is designed to maintain compliance
with a market maker's quoting obligations by providing liquidity at
prices that are automatically adjusted to comply with these quoting
obligations, the Exchange proposes to modify the Market Maker Peg Order
such that all such orders would be entered into the System with a Post
Only instruction.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\46\ in general, and
Section 6(b)(5) of the Act,\47\ in particular, in that it is designed
to remove impediments to and perfect the mechanism of a free and open
market and a national market system, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest and not to permit unfair discrimination between
customers, issuers, brokers, or dealers. Specifically, the Exchange
believes that the proposed LP\2\ delay mechanism would reduce the
opportunity for cross-asset latency arbitrage and thereby protect
liquidity providers and encourage better market quality on EDGA.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78f(b).
    \47\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Two registered national securities exchanges, IEX and NYE American,
currently operate markets with delay mechanisms. The 350 microsecond
delay mechanisms adopted on both of these markets are very similar, and
are designed to reduce latency arbitrage opportunities by allowing
resting non-displayed pegged orders to be updated based on changes in
the NBBO prior to being picked off by opportunistic traders. Neither of
these markets, however, address the critical need to encourage
liquidity provision by market makers and other market participants that
are vital to the proper functioning of the equities markets. While the
LP\2\ delay mechanism would also protect non-displayed orders pegged to
the midpoint of the NBBO, it is designed first and foremost to protect
price forming, displayed liquidity.
    To accomplish this result, the Exchange would implement a four
millisecond delay on incoming executable orders that would take
liquidity on entry. The delay mechanism is designed to provide
liquidity providers sufficient time to update their quotes based on
cross-asset signals, primarily from the futures markets. The Exchange
has found that, today, liquidity providers are at risk of trading at
stale prices when futures prices change as certain opportunistic
trading firms that utilize microwave connections, instead of the
traditional fiber, can race to the equities markets and trade with
resting liquidity before liquidity providers can adjust their quotes
appropriately. This effect is further compounded when market makers and
other providers of liquidity are quoting in many different securities
and may therefore need to simultaneously modify quotes across a number
of securities simultaneously. This is a significant disincentive to
firms that actively provide liquidity, and often results in those firms
being unwilling to display the best possible prices, or size, to the
market. As markets evolve, the Exchange believes that it is its
responsibility to respond to these changes in a manner that continues
to promote a free and open market and national market system. The
Exchange has therefore designed a unique delay mechanism to protect
liquidity providers, which has the potential to benefit both liquidity
providers and the ordinary investors that rely on the liquidity they
supply to the market.
    The Exchange believes that its approach has two important benefits
over the delay mechanisms introduced to date. First, it would give
liquidity providers the ability to control their own trading interest,
rather than requiring that firms use complex pegged order types that
cede pricing discretion to the Exchange in order to benefit from the
delay mechanism.\48\ Second, it would protect displayed orders in
addition to the non-displayed orders that are protected by existing
delay mechanisms. When the Commission adopted the Order Protection
Rule, it stated its view that ``strengthened protection of displayed
limit orders would help reward market participants for displaying their
trading interest and thereby promote fairer and more vigorous
competition among orders seeking to supply liquidity.'' \49\ The
Exchange believes that this statement remains true today. Displayed
limit orders are important to the national market system because they
inform the prices at which all transactions take place. Even without
protected market status, the Exchange believes that more displayed
liquidity increases pricing information available to investors and
contributes to more robust price formation.
---------------------------------------------------------------------------

    \48\ IEX and NYSE American provide discretionary pegged orders
that have discretion to execute at prices up to some discretionary
price, except when the exchange has detected an unstable quote. See
IEX Rule 11.190(b)(8),(10); NYSE American Rule 7.31E(h)(C).
    \49\ Regulation NMS Adopting Release, 70 FR at 37501.
---------------------------------------------------------------------------

    The Exchange also believes that these benefits would accrue to
market participants without unnecessarily burdening the ability of
investors to access displayed liquidity on EDGA. Although the proposed
four millisecond delay is longer than the one millisecond delay
contemplated by the Staff's guidance on automated quotations under
Regulation NMS, or the 700 millisecond roundtrip delay experienced on
IEX and NYSE American, the Exchange believes that this delay is
nonetheless sufficiently short so as to not impede the ability of long
term investors to access the Exchange's displayed quotations. Moreover,
the Commission's approval of delay mechanisms on both IEX and NYSE
American indicates that a speed bump that is appropriately designed
based on geographic latencies between trading venues where latency
arbitrage opportunities exist can be a suitable mechanism for
addressing that arbitrage, and thereby protecting investors. The LP\2\
delay mechanism, which is designed to reduce latency arbitrage based on
signals that originate from the futures markets in Aurora, IL and must
travel to the Exchange's data center in Secaucus, NJ, would introduce a
delay that is shorter than existing geographic latencies between those
markets in order to protect liquidity providers.\50\
---------------------------------------------------------------------------

    \50\ A fiber connection between Aurora, IL and Secaucus, NJ
would be subject to around 7.75 milliseconds of latency. See supra
note 10. The proposed four milliseconds of latency would level the
playing field between market participants that use a standard fiber
connection and opportunistic traders that use the fastest microwave
connections.

---------------------------------------------------------------------------

    In addition, the proposed delay would be shorter than existing
geographic latencies within the national market system for equities
based on the time it takes for a message to traverse the distance
between the Exchange's data center and the NYSE Chicago, Inc. (``CHX'')
CH2 data center, which is located in Chicago, IL. While CHX trades the
vast majority of symbols out of its data center in Secaucus, NJ, it
trades a number of ETPs out of the CH2 data center to reduce latency
with respect to the related index futures contracts. The proposed LP\2\
delay mechanism would produce a similar result by delaying incoming
messages based on geographical latencies between EDGA's data center in
Secaucus, NJ and CME's data center for futures trading in Aurora, IL,
and, more specifically, the difference in latencies between a high
speed microwave connection and a traditional fiber connection. As such,
the Exchange believes that the proposed delay mechanism is narrowly
tailored to reduce cross-asset latency arbitrage without impairing the
proper functioning of the equities markets. Furthermore, in the SEC's
interpretive guidance regarding automated quotations under Regulation
NMS, the Commission itself relied, in part, on geographic latencies
experienced between data centers located in northern NJ, where the
Exchange's own data center is located, and the CH2 data center in
Chicago, IL.\51\
---------------------------------------------------------------------------

    \51\ See Commission Interpretation, supra note 17, 81 FR at
40789.
---------------------------------------------------------------------------

    The proposed LP\2\ delay mechanism is also consistent with Rule 602
of Regulation NMS (i.e., the ``Quote Rule'').\52\ Generally, the firm
quote provisions of the Quote Rule require each responsible broker or
dealer to execute an order presented to it, other than an odd lot
order, at a price at least as favorable as its published bid or
published offer, in any amount up to its published quotation size. This
obligation does not apply if the responsible broker or dealer has
communicated a revised bid or offer before the incoming order is
presented to such broker or dealer.\53\ The LP\2\ delay mechanism would
not result in violations of the firm quote provisions of the Quote Rule
because no information is communicated about executable orders until
those orders go through the LP\2\ delay mechanism. As such, those
orders would not be ``presented'' to liquidity providers as
contemplated by the Quote Rule until they have gone through the delay
mechanism and are released for execution. Once the executable order has
gone through the delay mechanism and is presented to resting orders on
the EDGA Book, no liquidity provider would be given an opportunity to
update its prices in response to that information.
---------------------------------------------------------------------------

    \52\ 17 CFR 242.602(b)(2).
    \53\ 17 CFR 242.602(b)(3).
---------------------------------------------------------------------------

    Furthermore, while the LP\2\ delay mechanism is designed to improve
market quality, firms with executable order flow that believe that
their execution quality is harmed by the delay mechanism would be
permitted to ignore the Exchange's manual quotations and route their
orders to other trading venues. The Exchange is proposing to give up
its protected quote status in conjunction with the introduction of the
LP\2\ delay mechanism. As a result, no market participants would be
required to access liquidity on EDGA in order to meet their obligations
under the Order Protection Rule, and would only need to trade on EDGA
if they see the anticipated benefits, such as lower quoted and
effective spreads, or larger size at the inside.
    Although EDGA would operate without protected quote status, the
Exchange believes that expected improvements to market quality would
continue to make the Exchange an attractive venue for the trading of
NMS stocks.\54\ Routing orders to EDGA would therefore be consistent
with a broker-dealer's best execution obligations to the extent that
the proposal is successful in encouraging improved market quality in
the form of better prices, available size, or fill rates. The duty of
best execution requires broker-dealers to execute customers' orders at
the most favorable terms reasonably available under the circumstances,
i.e., at the best reasonably available price.\55\ A broker-dealer would
therefore be permitted to send orders for execution on EDGA, consistent
with this obligation, if it finds that the Exchange offers more
favorable execution opportunities to its customers, taking into account
the prices and sizes posted by liquidity providers on the Exchange, as
well as other factors such as the likelihood of execution. In the
absence of such expected improvements to market quality, however, the
Order Protection Rule would not obligate firms to access liquidity on a
``manual'' exchange. The Exchange believes that the anticipated
improvements to market quality as a result of the proposed delay
mechanism would make EDGA a competitive choice for investors seeking
liquidity.
---------------------------------------------------------------------------

    \54\ The Order Protection Rule does not supplant or diminish the
broker-dealer's responsibility for achieving best execution,
including its duty to evaluate the execution quality of markets to
which it routes customer orders. See Regulation NMS Adopting
Release, 70 FR at 37538.
    \55\ See Regulation NMS Adopting Release, 70 FR at 37538.
---------------------------------------------------------------------------

    The Exchange also believes that the proposed approach is not
unfairly discriminatory since orders would be subject to the LP\2\
delay mechanism on an equal basis based solely on whether the incoming
order is priced to remove or add liquidity on entry. The Exchange
believes that it is appropriate to provide protection for orders that
provide liquidity because these orders provide an important service to
the market and face asymmetric risks due to the fact that the market
may move while they are posted to the order book. Furthermore, in
contrast to other delay mechanisms that target very narrow subsets of
orders as deserving of protection, the LP\2\ delay mechanism is
designed broadly to protect all liquidity providing orders, and is not
limited to protecting either specific order types or specific
categories of market participants. The Exchange therefore believes that
the LP\2\ delay mechanism would promote liquidity provision without
unfairly discriminating against specific segments of the market.
    While market makers are the most likely to benefit from the
proposed delay mechanism due to their obligations to continuously quote
across a number of securities,\56\ the proposal would protect a wide
range of orders that provide liquidity to the market, and thereby
promote better market quality. The LP\2\ delay mechanism is therefore
designed to encourage liquidity provision by market makers entering
displayed two-sided quotes on a continuous basis throughout the trading
day, investors seeking to trade at the midpoint of the NBBO, and any of
a wide range of other market participants entering resting limit
orders. The Exchange believes that it is preferable to provide this
benefit to all liquidity providing orders rather than specific segments
of the market because its goal is to broadly encourage liquidity
provision. Any market participants that provide liquidity to the market
would benefit from the LP\2\ delay mechanism in relative proportion to
the amount of liquidity they provide.
---------------------------------------------------------------------------

    \56\ See EDGA Rule 11.20(d)(1).
---------------------------------------------------------------------------

    The Exchange does not believe that it is unfairly discriminatory to
subject orders that would remove liquidity on entry to the proposed
delay mechanism. By design, all speed bumps must be applied to certain
inbound/outbound messages and not others. For example, the delay
mechanisms adopted by both

IEX and NYSE American do not apply to the repricing of non-displayed
orders pegged to the NBBO. This allows those orders to be updated based
on their pegging instruction before opportunistic traders can trade
with them at the stale price. Similarly, the proposed LP\2\ delay
mechanism would apply only to orders that remove liquidity, while
exempting orders that add liquidity so that resting orders can be
modified before opportunistic traders can pick off quotes at the stale
price. Reducing this form of opportunistic trading is consistent with
the protection of investors and the public interest, and removes
impediments to and perfects the mechanism of a free and open market and
a national market system.
    The Exchange does not believe that it is unfairly discriminatory to
subject all liquidity removing orders to the delay mechanism, including
orders entered by market participants not engaged in latency arbitrage.
The proposed delay mechanism is designed to give liquidity providers
the ability to update their quotes in response to changed market
conditions (e.g., a price change in a futures contract) before trading
at stale prices. The Exchange believes that this approach is superior
to relying on complicated non-displayed pegged orders managed by the
exchange operator, as the chosen approach encourages liquidity
providers to actually improve displayed prices rather than simply
following prices displayed by other equities exchanges. Since the
liquidity provider would never be apprised of the existence of an
incoming liquidity removing order before it exits the delay mechanism,
updated quotations would be more likely to impact latency sensitive
market participants attempting to trade at times when the market is
about to move to a new price level. In turn, ordinary investors that
are not specifically seeking these opportunities would benefit from
better price discovery as the price at which their orders are executed
would better reflect the current market for a given security, as
potentially improved by liquidity providers due to decreased adverse
selection risk. The LP\2\ delay mechanism is designed to encourage
liquidity provision, and therefore has the potential to benefit all
market participants, including market participants that submit
executable orders subject to the delay mechanism. As the Commission
explained when it adopted Regulation NMS, the interests of liquidity
providers and market participants that submit marketable orders are
``inextricably linked together.'' \57\ Displayed limit orders, in
particular, are responsible for setting the market for a security and
are the primary driver of public price discovery in addition to
supplying needed liquidity to other market participants. Ultimately,
the goal of the LP\2\ delay mechanism is to protect liquidity providers
from opportunistic trading strategies so as to improve execution
quality for investors that submit marketable order flow.
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    \57\ See Regulation NMS Adopting Release, 70 FR at 37527.
``Displayed limit orders are the primary source of public price
discovery. They typically set quoted spreads, supply liquidity, and
in general establish the public ``market'' for a stock. The quality
of execution for marketable orders, which, in turn, trade with
displayed liquidity, depends to a great extent on the quality of
markets established by limit orders (i.e., the narrowness of quoted
spreads and the available liquidity at various price levels).'' Id.
---------------------------------------------------------------------------

    In fact, the success of the Exchange under the proposed market
structure is entirely contingent on providing improved market quality
(e.g., quoted spreads, size at the inside, and fill rates) to
marketable orders. Because the proposal contemplates disseminating a
manual quotation that is not protected under the Order Protection Rule,
interaction with resting order flow on the EDGA Book would be entirely
voluntary. That is, no market participant would be required to access
liquidity on the EDGA under Regulation NMS. Without the protection
normally afforded to displayed quotations by the Order Protection Rule,
the decision to route order flow to the Exchange would depend on the
entering firm's independent assessment that EDGA offers favorable
execution quality when compared to competing markets. As such, the
decision to route orders to the Exchange would reflect that firm's
assessment that the economics associated with improved market quality
outweigh any perceived costs associated with the delay mechanism.
    Given the importance of ensuring that liquidity providers can quote
aggressively with the introduction of the delay mechanism, the Exchange
also believes that the proposed flickering quote functionality would
remove impediments to and perfect the mechanism of a free and open
market and a national market system. As explained in the purpose
section of this proposed rule change, the proposed behavior is designed
to ensure that the EDGA quote would remain accessible to investors if
the Exchange's manual quotation is crossed by a protected quotation.
This change is necessitated by a difference in rules that apply to
automated and manual quotations: Specifically, the fact that the
crossed market exception under Rule 611(b)(4) of Regulation NMS only
applies when a Protected Bid is crossed with a Protected Offer. As
proposed, if the Exchange's previously disseminated manual quotation is
crossed by a protected quotation, aggressively priced orders on the
EDGA Book would remain displayed and executable at EDGA's quoted price
for one second. If the Exchange's quote is still crossed by a protected
quote after this one second period, the System would cancel the crossed
order(s), which would no longer be posted at an executable price. In
turn, this would ensure that the best quoted prices displayed in the
market remain accessible to investors. The Exchange believes that
permitting orders to remain posted and executable for the one second
period allowed under the Flickering Quote Exception is consistent with
the protection of investors and the public interest as it ensures that
market participants would be able to access EDGA's disseminated
quotation when EDGA has established the best price available in the
market.
    The Exchange also believes that the proposed changes to its locked
and crossed market rules under EDGA Rule 11.10(f), and the changes to
its crossed market collars as described in Rule 11.10(a)(2), are
necessary and appropriate as these changes would increase transparency
around the proposed operation of the Exchange as a ``manual'' market
that would no longer disseminate an automated quotation. Specifically,
and as described in more detail in the purpose section of the proposed
rule change, these changes are designed to ensure that the Exchange's
rules properly reflect the fact that EDGA would be disseminating a
manual quotation, subject to an exemption requested pursuant to Rule
610(e) of Regulation NMS that would allow the Exchange to continue
locking or cross manual quotations disseminated by NYSE. The Exchange
believes that the proposed changes are consistent with the Exchange's
obligations as an equities exchange disseminating a manual quotation,
as modified by the requested exemption.
    Finally, the Exchange believes that the proposed order type changes
are consistent with the protection of investors and the public
interest. The Exchange has reviewed the order types offered on EDGA to
determine how best to serve the needs of members and investors, while
striving to reduce System complexity with the introduction of the delay
mechanism. While the Exchange offers a wide array of order types, not
all of those order types are frequently used by market

participants that trade on EDGA. In addition, some of the order types
offered today would be more difficult to implement in a way that is
consistent with the operation and goals of the proposed LP\2\ delay
mechanism, while others could be made to more useful by making small
tweaks to their operation. The Exchange believes the proposed changes
to its order types satisfy its twin goals of providing functionality
that is the most useful to market participants and investors that trade
on EDGA while reducing System complexity surrounding the proposed delay
mechanism. Each of the order type changes is discussed in turn below.
    First, the Exchange has decided to eliminate the Discretionary
Range instruction and the related MDO order type as continuing to offer
orders that include this instruction would add complexity to the System
in the context of a delay mechanism that applies to all liquidity
taking orders. Specifically, implementation of the Discretionary Range
instruction alongside the proposed LP\2\ delay mechanism would require
that the System consider both an order's limit price and its
discretionary price in determining whether an order would be subject to
the speed bump. Based on current usage of this order instruction, the
Exchange does not believe at this time that continuing to offer it
would provide sufficient benefit to market participants to warrant the
increased complexity of building this feature to coexist with the delay
mechanism. With respect to MDOs, which contain a Discretionary Range
instruction that is pegged to the midpoint of the NBBO, the Exchange
notes that investors that desire a midpoint execution would be able to
continue using MidPoint Peg Orders. As noted below, while a number of
orders with automated re-pricing logic would be eliminated with the
proposed introduction of the LP\2\ delay mechanism, EDGA would continue
to offer MidPoint Peg Orders.
    Second, the Exchange has decided to eliminate a number of order
types that would automatically re-price based on changing prices in the
prevailing market. These include Pegged Orders (i.e., Primary Peg and
Market Peg), and orders that include a Multiple Price Adjust or
Multiple Display-Price Sliding instruction. The Exchange believes that
eliminating orders that re-price automatically is consistent with the
goals of the proposed delay mechanism as these orders could potentially
be used to obtain an execution against stale quotes that should have
been protected by the delay mechanism. For example, assume the NBBO is
$9.98 x $10.00, and the EDGA Book contains a displayed limit order at
the NBO of $10.00, and a non-displayed Primary Peg Order entered to buy
with an offset of one cent better than the NBB, currently ranked at
$9.99. If the NBBO were to update to $9.99 x $10.02, the Primary Peg
Order would be immediately re-priced to $10.00 and trade against the
contra-side sell order at the stale NBO price without going through the
delay mechanism. By contrast, if the buy order were instead a non-
displayed limit order and the member had entered a cancel/replace
message to update it to $10.00, the price update would be subject to
the delay mechanism, allowing the liquidity provider to update its sell
price based on changes to the market, as intended. While the Exchange
could subject automated re-pricing to the delay mechanism instead, as
it has proposed for User initiated modifications, the Exchange believes
that the proposed approach better serves the needs of members and
investors as continuously subjecting an order that re-prices
automatically to a delay may limit the ability of such an order to
reasonably obtain an execution. The Exchange therefore believes that it
is consistent with the protection of investors and the public interest
to eliminate a number of current order types and order instructions
that contain automated re-pricing logic. The Exchange also believes
that it is appropriate to eliminate Supplemental Peg Orders in
connection with the changes to other Pegged Orders described above.
Although Supplemental Peg Orders are designed to not remove liquidity,
use of Supplemental Peg Orders is minimal, and removing this order type
along with other similar instructions would therefore reduce system
complexity without any significant impact to market participants.
    At the same time, the Exchange has determined to keep MidPoint Peg
Orders, which account for a significant portion of pegged volume traded
today, and would continue to be valuable to a number of market
participants that seek to trade at the midpoint. As explained in the
purpose section of this proposed rule change, MidPoint Peg Orders may
become even more useful when the Exchange implements the LP\2\ delay
mechanism since these orders would be automatically re-priced to the
new midpoint before being accessed at a stale price. In addition, a
resting MidPoint Peg Order is willing to provide liquidity at the
midpoint of the NBBO, thereby providing price improvement opportunities
for investors accessing liquidity on EDGA.
    Although the Exchange is keeping MidPoint Peg Orders, which are
beneficial to members and investors, the Exchange is removing two
related instructions. First, the Exchange is eliminating an optional
feature that would peg a MidPoint Peg Order to the less aggressive of
the midpoint or one minimum price variation inside the same side of the
NBBO. These alternative MidPoint Peg Orders function in the same manner
as a Primary Peg Order with an offset, except in situations where the
market is one tick wide, and therefore would be eliminated along with
Primary Peg Orders. The Exchange believes that this is consistent with
the goal of reducing executions that result from re-priced orders
bypassing the delay mechanism, unless the order is a true midpoint
seeking order. Second, the Exchange is eliminating an option that a
User has to request that a MidPoint Peg Order be executed when the NBBO
is locked. The Exchange believes that this change is consistent with
the public interest because avoiding an execution when the midpoint is
locked would prevent such orders from trading with displayed orders
represented at the NBBO before those orders could be updated by
liquidity providers.\58\ Furthermore, the Exchange believes that the
majority of Users of MidPoint Peg Orders do not want their orders
executed in a locked market where there is no true midpoint execution.
---------------------------------------------------------------------------

    \58\ MidPoint Peg Orders would be able to re-price and trade
with hidden orders resting between the NBB and NBO without going
through the delay mechanism.
---------------------------------------------------------------------------

    The Exchange has also decided to amend the Post Only instruction
such that it would never be eligible to remove liquidity. Currently,
the Exchange's Post Only logic would allow a Post Only order to remove
liquidity in certain cases where doing so would be economically
beneficial to the party entering the order. The New York Stock Exchange
(``NYSE'') offers a similar but less complicated ``Add Liquidity Only''
or ``ALO'' instruction that would not remove liquidity from the NYSE
book in such circumstances.\59\ The Exchange believes that market
makers and other liquidity providers would find such an instruction
useful as it would allow them to ensure that orders entered to provide
liquidity would not inadvertently remove liquidity and thus be subject
to a delay. Market makers and similar market participants typically
prefer to provide liquidity to the market, entering quotes to capture
the spread, and may not desire an execution that

removes liquidity even when the economics of such an execution would
appear to be beneficial to such party. The Exchange therefore believes
that it is appropriate to amend its Post Only instruction in connection
with the introduction of the LP\2\ delay mechanism such that a Post
Only Order would never remove liquidity from the EDGA Book.
---------------------------------------------------------------------------

    \59\ See NYSE Rule 13(e)(1).
---------------------------------------------------------------------------

    Based on the proposed changes to the Post Only instruction, the
Exchange is also proposing to eliminate the NDS and Super Aggressive
Order instructions. As previously mentioned, NDS and Super Aggressive
both contain a built in liquidity swap component that the Exchange
believes is inconsistent with the proposed changes to the Post Only
instruction. Specifically, NDS and Super Aggressive are instructions
that are used to specify the terms under which a resting order would
execute with an incoming Post Only order that would not otherwise
remove liquidity because the amount of price improvement offered by
such an execution was insufficient. Since the Exchange is proposing to
never execute an incoming Post Only order with resting liquidity in
order to avoid having such orders go through the proposed delay
mechanism, these liquidity swap instructions would be rendered
obsolete.
    Finally, the Exchange proposes to modify the operation of Market
Maker Peg Orders such that all Market Maker Peg Orders would include a
Post Only instruction. The Exchange believes that this change is
appropriate because Market Maker Peg Orders are designed to enable
market makers to provide liquidity in compliance with their continuous
quoting obligations, and are not intended to remove liquidity. Today,
Market Maker Peg Orders usually add rather than remove liquidity today
since they are priced a designated percentage away from the NBBO when
there is an appropriate NBBO. However, it is possible that a Market
Maker Peg Order could remove liquidity, for example, when there is no
applicable NBB or NBO, in which case such orders are priced based on
the last reported sale. The Exchange therefore believes that it is
appropriate to systematically enforce the requirement that these orders
do not remove liquidity.

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

    The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. To the contrary, the
proposal is a competitive response to delay mechanisms available on
other markets such as IEX and NYSE American, and is designed to foster
competition between both markets and orders as contemplated by
Regulation NMS. The LP\2\ delay mechanism seeks to enhance available
liquidity and optimize price discovery by deemphasizing speed as a key
to trading success in order to further serve the interests of all
investors. It does this by subjecting all liquidity taking orders to a
short delay of a few milliseconds, while exempting all liquidity
providing orders from this delay mechanism. Every order entered on EDGA
would be subjected, or not subjected, to the delay mechanism based on
whether the order adds or removes liquidity, and regardless of the
order type used or identity of the entering firm.
    The Exchange believes that the resulting market structure benefits
of the proposal are likely to accrue to a wide range of market
participants that add liquidity on the Exchange. This includes market
makers that serve a critical function of providing liquidity to the
market, as well as a range of other investors, including those that
seek to trade at the midpoint of the NBBO. In addition, to the extent
that the proposal is successful in reducing risk for liquidity
providers, and encouraging those liquidity providers to improve market
quality, the expected benefits would also extend to market participants
that choose to access liquidity on EDGA. In sum, the Exchange believes
that the proposed rule change is designed to promote a more vibrant and
competitive market for the vast majority of market participants and
investors that do not rely on opportunistic trading strategies that
exploit differentials in speed.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No comments were solicited or received on the proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule
change should be 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_ADDRESS>Please include
File Number SR-CboeEDGA-2019-012 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-CboeEDGA-2019-012. 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-CboeEDGA-2019-012 and should be
submitted on or before July 17, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\60\
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    \60\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019-13537 Filed 6-25-19; 8:45 am]
BILLING CODE 8011-01-P