Statement Summary
Cboe BZX Exchange, Inc. has proposed a rule change to amend its Closing Auction procedures by moving the Market-On-Close (MOC) order cutoff time from 3:59 p.m. ET to 3:55 p.m. ET. This change restricts modifications and cancellations for MOC orders after 3:55 p.m., while maintaining the cutoff for Limit-On-Close (LOC) and Late-Limit-On-Close (LLOC) orders at 3:59 p.m., and proposes to increase the frequency of disseminating Closing Auction information to every second from 3:59 p.m. to 4:00 p.m.. The Exchange believes these amendments will enhance the auction process by allowing market makers additional time to manage potential order imbalances before the close. The changes aim to improve transaction efficiency and market transparency without unfairly discriminating against any users.
Original Statement
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102990; File No. SR-CboeBZX-2025-058]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Rule 11.23 Regarding the Closing Auction
May 5, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on April 25, 2025, Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act and Rule 19b-4(f)(6) thereunder. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
Proposed Changes
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) proposes to:
- Amend Rule 11.23(c)(1)(A) to change the Market-On-Close time from 3:59 p.m. Eastern Time to 3:55 p.m. Eastern Time;
- Amend Rule 11.23(c)(1)(B) to provide that Market-On-Close orders cannot be modified after 3:55 p.m. Eastern Time, and that Limit-On-Close (“LOC”) and Late-Limit-On-Close (“LLOC”) orders cannot be modified after 3:59 p.m. Eastern Time;
- Amend Rule 11.23(c)(2)(A) to change the frequency with which the Exchange publishes BZX Closing Auction information.
Purpose of the Proposed Rule Change
The Exchange aims to provide users with additional time to react to and respond to any potential closing auction imbalances. Notably, the proposed changes are based on feedback from market makers and reflect a desire to strike a balance between order control and market responsiveness.
The current cutoff for MOC orders was initially established at 3:55 p.m., allowing adequate time for market makers to adjust to late order entries, and the proposed change seeks to revert to this original timeframe.
Dissemination of BZX Auction Information
The Exchange proposes to increase the dissemination of Closing Auction information to every one second from 3:59 p.m. to 4:00 p.m. This will help in providing market participants more timely information to gauge potential imbalances in the market closer to the auction’s close.
Statutory Basis
The Exchange believes that the proposed rule change is consistent with the Securities Exchange Act of 1934 and is designed to promote just and equitable principles of trade, fostering a free and open market.
Comments and Solicitation
Interested persons are encouraged to submit comments regarding the proposed rule change via the Commission’s internet comment form or email. Paper comments should be sent in triplicate to the Secretary, Securities and Exchange Commission.
