FR 2020-29021

Summary of the Document

The document discusses the approval by the Securities and Exchange Commission (SEC) of proposed rule changes by four major exchanges: Cboe BYX, Cboe BZX, Cboe EDGA, and Cboe EDGX. These changes concern how these exchanges handle the re-opening of trading for securities listed on the New York Stock Exchange (NYSE) during hours outside of regular trading. Previously, the process required manual intervention by exchange staff to resume trading after a halt was lifted by NYSE. The approved changes will automate this process, making it more efficient by automatically resuming trading when specific conditions are met.

Significant Issues and Concerns

While the automation of the trading re-opening process appears to offer clear efficiencies, the document is notably technical and uses legal jargon. Terms like "NBBO" (National Best Bid and Offer) and references to specific rule numbers may not be easily understood by the general public. The lack of detailed examples or scenarios illustrating how these conditions are determined could also be seen as a significant oversight, potentially leaving stakeholders unclear on how the new automated process will function in real-world situations.

Additionally, the document does not delve into potential costs or challenges associated with transitioning from a manual to an automated system. Such information would be pertinent for assessing the potential financial impacts or operational hurdles the exchanges may face. Discussions regarding risks or implications for market stability with this shift to automation are also absent, which could be critical for evaluating how these changes might affect market reliability.

Impact on the Public

Broadly, these rule changes could positively impact the public by potentially leading to more efficient and timely re-openings of trading sessions. This enhanced efficiency might result in a more reliable and stable trading environment, which could be reassuring for investors who trade NYSE-listed securities outside of regular market hours. By eliminating manual intervention, the exchanges might also reduce human error, thereby maintaining fair trading practices.

Impact on Specific Stakeholders

For investors, particularly those who participate in after-hours trading, these changes could lead to quicker execution and less uncertainty around when trading resumes after a halt. However, investors may need to familiarize themselves with the new procedures to understand how and when their orders might be processed.

Exchange staff who previously managed this process manually may experience a shift in responsibilities as their role in re-opening processes diminishes due to automation. On the other hand, the exchanges themselves might benefit from increased operational efficiencies and reduced administrative overhead, allowing resources to be allocated elsewhere.

In conclusion, while the document outlines a straightforward push towards automation in trading processes, further clarity on the nuances of implementation and impact could offer a more comprehensive understanding for stakeholders, both directly involved and observational.