Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Permit the Exchange To Extend the Quote-Only Period

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104459; File No. SR-CboeBZX-2025-167]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Permit the Exchange To Extend the Quote-Only Period</SUBJECT> <DATE>December 18, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on December 16, 2025, Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially 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  <SU>3</SU> <FTREF/> and Rule 19b-4(f)(6) thereunder. <SU>4</SU> <FTREF/> The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <FTNT> <SU>3</SU>  15 U.S.C. 78s(b)(3)(A)(iii). </FTNT> <FTNT> <SU>4</SU>  17 CFR 240.19b-4(f)(6). </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> The Exchange is filing with the Commission a proposal to permit the Exchange to extend the Quote-Only Period  <SU>5</SU> <FTREF/> where there is a security that is the subject of an initial pricing on the Exchange that has not been listed on a national securities exchange immediately prior to the initial pricing. The text of the proposed rule change is provided in Exhibit 5. <FTNT> <SU>5</SU>   <E T="03">See</E> Exchange Rule 11.23(a)(17). </FTNT> The text of the proposed rule change is also available on the Commission's website ( <E T="03">https://www.sec.gov/rules/sro.shtml</E> ), the Exchange's website ( <E T="03">https://www.cboe.com/us/equities/regulation/rule_filings/bzx/</E> ), and at the principal office of the Exchange. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> 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. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to add a new subsection (vi) to Rule 11.23(d)(2)(B) to permit the Exchange to extend the Quote-Only Period where there is a security that is the subject of an initial pricing on the Exchange that has not been listed on a national securities exchange immediately prior to the initial pricing. The proposed ability to extend the Quote-Only Period is substantively identical to capabilities on other exchanges. <SU>6</SU> <FTREF/> The Exchange believes this proposal reinforces the Exchange's broad discretionary authority over the initial and continued listing of securities. <SU>7</SU> <FTREF/> <FTNT> <SU>6</SU>   <E T="03">See e.g.,</E> NYSE American Rule 7.18E(e); Securities and Exchange Commission No. 95945 (September 29, 2022) 87 FR 60428 (October 5, 2022) (SR-NYSEAMER-2022-44) (Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Permit the Exchange to Declare a Regulatory Halt). </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> Exchange Rules 14.2 (Regulatory Authority of Exchange) and 14.6 (Obligations for Companies Listed on the Exchange). </FTNT> Exchange Rule 11.23(d)(2) sets forth the IPO and Halt Auction Process. Specifically, Rule 11.23(d)(2)(B) provides that the Quote-Only Period for an IPO Auction  <SU>8</SU> <FTREF/> may be extended in five specific instances: (i) there are unmatched market orders on the Auction Book  <SU>9</SU> <FTREF/> associated with the auction; (ii) the underwriter requests an extension; (iii) where the Indicative Price  <SU>10</SU> <FTREF/> moves the greater of 10% or fifty (50) cents in the fifteen (15) seconds prior to the auction; (iv) in the event of a technical or systems issue at the Exchange that may impair the ability of Users  <SU>11</SU> <FTREF/> to participate in the IPO Auction or of the Exchange to complete the IPO Auction; or (v) where a Derivative Security  <SU>12</SU> <FTREF/> fails to meet the Exchange's listing qualification requirements as set forth in Rule 14.11. Now, the Exchange proposes to adopt Rule 11.23(d)(2)(B)(vi) which would provide that the Quote-Only Period may be extended where there is a security that is the subject of an initial pricing on the Exchange that has not been listed on a national securities exchange immediately prior to the initial pricing. <FTNT> <SU>8</SU>   <E T="03">See</E> Exchange Rule 11.22(l)(2)(B) (defining “IPO Auction”). </FTNT> <FTNT> <SU>9</SU>   <E T="03">See</E> Exchange Rule 11.23(a)(1) (defining “Auction Book”). </FTNT> <FTNT> <SU>10</SU>   <E T="03">See</E> Exchange Rule 11.23(a)(10) (defining “Indicative Price”). </FTNT> <FTNT> <SU>11</SU>   <E T="03">See</E> Exchange Rule 1.5(cc) (defining “Users”). </FTNT> <FTNT> <SU>12</SU>   <E T="03">See</E> Exchange Rule 1.5(dd) (defining “Derivative Security”). </FTNT> NYSE American LLC (“NYSE American”) Rule 7.18E(e) states “[t]he Exchange may declare a regulatory halt in a security that is the subject of an initial pricing on the Exchange of a security that has not been listed on a national securities exchange immediately prior to the initial pricing. This regulatory halt will be terminated when the security opens.” This proposal is identical to the NYSE American rule except that the NYSE American rule references a regulatory halt instead of extension of the Quote-Only Period. Additionally, the Exchange is proposing slightly different language than the NYSE American rule to clarify that the rule only references one security. Further, the Exchange is proposing to not include reference to the extension period being terminated when the security opens, as this language is redundant with respect to the Exchange's rules. While NYSE American's rule references a regulatory halt and additional language, the Exchange's approach of extending the Quote-Only Period achieves the same protective purpose through a mechanism that is consistent with the Exchange's existing auction framework under Rule 11.23(d)(2)(B). Additionally, this proposal is identical to NYSE Arca, Inc. (“Arca”) Rule 7.18-E(b)(1)(B)(i)  <SU>13</SU> <FTREF/> and Nasdaq Rule 4120(a)(7). <SU>14</SU> <FTREF/> Initial pricings of securities without prior exchange listing history can be subject to heightened volatility and uncertainty, particularly where there may be significant public interest or rapidly changing market conditions. This authority complements the existing extension provisions in Rule 11.23(d)(2)(B) and provides an additional safeguard specifically tailored to the unique circumstances of initial pricings. <FTNT> <SU>13</SU>   <E T="03">See</E> Arca Rule 7.18-E(b)(1)(B)(i), which provides that “[t]he Exchange may declare a Regulatory Halt in trading for any security for which it is the Primary Listing Market . . . . of a security that is the subject of an initial pricing on the Exchange that has not been listed on a national securities exchange immediately prior to initial pricing (“Initial Listing Regulatory Halt”).” <E T="03">See also</E> Securities and Exchange Commission No. 103476 (July 16, 2025) 90 FR 34314 (July 21, 2025) (SR-NYSEARCA-2025-50) (Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 7.18-E To Effectuate Amendments to Second Restatement of the CTA Plan and the Restated CQ Plan and To Make Confirming Changes to Rules 1.1, 7.11-E, and 7.35-E). </FTNT> <FTNT> <SU>14</SU>   <E T="03">See</E> Nasdaq Rule 4120(a)(7), which provides that “[i]n circumstances in which Nasdaq deems it necessary to protect investors and the public interest, Nasdaq, pursuant to the procedures set forth in paragraph (c) . . . . may halt trading in a security that is the subject of an Initial Public Offering on Nasdaq.” </FTNT> <HD SOURCE="HD3">2. Statutory Basis</HD> The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act. <SU>15</SU> <FTREF/> Specifically, the Exchange believes the proposed rule change is consistent with Section6(b)(5)  <SU>16</SU> <FTREF/> requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)  <SU>17</SU> <FTREF/> requirement that the rules of an exchange not be designed to pe ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 21k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━