Federal Register #SR-CboeBZX-2026-030

Cboe BZX Exchange Proposes Wide Market Protection Mechanism Rule Change

This notice announces a proposed rule change by Cboe BZX Exchange, Inc. to enhance market protections: - Government Buyer: - Securities and Exchange Commission (SEC) is the regulatory authority publishing the notice - Cboe BZX Exchange, Inc. is the entity proposing the rule change - OEMs and Vendors: - Cboe BZX Exchange, Inc. is the only organization mentioned - Products/Services Requested: - No products or services are being procured; this is a regulatory rule change - Rule Change Details: - Amends Rule 21.17 to implement a wide market protection mechanism - Mechanism aims to prevent orders from executing at extreme or adverse prices when the National Best Bid and Offer (NBBO) is wide - Utilizes an iterative drill-through protection process - Applies to market, limit, Stop (Stop-Loss), and Stop-Limit orders - Excludes bulk messages, Intermarket Sweep Orders (ISOs), Immediate-or-Cancel orders (IOCs), and M and N capacity orders - Allows for class-by-class application - Notable Requirements: - Focus on enhancing investor protection and market stability - No procurement of goods or services involved

Description

This notice announces a proposed rule change filed by Cboe BZX Exchange, Inc. to amend Rule 21.17. The amendment aims to adopt a wide market protection mechanism intended to reduce the risk of orders executing at extreme or adverse prices when the National Best Bid and Offer (NBBO) is determined to be wide. The mechanism leverages an iterative drill-through protection process and applies to certain market, limit, Stop (Stop-Loss), and Stop-Limit orders. The proposal also includes exclusions for certain order types and allows application on a class-by-class basis to enhance investor protection and market stability.

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