Co-authored by Avi Badash.

On June 18, the Chicago Board Options Exchange, Incorporated (CBOE) filed a proposed rule change regarding who is eligible to respond to auction messages. The proposed rule change would allow the CBOE to permit all Trading Permit Holders to respond to the Simple Auction Liaison (SAL), Hybrid Agency Liaison 2 system (HAL2) and complex order request for responses (COA) auction messages instead of limiting this functionality to Qualifying Trading Permit Holders. The proposal provides that the purpose of this proposed change is to increase the opportunities for all types of market participants (e.g., public customers, broker-dealers and market-makers) to participate in SAL, HAL2 and COA auctions in certain classes. According to the CBOE, this broader participation could lead to more robust competition in these auctions because more market participants will be able to submit responses, which may result in better prices for customers. The proposed rule change also seeks to delete the rule governing the Hybrid Agency Liaison system, as it is outdated and no longer applicable, and to rename HAL2 as HAL.

Click here to read Release No. 34-67209.