I. Introduction

On January 8, 2026, Cboe BZX Exchange, Inc. (“Exchange” or “BZX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) ^[1] and Rule 19b-4 thereunder,^[2] a proposed rule change to amend the Opening Auction Process provided under Rule 11.23(b)(2)(B) to delay the Opening Auction under certain market conditions in order to improve price discovery and allow executions to occur at prices that better reflect current market conditions. The proposed rule change was published for comment in the Federal Register on January 27, 2026.^[3] On March 11, 2026, pursuant to Section 19(b)(2) of the Act,^[4] the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.^[5] On April 27, 2026, the Commission instituted proceedings under Section 19(b)(2)(B) of the Act to determine whether to approve or disapprove the proposed rule change.^[6] On July 10, 2026, the Exchange filed Amendment No. 1 to the proposed rule change.^[7] The Commission has received no comments regarding the proposed rule change. The Commission is publishing this Notice and Order to solicit comment on Amendment No. 1 in Sections II and III below, which sections are being published verbatim as filed by the Exchange, and to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis.

II. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

Cboe BZX Exchange, Inc. (“BZX” or the “Exchange”) is filing with the Securities and Exchange Commission (“Commission” or “SEC”) a proposal to amend the Opening Auction Process provided under Rule 11.23(b)(2)(B) to ( printed page 47285) delay the Opening Auction under certain market conditions in order to improve price discovery and allow executions to occur at prices that better reflect current market conditions. The text of the proposed rule change is provided in Exhibit 5.

The text of the proposed rule change is also available on the Commission's website ( https://www.sec.gov/​rules/​sro.shtml), the Exchange's website ( https://www.cboe.com/​us/​equities/​regulation/​rule_​filings/​bzx/​), and at the principal office of the Exchange.

III. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

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.

A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

1. Purpose

This Amendment No. 1 to SR-CboeBZX-2026-004 amends and replaces in its entirety the proposal as originally submitted on January 8, 2026. The Exchange submits this Amendment No. 1 in order to clarify certain points and add additional details to the proposal.

The Exchange proposes to amend Rule 11.23(b)(2)(B) to delay the Opening Auction under certain market conditions to improve price discovery and allow executions to occur at prices that better reflect current market conditions. Specifically, as proposed, the Rule would provide that when (1) there is a Valid National Best Bid and Offer (“NBBO”) ^[8] but the Indicative Price ^[9] is outside the Collar Price Range ^[10] established using the NBBO (the “NBBO-established Collar Price Range”) or (2) there is no Valid NBBO and the Indicative Price is outside the Collar Price Range established using the Final Last Sale Eligible Trade (“FLSET”) ^[11] (the “FLSET-established Collar Price Range”), the Opening Auction will be delayed until market conditions improve or the delay period has lapsed, as further described below. In addition to these changes above, the Exchange proposes to amend the definition of “BZX Official Opening Price” to allow odd lot trades to set the BZX Official Opening Price.

The Exchange notes that the official opening price disseminated by the primary listing market (such as the BZX Official Opening Price) ^[12] provides market participants valuable information that is typically used to calculate the initial limit up-limit down (“LULD”) price bands ^[13] and also may serve as the basis for trading strategies for that trading day.^[14] The Exchange believes the proposal will result in (1) fewer LULD Halts due to LULD bands that are based on a stale price ( i.e., the BZX Official Closing Price); and (2) more accurate Collar Price Ranges that are based on current market conditions rather than the BZX Official Closing Price. The Exchange believes the benefit of allowing crossed auction interest to execute at the price that better reflects market conditions for a given security, outweighs any minimal and finite delay in the dissemination of the BZX Official Opening Price and LULD price bands. As such, the Exchange believes that this proposal strikes an appropriate balance by providing additional time for the Opening Auction Process to facilitate more meaningful price formation that better reflects current market conditions for BZX-listed securities, while limiting any delay to ensure the BZX Official Opening Price is still reported to the Securities Information Processor (“SIP”) ^[15] by 9:35 a.m. and used to set the LULD price bands.

Background—Current Opening Auction Process

As noted above, the Exchange proposes to amend its Opening Auction Process to allow, under limited circumstances, a delay that would enable additional information to be incorporated into the determination of the Opening Auction price. Currently, Rule 11.23(b)(2)(B) sets forth the process by which the BZX Official Opening Price is determined for BZX-listed securities during the Opening Auction Process (hereinafter referred to as the “Standard Opening Process”). Specifically, as currently provided in Rule 11.23(b)(2)(B), the Opening Auction price will be the price level within the Collar Price Range that maximizes the number of shares executed between the Continuous Book ^[16] and Auction Book ^[17] in the Opening Auction. In the event of a volume based tie at multiple price levels, the Opening Auction price will be the price which results in the minimum total imbalance. In the event of a volume based tie and a tie in minimum total imbalance at multiple price levels, the Opening Auction price will be the price closest to the Volume Based Tie Breaker.^[18]

The Collar Price Range for an Opening Auction is the range from a set percentage below the Collar Midpoint (which is generally the Volume Based Tie Breaker) to above the Collar Midpoint.^[19] The Collar Midpoint (and Volume Based Tie Breaker) will be the midpoint of the NBBO where there is a Valid NBBO. Where there is no Valid NBBO, the FLSET will be used as the Collar Midpoint (and Volume Based Tie Breaker).

Proposal

The Exchange notes, however, that because the FLSET ^[20] is typically based on the most recent execution in a security during Regular Trading Hours,^[21] its value may be significantly away from the Indicative Price at the time of the Opening Auction Process.^[22] As a result, the Exchange has observed instances where auction eligible orders priced in-line with the Indicative Price were not executed in the Opening Auction because they were outside the FLSET-established Collar Price Range. Based on analysis by the Exchange and feedback from market participants, certain of these instances prevented orders from executing in the Opening Auction at prices that would have been acceptable to both parties.

The Exchange believes that in every instance in which the proposed delay mechanism is invoked, the price ultimately produced by the Opening Auction will more accurately reflect current market conditions than the absence of any price that results under the current rule. To illustrate this with concrete data, the Exchange presents the following two examples drawn from actual opening auction activity in BZX-listed securities.

Example 1: KEEX—April 29, 2026

At the open on April 29, 2026, symbol KEEX experienced a dislocated opening auction condition that illustrates the price quality problem created by the current rule. The prior day's closing price was $34.97. An auction-only sell order for 10 shares at $26.63 had been resting in the BZX book since 09:05:41.445 (nearly 25 minutes before the open). At 09:30:00.000042, the Opening Auction was attempted. The NBBO was invalid (spread too wide), and the FLSET-established Collar Price Range was $33.22-$36.71; a range anchored to the prior day's closing price. The Indicative Price was $26.62, reflecting the actual intersection of buy and sell interest at the time of the open, but that price was below the collar. Under the current rule, the auction produced no execution, the Indicative Price was disregarded, and the sell order was canceled and returned. The participant who entered a legitimate, price-bounded order nearly 25 minutes before the open received no execution and no price.

Under the proposed rule, the delay mechanism would have been triggered and the sell order preserved. One second later, at 09:30:01, a 3,400-share bid entered at $33.60 ( i.e., inside the collar and consistent with the prior day's closing price of $34.97). The Opening Auction would have occurred at $33.60, producing a price well within the established collar range and reflective of genuine, bilateral market interest.

Example 2: JELH—May 1, 2026

At the open on May 1, 2026, symbol JELH presented a different but equally instructive example of how the current rule can produce a worse price outcome. An auction-only market buy order for 200 shares had been resting in the BZX book since 08:05:12.134 (over 85 minutes before the open). As a market order, it represented unconditional buy interest willing to trade at any price.

At 09:30:00.000016, the Opening Auction was attempted. The Collar Reference Price was $25.21, establishing a Collar Price Range of $23.95-$26.47. The uncollared Indicative Price was $37.81 (well above the collar upper bound) reflecting a significant dislocation between the prior day's reference price and current market interest. Executable size was zero. Under the current rule, the auction produced no execution and the buy order was canceled, despite the fact that contra-side sell interest later entered the book at $25.32; a price squarely inside the established collar of $23.95-$26.47 and well within a reasonable range of the $25.21 reference price.

Under the proposed rule, the delay mechanism would have been triggered and the buy order preserved. Two seconds later, at 09:30:02, a 500-share offer entered the BZX book at $25.32 (inside the collar). The Opening Auction would have occurred at $25.32, producing a price that is both inside the established collar and closely aligned with the $25.21 collar reference price.

In this example, the price ultimately produced under the proposed rule ($25.32) is not only inside the established collar but is closely consistent with the collar reference price of $25.21, demonstrating that the proposed delay mechanism does not produce executions at unreasonable or far-removed prices. Rather, it allows the market the brief additional time needed to supply contra-side liquidity at a price that the collar framework itself validates as appropriate. The current rule, by contrast, discards that price discovery opportunity entirely.

Taken together, these examples support the Exchange's view that the proposed delay mechanism produces superior price outcomes in every ( printed page 47287) instance in which it is invoked. Under the current rule, the Opening Auction produces no price, no execution, and no centralized price discovery when the Indicative Price falls outside the applicable collar range. Under the proposed rule, the same conditions trigger a brief, bounded delay that allows the market to supply the liquidity needed to establish a price that is both reflective of current market conditions and consistent with the applicable collar framework. The Exchange submits that a centralized, collar-validated opening price is, in every relevant respect, a better outcome than the absence of any opening price.To address the circumstances described, above, the Exchange is proposing to change its Opening Auction process in circumstances where the Indicative Price is outside the Collar Price Range—whether an FLSET-established Collar Price Range or NBBO-established Collar Price Range. The proposal is designed to prevent the cancellation of auction eligible orders priced equally or more aggressively than the Indicative Price, which the Exchange believes will result in Opening Auctions that occur at a price that better reflects current market conditions. The proposed process follows the general framework of the LULD re-opening process provided under existing Exchange Rules.^[23] The Exchange proposes to modify the definition of BZX Official Opening Price in Rule 11.23(a)(5). Existing Rule 11.23(a)(5) provides that the term “BZX Official Opening Price” shall mean the price disseminated to the consolidated tape as the market center opening trade.^[24] Based on this rule text, the Exchange currently allows only round-lot trades to set the BZX Official Opening Price. The Exchange now proposes to revise the definition to provide that the term “BZX Official Opening Price” shall mean the price disseminated to the consolidated tape as the market center official open (rather than market center opening trade). This change would align the Exchange's terminology with the terms used in specification documents related to the Consolidated Tape System Participation Input Binary Specification (“CTS SIP”) ^[25] and would encompass both odd-lot and round-lot executions. The proposed change would allow the Exchange to determine the BZX Official Opening Price by execution of either a round-lot or an odd-lot trade in the Opening Auction. The Exchange believes it is important to allow an odd-lot execution in the Opening Auction to set the BZX Official Opening Price because such a price would better reflect current market conditions.

The Exchange also proposes to expand the definition of BZX Official Opening Price to provide that the BZX Opening Auction price shall be the BZX Official Opening Price for issues that participate in the BZX Opening Auction. In the event there is no Opening Auction for an issue, the BZX Official Opening Price will be the price of the Final Last Sale Eligible Trade. This additional language is being moved from existing Rule 11.23(b)(2)(B) to more clearly explain how the BZX Official Opening Price is determined. The Exchange does not propose to move (and therefore proposes to eliminate) the portion of existing Rule 11.23(b)(2)(B) that provides that the FLSET will be the previous BZX Official Closing Price, because as proposed an FLSET may occur between 9:30:00 and 9:34:30, as described further below.

Next, as the proposal would allow the Opening Auction to occur later than 9:30 a.m. ET in certain circumstances, the Exchange also proposes to modify Rules 11.23(b)(1)(A) and (B) to reflect this variable timing. Specifically, as amended Rule 11.23(b)(1)(A) would state that Users may submit orders to the Exchange as set forth in Rule 11.1. Any Eligible Auction Orders designated for the Opening Auction will be queued for participation in the Opening Auction. Users may submit limit-on-open (“LOO”) and market-on-open (“MOO”) orders until 9:28 a.m., at which point any additional LOO and MOO orders submitted to the Exchange will be rejected. Regular Hours Only ^[26] (“RHO”) market orders will also be rejected from 9:28 a.m. until the Opening Auction has concluded. Users may submit late-limit-on-open ^[27] (“LLOO”) orders from 9:28 a.m. until the Opening Auction has concluded. Any LLOO orders submitted before 9:28 a.m. or after the Opening Auction has concluded will be rejected. RHO limit orders submitted from 9:28 a.m. until the Opening Auction has concluded will be treated as LLOO orders.^[28] Any portion of such order that remains unexecuted after the Opening Auction concludes will revert to RHO limit order treatment. As amended, Rule 11.23(b)(1)(B) would state that Eligible Auction Orders designated for the Opening Auction may not be cancelled or modified from 9:28 a.m. until the Opening Auction has concluded except that RHO limit orders designated for the Opening Auction may be modified, but not cancelled, from 9:28 a.m. until the time the Opening Auction has concluded. Any such RHO limit orders modified from 9:28 a.m. until the Opening Auction has concluded will be treated as LLOO orders until the Opening Auction has concluded. Any portion of such order that remains unexecuted after the Opening Auction concludes will revert to RHO limit order treatment.

Proposed Rule 11.23(b)(2)(B)(i) would set forth the “Standard Opening Process” as described above and currently provided for in existing Rule 11.23(b)(2)(B). However, the Standard Opening Process would only apply if the conditions of proposed Rule 11.23(b)(2)(B)(i) or (ii) are met. Specifically, the Opening Auction price will be established pursuant to the Standard Opening Process if (i) there is a Valid NBBO and the Indicative Price is within the NBBO-established Collar Price Range, or (ii) there is no Valid NBBO and the Indicative Price is within the FLSET-established Collar Price Range.

Proposed Rule 11.23(b)(2)(B)(iii) would delay the Opening Auction and set forth an alternative Opening Auction Process in subparagraphs (a) and (b), as discussed below, if the conditions in proposed Rules 11.23(b)(2)(B)(i) or (ii) are not met.

(a) Initial Five-Second Delay Period (9:30:00-9:30:05)

The System will check every second from 9:30:00 to 9:30:05 to determine whether (1) there is a Valid NBBO and the Indicative Price is within the NBBO-established Collar Price Range, or (2) there is no Valid NBBO and the Indicative Price is within the FLSET-established Collar Price Range. If either condition is met during a check, the Opening Auction price will be established pursuant to the Standard Opening Auction Process.

If, during any one-second check, there is no Indicative Price ( i.e., there is no ( printed page 47288) longer crossed interest), the Opening Auction would occur immediately pursuant to proposed Rule 11.23(2)(B)(v), which provides that the BZX Official Opening Price will be the price of the FLSET.

(b) Collar Widening and Extended Delay Period (9:30:05-9:34:30)

If the Opening Auction has not occurred by 9:30:05, the System will widen the Collar Price Range in the direction of the Indicative Price by 5% of the Volume Based Tie Breaker ^[29] as of 9:30:05 a.m. (the “Widening Amount”).^[30] The Exchange calibrated the 5% Widening Amount based on the collar widening increment used in the LULD halt re-opening process, which has established precedent as a standard measure for price collar adjustments across the national market system. The Exchange believes that a 5% increment strikes an appropriate balance; it is meaningful enough to permit executions at prices that reflect current market conditions while remaining narrow enough to guard against executions at prices so far removed from the reference price as to raise concerns about price integrity. The Exchange notes that successive application of the 5% widening step results in a maximum cumulative collar expansion of 25% by 9:34:30. This maximum reflects a deliberate calibration: the collar is never so narrow as to categorically prevent executions at reasonable prices, nor so broadly opened as to permit executions at prices wholly disconnected from any reasonable reference point. The Exchange views 25% as an appropriate outer bound given the finite, compressed timeframe of the proposed delay relative to the 5-to-10 minute halt re-opening periods provided under the LULD framework, and given the expectation that the rapid influx of liquidity in the first minutes of Regular Trading Hours will, in the vast majority of cases, allow the auction to occur well before the maximum collar expansion is reached.

The Volume Based Tie Breaker will be locked in at 9:30:05 and will be used for all subsequent collar widenings. If the Indicative Price is within the widened Collar Price Range, the Opening Auction price will be established pursuant to the Standard Opening Auction Process. If the Indicative Price is not within the widened Collar Price Range, the Opening Auction will be further delayed, as discussed below.

Proposed Rules 11.23(b)(2)(B)(iii)(b)(1) through (4) would set forth the delay of the Opening Auction if no auction occurred between 9:30:05 and 9:34:30. Specifically, the proposed Rules would provide:

(1) The System will check to see whether the Indicative Price is inside the widened Collar Price Range every second between 9:30:05 and 9:30:30 a.m. If the Indicative Price is inside the widened Collar Price Range during a check, the Opening Auction price will be established pursuant to the Standard Opening Auction Process.

(2) If by 9:30:30 a.m. the Indicative Price is not within the widened Collar Price Range, the Collar Price Range will again widen by the Widening Amount (based on the locked-in 9:30:05 Volume Based Tie Breaker). The System will check to see whether the Indicative Price is inside the widened Collar Price Range every second between 9:30:30 and 9:31:30 a.m. If an Indicative Price is inside the widened Collar Price Range during a check, the Opening Auction price will be established pursuant to the Standard Opening Auction Process.

(3) If by 9:31:30 a.m. the Indicative Price is not within the widened Collar Price Range, the Collar Price Range will again widen by the Widening Amount. The System will check to see whether the Indicative Price is inside the widened Collar Price Range every second between 9:31:30 and 9:32:30 a.m. If an Indicative Price is inside the widened Collar Price Range during a check, the Opening Auction price will be established pursuant to the Standard Opening Auction Process.

(4) If by 9:32:30 a.m. the Indicative Price is not within the widened Collar Price Range, the Collar Price Range will again widen by the Widening Amount. The System will check to see whether the Indicative Price is inside the widened Collar Price Range every second between 9:32:30 and 9:33:30 a.m. If an Indicative Price is inside the widened Collar Price Range during a check, the Opening Auction price will be established pursuant to the Standard Opening Auction Process.

(5) If by 9:33:30 a.m. the Indicative Price is not within the widened Collar Price Range, the Collar Price Range will again widen by the Widening Amount. The System will check to see whether the Indicative Price is inside the widened Collar Price Range every second between 9:33:30 and 9:34:30 a.m. If an Indicative Price is inside the widened Collar Price Range during a check, the Opening Auction price will be established pursuant to the Standard Opening Auction Process.

(6) If no Opening Auction has occurred by 9:34:30 a.m., the Opening Auction will occur pursuant to the Standard Opening Auction Process using the expanded Collar Price Range as of 9:34:30.

The Exchange notes that if, during any one-second check after 9:30:05, there is no longer an Indicative Price ( i.e., there is no longer crossed interest), the Opening Auction would occur immediately pursuant to proposed Rule 11.23(2)(B)(v).^[31] The Exchange is proposing to stop extending the Opening Auction Process at 9:34:30 a.m. in part to ensure that the Exchange is able to disseminate the BZX Official Opening Price with sufficient time to be used in the determination of the opening price ^[32] pursuant to the Plan to Address Extraordinary Market Volatility (the “LULD Plan”), from which the reference price ^[33] is used to calculate the LULD price bands. Specifically, the reference price for trading is typically the opening price on the primary listing exchange in an NMS Stock if such opening price occurs less than five minutes after the start of Regular Trading Hours. Therefore, because under the proposal the Opening Auction Process would occur no later than 9:34:30, the LULD price bands would be determined based on the BZX Official Opening Price.

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with ( printed page 47289) Section 6(b) of the Act.^[34] Specifically, the proposed change is consistent with Section 6(b)(5) of the Act,^[35] because it would promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest. The Exchange also believes the proposed rule change is consistent with Section 6(b)(1) of the Act, which provides that the Exchange be organized and have the capacity to be able to carry out the purposes of the Act and to enforce compliance by the Exchange's Members and persons associated with its Members with the Act, the rules and regulations thereunder, and the rules of the Exchange.^[36] The Exchange's overarching objective is to improve the quality of the opening price produced by the BZX Opening Auction Process. A more accurate opening price, one that reflects genuine, current bilateral market interest rather than a collar anchored to a prior day's reference price, benefits all market participants, provides a sounder foundation for the LULD price bands, and enhances the integrity of the national market system.

First, the Exchange believes proposed Rules 11.23(b)(2)(B)(i) and (ii) are consistent with the Act as the proposed paragraphs are substantially similar to existing Rule 11.23(b)(2)(B) and involve no change in the Opening Auction functionality. Second, the Exchange believes proposed Rule 11.23(b)(2)(B)(iii) would promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, protect investors and the public interest. The proposal is designed to improve the quality of the price produced by the Opening Auction by preserving auction-eligible orders and providing a brief, bounded period for current market conditions to be reflected in the auction's price discovery process, rather than allowing the Opening Auction to terminate without producing any price when the Indicative Price falls outside a collar range that may be anchored to a stale reference.

As stated above, current Rule 11.23(b)(2)(B) provides that in the event there is no Valid NBBO, the FLSET will be used as the Volume Based Tie Breaker and basis for calculating the Collar Price Range. Because the current Opening Auction Process occurs at 9:30:00 a.m., such a Collar Price Range is based on an FLSET that may not have occurred recently or may not otherwise be reflective of current market conditions. As a result, the Exchange has observed instances where auction eligible orders priced in-line with the Indicative Price were not executed in the Opening Auction because they were outside the FLSET-established Collar Price Range. The Exchange believes it is important to ensure that the BZX Opening Process is designed to produce an opening price that accurately reflects current market conditions. A collar range anchored to a prior day's closing price or a stale last sale does not serve that objective when the Indicative Price falls outside that range. Under those circumstances, the current rule effectively suppresses price discovery, discarding the very price signal that buyers and sellers have collectively generated through their pre-positioned auction orders.

Further to this point, Market-On-Open orders (also known as MOO orders) ^[37] are market orders only eligible for execution in the Opening Auction that are designed for participants that want to get an execution without regard to price. Because such orders are not price sensitive, they are more likely to cross contra-side orders outside of the Collar Price Range and the Exchange believes that the proposed changes improve the quality of the opening price for participants using such orders by ensuring their interest contributes to price discovery rather than being discarded when the Indicative Price falls outside a potentially stale collar reference.

The Exchange also believes the proposal strikes an appropriate balance by providing additional time for the Opening Auction Process to facilitate more meaningful price formation that better reflects current market conditions for BZX-listed securities, while limiting any delay to ensure the BZX Official Opening Price is reported to SIP ^[38] by 9:35 a.m. and is therefore used to set the LULD price bands. The Exchange notes that, while there will be no LULD price bands until the Exchange disseminates a reference price and thus there will be no LULD price bands during the period before the Opening Auction Process occurs, this is a tradeoff that already exists as it relates to the opening process on the New York Stock Exchange LLC (“NYSE”), which may delay the opening process for an indefinite period of time. The Exchange further notes that, during the period in which the Opening Auction is delayed and LULD price bands are not yet in effect, the Exchange's Clearly Erroneous Execution rules provided under BZX Rule 11.17 will continue to apply. Rule 11.17 provides a mechanism by which the Exchange may review and, if appropriate, nullify or adjust transactions that are clearly erroneous. The Exchange believes that the availability of these protections during the delay period provides an additional and meaningful safeguard for market participants in the event that any executions occurring prior to the establishment of the BZX Official Opening Price and the corresponding LULD price bands produce anomalous or erroneous results.^[39]

The Exchange also notes that LULD price bands disseminated during the circumstances in which the proposed delay would be applied are more likely to be based on a price that may not be reflective of current market conditions. For example, in situations where the proposed delay would be applied, the LULD price bands would be based off an FLSET from the prior trading day, and thus the LULD price bands could be based on a stale price. The Exchange is only proposing to delay the Opening Auction in circumstances where there is crossed interest and either (1) there is a Valid NBBO but the Indicative Price is outside the NBBO-established Collar Price Range, or (2) there is no Valid NBBO and the Indicative Price is outside the FLSET-established Collar Price Range, meaning that there are parties willing to execute at a particular price but the Collar Price Range established using either the NBBO or FLSET is not reflective of current market conditions. Therefore, the ( printed page 47290) Exchange believes any potential drawback in a delay of the LULD price bands is mitigated by the limited circumstances in which the delay would occur and that any LULD price bands disseminated during such a delay may not be reflective of current market conditions. Delaying the opening auction process under certain circumstances provides an opportunity for more meaningful price formation that is more representative of current market conditions, especially in thinly traded or less liquid securities which are by definition less likely to have executions during the period before the Opening Auction Process occurs.

Separately, the Exchange believes that creating functionality that could delay the Opening Auction Process by four minutes and 30 seconds is consistent with the Act because it also ensures that the Exchange's opening process is used to determine the LULD price band reference price. If the opening price on a primary listing exchange is not reported to the SIPs within five minutes after the start of Regular Trading Hours, the first reference price for a trading day is the arithmetic mean price of eligible reported transactions for the NMS stock over the preceding five minute period.^[40] However, if no eligible reported transactions have occurred in the NMS stock over the preceding five minute period, there will be no reference price and thus no LULD price bands in the security until an eligible reported transaction occurs. The Exchange believes that LULD price bands are an important mechanism for investor protection, especially in thinly traded or illiquid securities and, as such, is proposing to calculate a BZX Official Opening Price no later than 9:34:30 a.m. which will allow it to continue to report the BZX Official Opening price to the SIP prior to 9:35 a.m. so that it serves as the reference price on which the LULD price bands are based. To the extent that the Exchange's proposed opening process results in a more accurate BZX Official Opening Price, the Exchange believes it follows that such a price would also provide a better foundation for the LULD price bands. This improvement in the quality of the foundational reference price benefits the entire national market system without negatively impacting the LULD process, because the Exchange would continue to provide the BZX Official Opening Price to the SIP prior to 9:35 a.m.

To the extent that the Exchange's proposed opening process results in a more accurate BZX Official Opening Price it follows that such a price would also provide a better foundation for the LULD price bands without negatively impacting the LULD process because the Exchange would continue to provide the BZX Official Opening Price to the SIP prior to 9:35. As a result, the Exchange believes that the proposal would promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, protect investors and the public interest.

The Exchange notes that the concept of delaying an auction and widening the Collar Price Range as provided in proposed paragraphs 11.23(b)(2)(B)(iii)(b)(1) through (5) is similar to the Twelfth Amendment of the Plan (“Amendment 12”) and corresponding amendments by the primary listing exchanges. Specifically, Amendment 12 was created to improve re-openings following a trading pause,^[41] with an eye towards carefully balancing halt auction price quality and the speed with which continuous trading can be resumed. Amendment 12 provided that auction halt periods would be extended if either the auction price at which the most shares would be traded is outside the range of the pre-defined price threshold collars (the “price threshold collars”) or there is a market order share imbalance. Further, Amendment 12 provided that the price threshold collars would be widened in the event that the auction`s halt period is extended. In its approval of Amendment 12, the Commission stated that it is appropriate in the public interest, for the protection of investors and the maintenance of a fair and orderly market to provide that a trading pause continue until the primary listing exchange has reopened trading using its established reopening procedures, even if such reopening is more than 10 minutes after the beginning of a trading pause, and to require that trading centers may not resume trading in an NMS Stock following a trading pause without price bands in such NMS Stock. The Commission stated that these two provisions together support a more standardized process for reopening trading after a trading pause has been declared.

As a primary listing exchange, the Exchange amended Rule 11.23(d) to incorporate the provisions of Amendment 12.^[42] The Exchange notes that the purpose of Amendment 12 and corresponding Exchange amendment was intended to delay a halt auction to attract offsetting interest and improve price discovery, while the purpose of this proposal is intended to delay the Opening Auction Process in order to provide the Opening Auction price additional time to reflect current market conditions to arrive at a price that better reflects current market conditions and allows willing buyers and sellers to execute. While Exchange Rule 11.23(d) and Amendment 12 apply only to re-opening auctions that are single venue liquidity events and this proposal applies to the opening auction which is not a single venue liquidity event,^[43] applying a common functionality across the two remains logical because the Exchange believes that delaying the Opening Auction Process under certain conditions such that the delay will be coincident with the increasing liquidity that comes shortly after the beginning of Regular Trading Hours, which the Exchange believes is similar to extending halt auctions in order to allow for greater participation and simultaneous expansion of executable price range. Even though trading is ongoing while the Opening Auction Process is underway, orders on the Continuous Book are included in the Opening Auction Process and the increased liquidity around the open will generally increase liquidity in the Opening Auction Process even if market participants are entering orders in the Continuous Book rather than auction specific orders. To this point, both are designed to balance auction price quality and the speed with which an auction can occur and thus continuous trading can be resumed, in the case of a halt auction, or when the Opening Auction Process completes, in the case of an Opening Auction. Further, this consistency in approach offers a process ( printed page 47291) that market participants are already familiar with. Having consistent auction processes benefits all investors because market participants are already familiar with the proposed functionality and will not have to learn a new set of nuanced rules designed to accomplish the same end goal, will understand how the functionality operates because of its common usage in the LULD context, and will generally help with quick understanding and adoption while reducing the need for market participants to build systems designed to accommodate an entirely new process. Therefore, the Exchange believes the proposal is appropriate, in the public interest, for the protection of investors and the maintenance of a fair and orderly market.

The Exchange believes its proposal to allow odd-lot executions to establish the BZX Official Opening Price is consistent with Section 6(b)(5) of the Act because it will enable the Exchange to disseminate an opening price that more accurately reflects current market conditions and investor interest. By allowing either round-lot or odd-lot executions to set the BZX Official Opening Price, the Exchange will provide market participants with more timely and accurate pricing information, thereby promoting fair and orderly markets and protecting investors and the public interest. Additionally, a BZX Official Opening Price that more accurately reflects current market conditions will contribute to more appropriate LULD price bands. More accurate LULD bands better protect investors by preventing erroneous trades that deviate significantly from prevailing market prices while avoiding unnecessary trading halts that could result from bands based on stale or unrepresentative opening prices.

The Exchange also believes its proposal to move the last two sentences of existing Rule 11.23(b)(2)(B) to paragraphs 11.23(b)(2)(B)(iv) and (v), respectively, is consistent with Section 6(b)(5) of the Act because it will improve the clarity and readability of the rule without altering its substantive operation. Clear and well-organized rules enable market participants to better understand their obligations and the Exchange`s procedures, thereby facilitating compliance and promoting fair and orderly markets. Further, the proposal to remove the provision of paragraph 11.23(b)(2)(B)(v) that states the FLSET will be the previous BZX Official Closing Price is consistent with Section 6(b)(5) of the Act and the new proposed functionality, which would allow for an FLSET to occur between 9:30 and 9:34:30. This change eliminates an outdated provision that would be inconsistent with the Exchange's enhanced ability to establish a current-day FLSET during the opening period, thereby ensuring the rule accurately reflects the Exchange`s operational procedures and provides market participants with the most current and relevant pricing information. Finally, the Exchange believes its proposed clarifications to Rules 11.23(b)(1)(A) and (B) to reflect that the Opening Auction may occur at a time other than 9:30 a.m. will allow the Exchange to more easily administer its rules, and Members can more clearly understand how the Opening Auction Process may occur. Specifically, the proposed amendments to Rules 11.23(b)(1)(A) and (B) will add clarity, transparency and internal consistency to Exchange rules making them easier to navigate, in light of the other proposed Rule changes described herein.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, allowing the Exchange to make the above proposed modifications will allow the Exchange to better compete with other exchanges as a listing venue by improving the Exchange`s auction process by allowing executions to occur at prices that better reflect current market conditions. The Exchange believes the proposed amendments will improve the Exchange`s auction process, allowing it to better compete as both a listing and execution venue.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

The Exchange neither solicited nor received comments on the proposed rule change.

IV. Discussion and Commission Findings

After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange.^[44] In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Exchange Act,^[45] which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers.

The Commission believes the proposed changes to the Exchange's opening process is designed to strike an appropriate balance between providing additional time to facilitate more meaningful price formation that better reflects current market conditions for BZX-listed securities, while at the same time limiting any delay to ensure the BZX Official Opening Price is reported to the SIP for the purpose of setting LULD price bands. Prior to the proposed rule change, an Opening Auction could terminate without producing any price when the Indicative Price falls outside a collar range that may be anchored to a stale reference price. Under the proposed change, there would instead be a brief, bounded period for current market conditions to be reflected in the auction's price discovery process.

While a delay in the Opening Auction also would delay when LULD bands are in effect, the Commission notes that that the Clearly Erroneous Execution rules would continue to apply during the delay. The availability of Clearly Erroneous Execution rule protections during the delay period is designed to provide a safeguard for market participants in the event that any executions occurring prior to the establishment of the BZX Official Opening Price and corresponding LULD price bands produce anomalous or erroneous results.

Allowing either round-lot or odd-lot executions to set the BZX Official Opening Price is designed to better reflect current market conditions, which should contribute to promoting fair and orderly markets and protecting investors and the public interest. As the Exchange notes, the official opening price disseminated by the primary listing market (such as the BZX Official Opening Price) provides market participants valuable information that is typically used to calculate the initial LULD price bands and also may serve as the basis for trading strategies for that trading day. ( printed page 47292)

For the foregoing reasons, the Commission believes that the proposal, as modified by Amendment No. 1, is consistent with the Act.

V. Solicitation of Comments on Amendment No. 1 to the Proposed Rule Change

Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods:

Electronic Comments

• Use the Commission's internet comment form (https://www.sec.gov/​rules/​sro.shtml); or
• Send an email torule-comments@sec.gov. Please include file number

SR-CboeBZX-2026-004 on the subject line.

Paper Comments

• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-CboeBZX-2026-004. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website ( https://www.sec.gov/​rules/​sro.shtml). Copies of the filing will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection.

All submissions should refer to file number SR-CboeBZX-2026-004 and should be submitted on or before August 18, 2026.

VI. Accelerated Approval of Proposed Rule Change, as Modified and Superseded by Amendment No. 1

The Commission finds good cause to approve the proposed rule change, as modified and superseded by Amendment No. 1 (“Amended Proposal”), prior to the thirtieth day after the date of publication of notice of filing Amendment No. 1 in the Federal Register . Amendment No. 1 provided additional rationale for the proposed rule change including examples of how the proposed rule change would have impacted the opening. Amendment No. 1 does not raise any novel regulatory issues. The changes add additional clarity about the proposed rule change and assist the Commission in evaluating the Amended Proposal and in determining that it is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange, as discussed above. The Commission finds that Amendment No. 1 is reasonably designed to prevent fraudulent and manipulative acts and practices and, in general, to protect investors and the public interest. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act, to approve the Amended Proposal on an accelerated basis prior to the thirtieth day after publication of notice of filing of Amendment No. 1 in the Federal Register .

VII. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,^[46] that the proposed rule change (SR-CboeBZX-2026-004), as modified and superseded by Amendment No. 1, be, and hereby is, approved on an accelerated basis.