8011-01P
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100324; File No. SR-CboeBZX-2024-049]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change to Introduce a New Connectivity Offering
Through Dedicated Cores
June 13, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),1 and Rule
19b-4 thereunder,2 notice is hereby given that on June 6, 2024, 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 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 Act3 and Rule 19b-4(f)(6) thereunder.4 The
Commission is publishing this notice to solicit comments on the proposed rule change from
interested persons.
I.

Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule
Change
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) proposes to introduce a new

connectivity offering.
The text of the proposed rule change is also available on the Exchange’s website
(http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange’s Office of the
Secretary, and at the Commission’s Public Reference Room.

15 U.S.C. 78s(b)(1).

17 CFR 240.19b-4.

15 U.S.C. 78s(b)(3)(A)(iii).

17 CFR 240.19b-4(f)(6).

II.

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

The Exchange proposes to introduce a new connectivity offering relating to the use of
Dedicated Cores. By way of background, all Central Processing Units (“CPU Cores”) have
historically been shared by logical order entry ports (i.e., multiple logical ports from multiple
firms may connect to a single CPU Core). Starting June 10, 2024, the Exchange will allow
Users5 to assign a single Binary Order Entry (“BOE”) logical order entry port6 to a single
dedicated CPU Core (“Dedicated Core”).7 Use of Dedicated Cores can provide reduced latency,
enhanced throughput, and improved performance since a firm using a Dedicated Core is utilizing
the full processing power of a CPU Core instead of sharing that power with other firms. This
offering is completely voluntary and will be available to all Users.8 Users will also continue to
have the option to utilize BOE logical order entry ports on shared CPU Cores as they do today,

A User may be either a Member or Sponsored Participant. The term “Member” shall mean any registered
broker or dealer that has been admitted to membership in the Exchange, limited liability company or other
organization which is a registered broker or dealer pursuant to Section 15 of the Act, and which has been
approved by the Exchange. A Sponsored Participant may be a Member or non-Member of the Exchange
whose direct electronic access to the Exchange is authorized by a Sponsoring Member subject to certain
conditions. See Exchange Rule 11.3.

Users may currently connect to the Exchange using a logical port available through an application
programming interface (“API”), such as the Binary Order Entry (“BOE”) protocol. A BOE logical order
entry port is used for order entry.

The Exchange notes that firms will not have physical access to their Dedicated Core and thus cannot make
any modifications to the Dedicated Core or server. All Dedicated Cores (including servers used for this
service) are owned and operated by the Exchange.

The Exchange intends to submit a separate rule filing to adopt monthly fees related to the use of Dedicated
Cores.

either in lieu of, or in addition to, their use of Dedicated Core(s). As such, Users will be able to
operate across a mix of shared and dedicated CPU Cores which the Exchange believes provides
additional risk and capacity management, especially during times of market volatility and high
message traffic. Further, Dedicated Cores are not required nor necessary to participate on the
Exchange and as such Users may opt not to use Dedicated Cores at all.
2.

Statutory Basis

The Exchange believes the proposed rule change is consistent with the Securities
Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the Act.9 Specifically, the
Exchange believes the proposed rule change is consistent with the Section 6(b)(5)10 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)11 requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or dealers.
In particular, the proposal would provide Users the option to assign a single BOE logical
entry port to a single Dedicated Core. As described above, CPU Cores have historically been
shared by logical order entry ports (i.e., multiple logical ports from multiple firms may connect
to a single CPU Core). Use of Dedicated Cores can provide reduced latency, enhanced
throughput, and improved performance since a firm using a Dedicated Core is utilizing the full

15 U.S.C. 78f(b).

15 U.S.C. 78f(b)(5).

Id.

processing power of a CPU Core instead of sharing that power with other firms. The Exchange
also emphasizes that the use of Dedicated Cores is not necessary for trading and as noted above,
is entirely optional. Indeed, Users can continue to access the Exchange through shared CPU
Cores at no additional cost. Depending on a firm’s specific business needs, the proposal enables
Users to choose to use Dedicated Cores in lieu of, or in addition to, shared CPU Cores (or as
noted, not use Dedicated Cores at all). The Exchange also notes that its affiliated exchanges,
Cboe EDGA Exchange, Inc., Cboe BYX Exchange, Inc., and Cboe EDGX Exchange, Inc.
recently introduced Dedicated Cores and that another Exchange [sic] also provides a similar
connectivity offering.12
Furthermore, this service is optional and is available to all Users. In this regard, some
Users may determine it does not want or need Dedicated Cores and may continue their use of the
shared CPU Cores, unchanged. The Exchange has no current plans to eliminate shared Cores nor
require subscription to the dedicated offering.
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 that is not necessary or appropriate in furtherance of the purposes of the Act.
Particularly, the Exchange believes the proposed rule change does not impose any burden on
intra-market competition that is not necessary or appropriate in furtherance of the purposes of
the Act because Dedicated Cores will be available to all Users. While the Exchange believes that
the proposed Dedicated Cores provide a valuable service, Users can choose to purchase, or not
purchase, Dedicated Cores based on their own determination of the value and their business
needs. Indeed, no User is required or under any regulatory obligation to use Dedicated Cores.

See Securities Exchange Act Release No. 99818 (March 21, 2024), 89 FR 21294 (March 27, 2024) (SRCboeEDGA-2024-008), Securities Exchange Act Release No. 100062 (May 6, 2024), 89 FR 40517 (May
10, 2024) (SR-CboeBYX-2024-013) and Securities Exchange Act Release No. 100182 (May 20, 2024), 89
FR 45932 (May 24, 2024) (SR-CboeEDGX-2024-026). See also The Nasdaq Stock Market, Equity 7
Pricing Schedule, Section 115(g)(3), Dedicated Ouch Port Infrastructure.

Additionally, nothing in the proposal imposes any burden on the ability of other
exchanges to compete. The Exchange operates in a highly competitive market in which
exchanges offer various connectivity services as a means to facilitate the trading and other
market activities of those market participants and at least one other exchange has an offering
comparable to Dedicated Cores.13
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.
III.

Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the proposed rule change does not: (i) significantly affect the protection of

investors or the public interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days prior to date on which it was filed, or such shorter time as the
Commission may designate, if consistent with the protection of investors and the public interest,
the proposed rule change it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act14
and Rule 19b-4(f)(6) thereunder.15
A proposed rule change filed under Rule 19b-4(f)(6)16 normally does not become
operative prior to 30 days after the date of the filing. However, pursuant to Rule
19b-4(f)(6)(iii),17 the Commission may designate a shorter time if such action is consistent with
the protection of investors and the public interest.

See Securities Exchange Act Release No. 99818 (March 21, 2024), 89 FR 21294 (March 27, 2024) (SRCboeEDGA-2024-008), Securities Exchange Act Release No. 100062 (May 6, 2024), 89 FR 40517 (May
10, 2024) (SR-CboeBYX-2024-013) and Securities Exchange Act Release No. 100182 (May 20, 2024), 89
FR 45932 (May 24, 2024) (SR-CboeEDGX-2024-026). See also The Nasdaq Stock Market, Equity 7
Pricing Schedule, Section 115(g)(3), Dedicated Ouch Port Infrastructure.

15 U.S.C. 78s(b)(3)(A)(iii).

17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the
Commission written notice of its intent to file the proposed rule change, along with a brief description and
text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The Exchange has satisfied this
requirement.

17 CFR 240.19b-4(f)(6).

17 CFR 240.19b-4(f)(6)(iii).

The Exchange has asked the Commission to waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Exchange states that its affiliated
exchanges, Cboe EDGA Exchange, Inc., Cboe BYX Exchange, Inc., and Cboe EDGX Exchange,
Inc., recently introduced Dedicated Cores and another exchange has a connectivity offering
comparable to Dedicated Cores.18 The Commission believes that the proposed rule change
presents no novel legal or regulatory issues, and that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest. Accordingly, the Commission
hereby waives the 30-day operative delay and designates the proposed rule change operative
upon filing.19
At any time within 60 days of the filing of the proposed rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings under Section 19(b)(2)(B)20 of the Act to determine
whether the proposed rule change should be approved or disapproved.
IV.

Solicitation of Comments
Interested persons are invited to submit written data, views and arguments concerning the

foregoing, including whether the proposed rule change 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 to rule-comments@sec.gov. Please include file number

See supra note 12.

For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed
rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).

15 U.S.C. 78s(b)(2)(B).

SR-CboeBZX-2024-049 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-2024-049. 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 submission, all subsequent amendments, all written statements with respect to the
proposed rule change that are filed with the Commission, and all written communications
relating to the proposed rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be
available for website viewing and printing in the Commission’s Public Reference Room, 100 F
Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of the filing also 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-2024-049 and should be
submitted on or before [INSERT DATE 21 DAYS AFTER DATE OF PUBLICATION IN THE
FEDERAL REGISTER].
For the Commission, by the Division of Trading and Markets, pursuant to delegated
authority.21

17 CFR 200.30-3(a)(12), (59).

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13415 Filed: 6/18/2024 8:45 am; Publication Date: 6/20/2024]