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SEC Approves "Hard to Borrow List" Functionality for CBOE Exchanges

The SEC approved a proposed rule change allowing multiple CBOE exchanges - BYX, BZX, EDGA and EDGX - to offer their members "Hard to Borrow List" functionality, that users may elect to apply to their short sale orders in U.S. equity securities.

The technology allows a member firm to institute an automated block on traders at the member firm (or customers to whom it has granted direct market access) in stocks that the member firm has identified as "hard to borrow." The SEC said that the proposed rule change would provide a "useful risk management tool," but cautioned that it was not a substitute for a users' own systems for compliance with applicable securities laws.

Primary Sources

  1. SEC: Release No. 34-93963; Order Granting Approval of Proposed Rule Changes to Amend Each Exchange's Rules in Connection with a Risk Setting That Users May Elect to Apply to Their Orders in Hard to Borrow Securities
  2. SEC: Release 34-93638; Cboe BYX Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Amend Interpretation and Policy .01 to Rule 11.13 in Connection with a Risk Setting That Users May Elect to Apply to Their Orders in Hard to Borrow Securities
  3. SEC: Release 34-93641; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Amend Interpretation and Policy .01 to Rule 11.13 in Connection with a Risk Setting That Users May Elect to Apply to Their Orders in Hard to Borrow Securities
  4. SEC: Release 34-93642; Cboe EDGA Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Amend Interpretation and Policy .01 to Rule 11.13 in Connection with a Risk Setting That Users May Elect to Apply to Their Orders in Hard to Borrow Securities
  5. SEC: Release 34-93643; Cboe EDGX Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Amend Interpretation and Policy .01 to Rule 11.13 in Connection with a Risk Setting That Users May Elect to Apply to Their Orders in Hard to Borrow Securities

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Tags

Regulated Activities
Risk Management Trading
Regulated Entities
Broker-Dealers Markets
Regulated Products
Equities
Body of Law
Securities Law
Jurisdiction
US - Federal
Organization
SEC