SEC Grants No-Action Relief to Chicago Stock Exchange Regarding Proposed On-Demand Auction Functionality

The SEC Division of Trading and Markets granted no-action relief to Chicago Stock Exchange, Inc. from the "current" national best bid requirement of Reg. SHO, Rule 201 to determine whether a short sale order in a covered security subject to the rule can be executed in the exchange's "Sub-second Non-displayed Auction Process" or "SNAP" Cycle.

The relief, which the SEC staff found appropriate to "address the tension between Regulation NMS provisions [Rules 610(d) and 611] and Rule 201," is subject to a number of specified conditions and will allow Chicago Stock Exchange, Inc. to use a reference price other than the current national best bid under Rule 201 in determining permissible execution prices in SNAP Cycles where there is a SNAP execution delay between the "stage 2 market snapshot" and SNAP executions.