2026-01974Notice

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Exchange Rule 11.21 To Allow a Retail Member Organization To Enter a Retail Order Onto the Exchange in a Principal Capacity

Published Date: 2/2/2026

Notice

Summary

The Cboe EDGX Exchange just got the green light to let Retail Member Organizations (RMOs) enter retail orders as principals, meaning they can now trade for themselves under certain rules. This change affects RMOs and aims to make retail trading smoother and more flexible, with no extra costs announced. The new rule kicks in soon, giving RMOs a fresh way to handle retail orders on the exchange.

Analyzed Economic Effects

3 provisions identified: 2 benefits, 1 costs, 0 mixed.

RMOs May Submit Retail Orders as Principal

The Exchange now allows Retail Member Organizations (RMOs) to enter Retail Orders onto the Cboe EDGX Exchange in a principal capacity, subject to satisfying the requirements of new Exchange Rule 11.21(g). The Commission approved this change by order dated January 28, 2026.

Compliance Requirements for RMOs Entering Principal Orders

RMOs that enter Retail Orders as principal must meet new Rule 11.21(g) conditions and, under amended Rule 11.21(b)(6), maintain policies and procedures reasonably designed to ensure compliance, be able to produce documentation on request, obtain annual written representations from broker-dealers that send Retail Orders, and monitor routed Retail Order flow.

Potential Extra Price Improvement for Retail Investors

The rule allows RMOs to provide post-execution price improvement to the retail customer in addition to any price improvement received on the Exchange; any principal order used for this purpose must be solely to provide that post-execution improvement. The principal order size cannot exceed the underlying retail order(s) and executed shares must be allocated to the retail customer(s) within 60 seconds of execution.

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Key Dates

Published Date
2/2/2026

Department and Agencies

Department
Independent Agency
Agency
Securities and Exchange Commission
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