Exchange operator Cboe Global Markets plans to launch Cboe Market Close (CMC) on the company’s BZX Exchange on Monday, August 20, 2018, contingent upon the Securities and Exchange Commission (SEC) reaffirming the staff’s initial approval, according to company officials.
The creation of CMC, an alternative mechanism to primary market closing auctions that take place at the end of the day, was prompted by increasing demand from a range of industry participants frustrated by rising closing auction fees1.
CMC was approved by SEC staff on January 17, 2018, after an extended and robust public comment period. Cboe submitted four comment letters2 responding to industry queries on CMC’s functionality over the course of the process.
Bryan Harkins, Executive Vice President, Markets Division at Cboe, said: “Our proposal to launch Cboe Markets Close always had at its heart the enhanced accessibility of U.S. equity markets. The approval by SEC staff affirmed the case for its introduction after a healthy, vibrant period of industry-wide debate, and we are excited to work on delivering the benefits that Cboe Market Close offers to investors.”
The mechanism, first proposed in May 2017, allows participants to route Market-On-Close (MOC) orders to CMC on Cboe's BZX Exchange, where they are pre-matched with other MOC orders. When the primary exchange closing price is published, pre-matched trades are executed, saving participants from paying closing auction fees on orders that are not price forming. The timing of the CMC match allows any MOC orders that go unmatched to be sent to the primary exchange closing auctions.