7580 Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5Pursuant to Rule 5.26, the Exchange may enter 

into a back-up trading arrangement with another 

exchange, which could allow the Exchange to use 

the facilities of a back-up exchange to conduct 

trading of certain of its products. The Exchange 

currently has no back-up trading arrangement in 

place with another exchange. 

6Chapter 5, Section G of the Exchange’s rulebook 

sets forth the rules and procedures for manual order 

handling and open outcry trading on the Exchange. 

7See Securities Exchange Act Release Nos. 88386 

(March 13, 2020), 85 FR 15823 (March 19, 2020) 

(SR–CBOE–2020–019); 88447 (March 20, 2020), 85 

FR 17129 (March 26, 2020) (SR–CBOE–2020–023); 

88490 (March 26, 2020), 85 FR 18318 (April 1, 

2020) (SR–CBOE–2020–026); 88530 (March 31, 

2020), 85 FR 19182 (April 6, 2020) (SR–CBOE– 

2020–031); 88886 (May 15, 2020), 85 FR 31008 

(May 21, 2020) (SR–CBOE–2020–047); 89307 (July 

14, 2020), 85 FR 43938 (July 20, 2020) (SR–CBOE– 

2020–066); 89789 (September 8, 2020), 85 FR 56658 

(September 14, 2020) (SR–CBOE–2020–081); and 

90174 (October 14, 2020), 85 FR 66617 (October 20, 

2020) (SR–CBOE–2020–092). The Exchange 

recently adopted permanent Position Compression 

Cross (‘‘PCC’’)/Compression orders and deleted 

subparagraph (D), pursuant to which the Exchange 

could offer PCC/Compression orders in the even the 

trading floor was inoperable. See Securities 

Exchange Act Release No. 90179 (October 14, 2020), 

85 FR 66590 (October 20, 2020) (SR–CBOE–2020– 

074). In the rule filing to permanently adopt PCC/ 

Compression orders, the Exchange deleted the 

temporary version of compression orders in 

subparagraph (E) in its entirety (which was later 

relettered to subparagraph (D) pursuant to a 

separate rule filing that deleted the prior 

subparagraph (D)), but inadvertently did not change 

the applicability of subparagraph (e)(1) to 

subparagraphs (A) through (C) rather than (A) 

through (D). Therefore, the proposed rule change 

makes this update. 

8On March 11, 2020, the World Health 

Organization characterized COVID–19 as a 

pandemic and to slow the spread of the disease, 

federal and state officials implemented socialSECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90986; File No. SR–CBOE– 

2021–004] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 5.24 

January 25, 2021. 

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 January 

14, 2021, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) 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 ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 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 

Text of the Proposed Rule Change 

(a) Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) 

proposes to amend Rule 5.24. The text 

of the proposed rule change is provided 

below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 5.24. Disaster Recovery 

(a)–(d) No change. 

(e) Loss of Trading Floor. If the Exchange 

trading floor becomes inoperable and the 

Exchange does not make a virtual trading 

floor available in a class pursuant to 

subparagraph (3) below, the Exchange will 

continue to operate in a screen-based only 

environment using a floorless configuration 

of the System that is operational while the 

trading floor facility is inoperable. The 

Exchange will operate using this 

configuration only until the Exchange’s 

trading floor facility is operational. Open 

outcry trading will not be available in the 

event the trading floor becomes inoperable, 

except as otherwise set forth in this 

paragraph (e) below and pursuant to Rule 

5.26, as applicable. 

(1) Applicable Rules. In the event that the 

trading floor becomes inoperable, trading 

will be conducted pursuant to all applicable 

System Rules, except that open outcry Rules 

will not be in force, including but not limited 

to the Rules (or applicable portions of the 

Rules) in Chapter 5, Section G, and as follows 

(subparagraphs (A) through ([D]C) will be 

effective until [December 31, 2020]June 30, 

2021): 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 5.24 regarding the Exchange’s 

business continuity and disaster 

recovery plans. Rule 5.24 describes 

which Trading Permit Holders (‘‘TPHs’’) 

are required to connect to the 

Exchange’s backup systems as well as 

certain actions the Exchange may take 

as part of its business continuity plans 

so that it may maintain fair and orderly 

markets if unusual circumstances 

occurred that could impact the 

Exchange’s ability to conduct business. 

This includes what actions the 

Exchange would take if its trading floor 

became inoperable. Specifically, Rule 

5.24(e) states if the Exchange trading 

floor becomes inoperable and the 

Exchange does not make a virtual 

trading floor available in a class 

pursuant to Rule 5.24(e)(3), the 

Exchange will continue to operate in a 

screen-based only environment using a 

floorless configuration of the System 

that is operational while the trading 

floor facility is inoperable. The 

Exchange would operate using that 

configuration only until the Exchange’s 

trading floor facility became 

operational. Open outcry trading would 

not be available in the event the trading 

floor becomes inoperable.5

Rule 5.24(e)(1) currently states in the 

event that the trading floor becomes 

inoperable, trading will be conducted 

pursuant to all applicable System Rules, 

except that open outcry Rules would not 

be in force, including but not limited to 

the Rules (or applicable portions) in 

Chapter 5, Section G,6 and that all nontrading rules of the Exchange would 

continue to apply. The Exchange 

recently adopted several rule changes 

that would apply during a time in 

which the trading floor in inoperable, 

which are currently effective until 

December 31, 2020.7 The Exchange 

believes these rules were necessary to 

implement to maintain a fair and 

orderly market while the trading floor 

was not operable in order to create an 

all-electronic trading environment 

similar to the otherwise unavailable 

open outcry trading environment. 

As of March 16, 2020, the Exchange 

suspended open outcry trading to help 

prevent the spread of COVID–19.8 The 


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Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 7581 

distancing measures, placed significant limitations 

on large gatherings, limited travel, and closed nonessential businesses. 

9See Exchange Notice C2020052601, Standards 

of Conduct related to the Reopening of the Cboe 

Options Trading Floor and COVID–19 (May 26, 

2020), available at https://cdn.cboe.com/resources/ 

release_notes/2020/Standards-of-Conduct-relatedto-the-Reopening-of-the-Cboe-Options-TradingFloor-Notice-Final.pdf. 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 12 Id. 

trading floor remained closed until June 

15, 2020. During the time when the 

trading floor was closed, the Exchange 

operated in an all-electronic trading 

environment and the temporary rules in 

Rule 5.24(e)(1) applied to that electronic 

trading environment. The Exchange 

believes that, while those temporary 

rules did not fully replicate open outcry 

trading, they allowed all-electronic 

trading to occur more similarly to open 

outcry trading. The Exchange has 

continued to consider other 

enhancements to the all-electronic 

trading configuration to further replicate 

the open outcry trading environment. 

As part of those enhancements, the 

Exchange recently adopted Rule 

5.24(e)(3), which would permit the 

Exchange to make available a virtual 

trading floor in one or more classes if 

the trading floor became inoperable. 

That rule provides that if the Exchange 

makes a virtual trading floor available in 

a class, the temporary rules in 

subparagraph (e)(1) above will not apply 

to that class. 

The trading floor is currently open for 

open outcry trading, and the Exchange 

is operating pursuant to its normal 

hybrid trading rules. The Exchange 

implemented numerous health and 

safety measures in connection with the 

reopening of the trading floor on June 

15, 2020 to help protect the safety and 

welfare of the trading floor community 

and help prevent the continued spread 

of COVID–19.9 However, the Exchange 

recognizes the ongoing nature of the 

COVID–19 pandemic in the United 

States, which may cause the Exchange 

to once again close its trading floor. In 

the event the Exchange did close its 

trading floor again, the Exchange 

believes it would be necessary to 

operate in an all-electronic trading 

environment. The Exchange may 

determine to make a virtual trading floor 

available in some or all classes. 

However, to the extent the virtual 

trading is unavailable in any class, the 

Exchange believes it would be necessary 

again to apply the adopted temporary 

rules in Rule 5.24(e)(1) in that class to 

maintain a fair and orderly market while 

the trading floor was not operable in 

order to create an all-electronic trading 

environment for that class similar to the 

otherwise unavailable open outcry 

trading environment. As noted above, 

Rule 5.24(e)(1) is currently effective 

only until December 31, 2020 (and the 

rules became inapplicable upon the 

reopening of the trading floor on June 

15, 2020). Given the Exchange may 

believe it is appropriate to close the 

trading floor with little advanced notice 

and in a short timeframe to help protect 

the safety and welfare of the trading 

floor community, the Exchange 

proposes to extend the effectiveness of 

the temporary rules in Rule 5.24(e)(1) to 

June 30, 2021 (unless further extended). 

The Exchange believes this will permit 

the Exchange to as seamlessly as 

possible transition back to an allelectronic trading environment in any 

class in which the Exchange did not 

make a virtual trading floor available. 

The Exchange notes Rule 5.24(e)(1) will 

not apply to trading during times when 

the trading floor remains operable or to 

any class in which the Exchange makes 

a virtual trading floor available when 

the trading floor is inoperable. 

Previously when the temporary 

provisions of Rule 5.24(e)(1) were in 

place, the Exchange’s Regulatory 

Division has continued its standard 

routine surveillance reviews for 

electronic trading and implemented a 

regulatory plan to surveil the rules in 

place in Rule 5.24(e)(1) when operating 

in a screen-based only environment. In 

the event the Exchange closes its trading 

floor again and the temporary 

provisions in Rule 5.24(e)(1) become 

applicable to any class in an allelectronic trading environment, the 

Exchange’s Regulatory Division would 

reimplement that regulatory plan to 

surveil those rules. 

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.10 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 11 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) 12 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

the proposed rule change will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest by permitting the Exchange to 

as seamlessly as possible transition back 

to an all-electronic trading environment 

in the event the Exchange determines it 

is appropriate to again close its trading 

floor. The Exchange expects it would 

take this action if it believes necessary 

and appropriate to help protect the 

safety and welfare of the trading 

community. Such a determination may 

occur with little advance notice, and 

closure of the trading floor may need to 

occur in a short time frame. The 

Exchange continues to believe the 

recent amendments to Rule 5.24(e)(1) 

allowed all-electronic trading to occur 

more similarly to open outcry trading 

while the trading floor was closed. The 

Exchange believes the proposed rule 

change is necessary and appropriate to 

provide TPHs with execution 

opportunities in an all-electronic 

trading environment in which a virtual 

trading floor is unavailable for orders 

that generally execute in open outcry 

trading. Rule 5.24(e)(3), which would 

permit the Exchange to make available 

a virtual trading floor in one or more 

classes if the trading floor became 

inoperable, provides that if the 

Exchange makes a virtual trading floor 

available in a class, the temporary rules 

in subparagraph (e)(1) will not apply to 

that class. The proposed rule change 

will provide investors with definitive 

knowledge of what rules will apply 

when the trading floor is closed (and a 

virtual trading floor is not available). 

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. The 

proposed rule change is not intended as 

a competitive filing, but rather extends 

the effectiveness of temporary rules as 

part of the Exchange’s business 

continuity plans, which are intended to 

allow the Exchange to continue to 

maintain fair and orderly markets while 


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7582 Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) 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. 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6)(iii). 

17For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission notes that the Exchange 

initially filed the proposed Fee Schedule 

amendment on December 31, 2020 (SR–PEARL– 

the Exchange’s trading floor continues 

to be inoperable. 

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 foregoing 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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 13 and Rule 19b– 

4(f)(6) thereunder.14

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 15 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 16

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay so that the proposed 

rule change may become operative 

immediately. The Exchange believes 

extension of the temporary rules put in 

place due to the ongoing COVID–19 

pandemic will permit the Exchange to 

minimize disruptions in the market 

during a transition back to an allelectronic trading environment if the 

Exchange believes it is necessary and 

appropriate to help protect the safety 

and welfare of the trading community 

and did not make a virtual trading floor 

available. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest as it 

will allow the temporary rules to 

continue with minimal interruption, 

thereby avoiding investor confusion that 

could result from an interruption in the 

effectiveness of the rules. Accordingly, 

the Commission hereby waives the 

operative delay and designates the 

proposed rule change operative upon 

filing.17

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 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CBOE–2021–004 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–CBOE–2021–004. 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 (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CBOE–2021–004 and 

should be submitted on or before 

February 19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01942 Filed 1–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90981; File No. SR– 

PEARL–2021–01] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX 

PEARL Options Fee Schedule for 

Member and Non-Member Monthly 

Network Connectivity Fees 

January 25, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

13, 2021, MIAX PEARL, LLC (‘‘MIAX 

PEARL’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. 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 

The Exchange is filing a proposal to 

amend the MIAX PEARL Fee Schedule 

(the ‘‘Fee Schedule’’) for the Exchange’s 

options market.3


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