Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 7429 

24For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

25 17 CFR 200.30–3(a)(12). 

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). 

5The term ‘‘Composite Market’’ means the market 

for a series comprised of (1) the higher of the thencurrent best appointed Market-Maker bulk message 

bid on the Exchange and the away best bid (‘‘ABB’’) 

(if there is an ABB) and (2) the lower of the thencurrent best appointed Market-Maker bulk message 

offer on the Exchange and the away best offer 

(‘‘ABO’’) (if there is an ABO). The term ‘‘Composite 

Bid (Offer)’’ means the bid (offer) used to determine 

the Composite Market. See Rule 5.31(a). 

6The term ‘‘Composite Width’’ means the width 

of the Composite Market (i.e., the width between 

Continued 

with other market participants as soon 

as possible. In addition, the proposal 

automates an aspect of the opening 

process that the Exchange currently has 

the authority to perform manually. 

Therefore, the Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. The 

Commission hereby designates the 

proposed rule change to be operative 

upon filing.24

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– 

C2–2021–001 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–C2–2021–001. 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 20549–1090 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–C2–2021–001 and should 

be submitted on or before February 18, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01830 Filed 1–27–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90967; File No. SR–CBOE– 

2021–005] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating To Amend Its 

Opening Process for Simple Orders 

January 22, 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 

11, 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 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

its opening process for simple orders. 

The text of the proposed rule change is 

provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

AboutCBOE/CBOELegal

RegulatoryHome.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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 5.31 regarding its opening process 

for simple orders. Currently, following 

the occurrence of an opening rotation 

trigger pursuant to Rule 5.31(d), the 

System conducts an opening rotation for 

an option series. Following the opening 

rotation trigger, the System conducts the 

Maximum Composite Width Check 

pursuant to Rule 5.31(e)(1) to determine 

if a series is eligible to open. If the 

Composite Market 5 of a series is not 

crossed, and the Composite Width 6 of 

7430 Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 

the Composite Bid and the Composite Offer) of a 

series. See Rule 5.31(a). 

7See Rule 5.31(e)(1)(C). The proposed rule 

change codifies in this provision that a series is not 

eligible to open if there is no Composite Market. 

This is true today and implied by the current rule 

text. If there were no Composite Market, the System 

would be unable to perform the Maximum 

Composite Width Check, thus meaning the series 

could not satisfy that check and thus would not be 

eligible to open. This proposed change merely adds 

this detail to the Rules for additional transparency. 

8The term ‘‘Queuing Period’’ means the time 

period prior to the initiation of an opening rotation 

during which the System accepts orders and quotes 

in the Queuing Book (the book into which Users 

may submit orders for participation in the opening 

rotation) for participation in the opening rotation 

for the applicable trading session. See Rule 5.31(a). 

9The proposed forced opening process has no 

impact on the modified opening auction process set 

forth in Rule 5.31(j). 

10The proposed rule change is limited to series 

in equity and ETP option classes because these 

classes are eligible for listing on all U.S. options 

exchanges. 

11See Rule 1.5 (which permits the Exchange to 

announce determinations by, among other things, 

notice, regulatory circular, and specification). 

12Such an ABBO would indicate that an away 

exchange is open, as it would have disseminated an 

opening quote. 

13The Exchange currently has a similar forced 

opening after a specified amount of time for 

complex order strategies. See Rule 5.33(c)(2)(C). 

14The Exchange would announce the 

determinations (and any changes to those 

determinations) in accordance with Rule 1.5. 

the series is less than or equal to the 

Maximum Composite Width (as defined 

in Rule 5.31(a)), the series is eligible to 

open. Additionally, if the Composite 

Market of a series is not crossed, and the 

Composite Width of the series is greater 

than the Maximum Composite Width, 

but there are (i) no non-M Capacity (a) 

market orders or (b) buy (sell) limit 

orders with prices higher (lower) than 

the Composite Market midpoint and (ii) 

no orders or quotes marketable against 

each other, the series is eligible to open. 

Once a series become eligible to open, 

the System conducts the opening 

auction for the series (i.e., determines 

the opening trade price pursuant to Rule 

5.31(e)(2) and opens the series pursuant 

to Rule 5.31(e)(3)). The Exchange may 

also determine to compel a series to 

open in the interest of fair and orderly 

markets, including if the opening width 

is wider than the Maximum Composite 

Width, pursuant to Rule 5.31(h). 

Currently, if a series cannot satisfy 

these conditions described above (and 

thus is not eligible to open), or if the 

Composite Market of a series is crossed, 

the series is ineligible to open.7 When 

that occurs, the Queuing Period 8 for the 

series continues (including the 

dissemination of opening auction 

updates) until the Maximum Composite 

Width Check is satisfied or the 

Exchange determines to open the series 

pursuant to Rule 5.31(h). The proposed 

rule change adds that such a series may 

open pursuant to a forced opening as set 

forth in proposed Rule 5.31(f).9

Specifically, as proposed, if a series in 

an equity or exchange-traded product 

(‘‘ETP’’) option class 10 is unable to open 

because it does not satisfy the Maximum 

Composite Width Check described 

above within a time period (which the 

Exchange determines for all equity and 

ETP option classes) 11 after the 

occurrence of the opening rotation 

trigger for the class pursuant to Rule 

5.31(d), and the Composite Market is 

not crossed, the System forces the series 

to open after that time period upon the 

System’s observation of an away best 

bid and offer (‘‘ABBO’’) (with a non-zero 

offer) 12 for the series.13 For a series 

subject to a forced opening, the opening 

trade price determination and series 

open set forth in Rule 5.31(e)(2) and (3) 

(i.e., the opening auction) do not occur; 

instead, the System opens the series 

without a trade. This will permit a 

series to open for trading on the 

Exchange if the series is open for trading 

on at least one other options exchange, 

even though the market for the series on 

the Exchange may be wide. 

The proposed change to Rule 5.31(f) 

provides that in the event of a forced 

opening of a series pursuant to proposed 

Rule 5.31(e)(4) or a compelled opening 

of a series pursuant to paragraph (h), the 

System enters all of a User’s orders in 

that series in the Queuing Book into the 

Book in the manner set forth in current 

Rule 5.31(f), unless a User instructs the 

System to cancel its market orders or all 

of its orders, in which case the System 

enters only the non-cancelled orders 

into the Book in this manner. 

Specifically, they will be processed in 

accordance with Rule 5.32 (as 

unexecuted orders and quotes are 

handled following the conclusion of the 

opening rotation), which describes how 

the System processes, handles, and 

executes orders. If any order or quote in 

the Queuing Book is marketable upon 

the forced opening (and the User does 

not instruct the System to cancel it as 

proposed), the System would execute 

marketable orders subject to the priority 

rules set forth in Rule 5.32. If an order 

is marketable against away interest and 

is eligible for routing, the System may 

route the order for execution to an away 

exchange. Any non-marketable order 

would enter the Book or cancel, subject 

to the User instructions. This proposed 

change provides Users with flexibility 

for automated handling of their orders 

in the event a series opens with a wide 

market or is otherwise manually opened 

when the opening conditions may not 

otherwise be standard. 

If a series satisfies the Maximum 

Composite Width Check prior to the 

System’s observation of an ABBO for the 

series, the series opens pursuant to Rule 

5.31(d)(2) and (3) (i.e., the standard 

opening auction process occurs for the 

series). For example, suppose the 

Exchange determined the ‘‘forced 

opening’’ timer to be three minutes. If 

the opening trigger for a series occurs at 

9:30:05 Eastern time but the series does 

not satisfy the Maximum Composite 

Width Check after the trigger, the 

System will force the series open after 

9:33:05 Eastern time if it has received an 

ABBO by that time. However, if the 

series satisfies the Maximum Composite 

Width Check at 9:32:30, the series will 

open in accordance with the normal 

opening auction process. 

Finally, the proposed rule change 

amends the definitions of ‘‘Maximum 

Composite Width’’ and ‘‘Opening 

Collar’’ in Rule 5.31(a). The term 

‘‘Maximum Composite Width’’ means 

the amount that the Composite Width of 

a series may generally not be greater 

than for the series to open (subject to 

certain exceptions set forth in Rule 

5.31(e)(1)). The term ‘‘Opening Collar’’ 

means the price range that establishes 

limits at or inside which the System 

determines the Opening Trade Price for 

a series. The Opening Collar is 

determined by determining the 

midpoint of the Composite Market, and 

adding and subtracting half of the 

applicable width amount above and 

below, respectively, that midpoint. The 

amounts for the Maximum Composite 

Width and Opening Collar each apply 

on a Composite Bid basis and are 

currently the same for all classes (and 

the Maximum Composite Width 

amounts are the same as the Opening 

Collar amounts). 

The Maximum Composite Width and 

Opening Collar amounts are currently 

specified in these defined terms. The 

proposed rule change deletes these 

specified amounts and instead states 

that the Exchange determines each on a 

class and Composite Bid basis, which 

amount the Exchange may modify 

during the opening auction process 

(which modifications the Exchange 

disseminates to all subscribes to the 

Exchange’s data feeds that deliver 

opening auction updates).14 The 

Exchange believes having flexibility to 

set these amounts is appropriate so that 

it may consider the different market 

models and characteristics of different 

classes, as well as modify amounts in 

response to then-current market 

conditions. The Rules currently permit 

the Exchange to modify these amounts 

Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 7431 

15See, e.g., Nasdaq Options Market (‘‘NOM’’) 

Options 3, Section 8(a)(6), Cboe EDGX Options 

Exchange, Inc. (‘‘EDGX’’) Rule 21.7(a) (definitions 

of Maximum Composite Width and Opening 

Collar); Cboe BZX Options Exchange, Inc. (‘‘BZX’’) 

Rule 21.7(a) (definitions of Maximum Composite 

Width and Opening Collar); Cboe C2 Exchange Inc. 

(‘‘C2’’) Rule 6.11(a) (definitions of Maximum 

Composite Width and Opening Collar); see also 

Miami Securities Exchange, Inc. (‘‘MIAX’’) Rule 

503(f)(2) (which permits MIAX to determine by 

circular an acceptable range in which openings are 

permissible if there is no valid width national best 

bid or offer (‘‘NBBO’’)). 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(5). 

18 Id. 

19The Exchange notes pursuant to Rule 

5.31(e)(1)(B), there are currently instances in which 

the Exchange will open for trading despite the 

Composite Market Width being larger than the 

Maximum Composite Width. 

20See Rule 5.31(h); see also definition of 

Maximum Composite Width and Opening Collar in 

Rule 5.31(a). 

during the opening auction process 

when it deems necessary to maintain a 

fair and orderly opening process (which 

modifications the Exchange 

disseminates to all subscribers to the 

Exchange’s data feeds that deliver 

opening auction updates). This 

proposed change merely permits the 

Exchange to modify these amounts at 

any time as it deems necessary and 

appropriate. The Exchange notes several 

options exchanges are able to change the 

amounts of valid opening widths by 

notice or circular and do not need to 

submit a rule filing to the Commission 

to do so.15

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.16 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 17 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) 18 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 forced opening process for 

simple orders will remove impediments 

to and perfect the mechanism of a free 

and open market and a national market 

system and protect investors. The 

proposed rule change will provide for 

series to open for trading on the 

Exchange sooner than they may open 

currently, as long as they are open for 

trading on other options exchanges. The 

Exchange believes the proposed rule 

change will benefit investors, because it 

may permit these options to open 

sooner and increase the times during 

which investors may conduct trading in 

these options. Additionally, this may 

increase liquidity in the market for a 

series that is otherwise open on another 

options exchange. While the market on 

the Exchange for a series may be wider 

than the Maximum Composite Width,19

the Exchange believes it is reasonable to 

open the series if it opened for trading 

on another options exchange pursuant 

to that exchange’s Commissionapproved rules. Options exchanges have 

varying opening processes and have 

made separate determinations on what 

constitutes separate, reasonable opening 

market widths. The Exchange believes if 

other options exchanges opened a series 

with a market width, it is reasonable to 

open the series for trading on the 

Exchange as well (as orders submitted to 

other exchanges may be trading at those 

widths). Since orders may not trade 

outside of the disseminated NBBO 

(which defines the then-current market 

for the series), any orders resting in the 

Queuing Book that may execute 

following the forced opening will 

receive protection against executions at 

potentially erroneous prices. 

Additionally, the proposed ability of 

Users to cancel orders in the event of a 

forced opening will provide Users with 

additional protection. Additionally, the 

Exchange believes opening series for 

trading on the Exchange that are open 

for trading on other options exchanges 

will put Exchange Users on equal 

footing with other market participants, 

as it will provide Users’ orders that are 

otherwise resting in the Queuing Book 

and awaiting execution with the ability 

to get into the market for potential 

execution. 

The Exchange currently has the 

authority to deviate from the standard 

opening process, including to 

temporarily increase the Maximum 

Composite Width amounts (i.e., widen 

the permissible opening market) and to 

compel a series open, even if the 

Maximum Composite Width check is 

not satisfied, but that may only happen 

manually if the Exchange determines it 

is necessary in the interests of a fair and 

orderly market.20 Currently, if a series is 

open on another exchange but not on 

the Exchange, the Exchange generally 

manually increases the Maximum 

Composite Width for the series until the 

series opens. Manually increasing the 

Maximum Composite Width for a series 

until the series open is a different 

manual process than compelling the 

series to open, but ultimately achieves 

the same result of causing a series that 

does not satisfy the Maximum 

Composite Width check to otherwise 

open. The Exchange believes it is in the 

interests of a fair and orderly market to 

deviate from the opening process to 

systematically force a series to open, 

despite a wide Exchange market, if the 

series is open for trading on another 

exchange to provide investors with 

orders in that series resting on the 

Exchange’s Queuing Book to have the 

same execution opportunities as other 

investors who submitted orders to other 

options exchanges with different 

opening conditions. The proposed rule 

change is consistent with this authority 

and creates an automated compelled 

opening in certain circumstances to 

replace the manual process currently 

used. This will benefit investors by 

providing additional transparency to the 

Rules regarding when a series may open 

despite not satisfying the Maximum 

Composite Width check as well as 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

automating an otherwise manual 

process. 

The Exchange believes the proposed 

rule change to permit Users to give the 

System a standing instruction regarding 

how to handle their orders when a 

forced or manually compelled (for 

simple orders) opening of series occurs 

will benefit investors, as it will give 

them an additional tool to manage their 

orders in connection with the opening 

of series. Users may currently cancel 

any of their orders resting in the 

Queuing Book prior to the opening of a 

series, and they may cancel any orders 

that do not execute at the open once 

those orders are in the Book or COB, as 

applicable. Because the Exchange 

market may be wider in these situations, 

the Exchange believes it is appropriate 

to provide Users with the ability to 

cancel market orders so they don’t 

execute at the wider market prices once 

in the Book or cancel all of their orders 

if they prefer. 

Additionally, the Exchange believes 

the proposed rule change to permit the 

7432 Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 

21See, e.g., NOM Options 3, Section 8(a)(6), 

EDGX Rule 21.7(a) (definitions of Maximum 

Composite Width and Opening Collar), BZX Rule 

21.7(a) (definitions of Maximum Composite Width 

and Opening Collar), and C2 Rule 6.11(a) 

(definitions of Maximum Composite Width and 

Opening Collar); see also MIAX Rule 503(f)(2) 

(which permits MIAX to determine by circular an 

acceptable range in which openings are permissible 

if there is no valid width NBBO). 

22See, e.g., NOM Options 3, Section 8(a)(6), 

EDGX Rule 21.7(a) (definitions of Maximum 

Composite Width and Opening Collar), BZX Rule 

21.7(a) (definitions of Maximum Composite Width 

and Opening Collar), and C2 Rule 6.11(a) 

(definitions of Maximum Composite Width and 

Opening Collar); see also MIAX Rule 503(f)(2) 

(which permits MIAX to determine by circular an 

acceptable range in which openings are permissible 

if there is no valid width NBBO). 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f)(6). 

25 In addition, Rule 19b–4(f)(6)(iii) requires the 

Exchange 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 

filing of the proposed rule change, or such shorter 

time as designated by the Commission. The 

Exhange has satisfied this requirement. 

26 Id. 

27 17 CFR 240.19b–4(f)(6)(iii). 

Exchange to determine the amounts of 

the Maximum Composite Width and 

Opening Collar on a class and 

Composite Bid basis will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and 

protect investors, because it will 

provide the Exchange with flexibility to 

consider the different market models 

and characteristics of different classes, 

and respond to then-current market 

conditions. The Rules currently permit 

the Exchange to modify these amounts 

during the opening auction process 

when it deems necessary to maintain a 

fair and orderly opening process (which 

modifications the Exchange 

disseminates to all subscribers to the 

Exchange’s data feeds that deliver 

opening auction updates). This 

proposed change merely permits the 

Exchange to modify these amounts at 

any time as it deems necessary and 

appropriate. The Exchange notes several 

options exchanges are able to change the 

amounts of valid opening widths by 

notice or circular and do not need to 

submit a rule filing to the Commission 

to do so, and the proposed rule change 

would provide the Exchange with the 

same flexibility to determine maximum 

opening widths that other exchanges 

have.21

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 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because all Users may trade in any 

series that opens subject to the proposed 

forced opening process. The Exchange 

believes it is appropriate to limit the 

forced opening to equity and ETP 

options, as those may be multiply listed 

on exchanges. Additionally, all Users 

will have the opportunity to instruct the 

System to cancel its market orders or all 

open orders in the event of a forced or 

otherwise manual opening. Cancellation 

of some or all of a User’s orders in the 

event of such an opening would be 

voluntary and completely within the 

User’s discretion. The Exchange 

believes the proposed rule change to 

determine the amounts of the Maximum 

Composite Width and Opening Collar 

on a class and Composite Bid basis will 

not impose any burden on intramarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act, because the 

determined amounts (by Composite Bid) 

for each class will apply to all orders of 

all market participants in the applicable 

class in the same manner. The Exchange 

believes it is appropriate to be able to 

determine different amounts on a class 

basis (it already determines different 

amounts on a Composite Bid basis), 

because it will provide the Exchange 

with flexibility to consider the different 

market models and characteristics of 

different classes, and respond to thencurrent market conditions. The Rules 

currently permit the Exchange to modify 

these amounts during the opening 

auction process when it deems 

necessary to maintain a fair and orderly 

opening process (which modifications 

the Exchange disseminates to all 

subscribers to the Exchange’s data feeds 

that deliver opening auction updates). 

This proposed change merely permits 

the Exchange to modify these amounts 

at any time as it deems necessary and 

appropriate. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed forced opening 

process will permit series to open on the 

Exchange that are otherwise open for 

trading on other options Exchange, 

which may increase liquidity and 

competition in those series sooner. 

Additionally, the Exchange believes 

opening series for trading on the 

Exchange that are open for trading on 

other options exchanges will put 

Exchange Users on equal footing with 

other market participants, as it will 

provide Users’ orders that are otherwise 

resting in the Queuing Book and 

awaiting execution with the ability to 

get into the market for potential 

execution. The proposed flexibility for 

Users to instruct the System how to 

handle their orders in the event of a 

forced or manual opening applies only 

to how a Users’ orders on the Exchange 

will be handled in such a circumstance. 

The Exchange does not believe the 

proposed rule change to permit the 

Exchange to determine the amounts of 

the Maximum Composite Width and 

Opening Collar on a class and 

Composite Bid basis will impose any 

burden on intermarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Several options exchanges are able to 

change the amounts of valid opening 

widths by notice or circular and do not 

need to submit a rule filing to the 

Commission to do so, and the proposed 

rule change would provide the 

Exchange with the same flexibility to 

determine maximum opening widths 

that other exchanges have.22

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 

The Exchange has designated this rule 

filing as non-controversial under 

Section 19(b)(3)(A) 23 of the Act and 

Rule 19b–4(f)(6) 24 thereunder. Because 

the 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 and Rule 19b– 

4(f)(6) thereunder.25

A proposed rule change filed under 

Rule 19b–4(f)(6) 26 normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),27 the Commission 

may 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 proposal may become operative 

Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 7433 

28For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

29 17 CFR 200.30–3(a)(12). 

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). 

upon filing. Waiver of the operative 

delay will immediately permit series to 

open for trading on the Exchange when 

those series are already open for trading 

on other options exchanges pursuant 

their respective rules, and provide 

Users’ orders that are otherwise resting 

in the Queuing Book and awaiting 

execution with the ability to get into the 

market for potential execution, thereby 

putting such Users on equal footing 

with other market participants as soon 

as possible. In addition, the proposal 

automates an aspect of the opening 

process that the Exchange currently has 

the authority to perform manually, and 

provides the Exchange with the same 

flexibility as other exchanges to 

determine appropriate maximum 

opening widths. Therefore, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. The Commission hereby 

designates the proposed rule change to 

be operative upon filing.28

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–2021–005 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–2021–005. 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 20549–1090 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–2021–005 and 

should be submitted on or before 

February 18, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01834 Filed 1–27–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90969; File No. SR– 

CboeEDGX–2021–005] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Opening Process for Simple Orders 

January 22, 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 

11, 2021, Cboe EDGX Exchange, Inc. 

(the ‘‘Exchange’’ or ‘‘EDGX’’) 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 

Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX Options’’) 

proposes to amend its opening process 

for simple orders. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

options/regulation/rule_filings/edgx/), 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 21.7 regarding its opening process 

for simple orders. Currently, following 

the occurrence of an opening rotation 

trigger pursuant to Rule 21.7(d), the 

System conducts an opening rotation for 

an option series. Following the opening 

rotation trigger, the System conducts the 

Maximum Composite Width Check 

pursuant to Rule 21.7(e)(1) to determine