13004 Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices 

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

2 17 CFR 240.19b–4. 

3Pursuant to Options 3, Section 7(a)(2), a 

‘‘Directed Order’’ is an order to buy or sell which 

has been directed, provided it is properly marked 

as such, to a particular Market Maker (‘‘Directed 

Market Maker’’). 

4 ‘‘Minimum Quantity Order’’ is an order that 

require that a specified minimum quantity of 

contracts be obtained, or the order is cancelled. 

Minimum Quantity Orders are treated as having a 

time-in-force designation of Immediate or Cancel. 

Minimum Quantity Orders received prior to the 

opening cross or after market close will be rejected. 

See Options 3, Section 7(a)(4). 

5 ‘‘All-or-None Order’’ is a market or limit order 

which is to be executed in its entirety or not at all. 

All-or-None Orders are treated as having a time-inforce designation of Immediate or Cancel. All-orNone Orders received prior to the opening or after 

market close will be rejected. See Options 3, 

Section 7(a)(7). 

underwriting compensation permitted 

by Section 17(e) or 57(k)) received in 

connection with any Co-Investment 

Transaction will be distributed to the 

participants on a pro rata basis based on 

the amounts they invested or 

committed, as the case may be, in such 

Co-Investment Transaction. If any 

transaction fee is to be held by an 

Adviser pending consummation of the 

transaction, the fee will be deposited 

into an account maintained by the 

Adviser at a bank or banks having the 

qualifications prescribed in Section 

26(a)(1), and the account will earn a 

competitive rate of interest that will also 

be divided pro rata among the 

participants. None of the Advisers, the 

Affiliated Funds, the other Regulated 

Funds or any affiliated person of the 

Affiliated Funds or the Regulated Funds 

will receive any additional 

compensation or remuneration of any 

kind as a result of or in connection with 

a Co-Investment Transaction other than 

(i) in the case of the Regulated Funds 

and the Affiliated Funds, the pro rata 

transaction fees described above and 

fees or other compensation described in 

Condition 2(c)(iii)(B)(z), (ii) brokerage or 

underwriting compensation permitted 

by Section 17(e) or 57(k) or (iii) in the 

case of the Advisers, investment 

advisory compensation paid in 

accordance with investment advisory 

agreements between the applicable 

Regulated Fund(s) or Affiliated Fund(s) 

and its Adviser. 

15. Independence. If the Holders own 

in the aggregate more than 25 percent of 

the Shares of a Regulated Fund, then the 

Holders will vote such Shares in the 

same percentages as the Regulated 

Fund’s other shareholders (not 

including the Holders) when voting on 

(1) the election of directors; (2) the 

removal of one or more directors; or (3) 

any other matter under either the Act or 

applicable State law affecting the 

Board’s composition, size or manner of 

election. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–04501 Filed 3–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91226; File No. SR–BX– 

2021–003] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Various BX 

Options Rules 

March 1, 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 February 

17, 2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 proposes to amend 

Options 2, Section 10 (Directed Market 

Makers); Options 3, Section 7 (Types of 

Orders and Order and Quote Protocols); 

Options 3, Section 10 (Order Book 

Allocation); and Options 3, Section 15 

(Risk Protections). 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, at the principal office 

of the Exchange, 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 

Options 2, Section 10 (Directed Market 

Makers); Options 3, Section 7 (Types of 

Orders and Order and Quote Protocols); 

Options 3, Section 10 (Order Book 

Allocation); and Options 3, Section 15 

(Risk Protections). Each change will be 

described below. 

Options 2, Section 10 

Options 2, Section 10(a), which 

concerns Directed Market Makers, 

currently provides, ‘‘Market Makers may 

receive Directed Orders 3 in their 

appointed classes in accordance with 

the provisions of this Rule, Directed 

Market Makers provided they indicated 

to the Exchange, in a form specified, 

that they will receive Directed Orders.’’ 

The Exchange proposes to amend this 

sentence to remove the unnecessary 

phrase ‘‘Directed Market Makers’’ so 

that the sentence provides, ‘‘Market 

Makers may receive Directed Orders in 

their appointed classes in accordance 

with the provisions of this Rule, 

provided they indicated to the 

Exchange, in a form specified, that they 

will receive Directed Orders.’’ The 

words ‘‘Directed Market Makers’’ are not 

necessary and add confusion to the 

sentence. 

Options 3, Section 7 

The Exchange proposes to amend 

Options 3, Section 7(a)(4), which 

describes a Minimum Quantity Order, to 

amend the word ‘‘require’’ by making it 

plural. This grammatical amendment is 

technical and non-substantive. 

The Exchange proposes to amend 

Options 3, Section 7(a)(4) to describe a 

Contingency Order. Today, BX has two 

order types which have contingencies: 

(1) Minimum Quantity Orders 4 and (2) 

All-or-None Orders.5 The Exchange 


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Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices 13005 

6Options 3, Section 15(a)(1) provides in part, 

‘‘Order Price Protection (‘‘OPP’’). OPP is a feature 

of the System that prevents certain day limit, good 

til cancelled, and immediate or cancel orders at 

prices outside of pre-set standard limits from being 

accepted by the System. OPP applies to all options 

but does not apply to market orders . . .’’ 

7See Securities Exchange Act Release No. 86191 

(June 28, 2019), 84 FR 31131 (June 24, 2019) (SR– 

Phlx–2019–20) (Order Granting Approval of 

Proposed Rule Change Relating to the Allocation 

and Prioritization of Automatically Executed 

Trades) (‘‘Prior Allocation Rule Change’’). 

8See Securities Exchange Act Release No. 88213 

(February 14, 2020), 85 FR 9859 (February 20, 2020) 

(SR–Phlx–2020–03) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Relocate 

Rules From Its Current Rulebook Into Its New 

Rulebook Shell). 

9See Phlx Options 3, Section 10(a)(1)(B). 

10See BX Options 1, Section 1(a)(53). The term 

‘‘quote’’ or ‘‘quotation’’ mean a bid or offer entered 

by a Market Maker as a firm order that updates the 

Market Maker’s previous bid or offer, if any. 

11See BX Options 1, Section 1(a)(7). The term 

‘‘bid’’ means a limit order to buy one or more 

options contracts. 

12See BX Options 1, Section 1(a)(34). The term 

‘‘offer’’ means a limit order to sell one or more 

options contracts. 

13See BX Options 1, Section 1(a)(44). The term 

‘‘order’’ means a firm commitment to buy or sell 

options contracts as defined in Section 7 of Options 

3. 

14See Securities Exchange Act Release No. 89476 

(August 10, 2020), 85 FR 48274 (August 4, 2020) 

Continued 

proposes to formalize the definition of 

a ‘‘Contingency Order’’ within proposed 

new Options 3, Section 7(a)(4)(A) to 

mean Minimum Quantity Orders and 

All-or-None Orders to bring greater 

clarity to its rules. The Exchange 

proposes to state within proposed new 

Options 3, Section 7(a)(4)(A) that 

Contingency Orders will only execute 

against multiple, aggregated orders if the 

executions would occur simultaneously, 

which is true of Minimum Quantity 

Orders and All-or-None Orders today. 

Today, Minimum Quantity Orders and 

All-or-None Orders both have a time-inforce designation of Immediate or 

Cancel and both have a size 

requirement. A Minimum Quantity 

Order requires that a specified 

minimum quantity of contracts be 

obtained, or the order is cancelled. 

Similarly, an All-or-None Order is to be 

executed in its entirety at the specified 

size or the order will be cancelled. The 

Contingency Orders execute against 

multiple, aggregated orders only if the 

executions would occur simultaneously 

to ensure that Minimum Quantity 

Orders and All-or-None Orders are 

executed at the specified size while also 

honoring the priority of all other orders 

on the Order Book. The Exchange is 

adopting rule text which is similar, in 

relevant part, to a provision in the 

definition of Minimum Quantity Order 

on Cboe Exchange, Inc. (‘‘Cboe’’). Cboe 

Rule 5.6(b) provides, ‘‘. . . Minimum 

Quantity. A ‘‘Minimum Quantity’’ order 

is an order that requires a specified 

minimum quantity of contracts to be 

executed or is cancelled. Minimum 

Quantity orders will only execute 

against multiple, aggregated orders if the 

executions would occur simultaneously. 

Only a Book Only order with a Time-inForce designation of IOC may have a 

Minimum Quantity instruction (the 

System disregards a Minimum Quantity 

instruction on any other order). Users 

may not designate bulk messages as 

Minimum Quantity Orders.’’ Similar to 

BX’s Minimum Quantity Orders and 

All-or-None Orders, Cboe’s Minimum 

Quantity Orders will only execute 

against multiple, aggregated orders if the 

executions would occur simultaneously 

because of the size contingency. 

This amendment will clarify the 

current rule to more specifically 

describe the manner in which the 

System currently handles Contingency 

Orders on BX. The Exchange notes that 

the handling of such orders as described 

by the proposed rule text within 

Options 3, Section 7(a)(4)(A) is 

consistent with the Exchange’s 

allocation methodology within Options 

3, Section 10 and description of order 

types within Options 3, Section 7. The 

additional clarity makes clear that 

because of the size requirements of 

Minimum Quantity Orders and All-orNone Orders, that those orders must be 

satisfied simultaneously to avoid any 

priority conflict on the Order Book 

which considers current displayed 

NBBO prices to avoid locked and 

crossed markets as well as tradethroughs. 

The Exchange proposes to replace 

references to the term ‘‘Limit Order 

Price Protection’’ within Options 3, 

Section 7 with the correct term, ‘‘Order 

Price Protection.’’ The Exchange 

inadvertently referred to a ‘‘Limit Order 

Price Protection’’ within Options 3, 

Section 7(a)(1), Options 3, Section 

7(b)(3)(B), and Options 3, Section 

7(e)(1)(B). The correct name of the risk 

protection is the ‘‘Order Price 

Protection’’ as described within Options 

3, Section 15(a)(1).6 At this time the 

Exchange proposes to amend this term 

to reflect the correct name of the risk 

protection. 

Finally, the Exchange proposes to 

renumber the rule from current Options 

3, Section 7(a)(9) through (12) to amend 

the numbering which today does not 

have an Options 3, Section 7(a)(8). 

Options 3, Section 10 

The Exchange proposes to amend 

Options 3, Section 10, Order Book 

Allocation, to conform this rule, in 

relevant part, to Phlx Options 3, Section 

10 as discussed below. In 2019, Phlx 

revised its allocation rule,7 which was 

previously located at Phlx Rule 1089 

and has since been relocated to Options 

3, Section 10,8 to conform the location 

of Phlx’s allocation rule to the location 

of BX’s allocation rule. In addition to 

conforming the structure and certain 

content of the Phlx rule to BX’s rule in 

the Prior Allocation Rule Change, Phlx 

made some additional modifications to 

its rule. At this time, the Exchange 

proposes to conform certain rule text 

within BX’s allocation rule to Phlx’s 

allocation rule. The Phlx rule text was 

added within the Prior Allocation Rule 

Change in order to add specificity to 

Phlx’s allocation rule. 

Currently BX Options 3, Section 

10(a)(1)(C)(1)(b), which provides for 

Lead Market Maker allocation, states: 

Lead Market Maker (‘‘LMM’’) Priority: An 

LMM may be assigned by the Exchange in 

each option class in accordance with Options 

2, Section 3. LMM participant entitlements 

shall only be in effect when the Public 

Customer Priority Overlay is also in effect. 

After all Public Customer orders have been 

fully executed, upon receipt of an order, 

provided the LMM’s bid/offer is at or 

improves on the Exchange’s disseminated 

price, the LMM will be afforded a 

participation entitlement. The LMM shall not 

be entitled to receive a number of contracts 

that is greater than the displayed size 

associated with such LMM. LMM 

participation entitlements will be considered 

after the Opening Process. The LMM 

participation entitlement is as follows: 

The Exchange proposes to amend this rule 

text, similar to Phlx,9 to insert the term 

‘‘quote’’ 10 in place of the terms ‘‘bid’’ 11 and 

‘‘offer’’ 12 in the third sentence. The term 

‘‘quote’’ and the term ‘‘bid/offer’’ are, where 

changes are proposed herein, interchangeable 

terms that are intended to differentiate 

‘‘quotes’’ or ‘‘bid/offer’’ from an ‘‘order.’’ 13

Of note, only BX Market Makers may enter 

a ‘‘quote’’ or a ‘‘bid/offer.’’ The Exchange’s 

proposal regarding this amendment is nonsubstantive as the words proposed to be 

amended herein are interchangeable. 

Further, the Exchange proposes to amend 

the third sentence of Options 3, Section 

10(a)(1)(C)(1)(b) to replace ‘‘Exchange’s 

disseminated price’’ with ‘‘better of the 

NBBO or internal BBO.’’ BX Options 3, 

Section 4, Entry and Display of Quotes, 

provides, at subparagraph (b)(6), ‘‘. . . A 

quote will not be executed at a price that 

trades through another market or displayed at 

a price that would lock or cross another 

market. If, at the time of entry, a quote would 

cause a locked or crossed market violation or 

would cause a trade-through, violation, it 

will be re-priced to the current national best 

offer (for bids) or the current national best 

bid (for offers) and displayed at one 

minimum price variance above (for offers) or 

below (for bids) the national best price.’’ As 

further explained within a prior BX rule 

change,14


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13006 Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices 

(SR–BX–2020–017) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

Various BX Rules in Connection With a Technology 

Migration). 

15 Id at 48276. 

16See Options 3, Section 10(a)(1)(C)(1)(b), as 

proposed, ‘‘An LMM may be assigned by the 

Exchange in each option class in accordance with 

Options 2, Section 3. LMM participant entitlements 

shall only be in effect when the Public Customer 

Priority Overlay is also in effect. After all Public 

Customer orders have been fully executed, upon 

receipt of an order, provided the LMM’s quote is at 

or improves on the better of the NBBO or internal 

BBO, the LMM will be afforded a participation 

entitlement. The LMM shall not be entitled to 

receive a number of contracts that is greater than 

the displayed size associated with such LMM. LMM 

participation entitlements will be considered after 

the Opening Process. The LMM participation 

entitlement is as follows: . . .’’. A similar change 

is proposed within Options 3, Section 

10(a)(1)(C)(2)(ii). 

17The amendment to change the term ‘‘bid/offer’’ 

to ‘‘quote’’ was described above. 

18Options 2, Section 10(a)(1) provides, ‘‘When 

the Exchange’s disseminated price is the NBBO at 

the time of receipt of the Directed Order, and the 

Directed Market Maker is quoting at or improving 

the Exchange’s disseminated price, the Directed 

Order shall be automatically executed and allocated 

in accordance with Options 3, Section 10 such that 

the Directed Market Maker shall receive a Directed 

Market Maker participation entitlement provided 

for therein.’’ 

19Amending the terms ‘‘bid/offer’’ to the term 

‘‘quote’’ in this paragraph was described above. 

Today, BX re-prices certain orders to avoid 

locking and crossing away markets, 

consistent with its Trade-Through 

Compliance and Locked or Crossed Markets 

obligations. Orders which lock or cross an 

away market will automatically re-price one 

minimum price improvement inferior to the 

original away best bid/offer price to one 

minimum trading increment away from the 

new away best bid/offer price or its original 

limit price. The re-priced order is displayed 

on OPRA. The order remains on BX’s Order 

Book and is accessible at the non-displayed 

price. For example, a limit order may be 

accessed on BX by a Participant if the limit 

order is priced better than the NBBO. The 

Exchange believes that the addition of this 

rule text will allow BX to define an ‘‘internal 

BBO’’ within its rules when describing repriced orders that remain on the Order Book 

and are available at non-displayed prices, 

which are resting on the Order Book.15

BX Options 5, Section 4, Order 

Routing, describes the repricing of 

orders for both routable and nonroutable orders within Options 5, 

Section 4(a)(iii)(A), (B) and (C). The 

Exchange’s proposal to use the term 

‘‘better of the NBBO or the internal 

BBO’’ in BX Options 3, Section 

10(a)(1)(C)(1)(b) seeks to better articulate 

current behavior and more closely 

conform with the concept of re-pricing 

at an internal BBO described within BX 

Options 3, Section 4, Entry and Display 

of Quotes. While this concept of ‘‘better 

of the NBBO or the internal BBO’’ is 

currently described in other portions of 

the BX Rulebook today, the Exchange 

believes adding context within the 

allocation rule to the re-priced quotes 

which remain on BX’s Order Book and 

are accessible at the non-displayed 

price, will make clear within Options 3, 

Section 10 that, as is the case today, if 

the LMM’s quote is at or improves on 

the better of the better of the NBBO or 

internal BBO, the LMM is entitled to the 

allocation.16 While the proposed rule 

text offers a more precise description, 

the Exchange notes that the current rule 

text is not inaccurate as an LMM must 

improve on Exchange’s disseminated 

price. The proposed language also 

considers a re-priced quote, which may 

be at a better price on the Order Book 

but is non-displayed. Today, the repricing of quotes permits BX to comply 

with trade-through rules and prevent 

locked and crossed markets. This 

System behavior is not new, rather it is 

being described in greater detail herein 

as in other parts of the Rulebook. The 

proposed change within Options 3, 

Section 10(a)(1)(C)(1)(b) relates to BX’s 

Price-Time Execution Algorithm. A 

similar change is proposed in identical 

rule text contained within BX Options 

3, Section 10(a)(1)(C)(2)(ii)(1) which 

describes Size Pro-Rata Execution 

Algorithm. 

The Exchange also proposes to amend 

a paragraph within Options 3, Section 

10(a)(1)(C)(1)(b)(1) which currently 

provides, 

Notwithstanding the foregoing, when a 

Directed Order is received and the DMM’s 

bid/offer is at or improves on the NBBO and 

the LMM is at the same price level and is not 

the DMM, the LMM participation entitlement 

set forth in this subsection (C)(1)(b)(1) will 

not apply with respect to such Directed 

Order. 

The Exchange proposes to instead 

provide,17

Notwithstanding the foregoing, when a 

Directed Order is received and the DMM’s 

quote is at or improves on the better of the 

NBBO or internal BBO and the LMM is at the 

same price level and is not the DMM, the 

LMM participation entitlement set forth in 

this subsection (C)(1)(b)(1) will not apply 

with respect to such Directed Order. 

While today, the DMM’s quote must 

be at or improve upon the NBBO as 

provided for within Options 2, Section 

10,18 the re-pricing of orders would 

permit a DMM’s quote that is at or 

improves on the better of the NBBO or 

internal BBO to be subject to the DMM 

allocation described within Options 3, 

Section 10(a)(1)(C)(1)(b)(1). As 

explained above in greater detail, orders 

which lock or cross an away market will 

automatically re-price one minimum 

price improvement inferior to the 

original away best bid/offer price to one 

minimum trading increment away from 

the new away best bid/offer price or its 

original limit price. While the re-priced 

order is displayed on OPRA that order 

is accessible on BX’s Order Book at the 

non-displayed price. The proposed 

change within Options 3, Section 

10(a)(1)(C)(1)(b)(1) relates to BX’s PriceTime Execution Algorithm. A similar 

change is proposed in identical rule text 

contained within current Options 3, 

Section 10(a)(1)(C)(2)(iii) which 

describes the Size Pro-Rata Execution 

Algorithm, and which is proposed to be 

renumbered as ‘‘(iv)’’ to account for new 

rule text proposed herein. The changes 

described in this paragraph are not 

System or functionality changes but 

provide greater clarity as to the way the 

System functions. 

Finally, a similar clarifying change is 

proposed to be made to Options 3, 

Section 10(a)(1)(C)(1)(c) (DMM Priority) 

which relates to BX’s Price-Time 

Execution Algorithm. Similar to what 

was noted above for Options 3, Section 

10(a)(1)(C)(1)(b)(1), the Exchange 

proposes to amend the paragraph to 

provide, 

A Market Maker which receives a Directed 

Order is a DMM with respect to that Directed 

Order. DMM participant entitlements shall 

only be in effect when the Public Customer 

Priority Overlay is also in effect. After all 

Public Customer orders have been fully 

executed, upon receipt of a Directed Order, 

provided the DMM’s quote is at or improves 

on the better of the internal BBO or the 

NBBO, the DMM will be afforded a 

participation entitlement . . .19

While this proposed change relates to 

DMM Priority, it is proposed to be 

changed for the same reasons described 

herein for LMM Priority. A similar 

change is proposed in identical rule text 

contained within current Options 3, 

Section 10(a)(1)(C)(2)(iii) which 

describes the Size Pro-Rata Execution 

Algorithm. 

Currently, BX Options 3, Section 

10(a)(1)(C)(1)(b)(1) provides, 

(1) A BX Options LMM shall receive the 

greater of: 

(a) Contracts the LMM would receive if the 

allocation was based on time priority 

pursuant to subparagraph (C)(1)(a) above 

with Public Customer priority; 

(b) 50% of remaining interest if there is one 

or no other Market Maker at that price; 

(c) 40% of remaining interest if there is two 

other Market Makers at that price; 

(d) 30% of remaining interest if there are 

more than two other Market Makers at that 

price; or 

(e) the Directed Market Maker (‘‘DMM’’) 

participation entitlement, if any, set forth in 

subsection (C)(1)(c) below (if the order is a 

Directed Order and the LMM is also the 

DMM). 

Rounding will be up to the nearest integer. 


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20Current BX Options 3, Section 10(a)(C)(1)(c) 

relates to DMM Priority, the Exchange also proposes 

to redesignate that section as new BX Options 3, 

Section 10(a)(C)(1)(d) to account for the new rule 

text. 

21See Phlx Options 3, Section 10(a)(1)(D). 

22Phlx has All-or-None Orders which are 

permitted to rest on the Order Book. See Phlx 

Options 3, Section 7(b)(5). BX’s All-or-None Orders 

must be executed in its entirety or not at all and 

do not rest on the Order Book. See BX Options 3, 

Section 7(a)(8). Because BX’s All-or-None Orders do 

not rest on the Order Book, the treatment of such 

orders would be different on the two markets (Phlx 

and BX) and therefore it is consistent to align its 

treatment of order types within the allocation rule 

with its treatment of those orders pursuant to BX 

Options 3, Section 7. 

Notwithstanding the foregoing, when a 

Directed Order is received and the DMM’s 

bid/offer is at or improves on the NBBO and 

the LMM is at the same price level and is not 

the DMM, the LMM participation entitlement 

set forth in this subsection (C)(1)(b)(1) will 

not apply with respect to such Directed 

Order. 

The Exchange proposes to amend 

Options 3, Section 10(a)(1)(C)(1)(b)(1)(b) 

to remove the words ‘‘or no.’’ Today, if 

there was no other Market Maker order 

or quote present, the Lead Market Maker 

would receive the allocation described 

within Options 3, Section 

10(a)(1)(C)(1)(b)(1)(a) because there 

would be no other interest present to 

require a split allocation in this 

scenario. The removal of the words ‘‘or 

no’’ would align the rule text to the 

current System functionality. This 

proposed change within Options 3, 

Section 10(a)(1)(C)(1)(b)(1)(b) relates to 

BX’s Price-Time Execution Algorithm. A 

similar change is proposed in identical 

rule text contained within current 

Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b) 

which describes the Size Pro-Rata 

Execution Algorithm. 

The Exchange also proposes to be 

more specific with the text within 

Options 3, Section 

10(a)(1)(C)(1)(b)(1)(b)–(d) by adding the 

words ‘‘order or quote’’ or ‘‘orders or 

quotes,’’ as appropriate, after Market 

Maker because the System is looking for 

other orders or quotes from a Market 

Maker to determine the percentage of 

the allocation that will be provided to 

that Lead Market Maker. If a Market 

Maker entered both an order and a 

quote, the System would count the 

order and quote from the same Market 

Maker separately for purposes of 

determining the number of other Market 

Makers present for Options 3, Section 

10(a)(1)(C)(1)(b)(1)(b)–(d) allocation. 

This amendment would clarify current 

System behavior. This proposed change 

within Options 3, Section 

10(a)(1)(C)(1)(b)(1)(b)–(d) relates to BX’s 

Price-Time Execution Algorithm. A 

similar change is proposed in identical 

rule text contained within current 

Options 3, Section 

10(a)(1)(C)(2)(ii)(1)(b)–(d) which 

describes the Size Pro-Rata Execution 

Algorithm. 

The Exchange also proposes to correct 

a grammatical error within BX Options 

3, Section 10(a)(1)(C)(1)(b)(1)(c) to 

correct ‘‘is’’ to ‘‘are.’’ 

The Exchange proposes to update the 

cross-reference within Options 3, 

Section 10(a)(1)(C)(1)(b)(1)(e), related to 

BX’s Price-Time Execution Algorithm, 

and Options 3, Section 

10(a)(1)(C)(2)(ii)(1)(e), related to the Size 

Pro-Rata Execution Algorithm, as the 

Exchange proposes new rule text with 

this proposal which impacted the 

numbering/lettering. 

Currently, BX Options 3, Section 

10(a)(1)(C)(1)(b)(2), related to BX’s 

Price-Time Execution Algorithm, 

provides, ‘‘Orders for 5 contracts or 

fewer shall be allocated to the LMM. 

The Exchange will review this provision 

quarterly and will maintain the small 

order size at a level that will not allow 

orders of 5 contracts or less executed by 

the LMM to account for more than 40% 

of the volume executed on the 

Exchange. This provision shall not 

apply if the order of 5 contracts or fewer 

is directed to a DMM who is quoting at 

or better than the NBBO.’’ The Exchange 

proposes to replace this language with 

rule text similar to Phlx Options 3, 

Section 10(a)(1)(D) and redesignate the 

provision as BX Options 3, Section 

10(a)(C)(1)(c).20

Reorganizing this part of the rule to 

mirror Phlx is not a substantive change. 

The Exchange is not otherwise 

amending the System, rather these 

changes are being made to conform the 

rule text to Phlx rule text, which more 

specifically describes the scenarios in 

which a Lead Market Maker would be 

entitled to Orders of 5 contracts or 

fewer. 

Similar rule text describing 

entitlement for order of 5 contracts or 

fewer replacement is proposed within 

Options 3, Section 10(a)(1)(C)(2)(iii), 

relating to the Size Pro-Rata Execution 

Algorithm, and this rule text will cause 

current Options 3, Section 

10(a)(1)(C)(2)(iii), which describes DMM 

Priority, to be redesignated as Options 3, 

Section 10(a)(1)(C)(2)(iv) to account for 

the new rule text. 

With respect to proposed new BX 

Options 3, Section 10(a)(1)(C)(1)(c), 

related to the Price-Time Execution 

Algorithm, and Options 3, Section 

10(a)(1)(C)(2)(iii), related to the Size 

Pro-Rata Execution Algorithm, the 

Exchange proposes to provide, 

The Exchange proposes to provide the 

Entitlement for Orders of 5 contracts or fewer 

shall be allocated to the Lead Market Maker 

as described below. The allocation will only 

apply after the Opening Process and shall not 

apply to auctions. A Lead Market Maker is 

not entitled to receive a number of contracts 

that is greater than the size that is associated 

with its quote. On a quarterly basis, the 

Exchange will evaluate what percentage of 

the volume executed on the Exchange is 

comprised of orders for 5 contracts or fewer 

allocated to Lead Market Makers, and will 

reduce the size of the orders included in this 

provision if such percentage is over 40%. 

While the percentage of 40% of the 

volume executed on the Exchange is 

comprised of orders for 5 contracts or 

fewer allocated to Lead Market Makers 

differs from Phlx, which is 25%,21 the 

Exchange notes it is retaining BX’s 

current percentage which is specified 

within current BX Options 3, Section 

10(a)(1)(C)(1)(b)(2), related to the PriceTime Execution Algorithm, and current 

Options 3, Section 10(a)(1)(C)(2)(ii)(2), 

related to the Size Pro-Rata Execution 

Algorithm. 

With respect to proposed new BX 

Options 3, Section 10(a)(1)(C)(1)(c)(1), 

related to the Price-Time Execution 

Algorithm, and Options 3, Section 

10(a)(1)(C)(2)(iii)(1), related to the Size 

Pro-Rata Execution Algorithm, the 

Exchange proposes to provide, 

A Lead Market Maker is entitled to priority 

with respect to Orders of 5 contracts or fewer, 

including when the Lead Market Maker is 

also the Directed Market Maker, if the Lead 

Market Maker has a quote at the better of the 

internal BBO or the NBBO, with no other 

Public Customer or Directed Market Maker 

interest with a higher priority. 

Of note, Phlx describes the manner in 

which All-or-None Orders are handled 

in its related rule,22 which order type 

differs on BX. Also, the term ‘‘PBBO’’ is 

similar to BX’s term ‘‘BBO’’. 

With respect to proposed new BX 

Options 3, Section 10(a)(1)(C)(1)(c)(2), 

related to the Price-Time Execution 

Algorithm, the Exchange proposes to 

provide: 

If the Lead Market Maker’s quote is at the 

better of the internal BBO or the NBBO, with 

other Public Customer (including when the 

Lead Market Maker is also the Directed 

Market Maker) or other Directed Market 

Maker interest with a higher priority at the 

time of execution, a Lead Market Maker is 

not entitled to priority with respect to Orders 

of 5 contracts or fewer; thereafter orders will 

be allocated pursuant to paragraph 

(a)(1)(C)(1)(e). 

Similar rule text, with the appropriate 

cross-reference, is proposed within 

Options 3, Section 10(a)(1)(C)(2)(iii)(2), 

related to the Size Pro-Rata Execution 


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23Options 3, Section 10(a)(1)(C)(2)(iii)(2) 

proposes to provide, ‘‘(2) If the Lead Market Maker’s 

quote is at the better of the internal BBO, excluding 

All-or-None Orders that cannot be satisfied, or the 

NBBO, with other Public Customer (including when 

the Lead Market Maker is also the Directed Market 

Maker) or other Directed Market Maker interest 

with a higher priority at the time of execution, a 

Lead Market Maker is not entitled to priority with 

respect to Orders of 5 contracts or fewer, however 

the Lead Market Maker is eligible to receive such 

contracts pursuant to paragraph (a)(1)(C)(2)(v); 

thereafter orders will be allocated pursuant to 

paragraph (a)(1)(C)(2)(vi). 

24Phlx’s similar rule text at Phlx Options 3, 

Section 10(a)(1)(D) is similar, however Phlx’s rule 

has a different percentage than proposed for BX, 

despite the execution algorithm. Phlx provides that 

on a quarterly basis, the Exchange will evaluate 

what percentage of the volume executed on the 

Exchange is comprised of orders for 5 contracts or 

fewer allocated to Lead Market Makers, and will 

reduce the size of the orders included in this 

provision if such percentage is over 25%. BX’s rules 

both provide that on a quarterly basis, the Exchange 

will evaluate what percentage of the volume 

executed on the Exchange is comprised of orders for 

5 contracts or fewer allocated to Lead Market 

Makers, and will reduce the size of the orders 

included in this provision if such percentage is over 

40%. Also, as noted herein, All-or-None Orders are 

handled differently on Phlx and BX, and the term 

‘‘PBBO’’ is similar to BX’s term ‘‘BBO’’. 

25ATR settings are tied to the option premium. 

26 In the event of a crossed ABBO, ATR will use 

the NBO instead of the NBB for incoming sell 

orders and the NBB instead of the NBO for 

incoming buy orders as the reference price, unless 

the order’s last posted price is more aggressive than 

the NBO (for the sell order) or the NBB (for the buy 

order). 

Algorithm.23 Similar to the 

aforementioned paragraph, All-or-None 

Orders are handled differently on Phlx 

and BX, and the term ‘‘PBBO’’ is similar 

to BX’s term ‘‘BBO’’. 

As is the case today, in order to be 

entitled to receive Orders for 5 contracts 

or fewer, the Lead Market Maker’s quote 

must be at the better of the internal BBO 

or the NBBO with no other Public 

Customer or Directed Market Maker 

interest which has a higher priority. If 

the Lead Market Maker is quoting at the 

better of the internal BBO or the NBBO 

with other Public Customer or Directed 

Market Maker interest present which 

has a higher priority at the time of 

execution, a Lead Market Maker is not 

entitled to priority with respect to 

Orders of 5 contracts or fewer, however 

the Lead Market Maker is eligible to 

receive such contracts pursuant to 

paragraph (a)(1)(C)(1)(b)(1)(e) for PriceTime Execution, and paragraph 

(a)(1)(C)(2)(vi) for Size Pro-Rata 

Execution, which describe the treatment 

of all other remaining interest after Lead 

Market Maker and Directed Market 

Maker allocations. The Lead Market 

Maker would be entitled to the entire 

allocation of the Order of 5 contracts or 

fewer where the Lead Market Maker is 

also the Directed Market Maker and the 

Lead Market Maker receives the 

Directed Order and has a quote at the 

best price (described as the better of the 

internal BBO or the NBBO) at the time 

the Directed Order was received. This 

means that no other interest, including 

Public Customer or Directed Market 

Maker interest is present with a higher 

priority, if the Lead Market Maker is to 

receive the allocation. 

If, for example, a Public Customer is 

resting at the NBBO at the time of 

execution, a Lead Market Maker is not 

entitled to priority with respect to 

Orders of 5 contracts or fewer. The Lead 

Market Maker will continue to not be 

entitled to priority with respect to 

allocation of Orders of 5 contracts or 

fewer because there is interest present 

with a higher priority or because the 

Lead Market Maker is not quoting at the 

NBBO. In these situations, the Lead 

Market Maker is eligible to receive such 

contracts pursuant to paragraph 

(a)(1)(C)(1)(b)(1)(e) for Price-Time 

Execution and paragraph (a)(1)(C)(2)(vi) 

for Size Pro-Rata Execution, which both 

describe the treatment of all other 

remaining interest after Lead Market 

Maker and Directed Market Maker 

allocations. 

This is the manner in which the 

System behaves today and the rule is 

being amended to expand upon the 

current text, similar to Phlx, and 

provide additional granularity as to the 

circumstances in which a Lead Market 

Maker would be entitled to an allocation 

for Orders of 5 contracts or fewer.24

The Exchange proposes to amend 

current Options 3, Section 

10(a)(1)(C)(1)(c) (DMM Priority), related 

to Price-Time Execution, which will be 

redesignated as ‘‘d’’, to capitalize the 

term ‘‘Opening Process,’’ which is 

capitalized elsewhere in the rule. A 

similar change is proposed within 

current Options 3, Section 

10(a)(1)(C)(2)(iii) (DMM Priority), 

related to Size Pro-Rata Execution, 

which will be redesignated as ‘‘iv.’’ 

The Exchange proposes to add a title 

to current BX Options 3, Section 

10(a)(1)(C)(1)(d), ‘‘All Other Remaining 

Interest,’’ similar to Phlx Options 3, 

Section 10(a)(1)(d), and redesignate this 

section as ‘‘e’’. The Exchange also 

proposes to redesignate current BX 

Options 3, Section 10(a)(1)(C)(1)(e) as 

‘‘f’’. 

Current Options 3, Section 

10(a)(1)(C)(2)(iv) (Market Maker 

Priority), related to Size Pro-Rata 

Execution, is proposed to be 

renumbered as ‘‘(v).’’ 

The Exchange proposes to relocate the 

last sentence of current Options 3, 

Section 10(a)(1)(C)(2)(iv) to new Options 

3, Section 10(a)(1)(C)(2)(vi) with the 

Size Pro-Rata Execution Algorithm to 

conform the rule text to Phlx’s rule text 

and add the title ‘‘All Other Remaining 

Interest’’ to provide, 

If there are contracts remaining after all 

Market Maker interest has been fully 

executed, such contracts shall be executed 

based on the Size Pro-Rata execution 

algorithm. 

The Exchange notes that this same 

paragraph currently exists within BX 

Options 3, Section 10(a)(1)(C)(1)(e), 

related to Price-Time Execution, but 

those paragraphs differ because a 

Market Maker Priority overlay does not 

exist in the Price-Time Execution 

Algorithm on BX, but it does exist in the 

Size Pro-Rata Execution Algorithm on 

BX. 

Finally, current Options 3, Section 

10(a)(1)(C)(2)(v), related to Size Pro-Rata 

Execution, is proposed to be 

renumbered as ‘‘(vii).’’ 

Options 3, Section 15(b)(1) 

Today, the Exchange offers an 

Acceptable Trade Range (‘‘ATR’’) risk 

protection that sets dynamic boundaries 

within which quotes and orders may 

trade, and is designed to prevent the 

Exchange’s System from experiencing 

dramatic price swings by preventing the 

execution of quotes and orders beyond 

the thresholds set by the protection. 

As presently set forth in Options 3, 

Section 15(b)(1), the System will 

calculate an ATR to limit the range of 

prices at which an order will be allowed 

to execute. ATR is calculated by taking 

the reference price, plus or minus a 

value to be determined by the Exchange 

(i.e., the reference price ¥ (x) for sell 

orders and the reference price + (x) for 

buy orders).25 Upon receipt of a new 

order, the reference price is the National 

Best Bid (‘‘NBB’’) for sell orders and the 

National Best Offer (‘‘NBO’’) for buy 

orders or the last price at which the 

order is posted, whichever is higher for 

a buy order or lower for a sell order.26

If an order reaches the outer limit of the 

ATR (the ‘‘Threshold Price’’) without 

being fully executed pursuant to 

Options 3, Section 15(b)(1)(A), it will be 

posted at the Threshold Price for a brief 

period, not to exceed one second 

(‘‘Posting Period’’), to allow more 

liquidity to be collected. Upon posting, 

either the current Threshold Price of the 

order or an updated NBB for buy orders 

or the NBO for sell orders (whichever is 

higher for a buy order or lower for a sell 

order) then becomes the reference price 

for calculating a new ATR. If the order 

remains unexecuted, a new ATR will be 

calculated and the order will execute, 

route, or post up to the new Threshold 


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27 In the case of ‘‘Do Not Route’’ or ‘‘DNR’’ Orders 

that are locked against the ABBO, such orders will 

pause their ATR iterations (i.e., a new ATR will not 

be calculated based on the reference price at that 

time) and remain this way until the ATR process 

can be completed. 

28 During ATR iterations, route timers continue to 

run and ‘‘firm’’ quote posting can occur if, for 

example, the order is re-priced one minimum price 

variant away from the ABBO pursuant to Options 

3, Section 5(d) to comply with applicable TradeThrough and Locked/Crossed market restrictions, in 

which case the quotation will disseminate as a 

‘‘firm’’ quote. 

29See note 5 above. 

30See note 4 above. 

31 15 U.S.C. 78f(b). 

32 15 U.S.C. 78f(b)(5). 

33Today, Minimum Quantity Orders and All-orNone Orders both have a time-in-force designation 

of Immediate or Cancel and both have a size 

requirement. A Minimum Quantity Order requires 

that a specified minimum quantity of contracts be 

obtained, or the order is cancelled. Similarly, an 

All-or-None Order is to be executed in its entirety 

at the specified size or the order will be cancelled. 

Price. This process will repeat until 

either i) the order/quote is executed, 

cancelled, or posted at its limit price or 

ii) the order has been subject to a 

configurable number of instances of the 

ATR as determined by the Exchange (in 

which case it will be returned).27 During 

the Posting Period, pursuant to Options 

3, Section 15(b)(1)(B), the Exchange will 

disseminate as a quotation: (i) The 

Threshold Price for the remaining size 

of the order triggering the ATR and (ii) 

on the opposite side of the market, the 

best price will be displayed using the 

‘‘non-firm’’ indicator message in 

accordance with the specifications of 

the network processor.28 Following the 

final Posting Period, the Exchange will 

return to a normal trading state and 

disseminate its best bid and offer. 

The Exchange now proposes to add 

that ATR will not be available for Allor-None Orders (‘‘AONs’’) 29 or 

Minimum Quantity Orders (‘‘MQOs’’).30

Although this change reflects current 

functionality, the rule is silent in this 

regard. The Exchange does not believe 

that ATR is necessary for AONs or 

MQOs because by definition, these 

orders types must meet a sufficient size 

requirement before executing. As 

described above, applying ATR may 

result in an order receiving partial 

executions at multiple price points. The 

Exchange therefore believes that it 

would contradict the explicit 

instructions of a BX Participant using 

AONs and MQOs to apply ATR to these 

order types. The following examples 

illustrate how the ATR protection 

applies today: 

Example 1 

1. ATR band in this price range is set 

to $0.07 

2. Assume the following market: 

a. MM1 Quote sets BBO 2.00 (10) × 

2.12 (10) 

b. MM2 Quote 1.99 (10) × 2.13 (10) 

c. MM3 Quote 1.98 (10) × 2.13 (10) 

d. Customer Order to Buy 10 @ 1.97 

e. Firm Order to Buy 10 @ 1.93 

f. BD Order to Buy 10 @ 1.92 (this is 

.01 past ATR band since 2.00¥0.07 

= 1.93) 

3. Incoming AON Order to Sell 60 @ 

1.92 

4. The incoming AON trades with all of 

the bids layering the book, trading 

its total of 60 contracts without 

regard to the ATR band 

Example 2 

1. ATR band in this price range is set 

to $0.07 

2. Assume the following market: 

a. MM1 Quote sets BBO 2.00 (10) × 

2.12 (10) 

b. MM2 Quote 1.99 (10) × 2.13 (10) 

c. MM3 Quote 1.98 (10) × 2.13 (10) 

d. Customer Order to Buy 10 @ 1.97 

e. Firm Order to Buy 10 @ 1.93 

f. BD Order to Buy 10 @ 1.92 (this is 

.01 past ATR band since 2.00¥0.07 

= 1.93) 

3. Incoming DAY Order to Sell 100 @ 

1.92 

4. The incoming DAY Order trades at 

each price level down to 1.93, for a 

total of 50 contracts, but does not 

trade with the resting interest at 

1.92 yet 

5. DAY Order then posts at the ATR 

band of 1.93 during the ATR 

Posting Period 

6. After the ATR Posting Period 

concludes, the DAY Order trades 

with the BD Order @ 1.92 

7. Remainder of the DAY Order now 

books at its limit price of 1.92 as 

there is no more tradeable interest 

Lastly, the Exchange proposes the 

following minor, corrective changes in 

paragraph (b)(1)(A) of Options 3, 

Section 15 to replace: (i) ‘‘New 

Acceptable Trade Range’’ with ‘‘new 

Acceptable Trade Range,’’ and (ii) ‘‘new 

Acceptable Trade Range Threshold 

Price’’ with ‘‘new Threshold Price’’ to 

conform to the defined term. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,31 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,32

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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. 

Options 2, Section 10 

The Exchange’s proposal to amend 

Options 2, Section 10(a) to remove 

inadvertent wording is consistent with 

the Act because the removal of the 

wording will make the rule text easier 

to understand. 

Options 3, Section 7 

The Exchange’s proposal to amend 

Options 3, Section 7(a)(4) to make the 

term ‘‘require’’ plural is technical and 

non-substantive. 

The Exchange’s proposal to amend 

Options 3, Section 7 to describe a 

Contingency Order is consistent with 

the Act because it adds more context to 

the current rules. Today, BX has two 

order types which have contingencies: 

(1) Minimum Quantity Orders and (2) 

All-or-None Orders. The Exchange 

proposes to formalize the definition of 

a ‘‘Contingency Order’’ within proposed 

new Options 3, Section 7(a)(4)(A) to 

mean Minimum Quantity Orders and 

All-or-None Orders to bring greater 

clarity to its rules. The Exchange 

proposes to state within proposed new 

Options 3, Section 7(a)(4)(A) that 

Contingency Orders will only execute 

against multiple, aggregated orders if the 

executions would occur simultaneously, 

which is true of Minimum Quantity 

Orders and All-or-None Orders today.33

The Exchange’s proposal to adopt rule 

text which more clearly explains how 

the System executes Minimum Quantity 

Orders and All-or-None Orders, which 

both have a size requirement, within the 

Order Book protects investors and the 

public interest because it adds 

specificity to the rules with respect to 

current System handling. Specifically, 

this amendment will clarify the current 

rule to more specifically describe the 

manner in which the System currently 

handles Contingency Orders on BX. The 

Exchange notes that the handling of 

such orders as described by the 

proposed rule text within Options 3, 

Section 7(a)(4)(A) is consistent with the 

Exchange’s allocation methodology 

within Options 3, Section 10 and 

description of order types within 

Options 3, Section 7. The additional 

clarity makes clear that because of the 

size requirements of Minimum Quantity 

Orders and All-or-None Orders, that 

those orders must be satisfied 

simultaneously to avoid any priority 

conflict on the Order Book which 

considers current displayed NBBO 

prices to avoid locked and crossed 

markets as well as trade-throughs. Also, 

BX is adopting rule text which is 

similar, in relevant part, to a provision 

in the definition of Minimum Quantity 

Order to Cboe Rule 5.6(b). Similar to 

BX’s Minimum Quantity Orders and 


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34See Phlx Options 3, Section 10(a)(1)(B). 

35BX Options 5, Section 4, Order Routing, 

describes the repricing of orders for both routable 

and non-routable orders within Options 5, Section 

4(a)(iii)(A), (B) and (C). The Exchange’s proposal 

seeks to conform the concept of re-pricing and an 

internal BBO, which is described within BX 

Options 3, Section 4, Entry and Display of Quotes 

with the proposed change to BX Options 3, Section 

10(a)(1)(C)(1)(b). 

36The proposed change within Options 3, Section 

10(a)(1)(C)(1)(b) relates to BX’s Price-Time 

Execution Algorithm. A similar change is proposed 

in identical rule text contained within BX Options 

3, Section 10(a)(1)(C)(2)(ii) which describes Size 

Pro-Rata Execution Algorithm. 

37Options 2, Section 10(a)(1) provides, ‘‘When 

the Exchange’s disseminated price is the NBBO at 

the time of receipt of the Directed Order, and the 

Directed Market Maker is quoting at or improving 

the Exchange’s disseminated price, the Directed 

Order shall be automatically executed and allocated 

in accordance with Options 3, Section 10 such that 

the Directed Market Maker shall receive a Directed 

Market Maker participation entitlement provided 

for therein.’’ 

38The proposed change within Options 3, Section 

10(a)(1)(C)(1)(b)(1) relates to BX’s Price-Time 

Execution Algorithm. A similar change is proposed 

in identical rule text contained within current 

Options 3, Section 10(a)(1)(C)(2)(iii) which 

describes the Size Pro-Rata Execution Algorithm, 

and which is proposed to be renumbered as ‘‘(iv)’’ 

to account for new rule text proposed herein. 

39A similar change is proposed in identical rule 

text contained within current Options 3, Section 

10(a)(1)(C)(2)(iii) which describes the Size Pro-Rata 

Execution Algorithm 

40This proposed change within Options 3, 

Section 10(a)(1)(C)(1)(b)(1)(b) relates to BX’s PriceTime Execution Algorithm. A similar change is 

proposed in identical rule text contained within 

current Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b) 

which describes the Size Pro-Rata Execution 

Algorithm 

41This proposed change within Options 3, 

Section 10(a)(1)(C)(1)(b)(1)(b)–(d) relates to BX’s 

Price-Time Execution Algorithm. A similar change 

is proposed in identical rule text contained within 

current Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b)– 

(d) which describes the Size Pro-Rata Execution 

Algorithm. 

42Similar rule text describing entitlement for 

order of 5 contracts or fewer replacement is 

proposed within Options 3, Section 

10(a)(1)(C)(2)(iii), relating to the Size Pro-Rata 

Execution Algorithm, and this rule text will cause 

All-or-None Orders, Cboe’s Minimum 

Quantity Orders will only execute 

against multiple, aggregated orders if the 

executions would occur simultaneously 

because of the size contingency. 

The Exchange’s proposal to replace 

references to the term ‘‘Limit Order 

Price Protection’’ within Options 3, 

Section 7 with the correct term, ‘‘Order 

Price Protection’’ is consistent with the 

Act. Amending the inadvertent 

references to a ‘‘Limit Order Price 

Protection’’ within Options 3, Section 

7(a)(1), Options 3, Section 7(b)(3)(B), 

and Options 3, Section 7(e)(1)(B) to the 

correct name of the risk protection will 

bring clarity to these cross-references. 

Options 3, Section 10 

The Exchange proposes to amend 

Options 3, Section 10, Order Book 

Allocation, to conform this rule, in 

relevant part, to Phlx Options 3, Section 

10 as discussed herein. The Exchange’s 

proposal to amend rule text, similar to 

Phlx,34 to insert the term ‘‘quote’’ in 

place of the terms ‘‘bid’’ and ‘‘offer’’ in 

the third sentence is consistent with the 

Act. The term ‘‘quote’’ and the term 

‘‘bid/offer’’ are, where changes are 

proposed herein, interchangeable terms 

that are intended to differentiate 

‘‘quotes’’ or ‘‘bid/offer’’ from an ‘‘order.’’ 

Of note, only BX Market Makers may 

enter a ‘‘quote’’ or a ‘‘bid/offer.’’ The 

Exchange’s proposal regarding this 

amendment is non-substantive as the 

words proposed to be amended herein 

are interchangeable. 

The Exchange’s proposal to amend 

the third sentence of Options 3, Section 

10(a)(1)(C)(1)(b) to replace ‘‘Exchange’s 

disseminated price’’ with ‘‘better of the 

NBBO or internal BBO’’ is consistent 

with the Act because amending the rule 

text will protect investors and the 

general public by making clear that a repriced order is accessible on BX’s Order 

Book at the non-displayed price. Today, 

BX re-prices certain orders to avoid 

locking and crossing away markets, 

consistent with its Trade-Through 

Compliance and Locked or Crossed 

Markets obligations. Orders which lock 

or cross an away market will 

automatically re-price one minimum 

price improvement inferior to the 

original away best bid/offer price to one 

minimum trading increment away from 

the new away best bid/offer price or its 

original limit price. The re-priced order 

is displayed on OPRA. The order 

remains on BX’s Order Book and is 

accessible at the non-displayed price. 

The Exchange believes that the addition 

of this rule text will allow BX to define 

an ‘‘internal BBO’’ within its rules when 

describing re-priced orders that remain 

on the Order Book and are available at 

non-displayed prices while resting on 

the Order Book.35 The proposed rule 

text will make clear within Options 3, 

Section 10 that, as is the case today, if 

the LMM’s quote is at or improves on 

the better of the better of the NBBO or 

internal BBO, the LMM is entitled to the 

allocation. The proposed rule text is a 

more precise description which better 

articulates current behavior, although 

the Exchange notes that the current rule 

text is not inaccurate as an LMM must 

improve on Exchange’s disseminated 

price. This System behavior is not new, 

rather it is being described in greater 

detail herein as in other parts of the 

Rulebook.36

Similarly, the Exchange’s proposal to 

amend a paragraph within Options 3, 

Section 10(a)(1)(C)(1)(b)(1) to change 

‘‘. . . is at or improves on the NBBO 

. . .’’ to ‘‘. . . is at or improves on the 

better of the NBBO or internal BBO’’ is 

consistent with the Act. While today, 

the DMM’s quote must be at or improve 

upon the NBBO as provided for within 

Options 2, Section 10,37 the re-pricing of 

orders would permit a DMM’s quote 

that is at or improves on the better of the 

NBBO or internal BBO to be subject to 

the DMM allocation described within 

Options 3, Section 10(a)(1)(C)(1)(b)(1).38

The changes described in this paragraph 

are not System or functionality changes 

but provide greater clarity as to the way 

the System functions. 

Finally, a similar clarifying change 

proposed to be made to Options 3, 

Section 10(a)(1)(C)(1)(c) (DMM Priority), 

which relates to BX’s Price-Time 

Execution Algorithm, is also consistent 

with the Act. Similar to what was noted 

above for Options 3, Section 

10(a)(1)(C)(1)(b)(1), the Exchange 

proposes to amend the paragraph 

related to DMM Priority for the same 

reasons described herein for LMM 

Priority.39

The Exchange proposal to amend BX 

Options 3, Section 10(a)(1)(C)(1)(b)(1) to 

remove the words ‘‘or no’’ is consistent 

with the Act as the proposed change 

will bring greater clarity to the 

Exchange’s rule. Today, if there was no 

other Market Maker order or quote 

present, the Lead Market Makers would 

receive the allocation based described 

within Options 3, Section 

10(a)(1)(C)(1)(b)(1)(a) because there 

would be no other interest present to 

require a split allocation in this 

scenario. Further, the removal of the 

words ‘‘or no’’ would align the rule text 

to the current System functionality.40

The Exchange’s proposal to be more 

specific with the text within Options 3, 

Section 10(a)(1)(C)(1)(b)(1)(b)–(d) by 

adding the words ‘‘order or quote’’ or 

‘‘orders or quotes,’’ as appropriate, after 

Market Maker because the System is 

looking for other orders or quotes from 

a Market Maker to determine the 

percentage of the allocation that will be 

provided to that Lead Market Maker is 

consistent with the Act. If a Market 

Maker entered both an order and a 

quote, the System would count the 

order and quote from the same Market 

Maker separately for purposes of 

determining the number of other Market 

Makers present for Options 3, Section 

10(a)(1)(C)(1)(b)(1)(b)–(d) allocation. 

This amendment would clarify current 

System behavior for the protection of 

investors and the general public.41

The Exchange’s proposal to reorganize 

BX Options 3, Section 

10(a)(1)(C)(1)(b)(2),42 related to BX’s 


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Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices 13011 

current Options 3, Section 10(a)(1)(C)(2)(iii) which 

describes DMM Priority, to be redesignated as 

Options 3, Section 10(a)(1)(C)(2)(iv) to account for 

the new rule text. 

43Current BX Options 3, Section 10(a)(C)(1)(c) 

relates to DMM Priority, the Exchange also proposes 

to redesignate that section as new BX Options 3, 

Section 10(a)(C)(1)(d) to account for the new rule 

text. 

44Phlx’s similar rule text at Phlx Options 3, 

Section 10(a)(1)(D) is similar, however Phlx’s rule 

has a different percentage than proposed for BX, 

despite the execution algorithm. Phlx provides that 

on a quarterly basis, the Exchange will evaluate 

what percentage of the volume executed on the 

Exchange is comprised of orders for 5 contracts or 

fewer allocated to Lead Market Makers, and will 

reduce the size of the orders included in this 

provision if such percentage is over 25%. BX’s rules 

both provide that on a quarterly basis, the Exchange 

will evaluate what percentage of the volume 

executed on the Exchange is comprised of orders for 

5 contracts or fewer allocated to Lead Market 

Makers, and will reduce the size of the orders 

included in this provision if such percentage is over 

40%. Also, as noted herein, All-or-None Orders are 

handled differently on Phlx and BX, and the term 

‘‘PBBO’’ is similar to BX’s term ‘‘BBO’’. 

45Phlx’s similar rule text at Phlx Options 3, 

Section 10(a)(1)(D) is similar, however Phlx’s rule 

has a different percentage than proposed for BX, 

despite the execution algorithm. Phlx provides that 

on a quarterly basis, the Exchange will evaluate 

what percentage of the volume executed on the 

Exchange is comprised of orders for 5 contracts or 

fewer allocated to Lead Market Makers, and will 

reduce the size of the orders included in this 

provision if such percentage is over 25%. BX’s rules 

both provide that on a quarterly basis, the Exchange 

will evaluate what percentage of the volume 

executed on the Exchange is comprised of orders for 

5 contracts or fewer allocated to Lead Market 

Makers, and will reduce the size of the orders 

included in this provision if such percentage is over 

40%. Also, as noted herein, All-or-None Orders are 

handled differently on Phlx and BX, and the term 

‘‘PBBO’’ is similar to BX’s term ‘‘BBO’’. 

46See, e.g., Nasdaq ISE (‘‘ISE’’) Options 3, Section 

15(a)(2)(A) (providing that ISE’s ATR will not be 

available for AONs). 

47See Options 3, Section 15(a)(1). 

Price-Time Execution Algorithm, and 

replace this language with rule text 

similar to Phlx Options 3, Section 

10(a)(1)(D) and redesignate the 

provision as BX Options 3, Section 

10(a)(C)(1)(c) 43 is consistent with the 

Act. Reorganizing this part of the rule to 

mirror Phlx is not a substantive change. 

The Exchange is not otherwise 

amending the System, rather these 

changes are being made to conform the 

rule text to Phlx rule text, which more 

specifically describes the scenarios in 

which a Lead Market Maker would be 

entitled to Orders of 5 contracts or 

fewer. 

With respect to proposed new BX 

Options 3, Section 10(a)(1)(C)(1)(c), 

related to the Price-Time Execution 

Algorithm, and Options 3, Section 

10(a)(1)(C)(2)(iii), related to the Size 

Pro-Rata Execution Algorithm, the 

Exchange notes it is retaining BX’s 

current percentage which is specified 

within current BX Options 3, Section 

10(a)(1)(C)(1)(b)(2), related to the PriceTime Execution Algorithm, and current 

Options 3, Section 10(a)(1)(C)(2)(ii)(2), 

related to the Size Pro-Rata Execution 

Algorithm.44 The Exchange also 

proposes to adopt similar Phlx 

provisions into Options 3, Section 

10(a)(1)(C)(1)(c)(1), related to the PriceTime Execution Algorithm, and Options 

3, Section 10(a)(1)(C)(2)(iii)(1). Finally, 

the Exchange proposes to adopt similar 

Phlx provisions into new BX Options 3, 

Section 10(a)(1)(C)(1)(c)(2), related to 

the Price-Time Execution Algorithm and 

new Options 3, Section 

10(a)(1)(C)(2)(iii)(2), related to the Size 

Pro-Rata Execution Algorithm, with 

respectively appropriate crossreferences. 

As is the case today, in order to be 

entitled to receive Orders for 5 contracts 

or fewer, the Lead Market Maker’s quote 

must be at the better of the internal BBO 

or the NBBO with no other Public 

Customer or Directed Market Maker 

interest which has a higher priority. If 

the Lead Market Maker is quoting at the 

better of the internal BBO or the NBBO 

with other Public Customer or Directed 

Market Maker interest present which 

has a higher priority at the time of 

execution, a Lead Market Maker is not 

entitled to priority with respect to 

Orders of 5 contracts or fewer, however 

the Lead Market Maker is eligible to 

receive such contracts pursuant to 

paragraph (a)(1)(C)(1)(b)(1)(e) for PriceTime Execution, and paragraph 

(a)(1)(C)(2)(vi) for Size Pro-Rata 

Execution, which describe the treatment 

of all other remaining interest after Lead 

Market Maker and Directed Market 

Maker allocations. The Lead Market 

Maker would be entitled to the entire 

allocation of the Order of 5 contracts or 

fewer where the Lead Market Maker is 

also the Directed Market Maker and the 

Lead Market Maker receives the 

Directed Order and has a quote at the 

best price (described as the better of the 

internal BBO or the NBBO) at the time 

the Directed Order was received. This 

means that no other interest, including 

Public Customer or Directed Market 

Maker interest is present with a higher 

priority, if the Lead Market Maker is to 

receive the allocation. If, for example, a 

Public Customer is resting at the NBBO 

at the time of execution, a Lead Market 

Maker is not entitled to priority with 

respect to Orders of 5 contracts or fewer. 

The Lead Market Maker will continue to 

not be entitled to priority with respect 

to allocation of Orders of 5 contracts or 

fewer because there is interest present 

with a higher priority or because the 

Lead Market Maker is not quoting at the 

NBBO. In these situations, the Lead 

Market Maker is eligible to receive such 

contracts pursuant to paragraph 

(a)(1)(C)(1)(b)(1)(e) for Price-Time 

Execution and paragraph (a)(1)(C)(2)(vi) 

for Size Pro-Rata Execution, which both 

describe the treatment of all other 

remaining interest after Lead Market 

Maker and Directed Market Maker 

allocations. This is the manner in which 

the System behaves today and the 

proposed new rule text which is being 

amended to expand upon the current 

text, similar to Phlx, will provide 

additional granularity as to the 

circumstances in which a Lead Market 

Maker would be entitled to an allocation 

for Orders of 5 contracts or fewer 45 for 

the protection of investors and the 

general public. 

The remainder of the proposed rule 

changes within Options 3, Section 10 

which include renumbering, 

capitalizations, relocation of rule text, 

addition of headers and technical 

amendments are non-substantive. 

Options 3, Section 15 

The Exchange believes that its 

proposal to amend the ATR rule in 

Options 3, 

Section 15(b)(1) would promote just 

and equitable principles of trade as well 

as protect investors and the public 

interest. The Exchange notes that the 

ATR functionality, including the 

exclusion of certain size contingency 

order types from ATR protections, is not 

new or novel, and is available on other 

options exchanges.46 The proposed rule 

change codifies existing ATR 

functionality by providing that ATR will 

not be available for AONs and MQOs. 

Although this change reflects current 

functionality, the existing rule is silent 

in this regard. As discussed above, the 

Exchange does not believe that ATR is 

necessary for AONs or MQOs because 

by definition, these orders types must 

meet a sufficient size requirement before 

executing. Because ATR may result in 

an order receiving partial executions at 

multiple price points, the Exchange 

believes that it would contradict the 

explicit instructions of a Participant 

using AONs and MQOs to apply ATR to 

these order types. Accordingly, the 

proposed changes would add greater 

transparency and internal consistency to 

Exchange rules regarding the interaction 

of AONs and MQOs with this risk 

protection, and therefore provide more 

certainty to Participants as to the 

application of the rule. The Exchange 

also notes that AONs and MQOs are still 

subject to other Exchange risk 

protections like the Order Price 

Protection (‘‘OPP’’) 47 and Market Order 


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48See Options 3, Section 15(a)(2). 

49See Phlx Options 3, Section 10(a)(1)(B). 

50See BX Options 1, Section 1(a)(44). The term 

‘‘order’’ means a firm commitment to buy or sell 

options contracts as defined in Section 7 of Options 

3. 

51BX Options 5, Section 4, Order Routing, 

describes the repricing of orders for both routable 

and non-routable orders within Options 5, Section 

4(a)(iii)(A), (B) and (C). The Exchange’s proposal 

seeks to conform the concept of re-pricing and an 

internal BBO, which is described within BX 

Options 3, Section 4, Entry and Display of Quotes 

with the proposed change to BX Options 3, Section 

10(a)(1)(C)(1)(b). 

52Options 2, Section 10(a)(1) provides, ‘‘When 

the Exchange’s disseminated price is the NBBO at 

the time of receipt of the Directed Order, and the 

Directed Market Maker is quoting at or improving 

the Exchange’s disseminated price, the Directed 

Order shall be automatically executed and allocated 

in accordance with Options 3, Section 10 such that 

the Directed Market Maker shall receive a Directed 

Market Maker participation entitlement provided 

for therein.’’ 

53The proposed change within Options 3, Section 

10(a)(1)(C)(1)(b)(1) relates to BX’s Price-Time 

Execution Algorithm. A similar change is proposed 

in identical rule text contained within current 

Options 3, Section 10(a)(1)(C)(2)(iii) which 

describes the Size Pro-Rata Execution Algorithm, 

and which is proposed to be renumbered as ‘‘(iv)’’ 

to account for new rule text proposed herein. 

54A similar change is proposed in identical rule 

text contained within current Options 3, Section 

10(a)(1)(C)(2)(iii) which describes the Size Pro-Rata 

Execution Algorithm. 

Spread Protection (‘‘MOSP’’) 48 that are 

designed to prevent executions at far 

away prices. As such, the Exchange 

believes that its proposal will continue 

to protect investors by limiting 

executions that are away from 

prevailing market prices. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Options 3, Section 7 

The Exchange’s proposal amend 

Options 3, Section 7 to describe a 

Contingency Order does not impose an 

undue burden on competition because it 

adds more context to the current rules. 

Contingency Orders will trade against 

bids layering the order book to satisfy 

their size contingency to the extent that 

such size may be simultaneously 

executed against multiple orders on the 

order book in the aggregate for that 

contingency order. The Exchange 

believes that the addition of this rule 

text adds specificity to the rules with 

respect to current System handling. The 

proposal to renumber the rule is nonsubstantive. 

The Exchange’s proposal to replace 

references to the term ‘‘Limit Order 

Price Protection’’ within Options 3, 

Section 7 with the correct term, ‘‘Order 

Price Protection’’ does not impose an 

undue burden on competition. 

Amending the inadvertent references to 

a ‘‘Limit Order Price Protection’’ within 

Options 3, Section 7(a)(1), Options 3, 

Section 7(b)(3)(B), and Options 3, 

Section 7(e)(1)(B) to the correct name of 

the risk protection will bring clarity to 

these cross-references. 

Options 3, Section 10 

The Exchange’s proposal to amend 

Options 3, Section 10, Order Book 

Allocation, in relevant part as discussed 

herein, to conform this rule to Phlx 

Options 3, Section 10, does not impose 

an undue burden on competition, rather 

it will bring greater clarity to BX’s 

allocation rule. 

The Exchange’s proposal to amend 

rule text, similar to Phlx,49 to insert the 

term ‘‘quote’’ in place of the terms ‘‘bid’’ 

and ‘‘offer’’ does not impose an undue 

burden on competition. The term 

‘‘quote’’ and the term ‘‘bid/offer’’ are, 

where changes are proposed herein, 

interchangeable terms that are intended 

to differentiate ‘‘quotes’’ or ‘‘bid/offer’’ 

from an ‘‘order.’’ 50 Of note, only BX 

Market Makers may enter a ‘‘quote’’ or 

a ‘‘bid/offer.’’ The Exchange’s proposal 

regarding this amendment is nonsubstantive as the words proposed to be 

amended herein are interchangeable. 

The Exchange’s proposal to amend 

the third sentence of Options 3, Section 

10(a)(1)(C)(1)(b) to replace ‘‘Exchange’s 

disseminated price’’ with ‘‘better of the 

NBBO or internal BBO’’ does not 

impose an undue burden on 

competition because amending the rule 

text will make clear that a re-price order 

is accessible on BX’s Order Book at the 

non-displayed price. Today, BX reprices certain orders to avoid locking 

and crossing away markets, consistent 

with its Trade-Through Compliance and 

Locked or Crossed Markets obligations. 

Orders which lock or cross an away 

market will automatically re-price one 

minimum price improvement inferior to 

the original away best bid/offer price to 

one minimum trading increment away 

from the new away best bid/offer price 

or its original limit price. The re-priced 

order is displayed on OPRA. The order 

remains on BX’s Order Book and is 

accessible at the non-displayed price. 

The Exchange believes that the addition 

of this rule text will allow BX to define 

an ‘‘internal BBO’’ within its rules when 

describing re-priced orders that remain 

on the Order Book and are available at 

non-displayed prices, which are resting 

on the Order Book.51 The proposed rule 

text will make clear within Options 3, 

Section 10 that, as is the case today, if 

the LMM’s quote is at or improves on 

the better of the better of the NBBO or 

internal BBO, the LMM is entitled to the 

allocation. The proposed rule text is a 

more precise description, although the 

Exchange notes that the current rule text 

is not inaccurate as an LMM must 

improve on Exchange’s disseminated 

price. 

Similarly, the Exchange’s proposal to 

amend a paragraph within Options 3, 

Section 10(a)(1)(C)(1)(b)(1) does not 

impose an undue burden on 

competition. While today, the DMM’s 

quote must be at or improve upon the 

NBBO as provided for within Options 2, 

Section 10,52 the re-pricing of orders 

would permit a DMM’s quote that is at 

or improves on the better of the NBBO 

or internal BBO to be subject to the 

DMM allocation described within 

Options 3, Section 10(a)(1)(C)(1)(b)(1).53

A similar change to Options 3, 

Section 10(a)(1)(C)(1)(c) (DMM Priority) 

which relates to BX’s Price-Time 

Execution Algorithm does not impose 

an undue burden on competition. 

Similar to what was noted above for 

Options 3, Section 10(a)(1)(C)(1)(b)(1), 

the Exchange’s proposal amends the 

paragraph related to DMM Priority for 

the same reasons described herein for 

LMM Priority.54

The Exchange proposal to amend BX 

Options 3, Section 10(a)(1)(C)(1)(b)(1) to 

remove the words ‘‘or no’’ does not 

impose an undue burden on 

competition as the proposed change will 

bring greater clarity to the Exchange’s 

rule. Today, if there was no other 

Market Maker order or quote present, 

the Lead Market Makers would receive 

the allocation based described within 

Options 3, Section 10(a)(1)(C)(1)(b)(1)(a) 

because there would be no other interest 

present to require a split allocation in 

this scenario. 

The Exchange’s proposal to be more 

specific with the text within Options 3, 

Section 10(a)(1)(C)(1)(b)(1)(b)–(d) by 

adding the words ‘‘order or quote’’ or 

‘‘orders or quotes,’’ as appropriate, after 

Market Maker because the System is 

looking for other orders or quotes from 

a Market Maker to determine the 

percentage of the allocation that will be 

provided to that Lead Market Maker 

does not impose an undue burden on 

competition. If a Market Maker entered 

both an order and a quote, the System 

would count the order and quote from 

the same Market Maker separately for 

purposes of determining the number of 

other Market Makers present for Options 

3, Section 10(a)(1)(C)(1)(b)(1)(b)–(d) 


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55This proposed change within Options 3, 

Section 10(a)(1)(C)(1)(b)(1)(b)–(d) relates to BX’s 

Price-Time Execution Algorithm. A similar change 

is proposed in identical rule text contained within 

current Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b)– 

(d) which describes the Size Pro-Rata Execution 

Algorithm. 

56Similar rule text describing entitlement for 

order of 5 contracts or fewer replacement is 

proposed within Options 3, Section 

10(a)(1)(C)(2)(iii), relating to the Size Pro-Rata 

Execution Algorithm, and this rule text will cause 

current Options 3, Section 10(a)(1)(C)(2)(iii) which 

describes DMM Priority, to be redesignated as 

Options 3, Section 10(a)(1)(C)(2)(iv) to account for 

the new rule text. 

57Current BX Options 3, Section 10(a)(C)(1)(c) 

relates to DMM Priority, the Exchange also proposes 

to redesignate that section as new BX Options 3, 

Section 10(a)(C)(1)(d) to account for the new rule 

text. 

58See, e.g., ISE Options 3, Section 15(a)(2)(A) 

(providing that ISE’s ATR will not be available for 

AONs). 

59 15 U.S.C. 78s(b)(3)(A)(iii). 

60 17 CFR 240.19b–4(f)(6). 

61 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 

Exchange has satisfied this requirement. 

allocation. This amendment would 

clarify current System behavior.55

The Exchange’s proposal to reorganize 

BX Options 3, Section 

10(a)(1)(C)(1)(b)(2),56 related to BX’s 

Price-Time Execution Algorithm, and 

replace this language with rule text 

similar to Phlx Options 3, Section 

10(a)(1)(D) and redesignate the 

provision as BX Options 3, Section 

10(a)(C)(1)(c) 57 does not impose an 

undue burden on competition. 

Reorganizing this part of the rule to 

mirror Phlx is not a substantive change. 

The Exchange is not otherwise 

amending the System, rather these 

changes are being made to conform the 

rule text to Phlx rule text, which more 

specifically describes the scenarios in 

which a Lead Market Maker would be 

entitled to Orders of 5 contracts or 

fewer. As is the case today, in order to 

be entitled to receive Orders for 5 

contracts or fewer, the Lead Market 

Maker’s quote must be at the better of 

the internal BBO or the NBBO with no 

other Public Customer or Directed 

Market Maker interest which has a 

higher priority. If the Lead Market 

Maker is quoting at the better of the 

internal BBO or the NBBO with other 

Public Customer or Directed Market 

Maker interest present which has a 

higher priority at the time of execution, 

a Lead Market Maker is not entitled to 

priority with respect to Orders of 5 

contracts or fewer, however the Lead 

Market Maker is eligible to receive such 

contracts pursuant to paragraph 

(a)(1)(C)(1)(b)(1)(e) for Price-Time 

Execution, and paragraph (a)(1)(C)(2)(vi) 

for Size Pro-Rata Execution, which 

describe the treatment of all other 

remaining interest after Lead Market 

Maker and Directed Market Maker 

allocations. The remainder of the 

proposed rule changes within Options 

3, Section 10 which include 

renumbering, capitalizations, relocation 

of rule text, addition of headers and 

technical amendments are nonsubstantive. 

Options 3, Section 15 

The Exchange believes that its 

proposal to amend the ATR rule in 

Options 3, Section 15(b)(1) does not 

impose an undue burden on 

competition. The proposed rule change 

codifies existing ATR functionality by 

providing that ATR will not be available 

for AONs and MQOs, and therefore 

provides more certainty to Participants 

as to the application of the rule. The 

Exchange notes that the ATR 

functionality, including the exclusion of 

certain size contingency order types 

from ATR protections, is not new or 

novel, and is available on other options 

exchanges.58

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 59 and Rule 

19b–4(f)(6) thereunder.60 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 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder.61

At any time within 60 days of the 

filing of such 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. 

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– 

BX–2021–003 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–BX–2021–003. 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–BX–2021–003 and should 

be submitted on or before March 26, 

2021. 


jbell on DSKJLSW7X2PROD with NOTICES
13014 Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices 

62 17 CFR 200.30–3(a)(12). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.62

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–04529 Filed 3–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 11365] 

Notice of Determinations; Culturally 

Significant Objects Being Imported for 

Exhibition—Determinations: ‘‘Nam 

June Paik’’ Exhibition 

SUMMARY: Notice is hereby given of the 

following determinations: I hereby 

determine that certain objects being 

imported from abroad pursuant to 

agreements with their foreign owners or 

custodians for temporary display in the 

exhibition ‘‘Nam June Paik’’ at the San 

Francisco Museum of Modern Art, San 

Francisco, California and at possible 

additional exhibitions or venues yet to 

be determined, are of cultural 

significance, and, further, that their 

temporary exhibition or display within 

the United States as aforementioned is 

in the national interest. I have ordered 

that Public Notice of these 

determinations be published in the 

Federal Register. 

FOR FURTHER INFORMATION CONTACT: Chi 

D. Tran, Program Administrator, Office 

of the Legal Adviser, U.S. Department of 

State (telephone: 202–632–6471; email: 

section2459@state.gov). The mailing 

address is U.S. Department of State, L/ 

PD, SA–5, Suite 5H03, Washington, DC 

20522–0505. 

SUPPLEMENTARY INFORMATION: The 

foregoing determinations were made 

pursuant to the authority vested in me 

by the Act of October 19, 1965 (79 Stat. 

985; 22 U.S.C. 2459), E.O. 12047 of 

March 27, 1978, the Foreign Affairs 

Reform and Restructuring Act of 1998 

(112 Stat. 2681, et seq.; 22 U.S.C. 6501 

note, et seq.), Delegation of Authority 

No. 234 of October 1, 1999, and 

Delegation of Authority No. 236–3 of 

August 28, 2000. 

Matthew R. Lussenhop, 

Acting Assistant Secretary, Bureau of 

Educational and Cultural Affairs, Department 

of State. 

[FR Doc. 2021–04632 Filed 3–4–21; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

Notice of Request To Release Property 

at Charlotte Douglas International 

Airport, Charlotte, NC (CLT) 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice. 

SUMMARY: The Federal Aviation 

Administration is requesting public 

comment on a request by City of 

Charlotte, to release of land (69.273 

acres) at Charlotte Douglas International 

Airport from federal obligations. 

DATES: Comments must be received on 

or before April 5, 2021. 

ADDRESSES: Comments on this notice 

may be emailed to the FAA at the 

following email address: FAA/Memphis 

Airports District Office, Attn: Duane L. 

Johnson, Assistant Manager, 

Duane.Johnson@faa.gov. 

In addition, one copy of any 

comments submitted to the FAA must 

be mailed or delivered to Ms. Haley 

Gentry, Acting Aviation Director, 

Charlotte Douglas International Airport 

at the following address: 5601 

Wilkinson Blvd., Charlotte, NC 28208. 

FOR FURTHER INFORMATION CONTACT: 

Duane L. Johnson, Assistant Manager, 

Federal Aviation Administration, 

Memphis Airports District Office, 2600, 

Thousand Oaks Boulevard, Suite 2250, 

Memphis, TN 38118–2482, (901) 322– 

8191, or Duane.Johnson@faa.gov. The 

application may be reviewed in person 

at this same location, by appointment. 

SUPPLEMENTARY INFORMATION: The FAA 

proposes to rule and invites public 

comment on the request to release 

property for disposal at Charlotte 

Douglas International Airport, 5601 

Wilkinson Blvd., Charlotte, NC 28208, 

under the provisions of 49 U.S.C. 

47107(h)(2). The FAA determined that 

the request to release property at 

Charlotte Douglas International Airport 

(CLT) submitted by the Sponsor meets 

the procedural requirements of the 

Federal Aviation Administration and 

the release of these properties does not 

and will not impact future aviation 

needs at the airport. The FAA may 

approve the request, in whole or in part, 

no sooner than thirty days after the 

publication of this notice. 

The request consists of the following: 

The City of Charlotte is proposing the 

release of airport property totaling 

69.273 acres, more or less. This land is 

to be used by the Norfolk Southern 

Railway Company (NSRC) for the 

expansion of an Intermodal Rail Facility 

(69.273 acres fee simple). NRSC has the 

option to purchase this land for the 

same non-aeronautical purpose under a 

current long term lease. The release of 

land is necessary to comply with FAA 

Grant Assurances that do not allow 

federally acquired airport property to be 

used for non-aviation purposes. The sale 

of the subject property will result in the 

land at Charlotte Douglas International 

Airport (CLT) being changed 

permanently from aeronautical to nonaeronautical use and releases the lands 

from the conditions of the Airport 

Improvement Program (AIP) Grant 

Agreement Grant Assurances. In 

accordance with 49 U.S.C. 

47107(c)(2)(B)(i) and (iii), the airport 

will receive fair market value for the 

property, which will be subsequently 

reinvested in FAA approved eligible 

AIP projects for aviation facilities at 

Charlotte Douglas International Airport 

(CLT). The proposed use of this 

property is compatible with airport 

operations. The property is located on 

Charlotte Douglas International Airport, 

bordered on the west by Runway 18R– 

36L, bordered on the east by Runway 

18C–36C, bordered on the north by 

Taxiway N, and by West Boulevard to 

the south. 

This request will release this property 

from federal obligations. This action is 

taken under the provisions of 49 U.S.C. 

47107(h)(2). 

Any person may inspect the request 

in person at the FAA office listed above 

under FOR FURTHER INFORMATION

CONTACT. 

In addition, any person may, upon 

request, inspect the request, notice and 

other documents germane to the request 

in person at the Charlotte Douglas 

International Airport. 

Issued in Memphis, Tennessee, on March 

2, 2021. 

Duane Leland Johnson, 

Assistant Manager, Memphis Airports District 

Office, Southern Region. 

[FR Doc. 2021–04642 Filed 3–4–21; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

Public Notice for Waiver of 

Aeronautical Land Use Assurance; 

Rogue Valley International-Medford 

Airport, Medford, Oregon 

AGENCY: Federal Aviation 

Administration, (FAA), DOT. 

ACTION: Notice. 

SUMMARY: Notice is being given that the 

FAA is considering a proposal from the 

County of Jackson Airport Director to 


jbell on DSKJLSW7X2PROD with NOTICES