Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Notices 1231 

86See id. 

87 15 U.S.C. 78s(b)(3)(A)(ii). 

88 17 CFR 240.19b–4(f)(2). 

89 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

understanding the access structure of 

other exchanges, SIG refused. 

The SIG Letter further asserts that the 

Exchange ‘‘has not established that the 

other exchange fees are reasonable, nor 

that this would mean that the MIAX 

Pearl fees are reasonable as well.86 SIG 

should be aware that it is not the 

Exchange’s obligation to justify why 

another exchange’s fees are reasonable 

and it is presumed that such fees were 

deemed reasonable by the Commission 

when filed by the exchange that 

proposed said fee. If SIG felt another 

exchange’s fees were or are 

unreasonable, they are free to share that 

concern with the Commission and were 

provided an opportunity to submit 

comment letter on those earlier 

proposals from other exchanges. It is the 

Exchange’s responsibility to show that 

its own proposed fee change is 

reasonable and consistent with the Act, 

and that assertion is amply supported 

by the statements made in this Item 5 

and elsewhere herein. 

The Proposed Fees Are Consistent With 

Section 6(b)(4) of the Act Because the 

Proposed Fees Will Not Result in 

Excessive Pricing or Supra-Competitive 

Profit 

The Exchange has provided ample 

data that the proposed fees would not 

result in excessive pricing or a supracompetitive profit. In this Third 

Proposed Rule Change, the Exchange no 

longer utilizes a comparison of its profit 

margin to that of other options 

exchanges as a basis that the Proposed 

Access Fees are reasonable. Rather, the 

Exchange has enhanced its cost and 

revenue analysis and data in this Third 

Proposed Rule Change to further justify 

that the Proposed Access Fees are 

reasonable in accordance with the 

Commission Staff’s Guidance. 

Therefore, the Exchange believes it is no 

longer necessary to respond to this 

portion of the SIG Letter. 

Recoupment of Exchange Infrastructure 

Costs 

Nowhere in this proposal or in the 

First Proposed Rule Change did the 

Exchange assert that it benefits 

competition to allow a new exchange 

entrant to recoup their infrastructure 

costs. Rather, the Exchange asserts 

above that its ‘‘proposed fees are 

reasonable, equitably allocated and not 

unfairly discriminatory because the 

Exchange, and its affiliates, are still 

recouping the initial expenditures from 

building out their systems while the 

legacy exchanges have already paid for 

and built their systems.’’ The Exchange 

no longer makes this assertion in this 

filing and, therefore, does not believe is 

it necessary to respond to SIG’s 

assertion here. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,87 and Rule 

19b–4(f)(2) 88 thereunder. 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 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

PEARL–2021–59 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–PEARL–2021–59. 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 (https://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–PEARL–2021–59 and 

should be submitted on or before 

January 31, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.89

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00158 Filed 1–7–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93896; File No. SR–BX– 

2021–054] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt an Add 

Liquidity Order and Post-Only Quote 

Configuration Functionality 

January 4, 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 December 

22, 2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II and III, 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Options 3, Section 1 (Days and Hours of 


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3See Securities Exchange Act Release No. 93675 

(November 29, 2021), 86 FR 68714 (December 3, 

2021) (SR–NASDAQ–2021–69) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Include Juneteenth National Independence Day 

as a Holiday). BX’s General 3 rules incorporate by 

reference The Nasdaq Stock Market LLC’s General 

3 Rules. Rule 1030 of General 3 memorialized all 

current Exchange holidays and added a provision 

to permit the Exchange the authority to halt or 

suspend trading or close Exchange facilities for 

certain unanticipated closures. 

4See Securities Exchange Act Release No. 66617 

(March 19, 2012), 77 FR 17102 (March 23, 2012) 

(SR–ISE–2012–20) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Adopt a 

New Order Type). 

5 Id at 17103. 

6See Options 3, Section 3 (Minimum 

Increments). 

7See Securities Exchange Act Release No. 67353 

(July 5, 2012), 77 FR 40935 (July 11, 2012) (SR–ISE– 

2012–61) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change by 

International Securities Exchange To Amend ISE 

Rule 715 To Reflect a Modification in the 

Functionality of the Add Liquidity Order). 

8 Id at 40935. 

9The term ‘‘NBBO’’ means the national best bid 

or offer as calculated by BX Options based on 

market information received by BX Options from 

OPRA. See Options 3, Section 1(a)(33). 

10Options 3, Section 5(d) provides, ‘‘An order 

will not be executed at a price that trades through 

another market or displayed at a price that would 

lock or cross another market. An order that is 

designated by the member as routable will be 

routed in compliance with applicable TradeThrough and Locked and Crossed Markets 

restrictions. An order that is designated by a 

member as non-routable will be re-priced in order 

to comply with applicable Trade-Through and 

Locked and Crossed Markets restrictions. If, at the 

time of entry, an order that the entering party has 

elected not to make eligible for routing 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.’’ 

Business), Section 7 (Types of Orders 

and Quote Protocols), Section 13 (Price 

Improvement Auction (‘‘PRISM’’)) and 

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 the 

following rules: Options 3, Section 1 

(Days and Hours of Business), Section 7 

(Types of Orders and Quote Protocols), 

Section 13 (Price Improvement Auction 

(‘‘PRISM’’)) and Section 15 (Risk 

Protections). Each change will be 

described below. 

Options 3, Section 1 

The Exchange proposes to amend 

Options 3, Section 1 concerning the 

Days and Hours of Business. The 

Exchange proposes to amend the title 

from ‘‘Days and Hours of Business’’ to 

‘‘Hours of Business.’’ BX recently filed 

to establish General 3, Section 1030, 

which governs the days the Exchange 

will be open for business.3 At this time 

the Exchange proposes to amend 

Options 3, Section 1(c) which provides, 

‘‘BX Options shall not be open for 

business on any holiday observed by 

BX.’’ The Exchange proposes to instead 

provide, ‘‘BX Options shall not be open 

for business as provided within General 

3, Section 1030.’’ This proposed text 

will make clear that while General 3, 

Section 1030 governs the days the 

Exchange will be open for business, the 

remainder of the rule addresses the 

hours of operation of the System and 

specific products. Finally, the Exchange 

proposes to update citations to the 

Options 4 rules related to ExchangeTraded Fund Shares and Index-Linked 

Securities. 

Options 3, Section 7 

The Exchange proposes to amend 

Options 3, Section 7 to add a new order 

type entitled ‘‘Add Liquidity Order’’ 

within Options 3, Section 7(a)(12). 

Today, Nasdaq ISE, LLC (‘‘ISE’’), Nasdaq 

GEMX, LLC (‘‘GEMX’’) and Nasdaq 

MRX, LLC (‘‘MRX’’) have a similar order 

type within Options 3, Section 7(n). ISE 

adopted the Add Liquidity Order to 

provide an additional order type that 

will give market participants greater 

control over the circumstances in which 

their orders are executed.4 ISE’s 2012 

rule change explained that 

[s]ome investors and market participants 

wish only to provide liquidity in certain 

circumstances, such as to receive a maker fee 

(rebate) upon execution of an order. To 

accommodate this strategy, the Exchange 

proposed to adopt a new order type called an 

add liquidity order (‘‘ALO’’). ALOs are limit 

orders that will only be executed as a 

‘‘maker’’ on the ISE. Members can choose 

whether an ALO that is executable on the ISE 

upon entry (or that locks or crosses an away 

market upon entry) will be cancelled or repriced to one minimum price variation above 

the national best bid or below the national 

best offer. An Add Liquidity Order will only 

be re-priced once and will be executed at the 

re-priced price.5

ISE subsequently amended this order 

type in 2012 such that, if at the time of 

entry, an ALO would lock or cross one 

or more non-displayed orders on the 

Exchange, the ALO will be cancelled or 

re-priced to the minimum price 

variation 6 (‘‘MPV’’) above the best nondisplayed bid price (for sell orders) or 

below the best non-displayed offer price 

(for buy orders).7 ISE noted in that filing 

that it believed that adding this 

functionality was imperative to ensure 

that ALOs are only executed when 

providing liquidity. Without the ability 

to re-price an ALO that locks or crosses 

a non-displayed order, under certain 

circumstances, an incoming ALO could 

execute against a non-displayed order 

resting on the ISE limit order book, 

which would be in direct contravention 

with the purpose of an ALO—to provide 

liquidity, not take liquidity.8

At this time, the Exchange proposes to 

adopt an Add Liquidity Order similar to 

ISE, GEMX and MRX Options 3, Section 

7(n). The proposed Add Liquidity Order 

would be a limit order that is to be 

executed in whole or in part on the 

Exchange (i) only after being displayed 

on the Exchange’s limit order book; and 

(ii) without routing any portion of the 

order to another market center. 

Participants would be able to specify 

whether an Add Liquidity Order shall 

be cancelled or re-priced to the MPV 

above the national best bid price (for 

sell orders) or below the national best 

offer price (for buy orders) if, at the time 

of entry, the order (i) is executable on 

the Exchange; or (ii) the order is not 

executable on the Exchange but would 

lock or cross the national best bid or 

offer. If at the time of entry, an Add 

Liquidity Order would lock or cross one 

or more non-displayed orders or quotes 

on the Exchange, the Add Liquidity 

Order shall be cancelled or re-priced to 

the MPV above the best non-displayed 

bid price (for sell orders) or below the 

best non-displayed offer price (for buy 

orders). Notwithstanding the 

aforementioned, if an Add Liquidity 

Order would not lock or cross an order 

or quote on the System but would lock 

or cross the NBBO,9 the order will be 

handled pursuant to Options 3, Section 

5(d).10 This repricing of Add Liquidity 

Orders is the way other order types are 

currently re-priced on ISE, GEMX and 


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11See ISE, GEMX and MRX Options 3, Section 

5(d). The Exchange will amend the ISE, GEMX and 

MRX rules in separate rule changes. 

12 ISE, GEMX and MRX will propose a change to 

Options 3, Section 7(n) to add similar rule text. 

13See Securities Exchange Act Release No. 76301 

(October 29, 2015), 80 FR 68347 (November 4, 2015) 

(SR–BX–2015–032) (Notice of Filing of Amendment 

No. 2 and Order Granting Accelerated Approval of 

a Proposed Rule Change, as Modified by 

Amendment Nos. 1 and 2, To Adopt a New Price 

Improvement Auction, BX PRISM). 

14See Securities Exchange Act Release No. 89476 

(August 4, 2020), 85 FR 48274 (SR–BX–2020–017) 

(August 10, 2020) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

Various BX Rules in Connection With a Technology 

Migration). 

15None of these markets have similar system 

restrictions preventing the submission of orders in 

their respective price improvement mechanisms 

during the last two seconds of the trading day. See 

Nasdaq ISE, GEMX, and MRX Options 3, Section 

13. 

16See Phlx Options 3, Section 13(b)(4). The 

Exchange will separately amend Phlx’s rule to make 

a similar change to the rule text. 

17 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an 

interface that allows Market Makers to connect, 

send, and receive messages related to quotes, 

Immediate-or-Cancel Orders, and auction responses 

into and from the Exchange. Features include the 

following: (1) Options symbol directory messages 

(e.g., underlying instruments); (2) system event 

messages (e.g., start of trading hours messages and 

start of opening); (3) trading action messages (e.g., 

halts and resumes); (4) execution messages; (5) 

quote messages; (6) Immediate-or-Cancel Order 

messages; (7) risk protection triggers and purge 

notifications; (8) opening imbalance messages; (9) 

auction notifications; and (10) auction responses. 

The SQF Purge Interface only receives and notifies 

of purge requests from the Market Maker. Market 

Makers may only enter interest into SQF in their 

assigned options series. See Options 3, Section 

7(e)(1)(B). 

MRX. The Exchange notes that the same 

sentence does not appear in the ISE, 

GEMX and MRX Add Liquidity Order 

description.11

Finally, BX proposes to add rule text 

that is not currently in the ISE, GEMX 

and MRX rule. Add Liquidity Orders 

may only be submitted when an options 

series is open for trading.12 Therefore, 

an Add Liquidity Order would not be 

accepted during the Opening Process 

when the order book is not available. 

The Exchange believes that, similar to 

ISE, GEMX and MRX, the adoption of an 

Add Liquidity Order will give market 

participants greater control over the 

circumstances in which their orders are 

executed in addition to the order types 

which are currently offered today on 

BX. Below are some examples of the 

Add Liquidity Order. 

Add Liquidity Only Order Re-Price 

Example 

• Non-Penny Program MPV Option in 

open trading state 

• Market Maker A quote $0.90 (10) × 

$1.00 (10) 

• ABBO $0.85 × $1.05 

• Firm A sends Add Liquidity Only 

Order to buy 5 arrives at $1.00 

Æ Reprices on book to $0.95 

Æ Displays on $0.95 bid, which is 

National Best displayed bid with 5 

quantity 

• Order to sell 10 arrives at $0.90 

Æ 5 execute with Firm A @ $0.95 

Æ 5 execute with Market A @ $0.90 

Æ NBBO updates back to $0.90 × $1.00 

Add Liquidity Only Reject Example 

• Non-Penny Program MPV Option in 

open trading state 

• Market Maker A quote $0.90 (10) × 

$1.00 (10) 

• ABBO $0.85 × $1.05 

• Firm A sends Add Liquidity Only 

Order to buy 5 arrives at $1.00 

Æ Order is rejected back to sender 

because the sender configured the 

order for reject instead of re-price 

The Exchange also proposes to amend 

Options 3, Section 7(a)(11) to remove 

the title ‘‘Block Order’’ at the beginning 

of the sentence to conform the style of 

the description to the remaining order 

types within Options 3, Section 7. 

Options 3, Section 13 

The Exchange proposes to amend the 

Exchange’s PRISM rule in Options 3, 

Section 13 to delete an obsolete auction 

eligibility requirement and clarify 

existing rule text. 

Today, Options 3, Section 13(i) 

describes the various eligibility criteria 

under which a PRISM auction may be 

initiated, including requirements for 

when PRISM orders may be submitted. 

In particular, Section 13(i)(F) provides 

that PRISM orders submitted during the 

final two seconds of the trading session 

in the affected series are not eligible to 

initiate a PRISM auction and will be 

immediately cancelled. This restriction 

was introduced when PRISM was first 

adopted on the Exchange,13 and was 

based on certain technical restraints 

from BX’s original technical design 

which required no ongoing auctions to 

begin preparing for the end of trading 

day transition to closing state. However, 

with the Exchange’s recent technology 

migration,14 this system restriction was 

removed in order to be more consistent 

with the price improvement 

mechanisms on the Exchange’s affiliated 

options markets, Nasdaq ISE, GEMX, 

and MRX.15 The corresponding rule text 

in Options 3, Section 13(i)(F) should 

have likewise been deleted with the 

legacy functionality. Accordingly, the 

Exchange now proposes to delete the 

obsolete rule text in Section 13(i)(F) in 

its entirety, and renumber Section 

13(i)(G) as (F). 

Additionally, the Exchange proposes 

to amend rule text regarding the PRISM 

Auction process. Currently, Options 3, 

Section 13(ii) describes the manner in 

which a PRISM auction may be 

conducted. Specifically, with respect to 

an unrelated market or marketable limit 

order, Options 3, Section 13(a)(ii)(D) 

provides, 

An unrelated market or marketable limit 

order (against the BX BBO) on the opposite 

side of the market from the PRISM Order 

received during the Auction will not cause 

the Auction to end early and will execute 

against interest outside of the Auction. If 

contracts remain from such unrelated order 

at the time the auction ends, they will be 

considered for participation in the order 

allocation process described in subparagraphs (E) and (F) below. 

The term ‘‘marketable limit order’’ is 

too narrow a term as both orders and 

quotes on the opposite side of the 

market from the PRISM Order received 

during the PRISM auction would not 

cause the PRISM auction to end early 

and will execute against interest outside 

of the PRISM auction. Therefore, the 

Exchange proposes to replace the term 

‘‘marketable limit order’’ with the 

broader term ‘‘marketable interest’’ to 

accurately describe the interest a PRISM 

auction would interact with in the order 

book on the opposite side of the market 

from the PRISM Order. The Exchange 

believes that this amendment will bring 

greater clarity to the PRISM rule. The 

proposed new rule text would provide, 

Unrelated market or marketable interest 

(against the BX BBO) on the opposite side of 

the market from the PRISM Order received 

during the Auction will not cause the 

Auction to end early and will execute against 

interest outside of the Auction. If contracts 

remain from such unrelated interest at the 

time the auction ends, they will be 

considered for participation in the order 

allocation process described in subparagraphs (E) and (F) below. 

The Exchange notes that Nasdaq 

PHLX LLC’s Price Improvement XL 

(‘‘PIXL’’) auction does not early 

terminate from contra-side unrelated 

marketable interest.16

Options 3, Section 15 

The Exchange proposes to amend 

Options 3, Section 15, Risk Protections, 

to adopt an optional quoting protection 

for BX Market Makers. This optional 

risk protection would allow BX Market 

Makers to prevent their quotes from 

removing liquidity from the Exchange’s 

order book upon entry. 

Specifically, the Exchange proposes to 

adopt a new risk protection within 

Options 3, Section 15(c)(3). With this 

risk protection, NOM Market Makers 

may elect to configure their SQF 17

protocols to prevent their quotes from 


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18This would include any re-priced orders as 

described in Options 3, Section 5(d), any re-priced 

quotes as described in Options 3, Section 4(b)(6), 

and the proposed Add Liquidity Orders within 

proposed Options 3, Section 7(a)(12). As noted 

herein, Add Liquidity Orders may re-price. 19The Exchange’s Opening Process is described at 

Options 3, Section 8. 20Options 3, Section 4(b)(6) provides, ‘‘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.’’ 

21BOX Rules provide, ‘‘Notwithstanding Rule 

100(a)(56), all quotes and quote updates on BOX 

after the opening are liquidity adding only. 

Specifically, after the Opening Match pursuant to 

Rule 7070, a Market Maker’s quote will not execute 

against a resting order or quote on the BOX Book. 

If an incoming quote is marketable against the BOX 

Book and will execute against a resting order or 

quote, it will be rejected.’’ See BOX IM–8050–3. See 

also Securities Exchange Act Release No. 79311 

(November 15, 2016), 81 FR 83322 (November 21, 

2016) (SR–BOX–2016–45) (Order Approving a 

Proposed Rule Change To Amend the Treatment of 

Quotes To Provide That All Quotes on BOX Are 

Liquidity Adding Only). 

22NYSE Arca permits a market maker to 

optionally designate a quote as ‘‘Add Liquidity 

Only.’’ See NYSE Arca Rule 6.37A–O(a)(3)(B). 

23See MIAX Emerald Rule 517(a)(1)(i). 

24Miami International Securities Exchange LLC 

(‘‘MIAX’’) permits its market makers to add and 

remove liquidity from the order book. See MIAX’s 

Fee Schedule which delineates Maker and Taker 

pricing. Nasdaq ISE, LLC (‘‘ISE’’) also permits 

market makers to add and remove liquidity from the 

order book. See ISE’s Pricing Schedule at Options 

7. 

25See Securities and Exchange Release No. 93662 

(November 23, 2021), 86 FR 68009 (November 30, 

2021) (SR–NASDAQ–2021–094) (Notice of Filing 

and Immediate Effectiveness of Proposed Rule 

Change To Adopt a Post-Only Quote Configuration 

Risk Protection). 

26For example, the inbound auction would reject 

against the non-displayed Add Liquidity Only 

Order or quote with a Post-Only Quote 

Configuration with an auction mechanism. 

27See Options 3, Section 13. 

28See Options 3, Section 7(n). 29 Id. 

removing liquidity (‘‘Post-Only Quote 

Configuration’’). This Post-Only Quote 

Configuration would re-price or cancel 

a BX Market Maker’s quote that would 

otherwise lock or cross any resting 

order 18 or quote on the BX order book 

upon entry. The Exchange notes that 

this functionality does not apply during 

an Opening Process 19 because the order 

book is established once options series 

are open for trading. 

Participants may elect whether to reprice or cancel their quotes with this 

functionality. When configured for reprice, quotes would be re-priced to one 

MPV below the current low offer (for 

bids) or above the current best bid (for 

offers) and displayed by the System at 

one MPV below the current low offer 

(for bids) or above the current best bid 

(for offers). Notwithstanding the 

aforementioned, if a quote with a PostOnly Quote Configuration would not 

lock or cross an order or quote on the 

System but would lock or cross the 

NBBO, the quote will be handled 

pursuant to Options 3, Section 4(b)(6).20

When configured for cancel, 

Participants will have their quotes 

returned whenever the quote would 

lock or cross the NBBO or be placed on 

the book at a price other than its limit 

price. 

This optional risk protection would 

enable BX Market Makers to better 

manage their risk when quoting on BX. 

Today, BOX Exchange LLC (‘‘BOX’’),21

NYSE Arca, Inc. (‘‘NYSE Arca’’),22 and 

MIAX Emerald, LLC (‘‘MIAX 

Emerald’’) 23 have similar functionality. 

BOX does not permit Market Maker’s 

quotes to take liquidity and will reject 

the quote. Other options markets, unlike 

BOX, continue to permit their market 

makers to add or remove liquidity from 

the order book.24 NYSE Arca and MIAX 

Emerald will re-price quotes one MPV 

to avoid the quote from trading as a 

liquidity taker against the resting order 

similar to BX’s proposal. Also, the 

Exchange’s proposal permits a BX 

Market Maker a choice as to whether to 

cancel or re-price its quote when using 

the Post-Only Quote Configuration. 

Finally, the Nasdaq Options Market 

LLC (‘‘NOM’’) recently codified 25 a 

similar risk protection, however, unlike 

BX, NOM reprices $.01 below the 

current low offer (for bids) or above the 

current best bid (for offers) and displays 

the quote at one MPV below the current 

low offer (for bids) or above the current 

best bid (for offers). The Exchange notes 

that, unlike BX, NOM does not offer 

auction functionality. Because an 

auction mechanism may interact 

adversely with Add Liquidity Only 

Orders or quotes with a Post-Only Quote 

Configuration that are re-priced in $0.01 

increments and displayed at MPV 

increments, the Exchange proposes to 

re-price at one MPV.26 BX has the 

PRISM auction.27 The Exchange 

believes that it is consistent with the 

protection of investors and the general 

public to utilize one MPV to re-price an 

Add Liquidity Only Order or quote with 

a Post-Only Quote Configuration to 

avoid a PRISM auction rejecting against 

a non-displayed Add Liquidity Only 

Order or quote with a Post-Only Quote 

Configuration. The Exchange notes that 

a similar result could not be obtained on 

NOM as there are no auctions. The Add 

Liquidity Order on ISE, GEMX and 

MRX 28 also re-prices in one MPV as 

those markets have a price improvement 

auction.29

Further, with the adoption of Add 

Liquidity Orders as proposed herein 

within Options 3, Section 7, all BX 

Participants may utilize the Add 

Liquidity Order. The Post-Only Quote 

Configuration is available to Market 

Makers only as a risk protection. 

Below are some examples of the PostOnly Quote Configuration functionality. 

Post-Only Quote Configuration Reprice 

Example 

• Penny Interval Program MPV in open 

trading state 

• Market Makers A and C do not have 

Post-Only Quote Configuration risk 

protection configured 

• Market Maker B is configured for 

Post-Only Quote Configuration reprice 

• Market Maker A quote $0.98 (10) × 

$1.00 (10) 

• ABBO $0.96 × $1.03 

• Market Maker B quote $1.00 (10) × 

$1.01 (10) arrives 

Æ Bid side of quote re-prices onto order 

book @ 0.99 and updates displayed 

NBBO to 20 quantity 

Æ Offer side rests at 1.01 without issue 

• Market Maker C quote $0.97 (20) × 

0.98 (20) arrives 

Trades 10 with Market Maker A and 10 

with Market Maker B 

Market Maker B avoids taking 

liquidity while Market Maker C, who 

chose not to be configured for such, 

removes liquidity by interacting with repriced interest on BX’s order book. 

Re-Priced Post-Only Quote 

Configuration—Penny Interval Program 

Display and Execution Example—NonPenny Interval Program (Options 3, 

Section 7(a)(9)) 

• Non-Penny Interval Program MPV in 

open trading state 

• Market Maker A quote $0.95 (10) × 

$1.00 (10) 

• ABBO $0.85 × $1.05 

• Market Maker B (configured at the 

badge level for Post-Only Quote 

Configuration and selection of reprice upon quote) quote arrives 1.00 

(5) × $1.05 (5) 

Æ Bid side quote re-prices on order book 

to $0.95 

Æ Displays on order book @ $0.95 (bid), 

which now shows (15 quantity) 

Æ Offer side quote books and displays at 

$1.05 

• Order to sell 10 contracts arrives @ 

$0.95 

Æ 5 contracts execute with Market 

Maker B @ $0.95 

Æ 5 contracts execute with Market A @ 

$0.95 


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30 15 U.S.C. 78f(b). 

31 15 U.S.C. 78f(b)(5). 

32See note 3 above. 

33 ISE, GEMX and MRX will propose a change to 

Options 3, Section 7(n) to add similar rule text. 34See note 15 above. 

In this example, the Market Maker 

avoided taking liquidity by deploying 

the Post-Only Quote Configuration with 

re-price. 

Implementation 

The Exchange will issue an Options 

Trader Alert to Participants with the 

date of implementation for the Add 

Liquidity Order and the Post-Only 

Quote Configuration functionality. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,30 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,31

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 3, Section 1 

The Exchange’s proposal to amend 

Options 3, Section 1 concerning the 

Days and Hours of Business is 

consistent with the Act. The proposal to 

amend the title from ‘‘Days and Hours 

of Business’’ to ‘‘Hours of Business’’ 

will bring greater clarity to the rule. BX 

recently filed to establish General 3, 

Section 1030, which governs the days 

the Exchange will be open for 

business.32 Amending Options 3, 

Section 1(c) to reference General 3, 

Section 1030 will provide Participants 

with a guidepost as to where to locate 

the rule that applies to the days the 

Exchange is open for business. The 

proposed updated citations to the 

Options 4 rules will provide correct 

references for Participants and thereby 

bring greater clarity to the rules. 

Options 3, Section 7 

The Exchange’s proposal to amend 

Options 3, Section 7 to add a new order 

type entitled ‘‘Add Liquidity Order’’ 

within Options 3, Section 7(a)(12) is 

consistent with the Act. Today, ISE, 

GEMX and MRX have a similar order 

type within Options 3, Section 7(n). The 

Add Liquidity Order will provide an 

additional order type that will give 

market participants greater control over 

the circumstances in which their orders 

are executed. For investors and market 

participants that elect only to provide 

liquidity in certain circumstances, such 

as to receive a maker fee (rebate) upon 

execution of an order, the proposed 

order type will accommodate this 

strategy. Add Liquidity Orders will only 

be executed as a ‘‘maker’’ if elected. 

Participants may choose to cancel or 

re-price Add Liquidity Orders if, at the 

time of entry, the order is executable on 

BX or the order is not executable on BX 

but would lock or cross the national best 

bid or offer. Allowing Add Liquidity 

Order to re-price ensures that Add 

Liquidity Orders are only executed 

when providing liquidity and avoid 

executing against a non-displayed order 

or quote resting on BX’s order book, 

which would be in direct contravention 

with the purpose of the order type—to 

provide liquidity, not take liquidity. The 

Add Liquidity Order type is one of the 

order types that Participants may elect 

to utilize on BX to accomplish their 

trading strategies. The Exchange 

believes that adoption of the Add 

Liquidity Order will protect investors 

and the general public by making clear 

the manner in which the order would 

re-price on BX’s order book if re-price 

is elected, that is to the MPV above the 

best non-displayed bid price (for sell 

orders) or below the best non-displayed 

offer price (for buy orders). As is the 

case today, if an order would not lock 

or cross an order or quote on the System 

but would lock or cross the NBBO, the 

order will be handled pursuant to 

Options 3, Section 5(d). 

Add Liquidity Orders may only be 

submitted when an options series is 

open for trading.33 Therefore, an Add 

Liquidity Order would not be accepted 

during the Opening Process as the order 

book is not available. The Exchange 

believes that similar to ISE, GEMX and 

MRX, the adoption of an Add Liquidity 

Order will give market participants 

greater control over the circumstances 

in which their orders are executed in 

addition to the order types which are 

currently offered today on BX. 

The Exchange’s proposal to amend 

Options 3, Section 7(a)(11) to remove 

the title ‘‘Block Order’’ at the beginning 

of the sentence will conform the style of 

the description to the remaining order 

types within Options 3, Section 7. 

Options 3, Section 13 

With respect to amendments to 

Options 3, Section 13, first, the 

proposed rule change deletes a PRISM 

auction eligibility requirement that 

restricts PRISM orders from being 

submitted during the final two seconds 

of the trading day. As discussed above, 

this system restriction is legacy 

functionality that was removed as part 

of the Exchange’s technology migration 

in 2020. The Exchange is therefore 

proposing to remove the corresponding 

rule text in Options 3, Section 13(i)(F) 

as obsolete. The Exchange believes that 

the proposed changes will align the 

PRISM rule with the current operation 

of the Exchange’s system and will 

reduce potential confusion about when 

PRISM orders may be submitted. As 

noted above, the Exchange’s affiliated 

options markets, Nasdaq ISE, GEMX, 

and MRX, do not have similar system 

restrictions for their respective price 

improvement mechanisms.34

Furthermore, the Exchange believes that 

removing this system restriction may 

encourage greater participation in 

PRISM as Participants are no longer 

restricted from submitting PRISM orders 

during the last two seconds of the 

trading day, thereby increasing the 

opportunity for options orders to receive 

executions and price improvement on 

the Exchange. 

Second, the proposed rule change 

amends Options 3, Section 13(a)(ii)(D) 

which describes the manner in which a 

PRISM auction may be conducted. As 

noted herein, the term ‘‘marketable limit 

order’’ is too narrow a term as both 

orders and quotes on the opposite side 

of the market from the PRISM Order 

received during the PRISM auction 

would not cause the PRISM auction to 

end early and execute against interest 

outside of the PRISM auction. 

Amending Options 3, Section 

13(a)(ii)(D) to replace the term 

‘‘marketable limit order’’ with the 

broader term ‘‘marketable interest’’ will 

more accurately describe the way a 

PRISM auction would interact with 

interest in the order book on the 

opposite side of the market from the 

PRISM Order. The Exchange believes 

that this amendment is consistent with 

the Act as it will bring greater clarity to 

the PRISM rule. 

Options 3, Section 15 

The Exchange’s proposal to amend 

Options 3, Section 15, Risk Protections, 

to codify new paragraph (c)(3) to permit 

BX Market Makers to prevent their 

quotes from removing liquidity from the 

Exchange’s order book promotes 

equitable principles of trade and 

protects investors and the public 

interest by enhancing the risk 

protections available to BX Market 

Makers. The proposal also promotes the 

policy goals of the Commission which 

has encouraged execution venues, 

exchanges, and non-exchanges alike, to 

enhance risk protection tools and other 

mechanisms to decrease risk and 

increase stability. 


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35See note 18 above. 

36See Options 7, Section 2. 

37See Options 3, Section 10. 

38BOX Rules provide, ‘‘Notwithstanding Rule 

100(a)(56), all quotes and quote updates on BOX 

after the opening are liquidity adding only. 

Specifically, after the Opening Match pursuant to 

Rule 7070, a Market Maker’s quote will not execute 

against a resting order or quote on the BOX Book. 

If an incoming quote is marketable against the BOX 

Book and will execute against a resting order or 

quote, it will be rejected.’’ See BOX IM–8050–3. See 

also Securities Exchange Act Release No. 79311 

(November 15, 2016), 81 FR 83322 (November 21, 

2016) (SR–BOX–2016–45) (Order Approving a 

Proposed Rule Change To Amend the Treatment of 

Quotes To Provide That All Quotes on BOX Are 

Liquidity Adding Only). 

39NYSE Arca permits a market maker to 

optionally designate a quote as ‘‘Add Liquidity 

Only.’’ See NYSE Arca Rule 6.37A–O(a)(3)(B). 

40See MIAX Emerald Rule 517(a)(1)(i). 

41See Securities and Exchange Release No. 93662 

(November 23, 2021), 86 FR 68009 (November 30, 

2021) (SR–NASDAQ–2021–094) (Notice of Filing 

and Immediate Effectiveness of Proposed Rule 

Change To Adopt a Post-Only Quote Configuration 

Risk Protection). 

42Miami International Securities Exchange LLC 

(‘‘MIAX’’) permits its market makers to add and 

remove liquidity from the order book. See MIAX’s 

Fee Schedule which delineates Maker and Taker 

pricing. Nasdaq ISE, LLC (‘‘ISE’’) also permits 

market makers to add and remove liquidity from the 

order book. See ISE’s Pricing Schedule at Options 

7. 

43See Securities and Exchange Release No. 93662 

(November 23, 2021), 86 FR 68009 (November 30, 

2021) (SR–NASDAQ–2021–094) (Notice of Filing 

and Immediate Effectiveness of Proposed Rule 

Change To Adopt a Post-Only Quote Configuration 

Risk Protection). 

44For example, the inbound auction would reject 

against the non-displayed Add Liquidity Only 

Order or quote with a Post-Only Quote 

Configuration with an auction mechanism. 45See Options 3, Section 13. 46See Options 3, Section 7(n). 47 Id. 48See BX Options 2, Section 4(j) and Section 5(d). 49See BX Options 2, Section 4. 50Options 3, Section 15(c) describes the AntiInternalization and Quotation Adjustments 

Protections that are available today to BX Market 

Makers. 

While BX Market Makers may manage 

their risk by utilizing the Post-Only 

Quote Configuration to avoid removing 

liquidity from the Exchange’s order 

book if their quote would otherwise lock 

or cross any resting order or quote on 

the BX order book upon entry, there are 

also downstream benefits to market 

participants. Re-priced interest on the 

order book provides price improvement 

for market participants that interact 

with that non-displayed interest that is 

priced better than the NBBO. For 

example, the proposed Add Liquidity 

Order may re-price to the MPV above 

the national best bid price (for sell 

orders) or below the national best offer 

price (for buy orders) resulting in betterpriced non-displayed interest that is 

available on the order book. Market 

participants are entitled to the betterpriced interest when they interact with 

the re-priced Add Liquidity Order on 

the order book. Additionally, the 

benefits of enhanced risk protections 

flow downstream to counterparties both 

within and away from the Exchange, 

thereby increasing systemic protections 

as well. 

The proposed risk protection allows 

BX Market Makers the ability to avoid 

removing liquidity from the Exchange’s 

order book if their quote would 

otherwise lock or cross any resting order 

or quote on BX’s order book upon entry, 

thereby protecting investors and the 

general public as BX Market Makers 

transact a large number of orders on the 

Exchange and bring liquidity to the 

marketplace. BX Market Makers would 

utilize the proposed risk protection to 

avoid unexpectedly taking liquidity 

with non-displayed, non-transparent 

interest 35 on the order book. As a result 

of taking liquidity, BX Market Makers 

would incur a taker fee that may impact 

the BX Market Maker’s ability to 

provide liquidity and meet quoting 

obligations. BX Market Makers are 

required to add liquidity on NOM and, 

in turn, are rewarded with lower 

pricing 36 and enhanced allocations.37

Specifically, the risk protection would 

permit BX Market Makers to add 

liquidity only and avoid removing nondisplayed interest on the order book 

thereby maximizing the benefit of their 

quoting to bring liquidity to BX by 

allowing BX Market Makers to provide 

as much liquidity as possible, thereby 

removing impediments to and 

perfecting the mechanism of a free and 

open market and a national market 

system and protecting investors and the 

public interest. There is no impact to 

other market participants by introducing 

this Post-Only Quote Configuration as 

other non-Market Makers may utilize 

the proposed Add Liquidity Only order 

type that will continue to benefit 

downstream counterparties, both within 

and away from the Exchange, who may 

interact with non-displayed interest on 

BX’s order book and thereby interact 

with order flow that is priced better 

than the NBBO. Also, other market 

participants may interact with the 

liquidity provided by BX Market 

Makers. 

This optional risk protection enables 

BX Market Makers to better manage 

their risk when quoting on BX. Today, 

BOX,38 NYSE Arca,39 MIAX Emerald 40

and NOM 41 have similar functionality. 

BOX does not permit Market Maker’s 

quotes to take liquidity and will reject 

the quote. Other options markets, unlike 

BOX, continue to permit their market 

makers to add or remove liquidity from 

the order book.42 NYSE Arca and MIAX 

Emerald will re-price quotes one MPV 

to avoid the quote from trading as a 

liquidity taker against the resting order 

similar to BX’s proposal. Also, the 

Exchange’s proposal permits a BX 

Market Maker a choice as to whether to 

cancel or re-price its quote when using 

the Post-Only Quote Configuration. 

Finally, NOM recently codified 43 a 

similar risk protection, however, unlike 

BX which re-prices in MPVs, NOM 

reprices $.01 below the current low offer 

(for bids) or above the current best bid 

(for offers) and displays the quote at one 

MPV below the current low offer (for 

bids) or above the current best bid (for 

offers). The Exchange notes that, unlike 

BX, NOM does not offer auction 

functionality. Because an auction 

mechanism may interact adversely with 

Add Liquidity Only Orders or quotes 

with a Post-Only Quote Configuration 

that are re-priced in $0.01 increments 

and displayed at MPV increments, the 

Exchange proposes to re-price at one 

MPV.44 BX has the PRISM auction.45

The Exchange believes that it is 

consistent with the protection of 

investors and the general public to 

utilize one MPV to re-price an Add 

Liquidity Only Order or quote with a 

Post-Only Quote Configuration to avoid 

a PRISM auction rejecting against a nondisplayed Add Liquidity Only Order or 

quote with a Post-Only Quote 

Configuration. The Exchange notes that 

a similar result could not be obtained on 

NOM as it has no auctions. The Add 

Liquidity Order on ISE, GEMX and 

MRX 46 also re-prices in one MPV as 

those markets have a price improvement 

auction.47

Further, with the adoption of Add 

Liquidity Orders as proposed herein 

within Options 3, Section 7, all BX 

Participants may utilize the Add 

Liquidity Order. The Post-Only Quote 

Configuration is available to Market 

Makers only as a risk protection. 

Unlike other market participants, BX 

Market Makers have certain obligations 

on the market. BX Market Makers are 

required to provide continuous twosided quotes on a daily basis 48 and are 

subject to various obligations associated 

with providing liquidity on the 

market.49 BX Market Makers are the sole 

liquidity providers on the Exchange 

and, therefore, are offered certain quote 

risk protections noted within Options 3, 

Section 15 to allow them to manage 

their risk more effectively.50 The 

proposed Post-Only Quote 

Configuration is another risk protection 

afforded to BX Market Makers to assist 

them in managing their risk while 

continuing to comply with their 

obligations. The Exchange notes that 


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Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Notices 1237 

51See notes 21–25 above. 

52See Options 7, Section 2. 

53See Options 3, Section 10. 

54See BX Options 2, Section 4(j) and Section 5(d). 

55See BX Options 2, Section 4. 

56Options 3, Section 15(c) describes the AntiInternalization and Quotation Adjustments 

Protections that are available today to BX Market 

Makers. 

57 15 U.S.C. 78s(b)(3)(A)(iii). 

58 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

enhancing the ability of BX Market 

Makers to add liquidity and avoid 

taking liquidity from the order book 

promotes just and equitable principles 

of trade on BX and protects investors 

and the public interest, thereby 

enhancing market structure by allowing 

BX Market Makers to add liquidity only. 

Greater liquidity benefits all market 

participants by providing more trading 

opportunities and attracting greater 

participation by BX Market Makers. 

Also, an increase in the activity of BX 

Market Makers in turn facilitates tighter 

spreads. 

Finally, with the proposed addition of 

Add Liquidity Orders, all Participants 

may utilize similar functionality for 

orders and quotes. 

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 1 

The Exchange’s proposal to amend 

Options 3, Section 1 concerning the 

Days and Hours of Business does not 

impose an undue burden on 

competition. The proposal to amend the 

title from ‘‘Days and Hours of Business’’ 

to ‘‘Hours of Business’’ will bring 

greater clarity to the rule. Amending 

Options 3, Section 1(c) to reference 

General 3, Section 1030 will provide 

Participants with a guidepost as to 

where to locate the rule that applies to 

the days the Exchange is open for 

business. The proposed updated 

citations to the Options 4 rules will 

provide correct references for 

Participants and thereby bring greater 

clarity to the rules. 

Options 3, Section 7 

The Exchange’s proposal to amend 

Options 3, Section 7 to add a new order 

type entitled ‘‘Add Liquidity Order’’ 

within Options 3, Section 7(a)(12) does 

not impose an undue burden on 

competition. Today, ISE, GEMX and 

MRX have a similar order type within 

Options 3, Section 7(n). The Add 

Liquidity Order will provide an 

additional order type that will give 

market participants greater control over 

the circumstances in which their orders 

are executed. All Participants may 

utilize the Add Liquidity Order type. 

The Exchange’s proposal to amend 

Options 3, Section 7(a)(11) to remove 

the title ‘‘Block Order’’ at the beginning 

of the sentence will conform the style of 

the description to the remaining order 

types within Options 3, Section 7. 

Options 3, Section 13 

Removing Options 3, Section 13(i)(F) 

does not impose an undue burden on 

competition as the rule text is obsolete 

and the removal of the rule text will 

bring greater transparency to and 

reducing potential confusion about the 

Exchange’s Rulebook. 

Amending Options 3, Section 

13(a)(ii)(D) to utilize the broader term 

‘‘marketable interest’’ does not impose 

an undue burden on competition as it 

will more accurately describe the way a 

PRISM auction would interact with 

interest in the order book on the 

opposite side of the market from the 

PRISM Order. 

Options 3, Section 15 

Adopting a Post-Only Quote 

Configuration within Options 3, Section 

15(c)(3) does not impose an undue 

burden on competition, rather the 

proposal provides BX Market Makers 

with the opportunity to continue to 

avail themselves of functionality that 

currently exists on BOX, NYSE Arca, 

MIAX Emerald and NOM.51

The proposal does not impose a 

burden on inter-market competition, 

because Participants may choose to 

become market makers on a number of 

other options exchanges, which may 

have similar but not identical features. 

The Post-Only Quote Configuration 

functionality will continue to benefit 

downstream counterparties, both within 

and away from the Exchange, who may 

interact with non-displayed interest on 

BX’s order book and thereby interact 

with order flow that is priced better 

than the NBBO. 

The proposal does not impose a 

burden on intra-market competition. BX 

proposes to adopt an Add Liquidity 

Order herein which will permit all 

Participants to receive similar treatment 

for their orders. Offering BX Market 

Makers the ability to configure their 

quotes as Post-Only will allow all 

market participants on BX to add 

liquidity only if desired. 

The proposed risk protection allows 

BX Market Makers the ability to avoid 

removing liquidity from the Exchange’s 

order book if their quote would 

otherwise lock or cross any resting order 

or quote on BX’s order book upon entry, 

thereby protecting investors and the 

general public as BX Market Makers 

transact a large number of orders on the 

Exchange and bring liquidity to the 

marketplace. BX Market Makers are 

required to add liquidity on BX and, in 

turn, are rewarded with lower pricing 52

and enhanced allocations.53

Specifically, the risk protection would 

permit BX Market Makers to add 

liquidity only and avoid removing nondisplayed interest on the order book 

thereby maximizing the benefit of their 

quoting to bring liquidity to BX by 

allowing BX Market Makers to provide 

as much liquidity as possible. Unlike 

other market participants, BX Market 

Makers have certain obligations on the 

market. BX Market Makers are required 

to provide continuous two-sided quotes 

on a daily basis 54 and are subject to 

various obligations associated with 

providing liquidity on the market.55 BX 

Market Makers are the sole liquidity 

providers on the Exchange and, 

therefore, are offered certain quote risk 

protections noted within Options 3, 

Section 15 to allow them to manage 

their risk more effectively.56 The 

proposed Post-Only Quote 

Configuration is another risk protection 

afforded to BX Market Makers to assist 

them in managing their risk while 

continuing to comply with their 

obligations. 

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 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 57 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.58

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 


khammond on DSKJM1Z7X2PROD with NOTICES
1238 Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Notices 

59 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 92395 

(July 13, 2021), 86 FR 38129. Comments on the 

proposed rule change can be found at: https://

www.sec.gov/comments/sr-nysearca-2021-57/ 

srnysearca202157.htm. 4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 92722, 

86 FR 48268 (Aug. 27, 2021). 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 93191, 

86 FR 55090 (Oct. 5, 2021). 

8 15 U.S.C. 78s(b)(2). 

9See supra note 3. 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(57). 

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 

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– 

BX–2021–054 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–2021–054. 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–2021–054 and should 

be submitted on or before January 31, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.59

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00154 Filed 1–7–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93893; File No. SR– 

NYSEArca–2021–57] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on Proceedings To Determine Whether 

To Approve or Disapprove a Proposed 

Rule Change To List and Trade Shares 

of the NYDIG Bitcoin ETF Under NYSE 

Arca Rule 8.201–E 

January 4, 2022. 

On June 30, 2021, NYSE Arca, Inc. 

(‘‘NYSE Arca’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

list and trade shares of the NYDIG 

Bitcoin ETF under NYSE Arca Rule 

8.201–E (Commodity-Based Trust 

Shares). The proposed rule change was 

published for comment in the Federal 

Register on July 19, 2021.3

On August 23, 2021, pursuant to 

Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 On September 

29, 2021, the Commission instituted 

proceedings under Section 19(b)(2)(B) of 

the Act 6 to determine whether to 

approve or disapprove the proposed 

rule change.7

Section 19(b)(2) of the Act 8 provides 

that, after initiating proceedings, the 

Commission shall issue an order 

approving or disapproving the proposed 

rule change not later than 180 days after 

the date of publication of notice of filing 

of the proposed rule change. The 

Commission may extend the period for 

issuing an order approving or 

disapproving the proposed rule change, 

however, by not more than 60 days if 

the Commission determines that a 

longer period is appropriate and 

publishes the reasons for such 

determination. The proposed rule 

change was published for comment in 

the Federal Register on July 19, 2021.9

The 180th day after publication of the 

proposed rule change is January 15, 

2022. The Commission is extending the 

time period for approving or 

disapproving the proposed rule change 

for an additional 60 days. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to issue an order 

approving or disapproving the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change 

and the issues raised in the comments 

that have been submitted in connection 

therewith. Accordingly, the 

Commission, pursuant to Section 

19(b)(2) of the Act,10 designates March 

16, 2022, as the date by which the 

Commission shall either approve or 

disapprove the proposed rule change 

(File No. SR–NYSEArca-2021–57). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00152 Filed 1–7–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93898; File No. SR–Phlx– 

2021–76] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt a New Options 

4A, Sections 4 and 14, Related to Index 

Options, and Amend Other Phlx Rules 

January 4, 2022. 

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

Securities Exchange Act of 1934 (the 


khammond on DSKJM1Z7X2PROD with NOTICES