Federal Register / Vol. 87, No. 15 / Monday, January 24, 2022 / Notices 3625 

1Applicants request relief with respect to the 

named Applicants, including the Existing Funds, as 

well as to any future series of the Trust and any 

other registered open-end management investment 

company or series thereof that: (a) Is advised by the 

Adviser or any entity controlling, controlled by or 

under common control with the Adviser or its 

successors (each, an ‘‘Adviser’’); (b) uses the multimanager structure described in the application; and 

(c) complies with the terms and conditions set forth 

in the application (each, a ‘‘Sub-Advised Fund’’). 

For purposes of the requested order, ‘‘successor’’ is 

limited to an entity that results from a 

reorganization into another jurisdiction or a change 

in the type of business organization. 

2A ‘‘Sub-Adviser’’ for a Sub-Advised Fund is (1) 

an indirect or direct ‘‘wholly-owned subsidiary’’ (as 

such term is defined in the Act) of the Adviser for 

that Sub-Advised Fund, or (2) a sister company of 

the Adviser for that Sub-Advised Fund that is an 

indirect or direct ‘‘wholly-owned subsidiary’’ of the 

same company that, indirectly or directly, wholly 

owns the Adviser (each of (1) and (2) a ‘‘WhollyOwned Sub-Adviser’’ and collectively, the 

‘‘Wholly-Owned Sub-Advisers’’), or (3) not an 

‘‘affiliated person’’ (as such term is defined in 

section 2(a)(3) of the Act) of the Sub-Advised Fund, 

the Trust, or the Adviser, except to the extent that 

an affiliation arises solely because the Sub-Adviser 

serves as a sub-adviser to a Sub-Advised Fund 

(‘‘Non-Affiliated Sub-Adviser’’). 

3The requested relief will not extend to any subadviser, other than a Wholly-Owned Sub-Adviser, 

who is an affiliated person, as defined in section 

2(a)(3) of the Act, of the Sub-Advised Fund or of 

the Adviser, other than by reason of serving as a 

sub-adviser to one or more of the Sub-Advised 

Funds (‘‘Affiliated Sub-Adviser’’). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Summary of the Application 

1. The Adviser will serve as the 

investment adviser to each Sub-Advised 

Fund pursuant to an investment 

advisory agreement with the Trust (the 

‘‘Investment Management 

Agreement’’).1 Under the terms of each 

Investment Management Agreement, the 

Adviser, subject to the supervision of 

the board of trustees of the Trust (the 

‘‘Board’’) will provide continuous 

investment management of the assets of 

each Sub-Advised Fund. Consistent 

with the terms of each Investment 

Management Agreement, the Adviser 

may, subject to the approval of the 

Board, delegate portfolio management 

responsibilities of all or a portion of the 

assets of a Sub-Advised Fund to one or 

more Sub-Advisers.2 The Adviser will 

continue to have overall responsibility 

for the management and investment of 

the assets of each Sub-Advised Fund. 

The Adviser will evaluate, select and 

recommend Sub-Advisers to manage the 

assets of a Sub-Advised Fund and will 

oversee, monitor, and review the SubAdvisers and their performance and 

recommend the removal or replacement 

of Sub-Advisers. 

2. Applicants request an order to 

permit the Adviser, subject to Board 

approval, to enter into investment subadvisory agreements with the SubAdvisers (each, a ‘‘Sub-Advisory 

Agreement’’) and materially amend such 

Sub-Advisory Agreements without 

obtaining the shareholder approval 

required under section 15(a) of the Act 

and rule 18f–2 under the Act.3

Applicants also seek an exemption from 

the Disclosure Requirements to permit a 

Sub-Advised Fund to disclose (as both 

a dollar amount and a percentage of the 

Sub-Advised Fund’s net assets): (a) The 

aggregate fees paid to the Adviser and 

any Wholly-Owned Sub-Adviser; (b) the 

aggregate fees paid to Non-Affiliated 

Sub-Advisers; and (c) the fee paid to 

each Affiliated Sub-Adviser 

(collectively, ‘‘Aggregate Fee 

Disclosure’’). 

3. Applicants agree that any order 

granting the requested relief will be 

subject to the terms and conditions 

stated in the application. Such terms 

and conditions provide for, among other 

safeguards, appropriate disclosure to 

Sub-Advised Fund shareholders and 

notification about sub-advisory changes 

and enhanced Board oversight to protect 

the interests of the Sub-Advised Fund’s 

shareholders. 

4. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security, or transaction or any 

class or classes of persons, securities, or 

transactions from any provisions of the 

Act, or any rule thereunder, if such 

relief is necessary or appropriate in the 

public interest and consistent with the 

protection of investors and purposes 

fairly intended by the policy and 

provisions of the Act. Applicants 

believe that the requested relief meets 

this standard because, as further 

explained in the application, the 

Investment Management Agreements 

will remain subject to shareholder 

approval while the role of the SubAdvisers is substantially equivalent to 

that of individual portfolio managers, so 

that requiring shareholder approval of 

Sub-Advisory Agreements would 

impose unnecessary delays and 

expenses on the Sub-Advised Funds. 

Applicants believe that the requested 

relief from the Disclosure Requirements 

meets this standard because it will 

improve the Adviser’s ability to 

negotiate fees paid to the Sub-Advisers 

that are more advantageous for the SubAdvised Funds. 

For the Commission, by the Division 

of Investment Management, under 

delegated authority. 

Dated: January 19, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01293 Filed 1–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93989; File No. SR–BX– 

2022–001] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the BX Pricing 

Schedule at Options 7, Section 2 

January 18, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on January 

3, 2022, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 the 

BX Pricing Schedule at Options 7, 

Section 2, as described further below. 

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 purpose of the proposed rule 

change is to amend the BX Pricing 

Schedule at Options 7, Section 2. 


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3626 Federal Register / Vol. 87, No. 15 / Monday, January 24, 2022 / Notices 

4The term ‘‘Customer’’ or (‘‘C’’) applies to any 

transaction that is identified by a Participant for 

clearing in the Customer range at The Options 

Clearing Corporation (‘‘OCC’’) which is not for the 

account of broker or dealer or for the account of a 

‘‘Professional’’ (as that term is defined in Options 

1, Section 1(a)(48)). 

5The term ‘‘Lead Market Maker’’ or (‘‘LMM’’) 

applies to a registered BX Options Market Maker 

that is approved pursuant to Options 2, Section 3 

to be the LMM in an options class (options classes). 

6The term ‘‘BX Options Market Maker’’ or (‘‘M’’) 

is a Participant that has registered as a Market 

Maker on BX Options pursuant to Options 2, 

Section 1, and must also remain in good standing 

pursuant to Options 2, Section 9. In order to receive 

Market Maker pricing in all securities, the 

Participant must be registered as a BX Options 

Market Maker in at least one security. 

7The term ‘‘Non-Customer’’ shall include a 

Professional, Broker-Dealer and Non-BX Options 

Market Maker. 

8The term ‘‘Firm’’ or (‘‘F’’) applies to any 

transaction that is identified by a Participant for 

clearing in the Firm range at OCC. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(4) and (5). 

11NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

12Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

13For example, Nasdaq MRX, LLC (‘‘MRX’’) 

currently charges all market participants except 

Priority Customers a Penny Taker Fee of $0.50 per 

contract. See MRX Options 7, Section 3. In 

addition, NYSE Arca Options similarly charges all 

market participants except Customers a take 

liquidity fee in Penny Issues of $0.50 per contract. 

See NYSE Arca Options Fees and Charges, 

Transaction Fee for Electronic Executions—Per 

Contract. 

Specifically, the Exchange proposes to: 

(1) Increase the Taker Fees in Penny 

Symbols for all market participants 

except Customers 4 from $0.46 to $0.50 

per contract, (2) increase the Customer 

Taker Fee in SPY from $0.26 to $0.31 

per contract, and (3) remove the higher 

Maker Rebate of $0.42 per contract 

currently offered to Lead Market 

Makers 5 and Market Makers 6 for IWM, 

GLD, SLV, and TSLA. 

Penny Taker Fee 

Today, the Exchange charges LMM, 

Market Maker, Non-Customer,7 Firm,8

and Customer orders in Penny Symbols 

a Taker Fee of $0.46 per contract. For 

Customer orders in SPY, the Exchange 

charges a reduced Taker Fee of $0.26 

per contract. 

The Exchange now proposes to 

increase the Penny Taker Fees for all 

market participants except Customers 

from $0.46 to $0.50 per contract. The 

Exchange also proposes to increase the 

Customer Taker Fee in SPY from $0.26 

to $0.31 per contract. 

Penny Maker Rebate 

The Exchange currently offers LMMs 

and Market Makers a Maker Rebate in 

Penny Symbols that is $0.29 per 

contract (LMMs) and $0.25 per contract 

(Market Makers). For AAPL, IWM, GLD, 

QQQ, SLV, and TSLA, both LMMs and 

Market Makers are currently offered a 

higher Maker Rebate of $0.42 per 

contract. 

The Exchange now proposes to 

remove IWM, GLD, SLV, and TSLA 

from the list of Penny Symbols eligible 

to receive the higher $0.42 per contract 

Maker Rebate. While the Exchange will 

no longer offer the higher rebate for 

IWM, GLD, SLV, and TSLA, Participants 

will still receive the Penny Maker 

Rebate in these Penny Symbols, albeit at 

a lower rate of $0.29 per contract (for 

LMMs) and $0.25 per contract (for 

Market Makers). Furthermore, LMMs 

and Market Makers will continue to be 

provided the higher $0.42 Maker Rebate 

for AAPL and QQQ orders under this 

proposal. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,9 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,10 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposed changes to 

its Pricing Schedule are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

options securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has long been recognized 

by the courts. In NetCoalition v. 

Securities and Exchange Commission, 

the D.C. Circuit stated as follows: ‘‘[n]o 

one disputes that competition for order 

flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker 

dealers’. . . .’’ 11

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 12

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for options 

security transaction services. The 

Exchange is only one of sixteen options 

exchanges to which market participants 

may direct their order flow. 

Within this environment, market 

participants can freely and often do shift 

their order flow among the Exchange 

and competing venues in response to 

changes in their respective pricing 

schedules. As such, the proposal 

represents a reasonable attempt by the 

Exchange to increase its liquidity and 

market share relative to its competitors. 

Penny Taker Fee 

The Exchange believes that its 

proposal to increase the Penny Taker 

Fees for all market participants except 

Customers from $0.46 to $0.50 per 

contract is reasonable. While the Penny 

Taker Fees are increasing in this 

manner, the Exchange believes that its 

fees remain competitive with other 

options exchanges.13 Accordingly, the 

Exchange believes that the proposed 

fees will continue to attract order flow 

to BX to the benefit of all market 

participants. The Exchange further 

believes that increasing the Penny Taker 

Fees from $0.46 to $0.50 per contract is 

equitable and not unfairly 

discriminatory because the proposed 

changes will apply uniformly to all 

similarly situated Participants. 

The Exchange believes that its 

proposal to increase the Customer Taker 

Fee in SPY from $0.26 to $0.31 per 

contract is reasonable. While the 

Customer Taker Fee in SPY is 

increasing, Customers will continue to 

receive favorable pricing compared to 

all other market participants on BX. In 

particular, no other market participants 

except Customers are currently eligible 

to receive this reduced Taker Fee in 

SPY. These market participants are 

instead assessed the Penny Taker Fee of 

$0.46 per contract today (which is 

increasing to $0.50 per contract under 

this proposal). The Exchange believes 

that offering the reduced Taker Fee in 


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Federal Register / Vol. 87, No. 15 / Monday, January 24, 2022 / Notices 3627 

14As a comparison, Non-Customers and Firms are 

currently provided a Penny Maker Rebate of $0.12 

per contract. 15See supra note 13 with accompanying text. 16See Options 2, Section 4(j) (setting forth the 

90% or higher quoting obligations for LMMs) and 

Section 5(d) (setting forth the 60% or higher 

quoting obligations for Market Makers). 17 15 U.S.C. 78s(b)(3)(A)(ii). 

SPY of $0.31 per contract to Customers 

is equitable and not unfairly 

discriminatory because the proposed 

pricing will apply uniformly to all 

similarly situated Participants. 

Customer liquidity benefits all market 

participants by providing more trading 

opportunities which attracts market 

makers. An increase in the activity of 

these market participants in turn 

facilitates tighter spreads and may cause 

an additional corresponding increase in 

order flow from other market 

participants. 

Penny Maker Rebate 

The Exchange believes that its 

proposal to remove IWM, GLD, SLV, 

and TSLA from the list of Penny 

Symbols eligible to receive the higher 

$0.42 per contract Maker Rebate is 

reasonable. While the Exchange will no 

longer offer the higher rebate, 

Participants will still receive a Maker 

Rebate in these Penny Symbols, albeit at 

a lower rate of $0.29 per contract (for 

LMMs) and $0.25 per contract (for 

Market Makers). Other than the $0.30 

Penny Maker Rebate currently provided 

to Customers, these are still the highest 

Penny Maker Rebates provided to 

market participants today.14

Accordingly, the Exchange believes that 

its rebate program for Penny Symbols 

will remain attractive for LMMs and 

Market Makers, and will continue to 

attract order flow to BX to the benefit of 

all market participants. 

The Exchange believes that its 

proposal is equitable and not unfairly 

discriminatory as the changes will apply 

uniformly to all similarly situated 

Participants. With the proposed 

changes, the Exchange will still provide 

LMMs and Market Makers some of the 

highest Penny Maker Rebates in IWM, 

GLD, SLV, and TSLA compared to other 

market participants.15 Further, the 

Exchange believes that offering more 

favorable pricing for LMMs and Market 

Makers is equitable and not unfairly 

discriminatory. Unlike other market 

participants, LMMs and Market Makers 

add value through continuous quoting 

and the commitment of capital. As it 

relates to the higher Penny Maker 

Rebate provided to LMMs compared to 

Market Makers, the Exchange believes 

that this differentiation is equitable and 

not unfairly discriminatory given that 

LMMs are subject to heightened quoting 

obligations compared to Market 

Makers.16 The higher rebate therefore 

recognizes the differing contributions 

made to the liquidity and trading 

environment on the Exchange by LMMs. 

Overall, the Exchange believes that 

incentivizing both LMMs and Market 

Makers to provide greater liquidity 

benefits all market participants through 

the quality of order interaction. 

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. 

In terms of intra-market competition, 

all pricing would be uniformly assessed 

to similarly situated market 

participants. Customers will continue to 

receive favorable pricing as compared to 

other market participants because 

Customer liquidity enhances market 

quality on the Exchange by providing 

more trading opportunities, which 

benefits all market participants. 

Furthermore, the proposed changes to 

the Penny Maker Rebate program for 

LMMs and Market Makers are designed 

to incentivize these market participants 

to provide greater liquidity, which 

benefits all market participants through 

the quality of order interaction. 

In terms of inter-market competition, 

the Exchange believes that with the 

proposed changes, its pricing remains 

competitive with other options markets 

and will offer market participants with 

another choice of where to transact 

options. The Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily favor competing venues if they 

deem fee levels at a particular venue to 

be excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

options exchanges. Because competitors 

are free to modify their own fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. In sum, if the changes proposed 

herein are unattractive to market 

participants, it is likely that the 

Exchange will lose market share as a 

result. Accordingly, the Exchange does 

not believe that the proposed changes 

will impair the ability of Participants or 

competing order execution venues to 

maintain their competitive standing in 

the financial markets. 

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 foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.17

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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–2022–001 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BX–2022–001. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 


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3628 Federal Register / Vol. 87, No. 15 / Monday, January 24, 2022 / Notices 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 

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–2022–001, and should 

be submitted on or before February 14, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01221 Filed 1–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93991; SR–CboeEDGX– 

2022–003] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Rule 

20.6 To Improve the Operation of the 

Rule 

January 18, 2022. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on January 

11, 2022, Cboe EDGX Exchange, Inc. 

(the ‘‘Exchange’’ or ‘‘EDGX’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

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

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX Options’’) 

proposes to amend Rule 20.6 to improve 

the operation of the Rule. The text of the 

proposed rule change is provided 

below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe EDGX Exchange, Inc. 

* * * * * 

Rule 20.6. Nullification and Adjustment of 

Option Transactions Including Obvious 

Errors 

* * * * * 

(b) Theoretical Price. Upon receipt of a 

request for review and prior to any review of 

a transaction execution price, the 

‘‘Theoretical Price’’ for the option must be 

determined. For purposes of this Rule, if the 

applicable option series is traded on at least 

one other options exchange, then the 

Theoretical Price of an option series is the 

last NBB just prior to the trade in question 

with respect to an erroneous sell transaction 

or the last NBO just prior to the trade in 

question with respect to an erroneous buy 

transaction unless one of the exceptions in 

sub-paragraphs (b)(1) through (3) below 

exists. For purposes of this provision, when 

a single order received by the Exchange is 

executed at multiple price levels, the last 

NBB and last NBO just prior to the trade in 

question would be the last NBB and last NBO 

just prior to the Exchange’s receipt of the 

order. The Exchange will rely on this 

paragraph (b) and Interpretation and Policy 

.03 of this Rule when determining 

Theoretical Price. 

(1)–(2) No change. 

(3) Wide Quotes. 

(A) The Exchange will determine the 

Theoretical Price if the bid/ask differential of 

the NBB and NBO for the affected series just 

prior to the erroneous transaction was equal 

to or greater than the Minimum Amount set 

forth below and there was a bid/ask 

differential less than the Minimum Amount 

during the 10 seconds prior to the 

transaction. If there was no bid/ask 

differential less than the Minimum Amount 

during the 10 seconds prior to the transaction 

then the Theoretical Price of an option series 

is the last NBB or NBO just prior to the 

transaction in question, as set forth in 

paragraph (b) above. 

Bid price at time of trade Minimum 

amount 

Below $2.00 ............................................ $0.75 

$2.00 to $5.00 ......................................... 1.25 

Above $5.00 to $10.00 ............................ 1.50 

Bid price at time of trade Minimum 

amount 

Above $10.00 to $20.00 .......................... 2.50 

Above $20.00 to $50.00 .......................... 3.00 

Above $50.00 to $100.00 ........................ 4.50 

Above $100.00 ........................................ 6.00 

(B) Customer Transactions Occurring Within 

10 Seconds or Less After an Opening or 

Reopening 

(i) The Exchange will determine the 

Theoretical Price if the bid/ask differential of 

the NBB and NBO for the affected series just 

prior to the Customer’s erroneous transaction 

was equal to or greater than the Minimum 

Amount set forth in subparagraph (A) above 

and there was a bid/ask differential less than 

the Minimum Amount during the 10 seconds 

prior to the transaction. 

(ii) If there was no bid/ask differential less 

than the Minimum Amount during the 10 

seconds prior to the transaction, then the 

Exchange will determine the Theoretical 

Price if the bid/ask differential of the NBB 

and NBO for the affected series just prior to 

the Customer’s erroneous transaction was 

equal to or greater than the Minimum 

Amount set forth in subparagraph (A) above 

and there was a bid/ask differential less than 

the Minimum Amount anytime during the 10 

seconds after an opening or re-opening. 

(iii) If there was no bid/ask differential less 

than the Minimum Amount during the 10 

seconds following an opening or reopening, 

then the Theoretical Price of an option series 

is the last NBB or NBO just prior to the 

Customer transaction in question, as set forth 

in paragraph (b) above. 

(iv) Customer transactions occurring more 

than 10 seconds after an opening or reopening are subject to subparagraph (A) 

above. 

(c) Obvious Errors 

(1)–(3) No change. 

(4) Adjust or Bust. If it is determined that 

an Obvious Error has occurred, the Exchange 

shall take one of the actions listed below. 

Upon taking final action, the Exchange shall 

promptly notify both parties to the trade 

electronically or via telephone. 

(A) No change. 

(B) Customer Transactions. Where at least 

one party to the Obvious Error is a Customer, 

the execution price of the transaction will be 

adjusted by the Official pursuant to the table 

immediately above. Any Customer Obvious 

Error exceeding 50 contracts will be subject 

to the Size Adjustment Modifier defined in 

subparagraph (a)(4) above. However, if such 

adjustment(s) would result in an execution 

price higher (for buy transactions) or lower 

(for sell transactions) than the Customer’s 

limit price, the trade will be nullified, subject 

to sub-paragraph (C) below. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

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

options/regulation/rule_filings/edgx/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 


jspears on DSK121TN23PROD with NOTICES1