Federal Register / Vol. 87, No. 3 / Wednesday, January 5, 2022 / Notices 501 

29Applicants are not requesting and the 

Commission is not providing any relief for 

transaction fees received in connection with any 

Co-Investment Transaction. 

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

2 17 CFR 240.19b–4. 

3All Rule 4000 series referenced in this filing are 

within Equity 4. 4The LULD Closing Cross is the Exchange’s 

auction process for executing closing trades in 

Nasdaq-listed securities when a Trading Pause 

pursuant to Rule 4120(a)(12) exists at or after 3:50 

p.m. and before 4:00 p.m. ET. See Rule 4754(b)(6). 

5See Securities Exchange Act Release No. 92068 

(May 28, 2021), 86 FR 29864 (June 3, 2021) (SR– 

NASDAQ–2021–009) (‘‘Approval Order’’). 

6See Securities Exchange Act Release No. 93250 

(October 4, 2021), 86 FR 56307 (October 8, 2021) 

(SR–NASDAQ–2021–077). 

Conditions were approved by the 

Required Majority under section 57(f). 

12. Director Independence 

No Independent Director of a 

Regulated Fund will also be a director, 

general partner, managing member or 

principal, or otherwise be an ‘‘affiliated 

person’’ (as defined in the Act) of any 

Affiliated Fund. 

13. Expenses 

The expenses, if any, associated with 

acquiring, holding or disposing of any 

securities acquired in a Co-Investment 

Transaction (including, without 

limitation, the expenses of the 

distribution of any such securities 

registered for sale under the Securities 

Act) will, to the extent not payable by 

the Advisers under their respective 

advisory agreements with the Regulated 

Funds and the Affiliated Funds, be 

shared by the Regulated Funds and the 

participating Affiliated Funds in 

proportion to the relative amounts of the 

securities held or being acquired or 

disposed of, as the case may be. 

14. Transaction Fees 29

Any transaction fee (including breakup, structuring, monitoring or 

commitment fees but excluding 

brokerage or underwriting 

compensation permitted by section 

17(e) or 57(k)) received in connection 

with any Co-Investment Transaction 

will be distributed to the participants on 

a pro rata basis based on the amounts 

they invested or committed, as the case 

may be, in such Co-Investment 

Transaction. If any transaction fee is to 

be held by an Adviser pending 

consummation of the transaction, the 

fee will be deposited into an account 

maintained by an Adviser at a bank or 

banks having the qualifications 

prescribed in section 26(a)(1), and the 

account will earn a competitive rate of 

interest that will also be divided pro 

rata among the participants. None of the 

Adviser, the Affiliated Funds, the other 

Regulated Funds or any affiliated person 

of the Affiliated Funds or the Regulated 

Funds will receive any additional 

compensation or remuneration of any 

kind as a result of or in connection with 

a Co-Investment Transaction other than 

(i) in the case of the Regulated Funds 

and the Affiliated Funds, the pro rata 

transaction fees described above and 

fees or other compensation described in 

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

underwriting compensation permitted 

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

case of the Adviser, investment advisory 

compensation paid in accordance with 

investment advisory agreements 

between the applicable Regulated 

Fund(s) or Affiliated Fund(s) and its 

Adviser. 

15. Independence 

If the Holders own in the aggregate 

more than 25 percent of the Shares of 

a Regulated Fund, then the Holders will 

vote such Shares in the same 

percentages as the Regulated Fund’s 

other shareholders (not including the 

Holders) when voting on (1) the election 

of directors; (2) the removal of one or 

more directors; or (3) any other matter 

under either the Act or applicable State 

law affecting the Board’s composition, 

size or manner of election. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Dated: December 29, 2021. 

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2021–28512 Filed 1–4–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93876; File No. SR– 

NASDAQ–2021–101] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Amend Rule 4754 Related to Certain 

Order Handling in the LULD Closing 

Cross 

December 29, 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, The Nasdaq Stock Market LLC 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to a proposal 

to amend its rule related to certain order 

handling in the Limit-Up Limit-Down 

(‘‘LULD’’) closing cross. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/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 Equity 4, Rule 

4754 3 related to certain order handling 

in the LULD closing cross (‘‘LULD 

Closing Cross’’).4 On May 28, 2021, the 

Commission approved the Exchange’s 

proposal to make certain changes to the 

Exchange’s LULD Closing Cross, 

including the timing of the LULD 

Closing Cross, the process for 

determining the LULD Closing Cross 

price, establishing price protections for 

the LULD Closing Cross, the handling of 

on-close orders, and the imbalance 

information disseminated for the LULD 

Closing Cross.5 The Exchange has not 

yet implemented the proposed LULD 

Closing Cross changes in SR–NASDAQ– 

2021–009, and recently filed to delay 

implementation in order to allow the 

Exchange additional time to test and 

implement these functionalities.6

During the testing conducted to date, 

Nasdaq has identified some changes that 

it wishes to make to the approved rule 

governing the LULD Closing Cross in 

Rule 4754(b)(6). Accordingly, the 

Exchange is submitting this proposal to 


TKELLEY on DSK125TN23PROD with NOTICE 
502 Federal Register / Vol. 87, No. 3 / Wednesday, January 5, 2022 / Notices 

7A ‘‘Limit On Close Order’’ or ‘‘LOC Order’’ is 

an Order Type entered with a price that may be 

executed only in the Nasdaq Closing Cross, and 

only if the price determined by the Nasdaq Closing 

Cross is equal to or better than the price at which 

the LOC Order was entered. See Rule 4702(b)(12). 8 ‘‘Nasdaq Closing Cross’’ shall mean the process 

for determining the price at which orders shall be 

executed at the close and for executing those orders. 

See Rule 4754(a)(6). 

9 ‘‘First Reference Price’’ shall mean the Current 

Reference Price in the Early Order Imbalance 

Indicator (‘‘EOII’’) disseminated at 3:50 p.m. ET, or 

10 minutes prior to the early closing time on a day 

when Nasdaq closes early. See Rule 4754(a)(9). 

10 ‘‘Current Reference Price’’ means the following: 

(i) The single price that is at or within the current 

Nasdaq Market Center best bid and offer at which 

the maximum number of shares of MOC, LOC, and 

IO orders can be paired; (ii) if more than one price 

exists under subparagraph (i), the Current Reference 

Price shall mean the price that minimizes any 

Imbalance; (iii) it more than one price exists under 

subparagraph (ii), the Current Reference Price shall 

mean the entered price at which shares will remain 

unexecuted in the cross; or (iv) if more than one 

price exists under subparagraph (iii), the Current 

Reference Price shall mean the price that minimizes 

the distance from the bid-ask midpoint of the inside 

quotation prevailing at the time of the order 

imbalance indicator dissemination. See Rule 

4754(a)(7)(A). 

11 ‘‘Second Reference Price’’ shall mean the 

Current Reference Price in the Order Imbalance 

Indicator (‘‘NOII’’) disseminated at 3:55 p.m. ET, or 

five minutes prior to the early closing time on a day 

when Nasdaq closes early. See Rule 4754(a)(11). 

12Furthermore, if either the First Reference Price 

or the Second Reference Price is not at a 

permissible minimum increment, the First 

Reference Price or the Second Reference Price, as 

applicable, will be rounded (i) to the nearest 

permitted minimum increment (with midpoint 

prices being rounded up) if there is no imbalance, 

(ii) up if there is a buy imbalance, or (iii) down if 

there is a sell imbalance. The default configuration 

for Participants that do not specify otherwise will 

be to have such late LOC orders re-priced rather 

than rejected. See Rule 4702(b)(12). 

13See definition of Current Reference Price in 

Rule 4754(a)(7)(A). 

14See Approval Order at 29866. 

amend the rule text prior to 

implementation. Specifically, the 

Exchange is proposing to provide that in 

the context of the LULD Closing Cross, 

Limit on Close (‘‘LOC’’) orders 7 entered 

between 3:55 p.m. ET and immediately 

prior to 3:58 p.m. ET (‘‘late LOC 

orders’’) will use the same reference 

prices for re-pricing as the reference 

prices used during the standard Nasdaq 

Closing Cross.8

Today, Rule 4702(b)(12) describes the 

treatment of late LOC orders during the 

standard Closing Cross. The Rule 

provides that late LOC orders may be 

entered between 3:55 p.m. ET and 

immediately prior to 3:58 p.m. ET 

provided that there is a First Reference 

Price 9 (i.e., the Current Reference 

Price 10 disseminated at 3:50 p.m. ET) or 

a Second Reference Price 11 (i.e., the 

Current Reference Price disseminated at 

3:55 p.m. ET). Between 3:55 p.m. ET 

and immediately prior to 3:58 p.m. ET, 

LOC Orders can only be cancelled and/ 

or modified if the Participant requests 

that Nasdaq correct a legitimate error in 

the Order (e.g., Side, Size, Symbol, or 

Price, or duplication of an Order). LOC 

Orders cannot be cancelled or modified 

at or after 3:58 p.m. 

A late LOC order will be accepted at 

its limit price, unless its limit price is 

higher (lower) than the higher (lower) of 

the First Reference Price and the Second 

Reference Price for a late LOC order to 

buy (sell), in which case the late LOC 

order will be handled consistent with 

the Participant’s instruction that the late 

LOC order is to be: (1) Rejected; or (2) 

re-priced to the higher (lower) of the 

First Reference Price and the Second 

Reference Price.12

As stated in SR–NASDAQ–2021–009, 

the intent of the proposed rule change 

was to align the LULD Closing Cross 

process as closely as possible to the 

standard Closing Cross process, 

including the handling of various 

closing cross order types like LOC 

orders (and their subset, late LOC 

orders). As such, the Exchange amended 

Rule 4754(b)(6)(F)(ii) to provide that 

MOC, LOC, and IO orders may be 

entered, modified, and cancelled 

pursuant to Rules 4702(b)(11), 

4702(b)(12), and 4702(b)(13) to allow 

these order types to participate in the 

LULD Closing Cross in the same way as 

a standard Closing Cross. This includes 

accepting late LOC orders during the 

LULD Closing Cross and re-pricing (in 

certain cases) these orders to the more 

aggressive of First Reference Price or 

Second Reference Price in the same way 

as a standard Closing Cross. 

In the context of the standard Closing 

Cross, the First Reference Price and the 

Second Reference Price, at the time of 

their dissemination at 3:50 p.m. ET and 

3:55 p.m. ET, respectively, each 

represent the current price, bounded by 

the continuous market (i.e., the Nasdaq 

best bid and offer), at which paired onclose shares are maximized (with 

certain tie-breakers if multiple prices 

meet this criterion).13 SR–NASDAQ– 

2021–009, however, defined the 3:50 

p.m. ET reference price and 3:55 p.m. 

ET reference price in the context of the 

LULD Closing Cross as the price at 

which the LULD Closing Cross would 

execute should the cross conclude at 

that time, and further indicated that the 

reference price would be bounded by 

the benchmark prices.14 As described in 

SR–NASDAQ–2021–009, the benchmark 

prices represent the price range within 

which the LULD Closing Cross price 

must fall and are calculated off the last 

disseminated LULD Auction Collar or 

the LULD Band that triggered the 

Trading Pause, as further described in 

Rule 4754(b)(6)(E). As a result of the 

foregoing, in cases where a Trading 

Pause exists at or prior to 3:50 p.m. ET, 

the 3:50 and 3:55 p.m. ET reference 

prices in the LULD Closing Cross would 

not be bounded by continuous market 

(i.e., the Nasdaq best bid and offer) like 

the 3:50 and 3:55 p.m. ET reference 

prices in the standard Closing Cross as 

there was no continuous market in the 

halted security during those times, and 

those reference prices in the LULD 

Closing Cross would instead be 

bounded by the benchmark prices 

described above. Similarly, if a Trading 

Pause is triggered after 3:50 p.m. ET but 

before 3:55 p.m. ET, the 3:50 reference 

price would reflect and be bounded by 

the Nasdaq best bid and offer at the time 

of dissemination like the 3:50 reference 

price used in a standard Closing Cross 

whereas the 3:55 reference price would 

not. Lastly, if a Trading Pause is 

triggered after 3:55 p.m. ET, both the 

3:50 and 3:55 reference prices would 

reflect and be bounded by the Nasdaq 

best bid and offer at the time of 

dissemination like the reference prices 

used in a standard Closing Cross. The 

consequence of using the LULD Closing 

Cross-derived reference price and not 

the standard Closing Cross-derived 

reference price may result in late LOC 

orders being accepted and potentially 

repriced to 3:50 or 3:55 p.m. ET 

reference prices that are not reflective of 

the continuous market at the time of 

their dissemination (i.e., reference 

prices disseminated at a time when 

trading has been paused and that are not 

bounded by the Nasdaq best bid and 

offer), and which are bounded by 

benchmark prices that are calculated off 

the last disseminated LULD Auction 

Collar or the LULD Band that triggered 

the Trading Pause. The Exchange 

believes that this is inconsistent with 

market participant expectations of how 

late LOC orders would be normally 

repriced during a closing cross process 

(i.e., repriced to reference prices 

disseminated at a time when trading has 

been paused and that are not bounded 

by the Nasdaq best bid and offer), and 

therefore proposes to amend late LOC 

order handling so that its LULD Closing 

Cross and standard Closing Cross 

processes are more consistent. 

Accordingly, the Exchange proposes 

to state in its rules that it will only 

accept and if needed, re-price a late LOC 

order in the LULD Closing Cross if a 

standard Closing Cross-derived 

reference price (i.e., First Reference 

Price or Second Reference Price) is 

available. In particular, the Exchange 

proposes to add the following language 

at the end of Rule 4754(b)(6)(F)(ii): 


TKELLEY on DSK125TN23PROD with NOTICE 
Federal Register / Vol. 87, No. 3 / Wednesday, January 5, 2022 / Notices 503 

15The System will not accept late LOC orders in 

this scenario because if a security entered a Trading 

Pause prior and up to 3:50 p.m. ET, there would 

not be a First Reference Price or a Second Reference 

Price for the standard Closing Cross. 

16The System will accept late LOC orders 

provided there is a First Reference Price because in 

this scenario, the security entered a Trading Pause 

after 3:50 p.m. ET (but before 3:55 p.m. ET) so the 

First Reference Price would be disseminated at 3:50 

p.m. ET for the standard Closing Cross but the 

Second Reference Price for the standard Closing 

Cross would not be disseminated at 3:55 p.m. ET. 

The option to have the Participant’s aggressively 

priced late LOC order rejected instead of re-priced 

is consistent with the standard Closing Cross. See 

Rule 4702(b)(12). 

17The System will accept late LOC orders 

provided there is a First Reference Price or Second 

Reference Price because in this scenario, the 

security entered a Trading Pause after 3:55 p.m. ET 

so both the First Reference Price and the Second 

Reference Price would be disseminated for the 

standard Closing Cross. 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(5). 

With respect to LOC orders entered 

between 3:55 p.m. ET and immediately 

prior to 3:58 p.m. ET (hereinafter, ‘‘late 

LOC orders’’), the System will handle 

such orders in the LULD Closing Cross 

as follows: 

(a) If the security entered a Trading 

Pause prior and up to 3:50 p.m., the 

System will not accept late LOC 

orders.15

(b) If the security entered a Trading 

Pause after 3:50 p.m. and up to 3:55 

p.m., the System will accept late LOC 

orders, provided that there is a First 

Reference Price. Such orders may then 

be subject to re-pricing in accordance 

with Rule 4702(b)(12) or rejected, in 

either case consistent with the 

Participant’s instructions.16

(c) If the security entered a Trading 

Pause after 3:55 p.m., the System will 

accept late LOC orders, provided that 

there is a First Reference Price or a 

Second Reference Price. Such orders 

may then be subject to re-pricing in 

accordance with Rule 4702(b)(12) or 

rejected, in either case consistent with 

the Participant’s instructions.17

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,18 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,19

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 

because it would amend the LULD 

Closing Cross process with respect to 

certain LOC order handling as approved 

in SR–NASDAQ–2021–009 in order to 

further align the LULD Closing Cross 

with the standard Nasdaq Closing Cross. 

Specifically, the Exchange is proposing 

to provide in Rule 4754(b)(6)(F)(ii) that 

it will only accept and if needed, reprice a late LOC order in the LULD 

Closing Cross if a First Reference Price 

or Second Reference Price for the 

standard Closing Cross is available, 

identical to the handling of late LOC 

orders for the standard Closing Cross. 

As discussed above, in the context of 

the standard Closing Cross, the First 

Reference Price and the Second 

Reference Price, at the time of their 

dissemination at 3:50 p.m. ET and 3:55 

p.m. ET, respectively, each represent the 

current price, bounded by the 

continuous market (i.e., the Nasdaq best 

and offer), at which paired on-close 

shares are maximized. SR–NASDAQ– 

2021–009, however, defined the 3:50 

p.m. ET reference price and 3:55 p.m. 

ET reference price in the context of the 

LULD Closing Cross as the price, 

bounded by the benchmark prices, at 

which the LULD Closing Cross would 

execute should the cross conclude at 

that time. Because the benchmark prices 

are based on the LULD Auction Collar 

or LULD Band instead of the continuous 

market, the consequence of using the 

LULD Closing Cross-derived reference 

price and not the standard Closing 

Cross-derived reference price may result 

in late LOC orders being accepted and 

potentially repriced to 3:50 or 3:55 

reference prices that are not reflective of 

the continuous market at the time of 

their dissemination (i.e., reference 

prices disseminated at a time when 

trading has been paused and that are not 

bounded by the Nasdaq best bid and 

offer), and which are bounded by 

benchmark prices that are calculated off 

the last disseminated LULD Auction 

Collar or the LULD Band that triggered 

the Trading Pause. The Exchange 

believes that this is an undesirable 

outcome and contrary to market 

participant expectations of how a late 

LOC order would normally be repriced 

by the Exchange. The Exchange believes 

that the proposed changes will align the 

LULD Closing Cross with the standard 

Closing Cross more closely, thereby 

promoting a more consistent experience 

for market participants, and reducing 

any potential confusion regarding 

Nasdaq’s closing processes. 

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. Rather, the 

proposed changes would allow the 

Exchange to make certain changes to the 

Exchange’s rules and functionality 

related to certain LOC order handling in 

the LULD Closing Cross in a manner 

consistent with the current standard 

Closing Cross. Ultimately, the Exchange 

believes that the proposed changes will 

render the LULD Closing Cross more 

attractive to market participants by 

providing a more consistent experience 

for Nasdaq’s closing processes. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

NASDAQ–2021–101 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–NASDAQ–2021–101. 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 


TKELLEY on DSK125TN23PROD with NOTICE 
504 Federal Register / Vol. 87, No. 3 / Wednesday, January 5, 2022 / Notices 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Previously Cboe Options Rule 13.15(g)(14). The 

paragraphs in Cboe Options Rule 13.15(g) were 

recently renumbered. See Securities Exchange 

Release No. 92702 (August 18, 2021), 86 FR 47346 

(August 24, 2021) (SR–CBOE–2021–045). As a 

result, the proposed rule change updates Rules 

13.15(g)(6), (g)(14), and (g)(19) to Rules (g)(4), (g)(9), 

and (g)(14), respectively, as well as references 

where applicable, to be consistent with the recently 

renumbered paragraphs in Cboe Options Rule 

13.15(g). 

4See id. 

5See id. 

6The Exchange notes that Rule 13.15(a) 

authorizes the Exchange to impose a fine, not to 

exceed $5,000, for minor rule violations in lieu of 

commencing a disciplinary proceeding. 

Additionally, any fine imposed pursuant to Rule 

13.15 that (1) does not exceed $2,500 and (2) is not 

contested, shall be reported by the Exchange to the 

Commission on a periodic, rather than a current, 

basis, except as may otherwise be required by 

Exchange Act Rule 19d–1 and by any other 

regulatory authority. 

7See Rule 13.15(f). 

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–NASDAQ–2021–101 and 

should be submitted on or before 

January 26, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2021–28519 Filed 1–4–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93887; File No. SR–C2– 

2021–019] 

Self-Regulatory Organizations; Cboe 

C2 Exchange, Inc.; Notice of Filing and 

Order Granting Accelerated Approval 

of a Proposed Rule Change Relating to 

Certain Fine Amounts in Rule 13.15, 

Which Governs the Exchange’s Minor 

Rule Violation Plan, and NonSubstantive Clarifying Changes 

December 30, 2021. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on December 

16, 2021, Cboe C2 Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘C2’’) 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 Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons and approving 

the proposal on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 13.15, which governs the 

Exchange’s Minor Rule Violation Plan 

(‘‘MRVP’’), in connection with 

applicable fines, as well as a clarifying, 

nonsubstantive change. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

options/regulation/rule_filings/ctwo/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item III 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 its 

MRVP in Rule 13.15(g)(14) in 

connection with the fine schedule 

applicable for minor rule violations of a 

Market-Maker’s quoting obligations and 

proposes to update language in Chapter 

13 to reflect recent changes to Cboe 

Exchange, Inc. (‘‘Cboe Options’’) MRVP. 

Chapter 13 of the C2 Rulebook 

incorporates Cboe Options Chapter 13, 

in most part, by reference. Rule 13.15 

provides for disposition of specific 

violations through assessment of fines 

in lieu of conducting a formal 

disciplinary proceeding. Rule 13.15(g) 

sets forth the list of specific Exchange 

Rules under which a Trading Permit 

Holder (‘‘TPH’’) or person associated 

with or employed by a TPH may be 

subject to a fine for violations of such 

Rules and the applicable fines that may 

be imposed by the Exchange. 

The proposed rule change amends the 

fine schedule applicable to MakerMakers for failure to meet Exchange 

continuous quoting obligations. The 

Exchange notes that because Cboe 

Options Rule 13.15(g)(9) 3 applies to 

violations of Cboe Options’ MarketMaker quoting obligations, this 

subparagraph is inapplicable to MarketMakers on C2. Instead, the Exchange 

maintains its own Rule 13.15(g)(14),4

which governs minor rule violations of 

C2 Market-Makers’ continuous quoting 

obligations. Specifically, Rule 

13.15(g)(14) (13.15(g)(9), as amended) 5

provides that a fine will be imposed 

upon a Market-Maker in accordance 

with the fine schedule set forth below 

for failure to meet its continuous 

quoting obligations (Rule 5.52(d)): 

For the first offense during any rolling 

24-month period, the fine schedule 

imposed by Rule 13.15(g)(14) currently 

permits the Exchange to apply a fine 

ranging between $2,000 and $4,000. For 

subsequent offenses during the same 

period, the fine schedule currently 

permits the Exchange to apply a fine 

ranging between $4,000 and $5,000. The 

proposed rule change updates the fine 

schedule to provide that, during any 

rolling 24-month period, the Exchange 

may give a Letter of Caution for a first 

offense, may apply a fine of $1,500 for 

a second offense, may apply a fine of 

$3,000 for a third offense,6 and may 

proceed with formal disciplinary action 

for subsequent offenses. As is the case 

for all rule violations covered under 

Rule 13.15(g), the Exchange may 

determine that a violation of MarketMaker quoting obligations is intentional, 

egregious, or otherwise not minor in 

nature and choose to proceed under the 

Exchange’s formal disciplinary rules 

rather than its MRVP.7 The Exchange 

may continue to aggregate individual 


TKELLEY on DSK125TN23PROD with NOTICE