34074 Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 

31 15 U.S.C. 78s(b)(3)(A). 

32 17 CFR 240.19b–4(f)(6). 33 15 U.S.C. 78s(b)(2)(B). 

34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

calendar year 2021 inspections. This 

proposed supplementary material does 

not relieve firms from meeting the core 

regulatory obligation to establish and 

maintain a system to supervise the 

activities of each associated person that 

is reasonably designed to achieve 

compliance with applicable securities 

laws and regulations, and with 

applicable IEX rules that directly serve 

investor protection. In a time when 

faced with unique challenges resulting 

from the COVID–19 pandemic, IEX 

believes that the proposed rule change 

provides sensibly tailored relief that 

will afford firms the ability to observe 

the recommendations of public health 

officials to provide for the health and 

safety of their personnel, while 

continuing to serve and promote the 

protection of investors and the public 

interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

IEX does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change is not designed to 

address any competitive issue but to 

align the Exchange’s rules with those of 

FINRA, which will assist FINRA in its 

oversight work done pursuant to a 

regulatory services agreement with IEX. 

The proposed rule change will also 

provide for consistent application of the 

Exchange’s supervision rules with those 

of FINRA, on which they are based. 

Consequently, the Exchange does not 

believe that the proposed change 

implicates competition at all. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has designated this rule 

filing as non-controversial under 

Section 19(b)(3)(A) 31 of the Act and 

Rule 19b–4(f)(6) 32 thereunder. Because 

the proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

for 30 days from the date on which it 

was filed, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act and Rule 19b– 

4(f)(6) thereunder. 

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 

under Section 19(b)(2)(B) 33 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

IEX–2021–09 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–IEX–2021–09. This file 

number should be included in 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 Section, 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 will also be available for 

inspection and copying at the IEX’s 

principal office and on its internet 

website at www.iextrading.com. 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–IEX–2021–09 and 

should be submitted on or before July 

19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13652 Filed 6–25–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92230; File No. SR–BX– 

2021–028] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the 

Exchange’s Transaction Fees, at 

Equity 7, Section 118(e) 

June 22, 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 June 10, 

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 the 

Exchange’s transaction fees, at Equity 7, 

Section 118(e), 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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 34075 

3Retail Orders shall mean an order type with a 

Non-Display Order Attribute submitted to the 

Exchange by a Retail Member Organization (as 

defined in Rule 4780). A Retail Order must be an 

agency Order, or riskless principal Order that 

satisfies the criteria of FINRA Rule 5320.03. The 

Retail Order must reflect trading interest of a 

natural person with no change made to the terms 

of the underlying order of the natural person with 

respect to price (except in the case of a market order 

that is changed to a marketable limit order) or side 

of market and that does not originate from a trading 

algorithm or any other computerized methodology. 

See Rule 4702(b)(6). 

4Retail Price Improving (‘‘RPI’’) Orders shall 

mean an Order Type with a Non-Display Order 

Attribute that is held on the Exchange Book in order 

to provide liquidity at a price at least $0.001 better 

than the NBBO through a special execution process 

described in Rule 4780. A Retail Price Improving 

Order may be entered in price increments of $0.001. 

RPI Orders collectively may be referred to as ‘‘RPI 

Interest.’’ See Rule 4702(b)(5). 

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

6 15 U.S.C. 78f(b)(4) and (5). 

7NetCoalition 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)). 

8Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

9See CBOE BYX Fee Schedule, at http://

markets.cboe.com/us/equities/membership/fee_

schedule/byx/; NYSE National Fee Schedule, at 

https://www.nyse.com/publicdocs/nyse/regulation/ 

nyse/NYSE_National_Schedule_of_Fees.pdf. 

10The Exchange perceives no regulatory, 

structural, or cost impediments to market 

participants shifting order flow away from it. In 

particular, the Exchange notes that these examples 

of shifts in liquidity and market share, along with 

many others, have occurred within the context of 

market participants’ existing duties of Best 

Execution and obligations under the Order 

Protection Rule under Regulation NMS. 

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 operates on the ‘‘takermaker’’ model, whereby it generally 

pays credits to members that take 

liquidity and charges fees to members 

that provide liquidity. Currently, the 

Exchange has a schedule, at Equity 7, 

Section 118(e), which consists of several 

different credits and fees for Retail 

Orders 3 and Retail Price Improvement 

Orders 4 under Rule 4780 (Retail Price 

Improvement Program). 

Currently, the Exchange charges a fee 

of $0.0025 per share executed for RPI 

Orders that provide liquidity. The 

Exchange proposes to adopt a new fee 

of $0.0018 per share executed for RPI 

Orders entered by a member that (i) 

quotes Retail Price Improvement Orders 

in at least 2,500 symbols on average per 

day and (ii) provides liquidity through 

Retail Price Improvement Orders equal 

to or exceeding an average daily volume 

of 2,500,000 shares. The Exchange will 

continue to charge a fee of $0.0025 per 

share executed for all other RPI Orders 

that provide liquidity. The Exchange 

hopes that the proposed lower fee will 

encourage member organizations to 

increase liquidity providing activity on 

RPI Orders on the Exchange. If the 

proposal is effective in achieving this 

purpose, then the quality of the 

Exchange’s market will improve, 

particularly with respect to RPI and 

retail orders to the benefit of all 

participants, especially those who 

submit RPI and Retail Orders. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,5 in general, and furthers the 

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

of the Act,6 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 

proposal is also consistent with Section 

11A of the Act relating to the 

establishment of the national market 

system for securities. 

The Proposal Is Reasonable and Is an 

Equitable Allocation of Charges 

The Exchange’s proposed change to 

its schedule of credits and charges is 

reasonable in several respects. As a 

threshold matter, the Exchange is 

subject to significant competitive forces 

in the market for equity 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 brokerdealers 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’ . . . .’’ 7

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.’’ 8

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for equity 

security transaction services. The 

Exchange is only one of several equity 

venues to which market participants 

may direct their order flow, and it 

represents a small percentage of the 

overall market. It is also only one of 

several taker-maker exchanges. 

Competing equity exchanges offer 

similar tiered pricing structures to that 

of the Exchange, including schedules of 

rebates and fees that apply based upon 

members achieving certain volume 

thresholds.9

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.10 Within the foregoing 

context, the proposal represents a 

reasonable attempt by the Exchange to 

increase its market share relative to its 

competitors. 

The Exchange believes it is reasonable 

and equitable to adopt a new $0.0018 

per share executed fee for RPI Orders 

entered by a member that (i) quotes 

Retail Price Improvement Orders in at 

least 2,500 symbols on average per day 

and (ii) provides liquidity through 

Retail Price Improvement Orders equal 

to or exceeding an average daily volume 

of 2,500,000 shares. As discussed above, 

the Exchange’s goal is to increase 

liquidity adding activity in RPI Orders 

on its platform. It is reasonable and 

equitable to address this need by 


khammond on DSKJM1Z7X2PROD with NOTICES
34076 Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 

11 15 U.S.C. 78s(b)(3)(A)(ii). 

providing a lower fee to member 

organizations that meet the proposed 

thresholds as an incentive for them to 

increase their liquidity activity in RPI 

Orders on the Exchange. If the proposal 

is effective in achieving this purpose, 

then the quality of the Exchange’s 

market will improve, particularly with 

respect to RPI and Retail orders to the 

benefit of all participants, especially 

those who submit RPI and Retail Orders. 

The Proposed Fee Is Not Unfairly 

Discriminatory 

The Exchange believes that the 

proposal is not unfairly discriminatory. 

As an initial matter, the Exchange 

believes that nothing about its volumebased tiered pricing model is inherently 

unfair; instead, it is a rational pricing 

model that is well-established and 

ubiquitous in today’s economy among 

firms in various industries—from cobranded credit cards to grocery stores to 

cellular telephone data plans—that use 

it to reward the loyalty of their best 

customers that provide high levels of 

business activity and incent other 

customers to increase the extent of their 

business activity. It is also a pricing 

model that the Exchange and its 

competitors have long employed with 

the assent of the Commission. It is fair 

because it incentivizes customer activity 

that increases liquidity, enhances price 

discovery, and improves the overall 

quality of the equity markets. 

The Exchange intends for its proposal 

to improve market quality for all 

members that submit RPI and Retail 

Orders on the Exchange and by 

extension attract more liquidity to the 

market, improving market wide quality 

and price discovery. Although net 

adders of liquidity for RPI Orders will 

benefit most from the proposal, this 

result is fair insofar as increased 

liquidity adding activity in RPI Orders 

will help to improve market quality and 

the attractiveness of the Nasdaq BX 

market to all existing and prospective 

retail participants. 

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. 

Intramarket Competition 

The Exchange does not believe that its 

proposal will place any category of 

Exchange participant at a competitive 

disadvantage. As noted above, all 

member organizations of the Exchange 

will benefit from any increase in market 

activity that the proposal effectuates. 

Member organizations may modify their 

businesses so that they can meet the 

required thresholds and pay lower 

charges. Moreover, members are free to 

trade on other venues to the extent they 

believe that the fees assessed, and 

credits provided, are not attractive. As 

one can observe by looking at any 

market share chart, price competition 

between exchanges is fierce, with 

liquidity and market share moving 

freely between exchanges in reaction to 

fee and credit changes. The Exchange 

notes that the tier structure is consistent 

with broker-dealer fee practices as well 

as the other industries, as described 

above. 

Intermarket Competition 

The Exchange believes that its 

proposed modifications to its schedule 

of credits and charges will not impose 

a burden on competition because the 

Exchange’s execution services are 

completely voluntary and subject to 

extensive competition from the other 

live exchanges and from off-exchange 

venues, which include alternative 

trading systems that trade national 

market system stock. 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 exchanges and 

with alternative trading systems that 

have been exempted from compliance 

with the statutory standards applicable 

to 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. 

The proposed charge for adding 

liquidity is reflective of this competition 

because, as a threshold issue, the 

Exchange is a relatively small market so 

its ability to burden intermarket 

competition is limited. In this regard, 

even the largest U.S. equities exchange 

by volume has less than 17–18% market 

share, which in most markets could 

hardly be categorized as having enough 

market power to burden competition. 

Moreover, as noted above, price 

competition between exchanges is 

fierce, with liquidity and market share 

moving freely between exchanges in 

reaction to fee and credit changes. This 

is in addition to free flow of order flow 

to and among off-exchange venues 

which comprised more than 40% of 

industry volume in recent months. 

In sum, the Exchange intends for the 

proposed change to its fees for RPI 

Orders, in the aggregate, to increase 

member incentives to engage in the 

addition of liquidity on the Exchange. If 

the additional fee proposed herein is 

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 members 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.11

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–2021–028 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. 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices 34077 

12 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. 70050 

(July 26, 2013), 78 FR 46622 (August 1, 2013) 

(Application of Topaz Exchange, LLC for 

Registration as a National Securities Exchange; 

Findings, Opinion, and Order of the Commission). 

4Prior Interpretation and Policy .02 to Rule 8.7 

provided, ‘‘Market-Makers are expected ordinarily 

to refrain from purchasing a call option or a put 

option at a price more than $0.25 below parity, 

although a larger amount may be appropriate 

considering the particular market conditions. In the 

case of calls, parity is measured by the bid in the 

underlying security, and in the case of puts, parity 

is measured by the offer in the underlying security. 

The $0.25 amount above may be increased, or the 

provisions of this Interpretation may be waived, by 

the Exchange on a series-by-series basis.’’ 

5Cboe’s rule change merely noted, with respect 

to the removal of Cboe’s parity rule, that the filing 

makes non-substantive changes to the rule 

governing a Market-Maker’s general obligations 

(current Rule 8.7, in part), most of which remove 

redundant provisions that are already covered 

under the umbrella of a Market-Maker’s obligation 

to engage in dealing to maintain fair and orderly 

markets. No specific argument is provided with 

respect to removing this provision. See Securities 

Exchange Act 87024 (September 19, 2019), 84 FR 

50545 (September 25, 2019) (SR–CBOE–2019–059) 

(Notice of Filing and Immediate Effectiveness of a 

Proposed Rule Change To Amend Certain Rules 

Relating To Market-Makers Upon Migration to the 

Trading System Used by Cboe Affiliated 

Exchanges). 

6See Nasdaq Phlx LLC, The Nasdaq Options 

Market LLC and Nasdaq BX, Inc. at Options 2, 

Section 4 (Obligations of Market Makers). 

7See Options 3, Section 10 (Priority of Quotes 

and Orders). Primary Market Makers are offered an 

enhanced allocation provided the Primary Market 

Maker is quoting at same price as a non- Priority 

Customer Order or Market Maker quote. 

8See Options 2, Section 4. MRX Market Makers 

must for example: (1) Compete with other Market 

Makers to improve the market in all series of 

options classes to which the Market Maker is 

appointed; (2) make markets that, absent changed 

market conditions, will be honored for the number 

of contracts entered into the Exchange’s System in 

all series of options classes to which the Market 

Continued 

All submissions should refer to File 

Number SR–BX–2021–028. 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–2021–028 and should 

be submitted on or before July 19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13657 Filed 6–25–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92229; File No. SR–MRX– 

2021–07] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Options 2, Section 4 

(Obligations of Market Makers) 

June 22, 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 June 15, 

2021, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘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 2, Section 4, Obligations of 

Market Makers. The Exchange also 

proposes to add a new Options 4C. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/MRX/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Options 2, Section 4, Obligations of 

Market Makers. The Exchange also 

proposes to add a new Options 4C. 

Options 2, Section 4(a) 

The Exchange proposes to remove the 

following rule text from Options 2, 

Section 4(a), which has been in place 

since MRX’s inception: 3

. . . Ordinarily, Market Makers are expected 

to: 

(1) Refrain from purchasing a call option or 

a put option at a price more than $0.25 below 

parity, although a larger amount may be 

appropriate considering the particular market 

conditions. In the case of calls, parity is 

measured by the bid in the underlying 

security, and in the case of puts, parity is 

measured by the offer in the underlying 

security. 

(2) The $0.25 amount above may be 

increased, or the provisions of this Rule may 

be waived, by the Exchange on a series-byseries basis. 

This proposed rule text also 

previously existed on Cboe Exchange, 

Inc. within prior Rule 8.7 4 and was 

removed from Cboe’s Rulebook in 

2019.5 The Exchange likewise desires to 

remove this restriction on Market 

Makers which does not exist on Cboe or 

other Nasdaq affiliated markets.6 The 

proposed rule text is currently waived 

on MRX pursuant to Options 2, Section 

4(a)(2). The Exchange proposes to 

remove this rule text from Options 2, 

Section 4 as the Exchange does not 

desire to enforce this provision in the 

future. The Exchange believes that this 

market maker provision is no longer 

necessary. Today, MRX incentivizes 

Market Makers through allocation 7 to 

quote tightly in their assigned options 

series. Primary Market Makers and 

Competitive Market Makers also have 

other obligations with respect to market 

making 8 in addition to other quoting 


khammond on DSKJM1Z7X2PROD with NOTICES