43704 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Notices 

16See supra note 9 (where FINRA noted the 

same). In that filing, FINRA also requested and the 

Commission granted a waiver of the 30-day 

operative delay. See SR–FINRA–2021–003, 86 FR at 

13938–9. 17For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 18 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposed rule change may become 

operative immediately upon filing. As 

noted by the Exchange, correcting the 

cross-reference in Rule 3.31(a)(2)(A)(i) 

and updating the reference to an 

obsolete CE Program in Rule 3.33(a)(3) 

would immediately alleviate potential 

confusion in connection with the 

Exchange’s publicly available rulebook. 

The Exchange also states that the 

proposed rule changes will help ensure 

accuracy and clarity relating to cross 

references in its rules and regarding CE 

for TPHs. Additionally, the Exchange 

notes that the proposed rule change to 

Exchange Rule 3.34 is based on a similar 

rule change by FINRA that has already 

taken effect. Finally, as the Exchange 

notes above in regard to its proposed 

rule change allowing electronic 

signatures to satisfy the signature 

requirements of Rule 3.34, the COVID– 

19 pandemic amplified the need to 

better manage operational challenges 

like those that arose during the 

pandemic 16 and that may continue to 

arise in the future. 

For these reasons, the Commission 

believes that waiver of the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest. Accordingly, the Commission 

hereby waives the 30-day operative 

delay and designates the proposal 

operative upon filing.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 necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

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– 

CBOE–2021–043 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–CBOE–2021–043. 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 such 

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 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–CBOE– 

2021–043 and should be submitted on 

or before August 31, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16966 Filed 8–9–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34-92563; File No. SR– 

NYSEARCA–2021–68] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change New Rule 6.91P–O 

August 4, 2021. 

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 July 23, 

2021, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘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 self-regulatory 

organization. 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 new Rule 

6.91P–O (Electronic Complex Order 

Trading) to reflect the implementation 

of the Exchange’s Pillar trading 

technology on its options market and to 

make conforming amendments to Rule 

6.47A–O (Order Exposure 

Requirements—OX). The proposed 

change is available on the Exchange’s 

website at www.nyse.com, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 


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4 The Exchange’s national securities exchange 

affiliates are the New York Stock Exchange LLC 

(‘‘NYSE’’), NYSE American LLC (‘‘NYSE 

American’’), NYSE National, Inc. (‘‘NYSE 

National’’), and NYSE Chicago, Inc. (‘‘NYSE 

Chicago’’). 5 See Securities Exchange Act Release No. 92304 

(June 30, 2021), 86 FR 36440 (July 9, 2021) (SR– 

NYSEArca–2021–047) (‘‘Single-Leg Pillar Filing’’). 6 The term ‘‘Electronic Complex Order’’ is 

currently defined in the preamble to Rule 6.91–O 

to mean any Complex Order, as defined in Rule 

6.62–O(e) or any Stock/Option Order or Stock/ 

Complex Order as defined in Rule 6.62–O(h) that 

is entered into the NYSE Arca System (the 

‘‘System’’). 

7 See Single-Leg Pillar Filing (providing that, 

once a symbol is trading on the Pillar trading 

platform, a rule with the same number as a rule 

with a ‘‘P’’ modifier would no longer be operative 

for that symbol and the Exchange would announce 

by Trader Update when symbols are trading on the 

Pillar trading platform). 

8 The proposed definitions of Complex Order, 

Stock/Option Order and Stock/Complex Order 

under Pillar are set forth in proposed Rules 6.62P– 

O(f), (h)(6)(A), and (h)(6)(B), as described in the 

Single-Leg Pillar Filing, and are substantially 

identical to the current definitions. 

9 See Single-Leg Pillar Filing (describing 

proposed opening Auction Process rule per Rule 

6.64P–O). 

10 See, e.g., Cboe Exchange Inc. (‘‘Cboe’’) Rule 

5.33(a) (defining ‘‘complex strategy’’ as ‘‘a 

particular combination of components and their 

ratios to one another’’ and further providing that 

‘‘[n]ew complex strategies can be created as the 

result of the receipt of a complex instrument 

Continued 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

The Exchange plans to transition its 

options trading platform to its Pillar 

technology platform. The Exchange’s 

and its national securities exchange 

affiliates’ 4 (together with the Exchange, 

the ‘‘NYSE Exchanges’’) cash equity 

markets are currently operating on 

Pillar. For this transition, the Exchange 

proposes to use the same Pillar 

technology already in operation for its 

cash equity market. In doing so, the 

Exchange will be able to offer not only 

common specifications for connecting to 

both of its cash equity and equity 

options markets, but also common 

trading functions. The Exchange plans 

to roll out the new technology platform 

over a period of time based on a range 

of symbols, anticipated for the fourth 

quarter of 2021. 

In this regard, the Exchange recently 

filed a proposal to add new rules to 

reflect how options, particularly singleleg options, would trade on the 

Exchange once Pillar is implemented.5

The current proposal sets forth how 

Electronic Complex Orders 6 would 

trade on the Exchange once Pillar is 

implemented. As noted in the SingleLeg Pillar Filing, as the Exchange 

transitions to Pillar, certain rules would 

continue to be applicable to symbols 

trading on the current trading platform, 

but would not be applicable to symbols 

that have transitioned to trading on 

Pillar.7 Consistent with the Single-Leg 

Pillar Filing, proposed Rule 6.91P–O 

would have the same number as the 

current Electronic Complex Order 

Trading rule, but with the modifier ‘‘P’’ 

appended to the rule number. Current 

Rule 6.91–O, governing Electronic 

Complex Order Trading, would remain 

unchanged and continue to apply to any 

trading in symbols on the current 

system. Proposed Rule 6.91P–O would 

govern Electronic Complex Orders for 

trading in options symbols migrated to 

the Pillar platform. 

Similar to the Single-Leg Pillar Filing, 

proposed Rule 6.91P–O would (1) use 

Pillar terminology that is based on 

Exchange Rule 7–E Pillar terminology 

governing cash equity trading; and (2) 

introduce new functionality for 

Electronic Complex Order trading. 

Finally, as discussed in the Single-Leg 

Pillar Filing, the Exchange will 

announce by Trader Update when 

symbols are trading on the Pillar trading 

platform. The Exchange intends to 

transition Electronic Complex Order 

trading on Pillar at the same time that 

single-leg trading is transitioned to 

Pillar. 

Proposed Rule 6.91P–O: Electronic 

Complex Order Trading 

Current Rule 6.91–O (Electronic 

Complex Order Trading) specifies how 

the Exchange processes Electronic 

Complex Orders submitted to the 

Exchange. The Exchange proposes new 

Rule 6.91P–O to establish how such 

orders would be processed after the 

transition to Pillar. To promote clarity 

and transparency, the Exchange 

proposes to add a preamble to current 

Rule 6.91–O specifying that it would not 

be applicable to trading on Pillar. 

As discussed in greater detail below, 

the Exchange is not proposing 

fundamentally different functionality 

regarding how Electronic Complex 

Orders would trade on Pillar than is 

currently available on the Exchange. 

However, with Pillar, the Exchange 

would introduce certain new or updated 

functionality available for options 

trading on the Pillar platform and use 

Pillar terminology. 

Definitions. Proposed Rule 6.91P–O(a) 

would set forth the definitions 

applicable to trading on Pillar under the 

new rule. 

• Proposed Rule 6.91P–O(a)(1) would 

define the term ‘‘Electronic Complex 

Order’’ or ‘‘ECO’’ to mean a Complex 

Order as defined in proposed Rule 

6.62P–O(f) or a Stock/Option Order or 

Stock/Complex Order as defined in 

proposed Rule 6.62P–O(h)(6)(A), (B), 

respectively, that would be submitted 

electronically to the Exchange.8 This 

proposed definition is based on the 

preamble to Rule 6.91–O without any 

substantive differences, except that 

reference to the ‘‘NYSE Arca System’’ 

would be replaced with the term 

‘‘Exchange’’ and cross-references have 

been updated to reflect rules proposed 

in the Single-Leg Pillar Filing. 

• Proposed Rule 6.91P–O(a)(2) would 

define the term ‘‘ECO Order 

Instruction’’ to mean a request to cancel, 

cancel and replace, or modify an ECO. 

As described further below, this concept 

relates to order processing when a series 

opens or reopens for trading and is 

based on the term ‘‘order instruction’’ as 

used in Rule 7.35–E(g) and proposed to 

be used in Rules 6.64P–O(e) and (f), 

which (similarly) would define an 

‘‘order instruction’’ for options as a 

request to cancel, cancel and replace, or 

modify an order or quote.9

• Proposed Rule 6.91P–O(a)(3) would 

define the term ‘‘leg’’ or ‘‘leg market’’ to 

mean each of the component option 

series that comprise an ECO. This 

definition is consistent with the concept 

of leg markets as used in current Rule 

6.91–O(a), which defines legs as 

individual orders and quotes in the 

Consolidated Book. The Exchange 

believes the proposed definition would 

add clarity regarding how the terms 

‘‘leg’’ and ‘‘leg market’’ would be used 

in connection with ECO trading on 

Pillar. 

• Proposed Rule 6.91P–O(a)(4) would 

define the term ‘‘Complex NBBO’’ to 

mean the derived national best bid and 

derived national best offer for a complex 

strategy calculated using the NBB and 

NBO for each component leg of a 

complex strategy. This definition is 

based on current Rule 6.1A–O(a)(2)(b), 

without any substantive differences. 

• Proposed Rule 6.91P–O(a)(5) would 

define the term ‘‘Complex strategy’’ to 

mean a particular combination of leg 

components and their ratios to one 

another. The proposed definition would 

further provide that new complex 

strategies can be created when the 

Exchange receives either a request to 

create a new complex strategy or an 

ECO with a new complex strategy. This 

proposed definition is new and is 

consistent with how this concept is 

defined on other options exchanges and 

would promote clarity and 

transparency.10


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creation request or complex order for a complex 

strategy that is not currently in the System’’); MIAX 

Options Exchange (‘‘MIAX’’) Rule 518(a)(6) (same). 

11 The term BBO when used with respect to 

options traded on the Exchange would mean ‘‘the 

best displayed bid or best displayed offer on the 

Exchange.’’ See Single-Leg Pillar Filing (defining 

BBO in proposed Rule 1.1, which definition is 

substantially identical to the current definition of 

BBO in Rule 6.1A–O(a)(2)(a)). 

12 In the Single-Leg Pillar Filing, the Exchange 

proposes that the (new) term ‘‘Away Market NBBO’’ 

would refer to a calculation of the NBBO that 

excludes the Exchange’s BBO. See Single-Leg Pillar 

Filing (defining Away Market NBBO in proposed 

Rule 1.1). 

13 See, e.g., NYSE American Rule 900.2NY(7)(b) 

(providing that the Derived BBO ‘‘is calculated 

using the BBO from the Consolidated Book for each 

of the options series comprising a given complex 

order strategy’’); Cboe Rule 5.33(a) (defining 

‘‘Synthetic Bed Bid or Offer and SBBO’’ for 

complex orders as ‘‘the best bid and offer on the 

Exchange for a complex strategy calculated using’’ 

the ‘‘BBO for each component (or the NBBO for a 

component if the BBO for that component is not 

available) of a complex strategy from the Simple 

Book’’). 

14 The term ‘‘marketable’’ is defined in proposed 

Rule 1.1 of the Single-Leg Pillar Filing. 15 See e.g., Cboe Rule 5.33(d)(3) (providing that 

Cboe ‘‘determines the duration of the Response 

Time Interval on a class-by-class basis, which may 

not exceed 3000 milliseconds’’); NYSE American 

Rule 971.1NY(c)(2)(B) (providing that for a 

Customer Best Execution Auction ‘‘[t]he minimum/ 

maximum parameters for the Response Time 

Interval will be no less than 100 milliseconds and 

no more than one (1) second’’). 

• Proposed Rule 6.91P–O(a)(6) would 

define the term ‘‘DBBO’’ to address 

situations where it is necessary to derive 

a (theoretical) bid or offer for a 

particular complex strategy. As 

proposed, ‘‘DBBO’’ would mean the 

derived best bid (‘‘DBB’’) and derived 

best offer (‘‘DBO’’) for a complex 

strategy calculated using the Exchange 

BBO 11 for each leg (or the Away Market 

NBBO 12 for a leg if there is no Exchange 

BBO), provided that the bid (offer) price 

used to calculate the DBBO would never 

be lower (higher) than the greater of 

$0.05 or 5% below (above) the Away 

Market NBB (NBO). The proposed 

definition would also provide that the 

DBBO would be updated as the 

Exchange’s calculation of the Exchange 

BBO or Away Market NBBO, as 

applicable, is likewise updated. 

Proposed Rule 6.91P–O(a)(6)(A) 

would provide further detail about how 

the DBBO would be derived in the 

absence of an Exchange BB (BO) or 

Away Market NBB (NBO) for a given 

leg. As proposed, in such 

circumstances, the bid (offer) price used 

to calculate the DBBO would be the 

offer (bid) price for that leg minus (plus) 

‘‘one collar value,’’ which would be (i) 

$0.25 where the best offer (bid) is priced 

$1.00 or lower; or (ii) the lower of $2.50 

or 25% where the best offer (bid) is 

priced above $1.00, provided however 

that, per proposed Rule 6.91P– 

O(a)(6)(A)(i), if the best offer is equal to 

or less than one collar value, the best 

bid price used to calculate the DBBO for 

that leg would be $0.01. 

This proposed definition is new and 

is based, in part, on the current 

definition of Complex BBO set forth in 

Rule 6.1A–O(a)(2)(b), as well as on how 

this concept is defined on other options 

exchanges, including on NYSE 

American.13 The Exchange believes that 

the additional detail about how the 

DBBO would be calculated in the 

absence of an Exchange BBO and/or 

Away Market NBBO would promote 

clarity and transparency. In addition, 

the Exchange believes that it is 

appropriate to require that the DBBO be 

calculated within a certain amount of 

the Away Market NBBO as an additional 

protection against ECOs being executed 

on the Exchange at prices away from the 

current market. 

Proposed Rule 6.91P–O(a)(7) would 

define ‘‘Complex Order Auction’’ or 

‘‘COA’’ to mean an auction of an ECO 

as set forth in proposed Rule 6.91P–O(f) 

(discussed below). This definition is 

based on the title of paragraph (c) of 

current Rule 6.91–O, which sets forth 

the COA Process for ECOs without any 

substantive differences. Proposed Rule 

6.91P–O(a)(7) would also state that the 

terms defined in paragraphs (a)(7)(A)– 

(D) would be used for purposes of a 

COA. 

Proposed Rule 6.91P–O(a)(7)(A) 

would define a ‘‘COA Order’’ to mean 

an ECO that is designated by the OTP 

Holder as eligible to initiate a COA. This 

definition is based on the definition of 

a ‘‘COA-eligible order’’ as set forth in 

current Rule 6.91–O(c)(1) and (c)(1)(i), 

with a difference that the proposed 

definition would not require that an 

option class be designated as COAeligible because all option classes that 

trade on Pillar would be COA-eligible. 

Proposed Rule 6.91P–O(a)(7)(B) 

would define the term ‘‘Request for 

Response’’ or ‘‘RFR’’ to refer to the 

message disseminated to the Exchange’s 

proprietary complex data feed 

announcing that the Exchange has 

received a COA Order and that a COA 

has begun. As further proposed, the 

definition would provide that each RFR 

message would identify the component 

series, the price, and the size and side 

of the market of the COA Order. This 

definition is based on the description of 

RFR in Rule 6.91–O(c)(3) without any 

substantive differences. The Exchange 

proposes a clarifying difference to make 

clear that RFR messages would be sent 

over the Exchange’s proprietary 

complex data feed, which is based on 

current functionality. 

Proposed Rule 6.91P–O(a)(7)(C) 

would define the term ‘‘RFR Response’’ 

to mean any ECO received during the 

Response Time Interval (defined below) 

that is in the same complex strategy, on 

the opposite side of the market of the 

COA Order that initiated the COA, and 

marketable against the COA Order.14

This definition is based in part on the 

description of RFR Responses in Rule 

6.91–O(c)(5). However, unlike the 

current definition, an RFR Response 

would not have a time-in-force 

contingency for the duration of the 

COA. Instead, the Exchange would 

consider any ECOs received during the 

Response Time Interval (defined below) 

that are marketable against the COA 

Order as an RFR Response. As described 

below, the Exchange proposes to define 

separately the term ‘‘ECO GTX Order,’’ 

which would be more akin to the 

current definition of RFR Response. In 

addition, the proposed definition omits 

the current rule description that an RFR 

Response may be entered in $0.01 

increments or that such responses may 

be modified or cancelled because these 

features are applicable to all ECOs and 

therefore not necessary to separately 

state in connection with RFR Responses. 

Proposed Rule 6.91P–O(a)(7)(D) 

would define the term ‘‘Response Time 

Interval’’ to mean the period of time 

during which RFR Responses for a COA 

may be entered and would provide that 

the Exchange would determine and 

announce by Trader Update the length 

of the Response Time Interval; 

provided, however, that the duration of 

the Response Time Interval would not 

be less than 100 milliseconds and 

would not exceed one (1) second. This 

definition is based in part on the 

description of Response Time Interval 

in Rule 6.91–O(c)(4), with a difference 

that the Exchange proposes to reduce 

the minimum time from 500 

milliseconds to 100 milliseconds. While 

other option exchanges do not establish 

a minimum duration for a COA, the 

Exchange notes that the proposed 100 

milliseconds minimum is consistent the 

minimum auction length for electronicpaired auctions on NYSE American.15

Types of ECOs. Proposed Rule 6.91P– 

O(b) would set forth the types of ECOs 

that would trade on Pillar. Proposed 

Rule 6.91P–O(b)(1) would provide that 

ECOs may be entered as Limit Orders or 

Limit Orders designated as Complex 

Only Orders. This proposed text is 

based on current Rule 6.91–O(b)(1), 

with a difference to provide that the 

Exchange would offer Complex Only 

Orders on Pillar. Complex Only Orders 


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16 See Rule 6.62–O(y) (describing PNP Plus orders 

as ECOs that may only trade with other ECOs, but 

which will continuously be repriced if locking or 

crossing the Complex BBO). 

17 Other options exchanges likewise offer 

Complex Orders that trade only with Complex 

Orders. See, e.g., Cboe Rule 5.33(a) (defining 

‘‘Complex Only’’ order as an ECO ‘‘designate[ ] to 

execute only against complex orders in the COB 

and not Leg into the Simple Book’’). 

18 The term ‘‘pre-open state’’ is defined in 

proposed Rule 6.64P–O(a)(10), as described in the 

Single-Leg Pillar Filing, to mean ‘‘the period before 

a series is opened or reopened.’’ 19 See, e.g., Cboe Rule 5.33(f)(2) (setting forth 

parameters for the ‘‘net price’’ of complex orders 

traded on Cboe); Nasdaq ISE, LLC (‘‘Nasdaq ISE’’), 

Options 3, Section 14(c) (providing, in relevant 

part, that ‘‘[c]omplex strategies will not be executed 

at prices inferior to the best net price achievable 

from the best ISE bids and offers for the individual 

legs’’). 

20 See, e.g., Cboe Rule 5.33(f)(2) (setting forth 

substantially identical execution parameters for 

complex orders executed on Cboe, including that 

complex orders may not execute at a net price that 

would cause any component of the complex 

strategy to be executed at a price of zero, or worse 

than or equal to the Cboe SBBO when there is a 

Priority Customer at the SBBO, or would cause any 

component of the complex strategy to be executed 

at a price worse than the individual component 

prices on the Simple Book). 

(as described below) are based in part 

on existing functionality for PNP Plus 

orders, which likewise may trade only 

with other Electronic Complex Orders, 

with updated functionality available on 

Pillar.16 The Exchange proposes to 

rename this order type in a manner 

consistent with similar order types 

available on other options exchanges 

and therefore this proposed order type 

is not new or novel.17

• Proposed Rule 6.91P–O(b)(1)(A) 

would set forth the details of a Complex 

Only Order. As proposed, an ECO 

designated as a Complex Only Order 

would trade solely with ECOs and 

would not trade with the leg markets; 

provided that, if there is displayed 

Customer interest on all legs of the 

Complex Only Order, such order would 

not trade below (above) one penny 

($0.01) times the smallest leg ratio 

inside the DBB (DBO) containing 

Customer interest, which requirement 

ensures that a Complex Only Order 

would price improve at least a portion 

of the displayed leg markets. In such 

case, a Complex Only Order would 

remain on the Consolidated Book until 

it can trade with another ECO at this 

improved price. As noted above, the 

Complex Only Order type is based in 

part on existing PNP Plus order 

functionality, with updated 

functionality based on Pillar. 

Specifically, the Exchange would no 

longer reprice a resting Complex Only 

Order and instead would restrict it from 

trading until it can trade at a price at or 

inside the DBBO, as described below. 

• Proposed Rule 6.91P–O(b)(2) would 

set forth the time-in-force contingencies 

available to ECOs, which would be Day, 

IOC, FOK, or GTC, as those terms are 

defined in the Single-Leg Pillar Filing in 

proposed Rule 6.62P–O(b), and GTX 

(per proposed Rule 6.91P–O(b)(2)(B) as 

described below). The proposed text is 

based on current Rules 6.91–O(b)(2) and 

(3), except that it adds GTX (as 

described below). The proposed text 

also omits AON because the Exchange 

would not offer AONs for ECO trading 

on Pillar. 

• Proposed Rule 6.91P–O(b)(2)(A) 

would provide that an ECO designated 

as IOC or FOK would be rejected if 

entered during a pre-open state,18 which 

is consistent with the time-in-force of 

the order (because they could not be 

traded when a complex strategy is not 

open for trading) as well as with current 

functionality. 

• Proposed Rule 6.91P–O(b)(2)(B) 

would provide that an ECO designated 

as GTX would be defined as an ‘‘ECO 

GTX Order’’ and would have the 

following features: It would not be 

displayed; it may be entered only during 

the Response Time Interval of a COA; it 

must be on the opposite side of the 

market as the COA Order; and it must 

specify the price, size, and side of the 

market. As further proposed, ECO GTX 

Orders may be modified or cancelled 

during the Response Time Interval and 

any remaining size that does not trade 

with the COA Order would be cancelled 

at the end of the COA. This definition 

is based on the description of an RFR 

Response in current Rule 6.91– 

O(c)(5)(A)—(C), which likewise are not 

displayed and expire at the end of the 

COA. 

Priority and Pricing of ECOs. 

Proposed Rule 6.91P–O(c) would set 

forth how ECOs would be prioritized 

and priced under Pillar. As proposed, 

an ECO received by the Exchange that 

is not immediately executed (or 

cancelled) would be ranked in the 

Consolidated Book according to pricetime priority based on the total net price 

and the time of entry of the order. This 

proposed rule is based on Rule 6.91– 

O(a)(1), without any substantive 

differences. The Exchange proposes a 

non-substantive difference to refer 

simply to a ‘‘net price’’ rather than a 

‘‘net debit or credit price,’’ which 

streamlined terminology is consistent 

with the use of the term ‘‘net price’’ on 

other options exchanges.19

Proposed Rule 6.91P–O(c) would 

further provide that, unless otherwise 

specified in this Rule, ECOs would be 

processed as follows: 

• Proposed Rule 6.91P–O(c)(1) would 

provide that when trading with the leg 

markets: 

Æ An ECO must trade at or within the 

greater of $0.05 or 5% higher (lower) 

than the Away Market NBO (NBB) (see 

proposed Rule 6.91P–O(c)(1)(A)). This 

would be new under Pillar and operate 

as an additional protection against ECOs 

being executed on the Exchange at 

prices away from the current market. 

Æ An ECO would trade at the prices 

of the leg markets (see proposed Rule 

6.91P–O(c)(1)(B)). This proposed rule 

would make clear that when trading 

with the leg markets, the components of 

the ECO would trade at the prices of the 

leg markets, which is consistent with 

current functionality. For example, if 

there is sell interest in a leg market at 

$1.00, and a leg of an ECO to buy could 

trade up to $1.05, the ECO would trade 

with such leg market at $1.00. This 

would result in the ECO receiving price 

improvement and is consistent with the 

ECO trading as the aggressing order. 

• Proposed Rule 6.91P–O(c)(2) would 

provide that when trading with another 

ECO, an ECO must trade at a price at or 

within the DBBO and no leg of an ECO 

may trade at a price of zero. This 

provision is based in part on current 

Rule 6.91–O(a)(2), which provides that 

no leg of an ECO will be executed 

outside of the Exchange BBO, and adds 

detail about other limitations on 

executions based on the DBBO. This 

proposed rule, which ensures that ECOs 

would never trade through interest in 

the leg markets, is consistent with 

current functionality and adds clarity 

and transparency to the proposed Rule. 

This proposed rule is also consistent 

with how ECOs are processed on other 

options exchanges.20

• Proposed Rule 6.91P–O(c)(3) would 

provide that an ECO may trade without 

consideration of prices of the same 

complex strategy available on other 

exchanges, which is based on the same 

text as contained in current Rule 6.91– 

O(a)(2) without any substantive 

differences. 

• Proposed Rule 6.91P–O(c)(4) would 

provide that an ECO may trade in one 

cent ($0.01) increments regardless of the 

MPV otherwise applicable to any leg of 

the complex strategy, which is based on 

current Rule 6.91–O, Commentary .01 

without any substantive differences. 

Execution of ECOs at the Open (or 

Reopening after a Trading Halt). Current 

Rule 6.91–O(a)(2)(i) sets forth how ECOs 

are executed upon opening or reopening 

of trading. Proposed Rule 6.91P–O(d) 

would set forth details about how ECOs 

would be executed at the open or 

reopen following a trading halt. 

With the transition to Pillar, the 

Exchange proposes new functionality 


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21 See Single-Leg Pillar Filing (describing 

proposed opening Auction Process rule per Rule 

6.64P–O). 

22 See Single-Leg Pillar Filing (defining Auction 

Collars in proposed Rule 6.64P–O(a)(2)). 

23 See Single-Leg Pillar Filing (describing 

proposed Rule 6.64P–O(a)(7)). 

24 See Single-Leg Pillar Filing (describing 

proposed Rules 6.64P–O(a)(7)(B)(i) and 6.64P–O(b)). 

regarding the ‘‘ECO Opening Auction 

Process’’ on the Exchange, which would 

be applicable both to openings and 

reopenings following a trading halt. The 

Exchange proposes to incorporate into 

the ECO Opening Auction Process 

certain functionality currently available 

on the Exchange’s cash equity platform, 

which the Exchange has similarly 

proposed to include in the Auction 

Process for single-leg options.21

Accordingly, proposed Rule 6.91P–O(d) 

would use Pillar terminology relating to 

auctions that is based in part on Pillar 

terminology set forth in Rule 7.35–E for 

cash equity trading and in part on 

proposed Rule 6.64P–O for single-leg 

options. 

• Proposed Rule 6.91P–O(d)(1) would 

set forth the conditions required for the 

commencement of an ECO Opening 

Auction Process. Specifically, as 

proposed, the Exchange would initiate 

an ECO Opening Auction Process for a 

complex strategy only if all legs of the 

complex strategy have opened or 

reopened for trading, which text is 

based on current Rule 6.91–O(a)(2)(i)(A) 

without any substantive differences. 

Proposed Rule 6.91P–O(d)(1)(A)–(C) 

would set forth conditions that would 

prevent the opening of a complex 

strategy, as follows: 

Æ Any leg of the complex strategy has 

no BO or NBO; 

Æ The bid and offer prices used to 

calculate the DBBO for the complex 

strategy are locking or crossing; or 

Æ All legs of the complex strategy 

include displayed Customer interest and 

the width of the DBBO is less than or 

equal to one penny ($0.01) times the 

smallest leg ratio. 

The proposal to detail these 

conditions for opening are consistent 

with current functionality. The 

Exchange believes that this added detail 

would add clarity and transparency to 

Exchange rules and would promote a 

fair and orderly ECO Opening Auction 

Process. 

• Proposed Rule 6.91P–O(d)(2) would 

provide that any ECOs in a complex 

strategy with prices that lock or cross 

one another would be eligible to trade 

in the ECO Opening Auction Process. 

This proposed rule is based on current 

Rule 6.91–O(a)(2)(i)(B), which provides 

than an opening process will be used if 

there are ECOs that ‘‘are marketable 

against each other.’’ The Exchange 

proposes a difference in Pillar not to 

require that such ECOs be ‘‘priced 

within the Complex NBBO’’ because the 

proposed ECO Opening Auction Process 

under Pillar would instead rely on the 

DBBO (as described below). 

Proposed Rule 6.91P–O(d)(2)(A) 

would provide that an ECO received 

during a pre-open state would not 

participate in the Auction Process for 

the leg markets pursuant to proposed 

Rule 6.64P–O, which is based on the 

same text (in the second sentence) of 

current Rule 6.91–O(a)(2)(i)(A) without 

any substantive differences. 

Proposed Rule 6.91P–O(d)(2)(B) 

would provide that a complex strategy 

created intra-day when all leg markets 

are open would not be subject to an ECO 

Opening Auction Process and would 

instead trade pursuant to paragraph (e) 

of the proposed Rule (discussed below) 

regarding the handling of ECOs during 

Core Trading Hours. 

Proposed Rule 6.91P–O(d)(2)(C) 

would provide that the ECO Opening 

Auction Process would be used to 

reopen trading in ECOs after a trading 

halt. This proposed rule is based in part 

on current Rule 6.64–O(d) and makes 

clear that the ECO Opening Auction 

Process would be applicable to 

reopenings. 

• Proposed Rule 6.91P–O(d)(3) would 

describe each aspect of the ECO 

Opening Auction Process. First, 

proposed Rule 6.91P–O(d)(3)(A) would 

describe the ‘‘ECO Auction Collars,’’ 

which terminology would be new for 

ECO trading and is based on the term 

‘‘Auction Collars’’ used in Rule 7.35–E 

for trading cash equity securities as well 

as in proposed Rule 6.64P–O(a)(2) for 

single-leg options trading.22

As proposed, the upper (lower) price 

of an ECO Auction Collar for a complex 

strategy would be the DBO (DBB); 

provided, however, that if there is 

displayed Customer interest on all legs 

of a complex strategy, the upper (lower) 

price of an ECO Auction Collar would 

be one penny ($0.01) times the smallest 

leg ratio inside the DBO (DBB) 

containing Customer interest. This new 

functionality on Pillar would ensure 

that ECOs trade within the DBBO and 

thus avoid trading through displayed 

Customer interest in the leg markets, 

which the Exchange believes is 

consistent with fair and orderly markets 

and investor protection. 

• Next, proposed Rule 6.91P– 

O(d)(3)(B) would describe the ‘‘ECO 

Auction Price.’’ As proposed, the ECO 

Auction Price would be the price at 

which the maximum volume of ECOs 

can be traded in an ECO Opening 

Auction, subject to the proposed ECO 

Auction Collar. As further proposed, if 

there is more than one price at which 

the maximum volume of ECOs can be 

traded within the ECO Auction Collar, 

the ECO Auction Price would be the 

price closest to the midpoint of the ECO 

Auction Collar, or, if the midpoint falls 

within such prices, the ECO Auction 

Price would be the midpoint, provided 

that the ECO Auction Price would not 

be lower (higher) than the highest 

(lowest) price of an ECO to buy (sell) 

that is eligible to trade in the ECO 

Opening Auction Process. The concept 

of an ECO Auction Price is based in part 

on the concept of ‘‘single market 

clearing price’’ set forth in current Rule 

6.91–O(a)(2)(i)(B). For Pillar, the 

Exchange proposes to determine the 

ECO Auction Price in a manner that is 

based in part on how an Indicative 

Match Price is determined for trading of 

cash equity securities, as set forth in on 

Rule 7.35–E(a)(8)(A), and how the 

Exchange proposes to determine the 

price for Auctions on Pillar for singleleg options trading.23

Finally, as proposed, if the ECO 

Auction Price would be a sub-penny 

price, it would be rounded to the 

nearest whole penny, which text is 

based on current Rule 6.91–O(a)(2)(i)(B), 

with a difference that the current rule 

refers to the midpoint of the Complex 

NBBO (which could be a sub-penny 

price) as opposed to referring to the ECO 

Auction Price, which would be a new 

Pillar term for trading ECOs. 

Proposed Rule 6.91P–O(d)(3)(B)(i) 

would provide that an ECO to buy (sell) 

with a limit price at or above (below) 

the upper (lower) ECO Auction Collar 

would be included in the ECO Auction 

Price calculation at the price of the 

upper (lower) ECO Auction Collar, but 

ranked for participation in the ECO 

Opening (or Reopening) Auction 

Process in price-time priority based on 

its limit price. This proposed text is 

based in part on current Rule 6.91– 

O(a)(2)(i)(B). The proposed rule is also 

based on how the Exchange processes 

auctions for cash equity trading, as 

described in Rules 7.35–E(a)(10)(B) and 

(a)(6) and how the Exchange proposes to 

process Auctions on Pillar for single-leg 

options trading.24

Proposed Rule 6.91P–O(d)(3)(B)(ii) 

would provide that locking and crossing 

ECOs in a complex strategy would trade 

at the ECO Auction Price. As further 

proposed, if there are no locking or 

crossing ECOs in a complex strategy at 

or within the ECO Auction Collars, the 

Exchange would open the complex 

strategy without a trade. This proposed 


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25 See Single-Leg Pillar Filing (describing 

proposed Rule 6.64P–O(d)(2)(B). 

26 See Single-Leg Pillar Filing (describing 

Minimum Trade Size or MTS Modifier in proposed 

Rule 6.62P–O(i)(3)(B)). 

27 See Single-Leg Pillar Filing (describing the 

activity-based controls with updated functionality 

under Pillar that Market Makers would be required 

to use to manage risk in connection with their 

quotes, per proposed Rule 6.40P–O(a)(3) and (b)(2)). 

The proposed Pillar risk controls are substantively 

identical to the existing risk controls set forth in 

Rules 6.40–O(b)(2), (c)(2) and (d)(2) and 

Commentary .04 to Rule 6.40–O. 

text would be new and is based in part 

on proposed Rule 6.64P–O(d)(2)(B) for 

single-leg options, which describes 

when an option series could open 

without a trade.25

• Proposed Rule 6.91P–O(d)(4) would 

describe the ‘‘ECO Order Processing 

during ECO Opening Auction Process.’’ 

Because the Exchange would be using 

the same Pillar auction functionality for 

ECO trading that is used for its cash 

equity market and that the Exchange is 

proposing for single-leg options trading, 

the Exchange proposes to apply existing 

Pillar auction functionality regarding 

how to process ECOs that may be 

received during the period when an 

ECO Auction Process is ongoing. 

Accordingly, as proposed, new ECOs 

and ECO Order Instructions (as defined 

in proposed Rule 6.91P–O(a)(2), 

described above) that are received when 

the Exchange is conducting the ECO 

Opening Auction Process for the 

complex strategy would be accepted but 

would not be processed until after the 

conclusion of this process. As further 

proposed, when the Exchange is 

conducting the ECO Opening Auction 

Process, ECO Order Instructions would 

be processed as follows: 

Æ Proposed Rule 6.91P–O(d)(4)(A) 

would provide that an ECO Order 

Instruction received during the ECO 

Opening Auction Process would not be 

processed until after this process 

concludes if it relates to an ECO that 

was received before the process begins 

and that any subsequent ECO Order 

Instructions relating to such ECO would 

be rejected. 

Æ Proposed Rule 6.91P–O(d)(4)(B) 

would provide that an ECO Order 

Instruction received during the ECO 

Opening Auction Process would be 

processed on arrival if it relates to an 

order that was received during this 

process. 

Proposed Rule 6.91P–O(d)(4) and subparagraphs (A) and (B) are based on 

both current Rule 7.35–E(g) and its subparagraphs (1) and (2) and proposed 

Rule 6.64P–O(e) and its sub-paragraphs 

(1) and (2) (as described in the SingleLeg Pillar Filing) with differences only 

to reference the proposed defined term 

ECO Order Instruction and to refer to 

the ECO Opening Auction Process. The 

Exchange believes that the proposed 

rule text would provide transparency 

regarding how ECO Order Instructions 

that arrived during the ECO Opening 

Auction Process would be processed. 

Proposed Rule 6.91P–O(d)(5) would 

describe the ‘‘Transition to continuous 

trading’’ after the ECO Opening Auction 

Process. As proposed, after the ECO 

Opening Auction, ECOs would be 

subject to ECO Price Protection, per 

proposed Rule 6.91P–O(g)(2) (as 

described below) and, if eligible to 

trade, would trade as follows: 

Æ Proposed Rule 6.91P–O(d)(5)(A) 

would provide that an ECO received 

before the complex strategy was opened 

that did not trade in whole in the ECO 

Opening Auction Process and that is 

locking or crossing other ECOs or leg 

markets in the Consolidated Book 

would trade pursuant to proposed Rule 

6.91P–O(e) (discussed below) regarding 

the handling of ECOs during Core 

Trading Hours. This provision is based 

on the (last sentence) of current Rule 

6.91–O(a)(2)(i)(B) and (C), with nonsubstantive differences to use Pillar 

terminology. 

Æ Proposed Rule 6.91P–O(d)(5)(B) 

would provide that any ECO received 

during the ECO Opening Auction 

Process would be processed in time 

sequence relative to one another based 

on original entry time. This proposed 

rule is based on both current 

functionality and how the Exchange 

proposes to process orders in an option 

series that were received during an 

Auction Processing Period, as described 

in the Single-Leg Pillar Filing for 

proposed Rule 6.64P–O(a)(5). 

Execution of ECOs During Core 

Trading Hours. Proposed Rule 6.91P– 

O(e) would describe how ECOs would 

be processed during Core Trading 

Hours. 

Proposed Rule 6.91P–O(e)(1) would 

provide that once a complex strategy is 

open for trading, an ECO received by the 

Exchange would trade with the bestpriced contra-side interest as follows: 

• Proposed Rule 6.91P–O(e)(1)(A) 

would provide that if, at a price, the 

incoming ECO would be eligible to trade 

with the leg markets (e.g., not a 

Complex Only Order), the leg markets 

would have first priority at that price 

and would trade with the incoming ECO 

pursuant to proposed Rule 6.76AP–O 

before such incoming ECO would trade 

with contra-side ECOs resting in the 

Consolidated Book at that price. This 

proposed text is based on current Rule 

6.91–O(a)(2)(ii) without any substantive 

differences. 

• Proposed Rule 6.91P–O(e)(1)(B) 

would provide that an ECO would not 

trade with orders in the leg markets 

designated as AON or with an MTS 

modifier. This proposed text would be 

new and is based in part on existing 

functionality and reflects the Exchange’s 

proposed new MTS modifier for orders 

in the leg markets.26 The Exchange 

believes that this proposed rule would 

add clarity and transparency that ECOs 

would not trade with orders that have 

conditional instructions. 

• Proposed Rule 6.91P–O(e)(1)(C) 

would provide that an ECO (that is not 

designated as a Complex Only Order) 

would be eligible to trade with the leg 

markets (in full or in a permissible 

ratio), subject to certain enumerated 

exceptions set forth in proposed Rule 

6.91P–O(e)(1)(C)(i)–(iii). Specifically, 

ECOs with any one of the following 

complex strategies would be ineligible 

to trade with the leg markets and would 

be processed as a Complex Only Order: 

Æ A complex strategy with more than 

five legs; 

Æ a complex strategy with two legs 

and both legs are buying or both legs are 

selling, and both legs are calls or both 

legs are puts; or 

Æ a complex strategy with three or 

more legs and all legs are buying or all 

legs are selling. 

The proposal to restrict ECOs with 

more than five legs from trading with 

the leg markets (and being treated as 

Complex Only Orders), per proposed 

Rule 6.91P–O(e)(1)(C)(i), would be new 

functionality under Pillar and is 

designed to help Market Makers manage 

risk. The Exchange currently requires 

Market Makers to utilize certain risk 

controls for quoting to help mitigate risk 

particularly during periods of market 

volatility, and would require Market 

Makers to continue to use risk controls 

on Pillar.27 Because the execution of a 

multi-legged ECO is a single transaction, 

comprising discrete legs that must all 

trade simultaneously, allowing ECOs 

with more than five legs to trade with 

the leg markets may allow a multilegged transaction to occur before a 

Market Maker’s risk settings would be 

triggered. This proposed limitation is 

designed to prevent such multi-legged 

transactions, which would help ensure 

that Market Makers continue to provide 

liquidity and do not trade above their 

established risk tolerance levels. The 

Exchange notes that this restriction is 

consistent with similar limits 


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28 See e.g., Cboe Rule 5.33(g) (providing the ECOs 

may be restricted from trading with the leg markets 

if such ECO has more than a maximum number of 

legs, which maximum the Exchange determines on 

a class-by-class basis and may be two, three, or 

four). 

29 See, e.g., Nasdaq ISE Options 3, Section 

14(d)(3)(A)–(B) (proving that ECOs with these 

complex strategies may trade only with other 

ECOs). 

established on other options 

exchanges.28

Proposed Rule 6.91P–O(e)(1)(C)(ii)– 

(iii), which treats ECOs with certain 

complex strategies as Complex Only 

Orders, is based in part on current Rule 

6.91–O(b)(4)(i)–(ii), with a difference 

that currently, such so-called 

‘‘directional strategies’’ are rejected. The 

proposed handling under Pillar would 

be less restrictive than the current rule 

because such strategies would not be 

rejected and is consistent with the 

treatment of such complex strategies on 

other options exchanges.29 As with the 

proposal to restrict ECOs with more 

than five legs trading with the leg 

markets, this proposed restriction is also 

designed to ensure that Market Maker 

risk settings would not be bypassed. 

Because ECOs with directional 

strategies are typically geared towards 

an aggressive directional capture of 

volatility, such ECOs can represent 

significantly more risk than trading any 

one of the legs in isolation. As such, 

because Market Maker risk settings are 

only triggered after the entire ECO 

package has traded, the Exchange 

believes this proposed rule change 

would help ensure fair and orderly 

markets by preventing such orders 

trading with the leg markets, which 

would minimize risk to Market Makers. 

Proposed Rule 6.91P–O(e)(2) would 

provide that any ECO or portion thereof 

that does not trade immediately when it 

is received by the Exchange and that is 

designated either Day or GTC would be 

ranked in the Consolidated Book 

pursuant to proposed paragraph (c) of 

this Rule (regarding the priority of 

ECOs), which is based on current Rule 

6.91–O(a)(2)(iii), except that it adds 

details regarding the time-in-force 

modifier of the ECO, which adds clarity 

and transparency to the proposed Rule. 

As further proposed, the Exchange 

would evaluate trading opportunities for 

a resting ECO when the leg markets 

comprising a complex strategy update, 

provided that during periods of high 

message volumes, such evaluation may 

be reduced to no less than ten times per 

one (1) second. The Exchange believes 

that this proposed rule promotes 

transparency of the frequency with 

which the Exchange would be 

evaluating the leg markets for updates. 

Proposed Rule 6.91P–O(e)(3) would 

provide that ECOs that trade with the 

leg markets would be allocated pursuant 

to Rule 6.76AP–O. This proposed rule is 

based in part on current Rule 6.91– 

O(a)(2)(iii) without any substantive 

differences. 

Execution of ECOs During a COA. 

Proposed Rule 6.91P–O(f) would 

describe how ECOs would trade during 

a COA. The COA Process is currently 

described in Rule 6.91–O(c). Under 

Pillar, the Exchange proposes to 

simplify the COA process, including by 

relying on the current DBBO for pricing, 

allowing a COA Order to initiate a COA 

only on arrival, and streamlining the 

rule text describing the circumstances 

that would cause an early end to a COA. 

As proposed, a COA Order received 

when a complex strategy is open for 

trading would initiate a COA only on 

arrival, subject to proposed Rule 6.91P– 

O(f)(1) (described below). As further 

proposed, a COA Order would be 

rejected if entered during a pre-open 

state or if entered during Core Trading 

Hours with a time-in-force of FOK or 

GTX. This proposed order handling is 

based in part on current Rule 6.91– 

O(c)(1)(ii), which requires that COA 

Orders be submitted during Core 

Trading Hours. The proposed rejection 

of such orders during a pre-open state 

would be new under Pillar and is 

consistent with the Exchange’s 

proposed functionality that a COA 

Order would initiate a COA only on 

arrival. In addition, the proposal would 

clarify that COA Orders designated as 

FOK or GTX would be rejected, even if 

submitted during Core Trading Hours, is 

based on current functionality and this 

addition would add further detail and 

clarification to the rule text. Finally, as 

further proposed, only one COA may be 

conducted at a time in a complex 

strategy, which is identical to text in 

current Rule 6.91–O(c)(3). 

Proposed Rule 6.91P–O(f)(1) would 

describe the conditions required for the 

‘‘Initiation of a COA.’’ As proposed, to 

initiate a COA, the limit price of the 

COA Order to buy (sell) must be higher 

(lower) than the best-priced, same-side 

ECOs resting on the Consolidated Book 

and equal to or higher (lower) than the 

midpoint of the DBBO. This proposed 

text is based in part on current Rule 

6.91–O(c)(3)(i), with a difference to add 

a new ‘‘midpoint of the DBBO’’ 

requirement, which is designed to 

facilitate price improvement 

opportunities for the COA Order. As 

further proposed, a COA Order that does 

not satisfy these pricing parameters 

would not initiate a COA and would be 

processed as an ECO. This would be 

new under Pillar, as current Rule 6.91– 

O(c)(3) allows an order designated for 

COA to reside on the Consolidated Book 

unless or until such order meets the 

requisite pricing conditions to initiate a 

COA. The Exchange believes this 

proposed change would simplify the 

COA process. 

Finally, as proposed, once a COA is 

initiated, the Exchange would 

disseminate a Request for Response 

message, the Response Time Interval 

would begin and, during such interval, 

the Exchange would accept RFR 

Responses, including GTX ECO Orders. 

This proposed text is based on current 

functionality set forth in Rule 6.91–O(c), 

with non-substantive differences to use 

Pillar terminology, including using the 

new Pillar term for GTX ECO Orders. 

Proposed Rule 6.91P–O(f)(2) would 

describe the ‘‘Pricing of a COA.’’ As 

proposed, a COA Order to buy (sell) 

would initiate a COA at its limit price, 

unless its limit price locks or crosses the 

DBO (DBB), in which case it would 

initiate a COA at a price equal to one 

penny ($0.01) times the smallest leg 

ratio inside the DBO (DBB) (the ‘‘COA 

initiation price’’). This proposed 

functionality utilizes the new concept of 

a DBBO, is consistent with current 

functionality (that relies on 

substantively similar concept of 

Complex BBO), and ensures (consistent 

with current functionality) that interest 

on the leg markets maintain priority. 

• Proposed Rule 6.91P–O(f)(2)(A) 

would provide that prior to initiating a 

COA, a COA Order to buy (sell) would 

trade with any ECO to sell (buy) that is 

priced equal to or below (above) one 

penny ($0.01) times the smallest leg 

ratio inside the DBO (DBB) (i.e., priced 

better than the leg markets) and any 

unexecuted portion of such COA Order 

would initiate a COA. This proposed 

rule is based on current Rule 6.91– 

O(a)(2) with a difference to use the 

Pillar concept of DBBO rather than refer 

to the contra-side Complex BBO. 

• Proposed Rule 6.91P–O(f)(2)(B) 

would provide that a COA Order would 

not be eligible to trade with the leg 

markets until after the COA ends, which 

added detail, while not explicitly stated 

in the current rule, is consistent with 

current functionality described in Rules 

6.91–O(c)(7)(A) and (B) that only RFR 

Responses (i.e., GTX orders) and ECOs 

will be allocated in a COA and that the 

COA Order would not trade with the leg 

markets until after the COA allocations. 

• Proposed Rule 6.91P–O(f)(3) would 

set forth the conditions that would 

result in the ‘‘Early End to a COA’’ (i.e., 

a COA ending prior to the expiration of 

the Response Time Interval). Currently, 

as described in Rule 6.91–O(c)(3), the 

Exchange takes a snapshot of the 


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30 As discussed infra regarding proposed Rule 

6.91P–O(a)(6) and the definition of the Derived 

BBO, ‘‘the DBBO would be updated as the 

Exchange’s calculation of the Exchange BBO or 

Away Market NBBO, as applicable, is likewise 

updated’’). 

31 The Exchange has proposed to add the 

definition of MPID to proposed Rule 1.1, which 

would refer to ‘‘the identification number(s) 

assigned to the orders and quotes of a single ETP 

Holder, OTP Holder, or OTP Firm for the execution 

and clearing of trades on the Exchange by that 

permit holder. An ETP Holder, OTP Holder, or OTP 

Firm may obtain multiple MPIDs and each such 

MPID may be associated with one or more subidentifiers of that MPID.’’ See Single-Leg Pillar 

Filing. 

32 See, e.g., Cboe Rule 5.33 (providing, in its 

definition of ‘‘complex strategy’’ that Cboe ‘‘may 

limit the number of new complex strategies that 

may be in the [Cboe] System at a particular time’’) 

and MIAX Rule 518(a)(6) (providing, in its 

definition of ‘‘complex strategy’’ that MIAX ‘‘may 

limit the number of new complex strategies that 

may be in the System at a particular time and will 

communicate this limitation to Members via 

Regulatory Circular’’). 

Complex BBO at the start of a COA and 

uses that snapshot as the basis for 

determining whether to end a COA 

early. Under Pillar, the Exchange would 

no longer use a snapshot of the Complex 

BBO as the basis for determining 

whether to end a COA early but would 

instead rely on the DBBO (not initial 

snapshot), which is updated as market 

conditions change (including during the 

Response Time Interval).30 The 

Exchange proposes a COA would end 

early under the following conditions: 

Æ Proposed Rule 6.91P–O(f)(3)(A) 

would provide that a COA would end 

early if the Exchange receives an 

incoming ECO or COA Order to buy 

(sell) in the same complex strategy that 

is priced higher (lower) than the 

initiating COA Order to buy (sell), 

which proposed text is based on current 

Rule 6.91–O(c)(6)(B)(i) without any 

substantive differences. 

Æ Proposed Rule 6.91P–O(f)(3)(B) 

would provide that a COA would end 

early if the Exchange receives an RFR 

Response that crosses the same-side 

DBBO, which proposed text is based on 

current Rule 6.91–O(c)(6)(A)(i), except 

(as noted above) it refers to the DBBO 

rather than the ‘‘initial Complex BBO.’’ 

Æ Proposed Rule 6.91P–O(f)(3)(C) 

would provide that a COA would end 

early if the leg markets update causing 

the same-side DBBO to lock or cross (i) 

any RFR Response(s) or (ii) if no RFR 

Responses have been received, the bestpriced, contra-side ECOs. This proposed 

rule is based in part on current Rule 

6.91–O(c)(6)(C)(i), with differences to 

use Pillar terminology. 

Æ Proposed Rule 6.91P–O(f)(3)(D) 

would provide that a COA would end 

early if the leg markets update causing 

the contra-side DBBO to lock or cross 

the COA initiation price. This proposed 

rule is based in part on current Rule 

6.91–O(c)(6)(C)(ii), except that it would 

refer to the DBBO and the COA 

initiation price, which would be new 

concepts under Pillar. 

• Proposed Rule 6.91P–O(f)(4) would 

set forth the ‘‘Allocation of COA 

Orders’’ after a COA either ends early or 

after the expiration of the Response 

Time Interval. Current Rule 6.91– 

O(c)(7)(A) sets forth that the COAeligible orders are allocated against the 

best-priced interest received in the COA 

at each price on a ‘‘Size Pro-Rata Basis,’’ 

as that concept is defined in Rule 6.75– 

O(f)(6). Under Pillar, the allocation of 

the COA Order would be based on 

price-time priority, which would align 

the allocation of ECOs in a COA with 

standard processing of ECOs. 

Proposed Rule 6.91P–O(f)(4)(A) 

would provide that RFR Responses to 

sell (buy) would trade in price-time 

priority with a COA Order to buy (sell); 

provided, however, that if there is 

displayed Customer interest on all legs 

of the DBB (DBO), RFR Responses to sell 

(buy) would not trade below (above) one 

penny ($0.01) times the smallest leg 

ratio inside the DBB (DBO). This 

proposed rule would ensure that the 

COA Order would not trade at a worse 

price than the leg markets and would 

price improve at least a portion of the 

interest in the leg markets. The 

proposed text is based in part on current 

Rule 6.91–O(c)(7)(A) insofar as it 

ensures that the COA Order would trade 

with the best-priced RFR Responses 

received in the COA and differs 

substantively because, as discussed 

above, the COA Order would trade with 

RFR Responses in price-time priority 

(and not Size Pro Rata). 

Proposed Rule 6.91P–O(f)(4)(B) would 

provide that after COA allocations 

pursuant to paragraph (f)(4)(A) of this 

proposed Rule, any unexecuted balance 

of a COA Order (including COA Orders 

designated as IOC) would be eligible to 

trade with any contra-side interest, 

including the leg markets unless the 

COA Order is designated or treated as a 

Complex Only Order. This proposed 

text is based on existing functionality 

and makes explicit that a COA Order 

would trade solely with complex 

interest (and not the leg markets) during 

a COA. This proposed rule is designed 

to provide clarity and transparency that 

the remaining balance of a COA Order 

would be eligible to trade with the leg 

markets after the COA ends. 

Proposed Rule 6.91P–O(f)(4)(C) would 

provide that after a COA Order trades 

pursuant to proposed Rule 6.91P– 

O(f)(4)(B), any unexecuted balance of a 

COA Order would be processed as an 

ECO pursuant to paragraph (e) of this 

Rule. The proposed text is based on 

current Rule 6.91–O(c)(7)(B) without 

any substantive differences. 

Proposed Rule 6.91P–O(f)(5) would 

set forth ‘‘Prohibited Conduct related to 

COAs,’’ and is based on current 

Commentary .04 to Rule 6.91–O without 

any substantive differences, and would 

provide that a pattern or practice of 

submitting unrelated orders that cause a 

COA to conclude early would be 

deemed conduct inconsistent with just 

and equitable principles of trade and 

that dissemination of information 

related to COA Orders to third parties 

would also be deemed as conduct 

inconsistent with just and equitable 

principles of trade. 

ECO Risk Checks. Proposed Rule 

6.91P–O(g) would describe the ‘‘ECO 

Risk Checks,’’ which are designed to 

help OTP Holders and OTP Firms to 

effectively manage risk when trading 

ECOs. Current Commentaries .03, .05, 

and .06 of Rule 6.91–O set forth the 

existing risk checks for ECOs. With the 

transition to Pillar, the Exchange 

proposes to modify and enhance its 

existing risk checks for ECOs, as 

follows: 

• Proposed Rule 6.91P–O(g)(1) would 

set forth the ‘‘Complex Strategy Limit.’’ 

As proposed, the Exchange would 

establish a limit on the maximum 

number of new complex strategies that 

may be requested to be created per 

MPID, which limit would be announced 

by Trader Update.31 As further 

proposed, when an MPID reaches the 

limit on the maximum number of new 

complex strategies, the Exchange would 

reject all requests to create new complex 

strategies from that MPID for the rest of 

the trading day. In addition, and 

notwithstanding the established 

Complex Strategy Limit, the Exchange 

proposes that it may reject a request to 

create a new complex strategy from any 

MPID whenever the Exchange 

determines it is necessary in the 

interests of a fair and orderly market. 

This is new functionality proposed 

under Pillar but is conceptually similar 

to the Complex Order Table Cap (the 

‘‘Cap’’), set forth in Commentary .03 to 

Rule 6.91–O, which Cap (like the 

Complex Strategy Limit) is a system 

protection tool that enables the 

Exchange to limit the number of 

complex strategies available on the 

Exchange, which in turn improves the 

efficiency of the ECO process and helps 

maintain a fair and orderly market. The 

Exchange also notes that other options 

exchanges likewise impose a limit on 

new complex order strategies.32


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43712 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Notices 

33 As noted above, the Exchange proposes to 

define the Complex NBBO as the derived national 

best bid and derived national best offer for a 

complex strategy calculated using the NBB and 

NBO for each component leg of a complex strategy. 

See proposed Rule 6.91P–O(a)(4). 

34 See Single-Leg Pillar Filing (proposed Rule 

6.62P(a)(3) sets forth the Limit Order Price 

Protection Filter applicable to Limit Orders and 

quotes). 

35 See id. 

36 See Single-Leg Pillar Filing (discussion 

regarding proposed Rule 6.62P–O(a)(3)(A)(i)). 

37 See discussion infra regarding proposed Rule 

6.91P–O(d), which describes the ECO Opening 

Auction Process (or Reopening after a Trading Halt) 

as well as the concepts of ECO Auction Collars and 

ECO Auction Price. 

38 See Single-Leg Pillar Filing (discussion 

regarding proposed Rule 6.62P–O(a)(3)(A)(ii)). 

39 See Single-Leg Pillar Filing (discussion 

regarding proposed Rule 6.62P–O(a)(3)(A)(iii)). 

40 See Single-Leg Pillar Filing (discussion 

regarding proposed Rule 6.62P–O(a)(3)(A) 

excluding Cross Orders). 

41 See Single-Leg Pillar Filing (discussion 

regarding proposed Rule 6.62P–O(a)(3)(A)). 

42 See Single-Leg Pillar Filing (discussion 

regarding proposed Rule 6.62P–O(a)(3)(A) 

describing that the Reference Price for Limit Order 

Price Protection would be adjusted immediately 

following an Auction would ensure that the most 

up-to-date price would be used to assess whether 

to cancel a Limit Order that was received during a 

pre-open state or would be reevaluated after a 

Trading Halt Auction). 

43 See Single-Leg Pillar Filing (discussion 

regarding the proposed definition of ‘‘NBBO’’ in 

proposed Rule 1.1 describing that the ‘‘NBBO’’ for 

purposes of options trading would mean the 

national best bid or offer and that ‘‘[u]nless 

otherwise specified, the Exchange may adjust its 

calculation of the NBBO based on information 

about orders it sends to Away Markets, execution 

reports received from those Away Markets, and 

certain orders received by the Exchange.’’ The 

Exchange further proposes that the term ‘‘Away 

Market NBBO’’ refers to a calculation of the NBBO 

that excludes the Exchange’s BBO’’). 

44 References to the NBBO, NBB, and NBO in 

Rule 7.31–E refer to using a determination of the 

national best bid and offer that has not been 

adjusted. See Single-Leg Pillar Filing (describing 

use of unadjusted NBBO for single-leg Limit Order 

Price Protection in proposed Rule 6.62P–O(a)(3)(B)). 45 See, e.g., Cboe Rule 5.34(b)(6) (describing the 

‘‘Drill-Through Protection’’ and that Cboe 

‘‘determines a default buffer amount on a class-byclass basis). See Single-Leg Pillar Filing (describing 

use of Trader Update to modify Specified 

Thresholds in proposed Rule 6.62P–O (a)(3)(C)). 

• Proposed Rule 6.91P–O(g)(2) would 

set forth the ECO Price Protection. The 

existing ECO ‘‘Price Protection Filter’’ is 

set forth in Commentary .05 to current 

Rule 6.91–O (the ‘‘ECO Filter’’). The 

proposed ‘‘ECO Price Protection’’ on 

Pillar would work similarly to how the 

current ECO price protection 

mechanism functions on the Exchange 

because an ECO would be rejected if it 

is priced a specified percentage away 

from the contra-side Complex NBB or 

NBO.33 However, on Pillar, the 

Exchange proposes to use new 

thresholds and reference prices, which 

would not only simplify the existing 

price check, but it would also align the 

proposed functionality with the 

proposed ‘‘Limit Order Price 

Protection’’ for single-leg interest, thus 

adding uniformity to Exchange rules.34

Proposed Rule 6.91P–O(g)(2)(A) 

would provide that each trading day, an 

ECO to buy (sell) would be rejected or 

cancelled (if resting) if it is priced a 

Specified Threshold equal to or above 

(below) the Reference Price (as 

described below), rounded down to the 

nearest penny ($0.01), subject to 

proposed paragraphs (g)(2)(A)(i)–(v) of 

the Rule as described below. Because 

ECO Price Protection would be applied 

each trading day, an ECO designated 

GTC would be re-evaluated for ECO 

Price Protection on each day that it is 

eligible to trade and would be cancelled 

if the limit price is equal to or through 

the Specified Threshold. In addition, 

the rounding feature is based on how 

Limit Order Price Protection is 

calculated on the Exchange’s cash 

equity market if it is not within the MPV 

for the security, as described in the last 

sentence of Rule 7.31–E(a)(2)(B), and is 

consistent with the proposed operation 

of the single-leg ‘‘Limit Order Price 

Protection’’ functionality for options.35

Æ Proposed Rule 6.91P–O(g)(2)(A)(i) 

would provide that an ECO that arrives 

when a complex strategy is open for 

trading would be evaluated for ECO 

Price Protection on arrival. The 

Exchange has proposed similar 

functionality for single-leg options.36

Æ Proposed Rule 6.91P–O(g)(2)(A)(ii) 

would provide that an ECO received 

during a pre-open state would be 

evaluated for ECO Price Protection after 

the ECO Opening Auction Process 

concludes.37 The Exchange has 

proposed similar functionality for 

single-leg options.38

Æ Proposed Rule 6.91P–O(g)(2)(A)(iii) 

would provide that an ECO resting on 

the Consolidated Book before a trading 

halt would be reevaluated for ECO Price 

Protection after the ECO Opening 

Auction Process concludes. The 

Exchange has proposed similar 

functionality for single-leg options.39

Æ Proposed Rule 6.91P–O(g)(2)(A)(iv) 

would provide that Cross Orders (per 

proposed Rule 6.62P–O(g)) and ECOs 

entered on the Trading Floor would not 

be subject to ECO Price Protection. The 

Exchange has proposed similar 

functionality for single-leg options.40

Æ Proposed Rule 6.91P–O(g)(2)(A)(v) 

would provide that ECO Price 

Protection would not be applied if there 

is no Reference Price for an ECO. The 

Exchange has proposed similar 

functionality for single-leg options.41

Proposed Rule 6.91P–O(g)(2)(B) 

would specify the ‘‘Reference Price’’ 

used in connection with the ECO Price 

Protection. As proposed, the Reference 

Price for calculating ECO Price 

Protection for an ECO to buy (sell) 

would be the Complex NBO (NBB), 

provided that, immediately following an 

ECO Opening Auction Process, the 

Reference Price would be the ECO 

Auction Price or, if none, the Complex 

NBO (NBB). The Exchange believes that 

adjusting the Reference Price for ECO 

Price Protection immediately following 

an ECO Opening Auction would ensure 

that the most up-to-date price would be 

used to assess whether to cancel an ECO 

that was received during a pre-open 

state, including during a Trading Halt. 

The Exchange notes this functionality is 

consistent with the proposed operation 

of the Limit Order Price Protection for 

single-leg options.42

As further proposed, there would be 

no Reference Price for an ECO if there 

is no NBBO for any leg of such ECO (i.e., 

the Exchange would not calculate a 

Complex NBB (NBO)), which text is 

based on current Rule 6.91–O, 

Commentary .05(c), except that the 

proposed rule would not reference 

OPRA because, as further proposed, for 

purposes of determining a Reference 

Price, the Exchange would not use an 

adjusted NBBO (i.e., such NBBO is 

implicitly reliant on information from 

OPRA).43 The Exchange notes that using 

an unadjusted NBBO to calculate the 

Reference Price is based on how Limit 

Order Price Protection currently 

functions on the Exchange’s cash equity 

market, as described in Rule 7.31– 

E(a)(2)(B) and is also consistent with the 

proposed operation of the Limit Order 

Price Protection for single-leg options.44

Proposed Rule 6.91P–O(g)(2)(C) 

would set forth the ‘‘Specified 

Threshold’’ used in connection with the 

ECO Price Protection. As proposed, the 

Specified Threshold for calculating ECO 

Price Protection would be $1.00, unless 

determined otherwise by the Exchange 

and announced to OTP Holders and 

OTP Firms by Trader Update. 

The Exchange believes that the 

proposed Specified Threshold of $1.00 

simplifies how the Reference Price 

would be calculated as compared to the 

calculations currently specified in 

Commentary .05 to Rule 6.91–O. In 

addition, consistent with Commentary 

.05(d), the Exchange proposes that the 

Specified Threshold could change, 

subject to announcing the changes by 

Trader Update. Providing flexibility in 

Exchange rules regarding how the 

Specified Threshold would be set is 

consistent with the rules of other 

options exchanges as well as the 

proposed functionality for the single-leg 

Limit Order Price Protection feature.45


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Notices 43713 

46 See proposed Rule 6.47A–O(iii). Consistent 

with the Single-Leg Pillar Filing, the Exchange also 

proposes to replace reference to ‘‘OX’’ with ‘‘the 

Exchange.’’ See id. (preamble). 

47 15 U.S.C. 78f(b). 

48 15 U.S.C. 78f(b)(5). 

• Proposed Rule 6.91P–O(g)(3) would 

set forth the ‘‘Complex Strategy 

Protections.’’ The proposed protections 

are based on current Rule 6.91–O, 

Commentary .06, which are referred to 

as the ‘‘Debit/Credit Reasonability 

Checks.’’ The Exchange believes this 

name change is appropriate because it 

more accurately conveys that the check 

applies solely to certain complex 

strategies and because (as discussed 

above), the Exchange proposes to refer 

simply to a ‘‘net price’’ as opposed to 

the ‘‘total net debit or credit price.’’ The 

proposed Pillar Complex Strategy 

Protections would function similarly to 

the current Debit/Credit Reasonability 

Checks because erroneously priced 

incoming ECOs would be rejected. 

However, rather than to refer to 

specified debit or credit amounts as a 

way to determine whether a given 

strategy is erroneously priced, the 

proposed rule would instead focus on 

the expectation of the order sender and 

what would result if the ECO were not 

rejected. 

As proposed, to protect an OTP 

Holder or OTP Firm that sends an ECO 

(each an ‘‘ECO sender’’) with the 

expectation that it would receive (or 

pay) a net premium but has priced the 

ECO such that the ECO sender would 

instead pay (or receive) a net premium, 

the Exchange would reject any ECO that 

is comprised of the erroneously-priced 

complex strategies as set forth in 

proposed Rule 6.91P–O(g)(3)(A)–(C) and 

described below. 

Proposed Rule 6.91P–O(g)(3)(A) 

would provide that ‘‘’All buy’ or ‘all 

sell’ strategies’’ would be rejected as 

erroneously-priced if it is an ECO for a 

complex strategy where all legs are to 

buy (sell) and it is entered at a price less 

than one penny ($0.01) times the sum of 

the number of options in the ratio of 

each leg of such strategy (e.g., a complex 

strategy to buy (sell) 2 calls and buy 

(sell) 1 put with a price less than $0.03). 

The proposed text is based on Rule 

6.91–O, Commentary .06(a)(1), with no 

substantive differences, except that the 

Exchange has streamlined the text and 

set forth the minimum price (i.e., $0.03) 

for any ‘‘all buy’’ or ‘‘all sell’’ strategies. 

Proposed Rule 6.91P–O(g)(3)(B) 

would provide for the rejection of 

erroneously-priced ‘‘Vertical spreads,’’ 

which are defined as complex strategies 

that consists of a leg to sell a call (put) 

option and a leg to buy a call (put) 

option in the same option class with the 

same expiration but at different strike 

prices. As proposed, the Exchange 

would reject as erroneously-priced: (i) 

An ECO for a vertical spread to buy a 

lower (higher) strike call and sell a 

higher (lower) strike call and the ECO 

sender would receive (pay) a net 

premium (proposed Rule 6.91P– 

O(g)(3)(B)(i)); and (ii) an ECO for a 

vertical spread to buy a higher (lower) 

strike put and sell a lower (higher) strike 

put and the ECO sender would receive 

(pay) a net premium (proposed Rule 

6.91P–O(g)(3)(B)(ii)). The proposed 

strategy protections for vertical spreads 

are based on current Rule 6.91–O, 

Commentary .06(a)(2), except that, as 

noted above, the proposed Rule is 

written from the standpoint of the 

expectation of the ECO sender as 

opposed to reviewing total net debit or 

credit price of the strategy. 

Proposed Rule 6.91P–O(g)(3)(C) 

would provide for the rejection of 

erroneously-priced ‘‘Calendar spreads,’’ 

which are defined as consisting of a leg 

to sell a call (put) option and a leg to 

buy a call (put) option in the same 

option class at the same strike price but 

with different expirations. As proposed, 

the Exchange would reject as 

erroneously-priced: (i) An ECO for a 

calendar spread to buy a call leg with a 

shorter (longer) expiration while selling 

a call leg with a longer (shorter) 

expiration and the ECO sender would 

pay (receive) a net premium (proposed 

Rule 6.91P–O(g)(3)(C)(i)); and (ii) an 

ECO for a calendar spread to buy a put 

leg with a shorter (longer) expiration 

while selling a put leg with a longer 

(shorter) expiration and the ECO sender 

would pay (receive) a net premium 

(proposed Rule 6.91P–O(g)(3)(C)(ii)). 

The proposed strategy protections for 

calendar spreads are based on current 

Rule 6.91–O, Commentary .06(a)(3), 

except that, as noted above, the 

proposed Rule is written from the 

standpoint of the expectation of the ECO 

sender as opposed to reviewing the total 

net debit or credit price of the strategy. 

The Exchange has also not retained 

discretion to disable the strategy 

protections for calendar spreads (as 

contained in Commentary .06(a)(3)(i) of 

the current Rule) because since adopting 

this provision in 2017, the Exchange has 

never exercised this discretion and 

therefore has determined that such 

discretion is no longer needed. 

Proposed Rule 6.91P–O(g)(3)(D) 

would provide that any ECO that is not 

rejected by the complex strategy 

protections would still be subject to the 

Price Protection Filter, per paragraph 

(g)(2) of this Rule, which proposed text 

is based on Rule 6.91–O, Commentary 

.06(b) without any substantive 

difference. 

Rule 6.47A–O: Order Exposure 

Requirements—OX 

The Exchange also proposes 

conforming, non-substantive 

amendments to Rule 6.47A–O, regarding 

order exposure, to add a cross-reference 

to new Pillar Rule 6.91P–O. This 

proposed amendment would extend the 

exemption from the order exposure 

requirements to COAs on Pillar.46 The 

Exchange also proposes to modify the 

reference to ‘‘Complex Order Auction 

Process (‘COA’)’’ to simply ‘‘Complex 

Order Auction (‘COA’)’’ (i.e., removing 

the word Process) consistent with how 

this concept is defined in proposed Rule 

6.91P–O(a)(7). 

* * * * * 

As discussed above, because of the 

technology changes associated with the 

migration to the Pillar trading platform, 

subject to approval of the Single-Leg 

Pillar Filing as well as this proposed 

rule change, the Exchange will 

announce by Trader Update when rules 

with a ‘‘P’’ modifier will become 

operative and for which symbols. The 

Exchange believes that keeping existing 

rules on the rulebook pending the full 

migration of Pillar will reduce 

confusion because it will ensure that the 

rules governing trading on the 

Exchange’s current system will continue 

to be available pending the full 

migration to Pillar. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),47 in general, and furthers the 

objectives of Section 6(b)(5),48 in 

particular, because it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, 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. The Exchange believes 

that proposed Rule 6.91P–O to support 

electronic complex trading on Pillar 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because the proposed rule would 

promote transparency in Exchange rules 

by using consistent terminology 

governing trading on both the 

Exchange’s cash equity and options 

Pillar trading platforms, thereby 

ensuring that members, regulators, and 


jbell on DSKJLSW7X2PROD with NOTICES
43714 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Notices 

49 See generally the Single-Leg Pillar Filing. 

50 See supra note 17 (citing Cboe Rule 5.33(a) 

regarding similar Complex Only order 

functionality). 

the public can more easily navigate the 

Exchange’s rulebook and better 

understand how options trading is 

conducted on the Exchange. 

The Exchange believes that adding 

new Rule 6.91P–O with the modifier 

‘‘P’’ to denote that this rule would be 

operative for the Pillar trading platform 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system by providing transparency of 

which rules would govern trading once 

a symbol has been migrated to the Pillar 

platform. The Exchange similarly 

believes that adding a preamble to 

current Rule 6.91–O stating that it 

would not be applicable to trading on 

Pillar would remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system because it would promote 

transparency regarding which rules 

would govern trading on the Exchange 

during and after the transition to Pillar. 

The Exchange believes that 

incorporating Pillar functionality 

currently available on the Exchange’s 

cash equity market (and recently 

proposed for single-leg options),49 for 

trading of electronic complex orders on 

its options market in proposed Rule 

6.91P–O would remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system because the Exchange would be 

able to offer consistent functionality 

across both its options and cash equity 

trading platforms, adapted as applicable 

for trading of electronic complex orders. 

Accordingly, with the transition to 

Pillar, the Exchange will be able to offer 

additional features to its OTP Holders 

and OTP Firms that are currently 

available only on the Exchange’s cash 

equity platform (and recently proposed 

to be available for single-leg options 

trading). For similar reasons, the 

Exchange believes that using Pillar 

terminology for the proposed new rule 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it would promote 

consistency in the Exchange’s rules 

across both its options and cash equity 

platforms. 

Definitions, Types of ECOs and Priority 

and Pricing of ECOs 

The Exchange believes that the 

proposed definitions in Rule 6.91P–O(a) 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because the proposed changes 

are designed to promote clarity and 

transparency by consolidating existing 

defined terms related to electronic 

complex trading into one section of the 

proposed rule. The Exchange believes 

that the proposed non-substantive 

amendments to those terms currently 

defined in Rule 6.91–O would promote 

clarity and transparency by using Pillar 

terminology. The Exchange further 

believes consolidating defined terms in 

proposed Rule 6.91P–O(a) would make 

the proposed rule more transparent and 

easier to navigate. 

The Exchange believes that the 

proposed new definition of DBBO (and 

related terms of DBB and DBO) would 

further remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it would promote clarity 

and transparency to market participants 

regarding how the DBBO would be 

calculated under Pillar. The proposed 

definition is not novel and is based in 

part on similarly defined terms used on 

NYSE American and Cboe. In addition, 

the Exchange believes that setting forth 

additional definitions in proposed Rule 

6.91P–O(a), including those that are 

used on other options exchanges (e.g., 

‘‘complex strategy’’) and clarifying 

terms (e.g., ‘‘leg’’ and ‘‘leg markets’’), 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it would promote clarity 

and transparency to market participants 

regarding electronic complex trading 

under Pillar. Finally, the proposed 

definition of ‘‘ECO Order Instruction’’ 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it would incorporate for 

ECOs existing Pillar order handling 

functionality in an auction that is 

currently available on the Exchange’s 

cash equity platform, as described in 

Rule 7.35–E(g) and is proposed for 

options trading in proposed Rule 6.64P– 

O(e) and its sub-paragraphs (1) and (2) 

(as described in the Single-Leg Pillar 

Filing). The Exchange similarly 

proposes this functionality for the ECO 

Opening Auction Process, with nonsubstantive differences only to use an 

ECO-specific defined term and to refer 

to the ECO Opening Auction Process. 

The Exchange believes that the 

proposed types of ECOs available per 

Rule 6.91P–O(b) would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because it 

would describe the ECOs and time-inforce modifiers that would be available 

on Pillar, as well as specifying 

additional ECO types. The Exchange is 

not proposing any new ECO order types 

or time-in-force modifiers on Pillar and 

believes that the non-substantive 

differences to use Pillar terminology to 

describe the available ECO order types 

would promote transparency and clarity 

in Exchange rules. The Exchange 

believes that the proposed Complex 

Only Order is not novel because it is 

based in part on the existing PNP Plus 

order functionality as both order types 

only interact with other ECOs. The 

proposed functionality on Pillar is also 

based on how such orders function on 

other options exchanges.50 In addition, 

the proposed ECO GTX Order uses 

Pillar terminology to describe what is 

referred to as an ‘‘RFR Response’’ in the 

current rules, and therefore is not novel. 

The Exchange believes that proposed 

new Rule 6.91P–O(c), and 

subparagraphs (2), (3), and (4), would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the proposed rules would set forth a 

price-time priority model for Pillar and 

pricing requirements for ECO trading 

that are substantively the same as the 

Exchange’s current price-time priority 

model and pricing requirements as set 

forth in Rule 6.91–O(a)(1) and 

Commentaries .01 and .02(i) to Rule 

6.91–O. The Exchange believes that 

proposed Rule 6.91P–O(c)(1) and 

subparagraphs (A) and (B) would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

they would promote transparency and 

clarity in Exchange rules regarding how 

ECOs would trade with the leg markets. 

Execution of ECOs at the Open (or 

Reopening After a Trading Halt) 

The Exchange believes that proposed 

Rule 6.91P–O(d) regarding the ECO 

Opening Auction Process would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the proposed rule maintains the 

fundamentals of an auction process that 

the Exchange currently uses for ECOs, 

as described in Rule 6.91–O(a)(2)(i)(B), 

while at the same time enhancing the 

process by incorporating Pillar auction 

functionality that is currently available 

on the Exchange’s cash equity platform, 

as described in Rule 7.35–E as well as 

proposed for single-leg options in 

proposed Rule 6.64P–O. For example, 

the Exchange proposes to use Pillar 

functionality to determine how to price 

an ECO Opening Auction Process, as 

described in proposed Rule 6.91P– 


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Notices 43715 

51 See discussion infra regarding rationale for 

proposed Rule 6.91P–O(e) to restrict certain ECOs 

from executing as a package and bypassing Market 

Maker risk settings. 

52 See supra notes 28 and 29 (citing to Cboe Rule 

5.33(g) and Nasdaq ISE Options 3, Section 

14(d)(3)(A)–(B) regarding similar functionality. 

53 See supra note 32 (citing Cboe Rule 5.33(a) and 

MIAX Rule 518(a)(6) regarding each exchange’s 

ability to limit the number of new complex 

strategies in their systems at any particular time). 

O(d)(3), including using proposed ‘‘ECO 

Auction Collars’’ and an ‘‘ECO Auction 

Price,’’ which would promote 

transparency to market participants. The 

Exchange also proposes to process ECOs 

received during an ECO Opening 

Auction Process, as described in 

proposed Rule 6.91P–O(d)(4), and 

transition to continuous trading 

following an ECO Opening Auction 

Process, as described in proposed Rule 

6.91P–O(d)(5), in a manner similar to 

how the Exchange’s cash equity market 

processes orders that are received 

during an Auction Processing Period 

and transitions to continuous trading 

following a cash equity Trading Halt 

Auction, which the Exchange also 

proposes for single-leg options in 

proposed Rule 6.64P–O. The Exchange 

believes that using similar functionality 

for different types of auctions would 

promote consistency across the 

Exchange’s options and cash equity 

trading platforms. Because the Exchange 

would be harnessing Pillar technology 

to support the ECO Opening Auction 

Process for electronic complex options 

trading, the Exchange believes that 

structuring proposed Rule 6.91P–O(d) 

based on Rule 7.35–E and proposed 

Rule 6.64P–O would promote 

transparency in the Exchange’s trading 

rules. 

The Exchange further believes that the 

proposed Rules 6.91P–O(d)(1) and (2), 

which describe when the Exchange 

would initiate an ECO Opening Auction 

Process and which ECOs would be 

eligible to trade in that process, would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

they would provide clarity and 

transparency of the conditions required 

before the Exchange would initiate an 

ECO Opening Auction Process. The 

Exchange further believes that those 

conditions are not novel and are based 

on existing conditions specified in Rule 

6.91–O(a)(2)(i)(A) and (B), with 

additional specificity designed to 

promote clarity and transparency. 

Accordingly, the Exchange believes that 

the ECO Opening Auction Process for 

ECOs trading on Pillar would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the proposed process is based on the 

current opening process, including that 

orders would be matched based on 

price-time priority at a price at which 

the maximum volume can be traded. 

Execution of ECOs During Core Trading 

Hours 

The Exchange believes that proposed 

Rule 6.91P–O(e), setting forth the 

execution of ECOs during Core Trading 

Hours, would remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system because the proposed 

functionality would incorporate the 

Exchange’s existing price-time priority 

model for trading ECOs, including 

providing that the leg markets would 

have priority at a price. The Exchange 

believes that it would remove 

impediments to and perfect the 

mechanism of a free and open market 

and national market system for ECOs 

not to trade with orders in the leg 

markets designated AON or with an 

MTS modifier (as described in the 

Single-Leg Pillar Filing), because both 

orders types are conditional. The 

Exchange further believes that it would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system for ECOs 

to trade as Complex Only Orders (rather 

than be rejected as they would under 

current rules) if they have a complex 

strategy that could result in a Market 

Maker breaching their established risk 

settings.51 This proposed process is also 

consistent with the treatment of similar 

ECOs on other options markets.52 The 

Exchange further believes that it would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system to specify 

the frequency with which the Exchange 

would evaluate trading opportunities for 

an ECO with the leg markets update 

because it would promote clarity and 

transparency in Exchange rules. 

Execution of ECOs During a COA 

The Exchange believes that proposed 

Rule 6.91P–O(f), setting forth the 

execution of ECOs during a COA, would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and 

promote just and equitable principles of 

trade because the proposed 

functionality would both incorporate 

existing functionality to provide that 

COA Orders would trade solely with 

other ECOs (and not the leg markets) 

during the auction and that a COA 

Auction would be allocated on pricetime priority, which is consistent with 

the Exchange’s priority scheme. The 

Exchange believes the proposed rule 

would add clarity and transparency to 

OTP Holders and OTP Firms utilizing 

the COA process. 

In addition, the Exchange further 

believes that the proposed changes to 

the COA process on Pillar that either 

differ from current functionality or that 

would be new would remove 

impediments to and perfect the 

mechanism of a free and open market 

and national market system because: 

• Requiring that a COA Order initiate 

a COA on arrival, else [sic] be treated as 

a standard ECO, is new under Pillar and 

would provide OTP Holders and OTP 

Firms with a higher level of 

transparency and determinism of when 

a COA Order could initiate a COA. 

• Making explicit that COA Orders 

may only execute with ECOs (and not 

the leg markets) until after the COA 

ends is designed to make clear that 

ECOs have priority during a COA. 

• Streamlining the rule text that 

would describe the market events that 

would cause an early end to a COA 

under Pillar would simplify the COA 

process and would provide OTP 

Holders and OTP Firms with a higher 

level of transparency and determinism 

regarding the handling of COA Orders. 

ECO Risk Checks 

The Exchange believes that proposed 

Rule 6.91P–O(g), setting forth ECO Risk 

Checks, would remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system and promote just and equitable 

principles of trade because the proposed 

functionality would incorporate existing 

risk controls, without any substantive 

differences. The Exchange further 

believes that the proposed changes to 

ECO Risk Checks on Pillar that either 

differ from current functionality or 

would be new would remove 

impediments to and perfect the 

mechanism of a free and open market 

and national market system because: 

• The Exchange believes that the new 

Complex Strategy Limit (which is 

conceptually similar to the Complex 

Order Table Cap under the current Rule) 

would operate as a system protection 

tool that enables the Exchange to limit 

the number of complex strategies 

available on the Exchange, which in 

turn would improve the efficiency of the 

ECO process and helps maintain a fair 

and orderly market. The proposed limits 

are not novel and are based on limits 

imposed by other options exchanges on 

new complex order strategies.53

• The proposed ECO Price Protection 

on Pillar would work similarly to how 

the current ECO price protection 


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43716 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Notices 

54 As noted above, the Exchange proposes to 

define the Complex NBBO as the derived national 

best bid and derived national best offer for a 

complex strategy calculated using the NBB and 

NBO for each component leg of a complex strategy. 

See proposed Rule 6.91P–O(a)(4). 

55 See Single-Leg Pillar Filing (proposed Rule 

6.62P(a)(3) sets forth the Limit Order Price 

Protection Filter applicable to Limit Orders and 

quotes). 

mechanism functions on the Exchange 

because an ECO would be rejected if it 

is priced a specified percentage away 

from the contra-side Complex NBB or 

NBO.54 The Exchange believes that the 

proposed differences on Pillar, to use 

new thresholds and reference prices, 

would not only simplify the existing 

price check, but it would also align the 

proposed functionality with the 

proposed ‘‘Limit Order Price 

Protection’’ for single-leg interest, thus 

adding uniformity to Exchange rules.55

• The proposed Pillar Complex 

Strategy Protections would function 

similarly to the current Debit/Credit 

Reasonability Checks because 

erroneously priced incoming ECOs 

would be rejected. The Exchange 

believes that the non-substantive 

differences to focus on the expectation 

of the ECO sender and what would 

result if the ECO were not rejected 

rather than refer to specified debit or 

credit amounts as a way to determine 

whether a given strategy is erroneously 

priced would remove impediments to 

and perfect the mechanism of a free and 

open market system because it would 

promote clarity and transparency in 

Exchange rules. 

Rule 6.47A–O 

The Exchange believes that the 

proposed non-substantive change to 

Rule 6.47A–O to update references to 

‘‘COA’’ (versus COA Process) and ‘‘the 

Exchange,’’ to delete reference to ‘‘OX,’’ 

and add the reference to Rule 6.91P–O 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system and, in general, protect investors 

and the public interest because the 

proposed conforming changes would 

add clarity, transparency and 

consistency to the Exchange’s rules. The 

Exchange believes that market 

participants would benefit from the 

increased clarity, thereby reducing 

potential confusion. Similarly, the 

Exchange believes that adding a crossreference to proposed Rule 6.91P–O 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it would promote clarity 

and transparency of which Pillar rules 

would be eligible for the exception 

specified in that Rule. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange operates in a competitive 

market and regularly competes with 

other options exchanges for order flow. 

The Exchange believes that the 

transition to Pillar for trading of ECOs 

on its options trading platform would 

promote competition among options 

exchanges by offering a low-latency, 

deterministic trading platform. The 

proposed rule changes would support 

that inter-market competition by 

allowing the Exchange to offer 

additional functionality to its OTP 

Holders and OTP Firms, thereby 

potentially attracting additional order 

flow to the Exchange. Otherwise, the 

proposed changes are not designed to 

address any competitive issues, but 

rather to amend the Exchange’s rules 

relating to trading of ECOs to support 

the transition to Pillar. As discussed in 

detail above, with this rule filing, the 

Exchange is not proposing to change its 

core functionality regarding the 

treatment of ECOs. Rather, the Exchange 

believes that the proposed rule changes 

would promote consistent use of 

terminology to support options (both 

single-leg and complex) and cash equity 

trading on the Exchange, making the 

Exchange’s rules easier to navigate. The 

Exchange does not believe that the 

proposed rule changes would raise any 

intra-market competition as the 

proposed rule changes would be 

applicable to all OTP Holders and OTP 

Firms, and reflects the Exchange’s 

existing treatment of ECOs, without 

proposing any material substantive 

changes. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 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– 

NYSEARCA–2021–68 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–NYSEARCA–2021–68. 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–NYSEARCA–2021–68, and 


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Notices 43717 

56 17 CFR 200.30–3(a)(12). 

should be submitted on or before 

August 31, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.56

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16967 Filed 8–9–21; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 11491] 

Foreign Affairs Policy Board Charter 

Renewal 

ACTION: Notice of renewal of the charter 

of the Foreign Affairs Policy Board. 

SUMMARY: Pursuant to the Federal 

Advisory Committee Act, the 

Department of State hereby provides 

notice of the renewal of the charter of 

the Foreign Affairs Policy Board (‘‘the 

Board’’). The Foreign Affairs Policy 

Board provides the Secretary of State 

with advice, feedback, and perspectives 

from a diverse array of experts to 

advance the Department’s mission and 

help root American foreign policy in the 

needs and aspirations of the American 

people. The Board’s activities are 

advisory only. 

FOR FURTHER INFORMATION CONTACT: 

Designated Federal Officer Jennifer R. 

Littlejohn in the Office of Policy 

Planning, U.S. Department of State, at 

email: LittlejohnJR@state.gov. 

SUPPLEMENTARY INFORMATION: The Board 

is established under the general 

authority of the Secretary of State and 

the Department of State as set forth in 

Title 22 of the United States Code, in 

particular Section 2656 of that Title and 

consistent with the Federal Advisory 

Committee Act. 

Authority: 5 U.S.C. Appendix, 41 CFR 

102–3.65. 

Salman Ahmed, 

Director, Office of Policy Planning, 

Department of State. 

[FR Doc. 2021–16987 Filed 8–9–21; 8:45 am] 

BILLING CODE 4710–10–P 

DEPARTMENT OF STATE 

[Public Notice 11493] 

Imposition of Nonproliferation 

Measures Against Foreign Persons, 

Including a Ban on U.S. Government 

Procurement 

AGENCY: Bureau of International 

Security and Nonproliferation, 

Department of State. 

ACTION: Notice. 

SUMMARY: A determination has been 

made that a number of foreign persons 

have engaged in activities that warrant 

the imposition of measures pursuant to 

Section 3 of the Iran, North Korea, and 

Syria Nonproliferation Act. The Act 

provides for penalties on foreign entities 

and individuals for the transfer to or 

acquisition from Iran since January 1, 

1999; the transfer to or acquisition from 

Syria since January 1, 2005; or the 

transfer to or acquisition from North 

Korea since January 1, 2006, of goods, 

services, or technology controlled under 

multilateral control lists (Missile 

Technology Control Regime, Australia 

Group, Chemical Weapons Convention, 

Nuclear Suppliers Group, Wassenaar 

Arrangement) or otherwise having the 

potential to make a material 

contribution to the development of 

weapons of mass destruction (WMD) or 

cruise or ballistic missile systems. The 

latter category includes (a) items of the 

same kind as those on multilateral lists 

but falling below the control list 

parameters when it is determined that 

such items have the potential of making 

a material contribution to WMD or 

cruise or ballistic missile systems, (b) 

items on U.S. national control lists for 

WMD/missile reasons that are not on 

multilateral lists, and (c) other items 

with the potential of making such a 

material contribution when added 

through case-by-case decisions. 

DATES: July 29, 2021. 

FOR FURTHER INFORMATION CONTACT: On 

general issues: Pam Durham, Office of 

Missile, Biological, and Chemical 

Nonproliferation, Bureau of 

International Security and 

Nonproliferation, Department of State, 

Telephone (202) 647–4930. For U.S. 

Government procurement ban issues: 

Eric Moore, Office of the Procurement 

Executive, Department of State, 

Telephone: (703) 875–4079. 

SUPPLEMENTARY INFORMATION: On July 

29, 2021, the U.S. Government applied 

the measures authorized in Section 3 of 

the Iran, North Korea, and Syria 

Nonproliferation Act (Pub. L. 109–353) 

against the following foreign persons 

identified in the report submitted 

pursuant to Section 2(a) of the Act: 

Asa’ib Ahl al-Haq (AAH) (Iraq) and 

any successor, sub-unit, or subsidiary 

thereof; 

Kata’ib Hezbollah (Iraq) and any 

successor, sub-unit, or subsidiary 

thereof; 

Asia-Invest LLC (Russia) and any 

successor, sub-unit, or subsidiary 

thereof; 

Charter Green Light Moscow (CGLM) 

(Russia) and any successor, sub-unit, or 

subsidiary thereof; 

NPP Pulsar LLC (Russia) and any 

successor, sub-unit, or subsidiary 

thereof; 

Ayman Al Sabbagh Trading (Syria) 

and any successor, sub-unit, or 

subsidiary thereof; 

Lebanese Hizballah (Syria) and any 

successor, sub-unit, or subsidiary 

thereof; 

Wael Issa Trading Establishment 

(Syria) and any successor, sub-unit, or 

subsidiary thereof. 

Accordingly, pursuant to Section 3 of 

the Act, the following measures are 

imposed on these persons: 

1. No department or agency of the 

U.S. government may procure or enter 

into any contract for the procurement of 

any goods, technology, or services from 

these foreign persons, except to the 

extent that the Secretary of State 

otherwise may determine; 

2. No department or agency of the 

U.S. government may provide any 

assistance to these foreign persons, and 

these persons shall not be eligible to 

participate in any assistance program of 

the U.S. government, except to the 

extent that the Secretary of State 

otherwise may determine; 

3. No U.S. government sales to these 

foreign persons of any item on the 

United States Munitions List are 

permitted, and all sales to these persons 

of any defense articles, defense services, 

or design and construction services 

under the Arms Export Control Act are 

terminated; and 

4. No new individual licenses shall be 

granted for the transfer to these foreign 

persons of items the export of which is 

controlled under the Export Control 

Reform Act of 2018 or the Export 

Administration Regulations, and any 

existing such licenses are suspended. 

These measures shall be implemented 

by the responsible departments and 

agencies of the U.S. government and 

will remain in place for two years from 

the effective date, except to the extent 


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