44090 Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Notices 

22 15 U.S.C. 78s(b)(3)(A). 

23 17 CFR 240.19b–4(f)(6). 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

of the purposes of the Act. The 

Exchange does not believe the proposed 

rule change will impose any burden on 

intramarket competition, as the 

proposed changes will apply in the 

same manner to all Book Only orders 

and bulk messages submitted through a 

bulk port. The proposed rule change to 

codify that bulk messages will only be 

subject to single price adjust is 

appropriate given that Market-Makers’ 

automated quote streaming systems 

review their resting interest when the 

markets change and update as 

appropriate in accordance with their 

business and risk models. Therefore, the 

Exchange does not believe it is 

necessary for it also to review resting 

Market-Maker interest continuously and 

reprice as the market changes. The 

Exchange does not believe the proposed 

rule change will impose any burden on 

intermarket competition, as the 

proposed rule change applies to 

functionality that applies to incoming 

interest that may only rest or execute on 

the Exchange’s book. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

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

Act 22 and Rule 19b–4(f)(6) 23

thereunder. At any time within 60 days 

of the filing of the proposed rule change, 

the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will 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– 

CboeEDGX–2021–035 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–CboeEDGX–2021–035. 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–CboeEDGX–2021–035 and 

should be submitted on or before 

September 1, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–17081 Filed 8–10–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92575; File No. SR– 

CboeBZX–2021–054] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Modify the 

Bulk Message Fat Finger Check 

August 5, 2021. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on July 28, 

2021, Cboe BZX Exchange, Inc. 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

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

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

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX Options’’) 

proposes to modify the bulk message fat 

finger check. The text of the proposed 

rule change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 


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Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Notices 44091 

5The term ‘‘bulk message’’ means a bid or offer 

included in a single electronic message a User 

submits with an M Capacity to the Exchange in 

which the User may enter, modify, or cancel up to 

an Exchange-specified number of bids and offers 

(which number the Exchange announces via 

Exchange notice or publicly available technical 

specifications). A User may submit a bulk message 

through a bulk port as set forth in Rule 21.1(j)(3). 

The System handles a bulk message in the same 

manner as it handles an order or quote, unless the 

Rules specify otherwise. See Rule 16.1. 

6This check does not apply to bulk messages 

submitted prior to the conclusion of the opening 

process or when no NBBO is available. 

7The proposed rule change also makes a 

nonsubstantive change to say the System cancels or 

rejects any bulk message bid (offer) more than a 

buffer amount above (below) the NBO (NBB) to 

align the language with other rules. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10 Id. 

11See, e.g., Rule 21.17(a)(1) (market order NBBO 

width protection). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to modify the 

bulk message 5 fat finger check in Rule 

21.17(a)(6). In accordance with the fat 

finger check, the System cancels or 

rejects any bulk message bid (offer) 

above (below) the national best offer 

(‘‘NBO’’) (national best bid (‘‘NBB’’)) by 

more than a specified amount 

determined by the Exchange.6 The 

proposed rule change indicates that the 

Exchange may also determine a 

minimum and maximum dollar value 

for the bulk message fat finger check.7

The Exchange believes Market-Makers 

may be willing to accept an execution 

at a price beyond the NBBO at the time 

of order entry, but not too far away. The 

purpose of the fat finger check is 

intended to reject bulk message bids and 

offers that on their face are likely to be 

entered at erroneous prices and thus 

prevent potentially erroneous 

executions. The proposed rule change to 

permit the Exchange to set a minimum 

and maximum value will provide the 

Exchange with the opportunity to set a 

meaningful buffer that is not ‘‘too close’’ 

to the NBBO (in other words, a de 

minimis buffer) but not ‘‘too far’’ from 

the NBBO (in other words, a buffer that 

is more likely to accept erroneously 

priced bulk messages). The proposed 

rule change also permits the Exchange 

to set the relevant amounts for the bulk 

message fat finger check on a class-byclass basis. Option classes have different 

characteristics and trading models, and 

the proposed flexibility will permit the 

Exchange to apply different parameters 

to address those differences. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.8 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 9 requirements that the rules of 

an exchange be 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 regulating, clearing, settling, 

processing information with respect to, 

and 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 10 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the proposed change to 

the bulk message fat finger check will 

protect investors and the public interest 

as the check will continue to mitigate 

potential risks associated with MarketMakers submitting bulk message bids 

and offers at unintended prices, and 

risks associated with orders and quotes 

trading at prices that are extreme and 

potentially erroneous, which may likely 

have resulted from human or 

operational error. The proposed 

enhancement that the Exchange will 

apply a minimum and maximum to the 

fat finger check will permit the 

Exchange to apply the fat finger check 

to bulk messages in a more meaningful 

way. The Exchange believes class 

flexibility is appropriate to permit the 

Exchange to apply reasonable buffers to 

classes, which may exhibit different 

trading characteristics and have 

different market models. The Exchange 

has other price checks and risk controls 

that permit it to set a minimum and 

maximum, as well as apply parameters 

on a class basis.11

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 does not believe the proposed 

rule change will impose any burden on 

intramarket competition, as the 

proposed changes will apply in the 

same manner to all bulk messages 

submitted through a bulk port. The 

Exchange does not believe the proposed 

rule change will impose any burden on 

intermarket competition, as the 

proposed rule change applies to 

functionality that applies to incoming 

interest that may only rest or execute on 

the Exchange’s book. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

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

Act 12 and Rule 19b–4(f)(6) 13

thereunder. At any time within 60 days 

of the filing of the proposed rule change, 

the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will 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. 


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44092 Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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– 

CboeBZX–2021–054 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CboeBZX–2021–054. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2021–054 and 

should be submitted on or before 

September 1, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–17080 Filed 8–10–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92577; File No. SR–ISE– 

2021–16] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend ISE’s Options 

Regulatory Fee 

August 5, 2021. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on July 30, 

2021, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

ISE’s Pricing Schedule at Options 7, 

Section 9, Part C related to the Options 

Regulatory Fee or ‘‘ORF’’. 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated the amendments become 

operative on October 1, 2021. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Currently, ISE assesses an ORF of 

$0.0018 per contract side as specified in 

ISE’s Pricing Schedule at Options 7, 

Section 9, Part C. The Exchange 

proposes to waive its ORF from October 

1, 2021 to January 31, 2022, and then 

recommence the ORF on February 1, 

2022. 

By way of background, the options 

industry has experienced extremely 

high options trading volumes and 

volatility. This historical anomaly of 

persistent increased options volumes 

has impacted ISE’s ORF collection 

which, in turn, has caused the Exchange 

to continue to revisit its financial 

forecast to reflect the sustained elevated 

options volumes and volatility. As the 

Exchange continues to monitor the 

amount of revenue collected from the 

ORF to ensure that our ORF collection, 

in combination with other regulatory 

fees and fines, does not exceed 

regulatory costs, the Exchange has 

found it difficult to determine when 

volumes will return to more normal 

levels. In order to avoid iterative rule 

changes to amend its ORF, the Exchange 

believes it is prudent to instead waive 

its ORF from October 1, 2021 to January 

31, 2022, to permit the Exchange to plan 

future forecasts without the need to 

account for any ORF collection during 

that timeframe. This proposal would 

ensure that revenue collected from the 

ORF, in combination with other 

regulatory fees and fines, would not 

exceed the Exchange’s total regulatory 

costs. ISE would recommence assessing 

its current ORF rate of $0.0018 per 

contract side as of February 1, 2022. 

Furthermore, prior to February 1, 2022, 

ISE will examine its ORF rate to 

determine if the $0.0018 per contract 

side ORF is justified given the current 

volumes in 2022 as well as the current 

Exchange regulatory expenses at that 

time. ISE would file a proposed rule 

change to amend its per contract ORF if 

changes are necessary to ensure an 

equitable allocation of reasonable ORF, 

if e.g., the Exchange believes that the 

volumes ISE experiences in the second 

half of 2021 are likely to persist 

throughout 2022. Of note, ISE proposes 

to continue to operate with the ORF fee 

waived in January 2022 to allow its 

members and other broker dealers time 

to align their systems for February 1, 

2022, allowing for time after the holiday 

period which traditionally have yearend code freezes in place. 


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