47346 Federal Register / Vol. 86, No. 161 / Tuesday, August 24, 2021 / Notices 

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

2 17 CFR 240.19b–4. 

3As a result of the proposed elimination of 

certain rule violations listed under Rule 13.15(g), 

the proposed rule change subsequently renumbers 

current Rules 13.15(g)(6), (8), (9), (11), (13), (14), 

(15), (16), (17), (18), (19) and (20), to Rules 

13.15(g)(4), (5), (6), (7), (8), (9), (10), (11), (12), (13), 

(14) and (15), respectively. 

4See Rule 6.1(a), which provides that a 

participant in each transaction to be designated by 

the Exchange must report or ensure the transaction 

is reported to the Exchange within 90 seconds of 

the execution in a form and manner prescribed by 

the Exchange so that the trade information may be 

reported to time and sales reports; and Rule 6.1(c), 

which provides the Exchange-established procedure 

for reporting transactions pursuant to Rule 6.1(a). 

5See Rule 5.52(a), which provides, in relevant 

part, that Market-Maker bids and offers are firm for 

all orders under this Rule and Rule 602 of 

Regulation NMS under the Exchange Act (‘‘Rule 

602’’) for the number of contracts specified in the 

bid or offer, except if: (1) A system malfunction or 

other circumstance impairs the Exchange’s ability 

to disseminate or update market bids and offers in 

a timely and accurate manner; (2) the level of 

trading activities or the existence of unusual market 

conditions is such that the Exchange is incapable 

of collecting, processing, and making available to 

quotation vendors the data for the option in a 

manner that accurately reflects the current state of 

the market on the Exchange; (3) prior to the 

conclusion of the Opening Auction Process; or (4) 

any of the circumstances provided in Rule 602(c)(4) 

exist. 

6Rule 5.85(a)(2)(A), which provides that Priority 

Customer orders in the Book have first priority. If 

there are two or more Priority Customer orders in 

the Book at the same price, the System prioritizes 

them in the order in which the System received 

them (i.e., in time priority). The Exchange notes that 

customer priority for electronic executions is 

systematically enforced. See Rule 5.32(a)(2)(A). 

7See Rule 5.91(a), which provides that a Floor 

Broker handling an order must use due diligence to 

execute the order at the best price or prices 

available to him or, in accordance with the Rules. 

Use of due diligence in handling and executing an 

order includes: (1) Announcing to the trading 

crowd a request for quotes; (2) taking the necessary 

measures to ensure the proper execution of an order 

in accordance with firm quote obligations in Rule 

5.52, including the executable quantity of a quote 

from the trading crowd; (3) the immediate and 

continuous representation at the trading station 

where the applicable class trades of the following 

types of orders: (A) Market orders; (B) limit orders 

to sell where the specified price is at or below the 

current offer or; and (C) limit orders to buy where 

the specified price is at or above the current bid; 

(4) subject to the requirement to systematize orders 

prior to representation pursuant to Rule 5.7(f), 

electronically recording the time via a PAR 

workstation at which the Floor Broker initially 

represents the order to the trading crowd; and (5) 

prioritizing the Floor Broker’s agency business over 

the Floor Broker’s liquidation orders (which 

liquidation orders are described in Rule 5.91(d)). 

David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Cynthia 

Roscoe, 100 F Street NE, Washington, 

DC 20549, or by sending an email to: 

PRA_Mailbox@sec.gov. 

Dated: August 18, 2021. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18105 Filed 8–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92702; File No. SR–CBOE– 

2021–045] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Order Granting Accelerated Approval 

of a Proposed Rule Change To Amend 

Rule 13.15, Which Governs the 

Exchange’s Minor Rule Violation Plan 

August 18, 2021. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on August 3, 

2021, Cboe Exchange, Inc. filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons and approving 

the proposal on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

Rule 13.15, which governs the 

Exchange’s Minor Rule Violation Plan 

(‘‘MRVP’’), in connection with certain 

minor rule violations, applicable fines, 

as well as other clarifying, 

nonsubstantive changes. 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://www.cboe.com/ 

AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item III below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

MRVP in Rule 13.15 in connection with 

certain minor rule violations, applicable 

fines, as well as other clarifying, 

nonsubstantive changes. Rule 13.15 

provides for disposition of specific 

violations through assessment of fines 

in lieu of conducting a formal 

disciplinary proceeding. Rule 13.15(g) 

sets forth the list of specific Exchange 

Rules under which a Trading Permit 

Holder (‘‘TPH’’) or person associated 

with or employed by a TPH may be 

subject to a fine for violations of such 

Rules and the applicable fines that may 

be imposed by the Exchange. 

Specifically, the proposed rule change 

amends Rule 13.15(g) by: (1) 

Eliminating certain rule violations that 

the Exchange no longer believes to be 

minor in nature; (2) updating the fine 

schedule applicable to minor rule 

violations related to a Market-Maker’s 

failure to meet Exchange quoting 

obligations; and (3) making other 

nonsubstantive changes. 

First, the proposed rule change 

removes the following rule violations 

and applicable fines from Rule 

13.15(g): 3

• Rule 13.15(g)(4), which currently 

imposes certain fines for failure to 

submit trade information on time and 

failure to submit trade information to 

the Price Reporter pursuant to Rule 6.1 

(Report Transactions to the Exchange); 4

• Rule 13.15(g)(5), which currently 

imposes certain fines for failure to 

honor the firm quote requirements of 

Rules 5.52 (Market-Maker Quotes) 5 and 

5.59 (Firm Disseminated Market 

Quotes), to honor the priority of 

marketable priority customer orders 

pursuant to Rules 5.32 and 5.85 (which 

among other things, govern customer 

priority on the Exchange’s trading 

floor),6, and to use due diligence in the 

execution of orders for which the floor 

Trading Permit Holder maintains an 

agency obligation pursuant to Rule 5.91 

(Floor Broker Responsibilities); 7

• Rule 13.15(g)(7), which currently 

imposes certain fines for any individual 

Trading Permit Holder who fails for 

more than 5% of the Trading Permit 

Holder’s transactions in any month to 

submit on the date that a transaction is 


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8See Rule 6.1(b), which requires parties to a trade 

to immediately record on a card or ticket, or enter 

in an electronic data storage medium acceptable to 

the Exchange, (1) the assigned broker initial code 

and clearing firm (if a Market-Maker); (2) the 

symbol of the underlying security or index; (3) the 

type, expiration month, and exercise price of the 

option contract; (4) the transaction price; (5) the 

number of contract units comprising the 

transaction; (6) the time of the transaction obtained 

from a source designated by the Exchange; (7) the 

name of the contra Clearing Trading Permit Holder; 

and (8) the assigned broker initial code of the contra 

Trading Permit Holder. 

9See Rule 8.14, which provides that no Trading 

Permit Holder, person associated with a Trading 

Permit Holder or applicant to be a Trading Permit 

Holder shall make any misrepresentation or 

omission in any application, report or other 

communication to the Exchange, or to the Clearing 

Corporation with respect to the reporting or 

clearance of any Exchange transaction, or adjust any 

position at the Clearing Corporation in any class of 

options traded on the Exchange except for the 

purpose of correcting a bona fide error in recording 

or of transferring the position to another account. 

10See Rule 5.66(a), which provides that, except 

as provided in paragraph (b), Trading Permit 

Holders shall not effect Trade-Throughs. The 

Exchange notes that trade-through compliance for 

electronic executions are systematically enforced. 

11See supra note 3. 

12The proposed rule change also makes 

nonsubstantive clarifying updates to Rule 

13.15(g)(14), by removing the conduct listed in 

subparagraph (g)(14)(B) and updating the format in 

which time is reflected. These nonsubstantive 

amendments are described in further detail herein 

this proposal below. 

13The Exchange notes that Rule 13.15(a) 

authorizes the Exchange to impose a fine, not to 

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

commencing a disciplinary proceeding. 

Additionally, any fine imposed pursuant to Rule 

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

contested, shall be reported by the Exchange to the 

Commission on a periodic, rather than a current, 

basis, except as may otherwise be required by 

Exchange Act Rule 19d–1 and by any other 

regulatory authority. 

14See Rule 13.15(f). 

executed the trade information required 

by Rule 6.1; 8

• Rule 13.15(g)(10), which currently 

imposes certain fines for violations of 

Rule 8.14 (Communications to the 

Exchange or the Clearing Corporation); 9

and 

• Rule 13.15(g)(12), which currently 

imposes certain fines for trade-through 

violations pursuant to Rule 5.66 (Order 

Protection).10

Additionally, as a result of the 

proposed deletion of Rule 13.15(g)(4) 

and (g)(5), the proposed rule change also 

deletes Interpretations and Policies .01 

and .02 to Rule 13.15, as Interpretation 

and Policy .01 exclusively relates to 

Rule 13.15(g)(5), and Interpretation and 

Policy .02 exclusively relates to Rule 

13.15(g)(4). The proposed rule change 

also moves the entirety of the rule text 

in Interpretation and Policy .03, which 

exclusively corresponds to current Rule 

13.15(g)(6), into Rule 13.15(g)(6) itself. 

Additionally, the proposed rule change 

moves the language currently in 

footnote 1 into current Rule 13.15(g)(6). 

Footnote 1 provides that Minor Rule 

Violation Fines imposed under this 

provision may be issued by Exchange 

Floor Officials. The Exchange notes that, 

while footnote 1 is currently appended 

to Rule 13.15(g)(5), which is being 

deleted as proposed herein, it more 

appropriately applies to current Rule 

13.15(g)(6) (Violations of Trading 

Conduct and Decorum Policies), as fines 

for violations of which are currently 

issued by Exchange Floor Officials 

pursuant to Rule 5.80(c). Rule 

5.80(c)(1)(A) specifically provides that 

Exchange Floor Officials may fine TPHs 

and persons employed by or associated 

with TPHs pursuant to Rule 13.15 for 

trading conduct and decorum violations 

which are subject to fine under such 

fine schedules. As such, the proposed 

relocation of the language in footnote 1 

merely provides additional clarity in the 

MRVP fine schedule regarding the 

issuance of Minor Rule Violation fines 

for trading conduct and decorum 

violations. 

The Exchange no longer believes 

violations of the above-listed rules to be 

minor in nature and therefore proposes 

to remove them from the list of rules in 

Rule 13.15(g) eligible for a minor rule 

fine disposition. Particularly, the 

Exchange believes that violations of 

each of the rules listed above may 

directly impact trading on the Exchange, 

maintenance of a fair and orderly 

market, and/or customer protections. 

For example, the Exchange believes that 

the requirement to submit trade 

information on time, to the Price 

Reporter and consistently on an order’s 

transaction date, as well as the 

requirement to truthfully and accurately 

represent information in 

communications to the Exchange and 

the Clearing Corporation allows the 

Exchange (and the Clearing Corporation) 

to maintain an accurate audit trail and 

trade information. Likewise, honoring 

firm quotations is vital in promoting 

efficient functioning of intermarket 

price priority and trading in general. 

Timely and accurate representation of 

both trade information and quotations 

protects investors by providing them 

with accurate information essential to 

their trading activities and participation 

in the markets. Upholding due diligence 

to honor the priority of customer orders 

and obligations as a principal, as well as 

the prohibition against the execution of 

trades at prices inferior to protected 

quotations (trade-throughs), all provide 

important customer protections. 

Pursuant to Rule 13.15(f), the Exchange 

is not required to impose a fine 

pursuant to its MRVP with respect to 

the violation of any rule listed under 

Rule 13.15. If the Exchange determines 

that any violation is intentional, 

egregious, or otherwise not minor in 

nature, it may proceed under its formal 

disciplinary rules. As such, the 

Exchange has increasingly chosen to 

handle such violations in recent years 

under the Exchange’s formal 

disciplinary rules, rather than imposing 

a fine pursuant to its MRVP. 

The proposed rule change next 

amends the fine schedule applicable to 

Maker-Makers for failure to meet 

Exchange quoting obligations. 

Specifically, Rule 13.15(g)(14) ((g)(9), as 

amended) 11 provides that a fine shall be 

imposed upon a Market-Maker, 

Designated Primary Market-Maker or 

Lead Market Maker (as applicable) in 

accordance with the fine schedule set 

forth below for the following conduct: 12

• Failure to meet the continuous 

quoting obligation (Rule 5.52, 5.55, and 

5.54); 

• Failure to meet the initial quote 

volume requirements (Rule 5.52); and 

• Failure of a Lead Market-Maker or 

Designated Primary Market-Maker to 

enter opening quotes within one minute 

following the initiation of an opening 

rotation (e.g., 9:31 a.m.) in a series in its 

appointed or allocated class, 

respectively, that is not open due to the 

lack of a quote (see Rule 5.31(e)(2) or 

(j)(5)(B), as applicable) (Rules 5.55 and 

5.54), respectively. 

For the first offense during any rolling 

24-month period, the fine schedule 

imposed by Rule 13.15(g)(14) currently 

permits the Exchange to apply a fine 

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

subsequent offenses during the same 

period, the fine schedule currently 

permits the Exchange to apply a fine 

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

proposed rule change updates the fine 

schedule to provide that, during any 

rolling 24-month period, the Exchange 

may give a Letter of Caution for a first 

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

a second offense, may apply a fine of 

$3,000 for a third offense,13 and may 

proceed with formal disciplinary action 

for subsequent offenses. As described 

above, and as is the case for all rule 

violations covered under Rule 13.15(g), 

the Exchange may determine that a 

violation of Market-Maker quoting 

obligations is intentional, egregious, or 

otherwise not minor in nature and 

choose to proceed under the Exchange’s 

formal disciplinary rules rather than its 

MRVP.14 The Exchange may continue to 

aggregate individual violations of 


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15See Rule 13.15(a). 

16See BZX Rule 25.3(d); and EDGX Rule 25.3(d). 

17See e.g., MIAX Options Rule 1014(d)(7). 

18The Exchange again notes that pursuant to the 

BZX and EDGX MRVPs, first offenses regarding 

market maker quoting obligations already receive a 

Letter of Caution and the highest/last range of 

offenses (currently 5 or more) are already subject to 

formal disciplinary action. See supra note 16. 

19See Securities Exchange Act Release No. 87024 

(September 19, 2019), 84 FR 50545 (September 25, 

2019) (SR–CBOE–2019–059). 

20See Securities Exchange Act Release No. 87320 

(October 16, 2019), 84 FR 56501 (October 22, 2019) 

(SR–CBOE–2019–095). 

21See Securities Exchange Act Release No. 87210 

(October 3, 2019), 84 FR 54190 (October 9, 2019) 

(SR–CBOE–2019–068). 

22 15 U.S.C. 78f(b). 

23 15 U.S.C. 78f(b)(5). 24 Id. 

particular rules and treat such violations 

as a single offense.15

The Exchange believes it is 

appropriate to remove the range of fines 

imposed for first and subsequent 

offenses and, instead, apply a letter of 

caution for a first offense, a specified 

fine amount for a second and a third 

offense, and formal disciplinary 

proceedings for subsequent offenses. 

Particularly, the Exchange believes that 

applying a lesser penalty (Letter of 

Caution) for a first offense and then 

providing a higher, itemized fine per 

second and third offenses and, 

ultimately, formal disciplinary 

proceedings for any subsequent offenses 

during a rolling 24-month period, will 

allow the Exchange to levy 

progressively larger fines and greater 

penalties against repeat-offenders (as 

opposed to a fine range for any offenses 

that may come after a first offense). The 

Exchange believes this fine structure 

may serve to more effectively deter 

repeat-offenders while providing 

reasonable warning for a first offense 

during a rolling 24-month period. The 

Exchange notes that a lesser penalty in 

the form of a warning letter for a first 

offense paired with a greater penalty in 

the form of formal disciplinary 

proceedings after a finite number of 

following offenses is consistent with the 

minor rule violation fine schedules 

applicable to minor rule violations of 

substantially the same market maker 

quoting obligations on the Exchange’s 

affiliated options exchanges, EDGX and 

BZX,16 as well as substantially similar 

market maker quoting obligations on 

another options exchange.17 The 

Exchange notes that the proposed 

change is intended to provide for 

consistency across the Exchange’s 

MRVP and the MRVPs of its affiliated 

options exchanges. Additionally, EDGX 

and BZX also intend to file proposals to 

update their minor rule violation fines 

so that second, third, and subsequent 

offenses for violating market maker 

quoting obligations will receive the 

same sanctions,18 as proposed herein. 

The proposed rule change also makes 

nonsubstantive clarifying changes to 

certain provisions in Rule 13.15(g). The 

proposed rule change makes a clean-up 

revision by removing the conduct listed 

in subparagraph (g)(14)(B), ‘‘failure to 

meet the applicable quote width 

requirements (Rule 5.52),’’ because, as 

of 2019, Market-Makers are no longer 

subject to a quote width requirement.19

The proposed rule change amends the 

subsequent lettering in subparagraph 

(g)(14) as a result of this revision. The 

proposed rule change corrects a typo in 

the fine amounts that inadvertently 

contain an additional digit in 

subparagraph (g)(8). The proposed rule 

change also updates the time format in 

the example provided in subparagraph 

(g)(14)(D), which is currently reflected 

in Central Time, to instead reflect 

Eastern Time without time zone 

indication. This proposed change is 

consistent with Rule 1.6, which states 

that unless otherwise specified, all 

times in the Rules are Eastern Time, and 

conforms the time reflected in (g)(14)(D) 

to the time format reflected throughout 

the Rules. The proposed rule change 

corrects the cross-reference to Rule 

5.24(e) in Rule 13.15(g)(19) to, instead, 

correctly reflect Rule 5.5(d). The 

Exchange previously restructured its 

Rulebook in connection with a 2019 

technology migration and, prior to this 

restructuring, the provision in current 

Rule 13.15(g)(19) referred to what is 

now Rule 5.5(d) (former Rule 

6.23A(f)),20 instead of what is now Rule 

5.24(e) (former Rule 6.18). Upon 

restructuring Chapter 13,21 the 

Exchange inadvertently changed the 

cross-reference in Rule 13.15(g)(19) to 

reflect the incorrect rule and now 

proposes to update this cross-reference 

to reflect the correct and originally 

intended cross-reference to Rule 5.5(d). 

Likewise, the Exchange updates a crossreference to prior Rule 5.25 to current 

Rule 5.5 in subparagraph (g)(19). 

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.22 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 23 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. The 

Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 24 requirement that the rules of 

an exchange not be designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposed rule change to remove certain 

rules listed as eligible for a minor rule 

fine disposition under its MRVP, which 

it no longer considers violations of 

which to be minor in nature, will assist 

the Exchange in preventing fraudulent 

and manipulative acts and practices and 

promoting just and equitable principles 

of trade, and will serve to 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. Particularly, the Exchange 

believes that violations of each of the 

rules proposed to be removed from its 

MRVP may directly impact trading on 

the Exchange, maintenance of a fair and 

orderly market, and/or customer 

protection. As such, the Exchange does 

not believe violations of these rules to 

be minor in nature and, instead, should 

continue to be handled under its formal 

disciplinary rules, as the Exchange has 

chosen to handle the majority of all 

such violations in recent years, rather 

than imposing fines pursuant to its 

MRVP. 

The Exchange also believes that the 

proposed rule change to remove the 

range of fines imposed for first and 

subsequent Market-Maker quoting 

offenses and, instead, apply a letter of 

caution for a first offense, a specified 

fine amount for a second and a third 

offense, and formal disciplinary 

proceedings for subsequent offenses will 

assist the Exchange in preventing 

fraudulent and manipulative acts and 

practices and promoting just and 

equitable principles of trade, and will 

serve to 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. 

Particularly, the Exchange believes that 

applying a lesser penalty (Letter of 

Caution) for a first offense and then 

providing an itemized fine per second 


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25See supra note 16. 

26See supra note 18. 

27 15 U.S.C. 78f(b)(6). 28 15 U.S.C. 78f(b)(7) and 78f(d). 

29 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

Continued 

and third offenses and, ultimately, 

formal disciplinary proceedings for any 

subsequent offenses during a rolling 24- 

month period, will allow the Exchange 

to levy greater penalties (i.e., formal 

disciplinary proceedings) against repeatoffenders (as opposed to a fine range for 

any offenses that may come after a first 

offense) which may serve to more 

effectively deter repeat-offenders while 

providing reasonable warning for a first 

offense during a rolling 24-month 

period. The Exchange believes that more 

effectively deterring repeat-offenders 

and making first instance offenders 

aware of their quoting obligation 

violations and the subsequent 

consequences for continued failure, 

will, in turn, further motivate MarketMakers to continue to uphold their 

quoting obligations, providing liquid 

markets to the benefit of all investors. 

The Exchange again notes that a lesser 

penalty in the form of a warning letter 

for a first offense paired with greater 

penalties in the form of eventual formal 

disciplinary proceedings following a 

finite number of offenses is consistent 

with the minor rule violation fine 

schedules applicable to minor rule 

violations of substantially the same 

market maker quoting obligations on the 

Exchange’s affiliated options exchanges, 

EDGX and BZX.25 As such, the 

proposed rule change is also designed to 

benefit investors by providing from 

consistent penalties across the MRVPs 

of the Exchange and its affiliated 

options exchanges. As described above, 

EDGX and BZX intend to file proposals 

to update their minor rule violation 

fines so that second, third, and 

subsequent offenses for violating market 

maker quoting obligations will receive 

the same sanctions,26 as proposed 

herein. 

Additionally, the proposed 

clarifications and corrections, as 

applicable, in connection with footnote 

1 of Rule 13.15, Interpretation and 

Policy .03 to Rule 13.15, and Rules 

13.15(g)(8), (14) and (19) will benefit 

investors by adding clarity to the Rules. 

The Exchange further believes that the 

proposed rule changes to Rule 13.15(g) 

are consistent with Section 6(b)(6) of the 

Act,27 which provides that members and 

persons associated with members shall 

be appropriately disciplined for 

violation of the provisions of the rules 

of the exchange, by expulsion, 

suspension, limitation of activities, 

functions, and operations, fine, censure, 

being suspended or barred from being 

associated with a member, or any other 

fitting sanction. As noted, the proposed 

rule change removes certain Rules listed 

as eligible for a minor rule fine 

disposition under the Exchange’s MRVP 

that the Exchange no longer believes 

violations of which are minor in nature 

and are more appropriately disciplined 

through the Exchange’s formal 

disciplinary procedures, and amends 

the fine schedule applicable to MarketMaker failures to meet their quoting 

obligations in a manner that 

appropriately sanctions such failures. 

The Exchange also believes that the 

proposed change is designed to provide 

a fair procedure for the disciplining of 

members and persons associated with 

members, consistent with Sections 

6(b)(7) and 6(d) of the Act.28 Rule 13.15, 

currently and as amended, does not 

preclude a TPH or person associated 

with or employed by a TPH from 

contesting an alleged violation and 

receiving a hearing on the matter with 

the same procedural rights through a 

litigated disciplinary proceeding. 

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 

proposed rule change is not intended to 

address competitive issues but rather is 

concerned solely with amending its 

MRVP in connection with rules eligible 

for a minor rule fine disposition and 

with the fine schedule for Market-Maker 

failures to meet quoting obligations. The 

Exchange believes the proposed rule 

changes, overall, will strengthen the 

Exchange’s ability to carry out its 

oversight and enforcement functions 

and deter potential violative conduct. 

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. 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–2021–045 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–2021–045. 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–CBOE–2021–045 and 

should be submitted on or before 

September 14, 2021. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.29 In particular, the 


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47350 Federal Register / Vol. 86, No. 161 / Tuesday, August 24, 2021 / Notices 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

30 15 U.S.C. 78f(b)(5). 

31 15 U.S.C. 78f(b)(1) and 78f(b)(6). 

32 17 CFR 240.19d–1(c)(2). 

33 15 U.S.C. 78s(b)(2). 

34 15 U.S.C. 78s(b)(2). 

35 17 CFR 240.19d–1(c)(2). 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 92304 

(June 30, 2021), 86 FR 36440 (July 9, 2021). 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,30 which requires that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to remove impediments and to 

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 

Commission also believes that the 

proposal is consistent with Sections 

6(b)(1) and 6(b)(6) of the Act 31 which 

require that the rules of an exchange 

enforce compliance with, and provide 

appropriate discipline for, violations of 

Commission and Exchange rules. 

Finally, the Commission finds that the 

proposal is consistent with the public 

interest, the protection of investors, or 

otherwise in furtherance of the purposes 

of the Act, as required by Rule 19d– 

1(c)(2) under the Act,32 which governs 

minor rule violation plans. 

As stated above, the Exchange 

proposes to amend Rule 13.15(g) by: (1) 

Eliminating certain rule violations that 

the Exchange no longer believes to be 

minor in nature; (2) updating the fine 

schedule applicable to minor rule 

violations related to a Market-Maker’s 

failure to meet Exchange quoting 

obligations; and (3) making other nonsubstantive changes. 

The Commission believes that Rule 

13.15 is an effective way to discipline a 

member for a minor violation of a rule. 

The Commission finds that the 

Exchange’s proposal to eliminate rules 

that the Exchange no longer believes to 

be minor in nature from the MRVP and 

amending the fee schedule related to a 

Market-Maker’s failure to meet the 

Exchange’s quoting obligations is 

consistent with the Act because it may 

help the Exchange’s ability to better 

carry out its oversight and enforcement 

responsibilities. Lastly, the Commission 

also believes that the Exchange’s 

proposal to make non-substantive 

changes are consistent with the Act 

because they add clarity to the 

Exchange’s rules. 

In approving the propose rule change, 

the Commission in no way minimizes 

the importance of compliance with the 

Exchange’s rules and all other rules 

subject to fines under Rule 13.15. The 

Commission believes that a violation of 

any self-regulatory organization’s rules, 

as well as Commission rules, is a serious 

matter. However, Rule 13.15 provides a 

reasonable means of addressing rule 

violations that may not rise to the level 

of requiring formal disciplinary 

proceedings, while providing greater 

flexibility in handling certain violations. 

The Commission expects that the 

Exchange will continue to conduct 

surveillance with due diligence and 

make a determination based on its 

findings, on a case-by-case basis, 

whether a fine of more or less than the 

recommended amount is appropriate for 

a violation under Rule 13.15 or whether 

a violation requires formal disciplinary 

action. 

For the same reasons discussed above, 

the Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,33 for approving the proposed rule 

change prior to the thirtieth day after 

the date of publication of the notice of 

the filing thereof in the Federal 

Register. The proposal will assist the 

Exchange in preventing fraudulent and 

manipulative practices by allowing the 

Exchange to adequately enforce 

compliance with, and provide 

appropriate discipline for, violations of 

Exchange rules. Accordingly, the 

Commission believes that a full noticeand-comment period is not necessary 

before approving the proposal. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 34 and Rule 

19d–1(c)(2) thereunder,35 that the 

proposed rule change (SR–CBOE–2021– 

045) be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18123 Filed 8–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92696; File No. SR– 

NYSEArca–2021–47] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on a Proposed Rule Change for New 

Rules 6.1P–O, 6.37AP–O, 6.40P–O, 

6.41P–O, 6.62P–O, 6.64P–O, 6.76P–O, 

and 6.76AP–O and Amendments to 

Rules 1.1, 6.1–O, 6.1A–O, 6.37–O, 

6.65A–O and 6.96–O 

August 18, 2021. 

On June 21, 2021, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change for new NYSE Arca Rules 6.1P– 

O, 6.37AP–O, 6.40P–O, 6.41P–O, 6.62P– 

O, 6.64P–O, 6.76P–O, and 6.76AP–O 

and amendments to NYSE Arca Rules 

1.1, 6.1–O, 6.1A–O, 6.37–O, 6.65A–O 

and 6.96–O. The proposed rule change 

was published for comment in the 

Federal Register on July 9, 2021.3 The 

Commission has received no comment 

letters on the proposed rule change. 

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is August 23, 

2021. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,5

designates October 7, 2021 as the date 

by which the Commission shall either 

approve or disapprove, or institute 


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