Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Notices 48457 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Release No. 92354 (July 

8, 2021), 86 FR 37197 (July 14, 2021) (SR–CBOE– 

2021–020) (Notice of Filing of Amendment No. 1 

and Order Granting Accelerated Approval of a 

Proposed Rule Change, as Modified by Amendment 

No. 1, To Adopt Rule 6.10 To Introduce a Voluntary 

Multilateral Compression Service for SPX Options). 

4The ‘‘compression price’’ is generally the price 

of the option as close as possible to the midpoint 

of the NBBO at the close of the trading day or the 

daily marking time, subject to adjustment using 

generally accepted volatility and options pricing 

models in the event of wide markets, market 

volatility, or other unusual circumstances. 

5The Exchange notifies the TPH participants of 

each TPH’s individual compression proposal, and 

each TPH with at least one offsetting position must 

notify the Exchange whether it accepts its 

individual proposal in order to proceed with the 

CCS transactions. 

6The Exchange notes that footnote 41 is also 

appended to the Floor Broker Sliding Scale Rebate 

Program; however, this program is not applicable 

generally to orders in SPX/SPXW. 

7The Exchange notes that PCC for FLEX is not 

currently supported, therefore this surcharge is not 

currently applicable to PCC orders. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92739; File No. SR–CBOE– 

2021–048] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Fees Schedule 

Regarding Executions in the Cboe 

Compression Service 

August 24, 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 

12, 2021, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) 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. 

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 

its fees schedule. 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/CBOELegalRegulatory

Home.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 IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fees Schedule in connection with 

executions of S&P 500 Index options 

(‘‘SPX’’) in the Cboe Compression 

Service (‘‘CCS’’) and to make a 

clarifying change regarding Position 

Compression Cross (‘‘PCC’’) orders, 

effective August 12, 2021. 

Specifically, the Exchange recently 

adopted the CCS for SPX (including 

SPX Weeklys (‘‘SPXW’’)),3 which it 

intends to launch on August 12, 2021. 

CCS is an additional, voluntary 

compression tool that Trading Permit 

Holders (‘‘TPHs’’) can use to close SPX 

positions to reduce regulatory capital 

attributable to their SPX holdings. To 

participate, a TPH must submit a 

‘‘position list’’ prior to an Exchangespecified time after the close of trading 

on the specified day that details all of 

the open SPX positions it would like to 

close out. If all TPHs that submit 

position lists on that day agree to the 

compression proposal provided by the 

Exchange, the Exchange then runs an 

automated process to match offsetting 

positions in an anonymized manner and 

then effects the transactions at specified 

compression prices 4 off the exchange.5

The Exchange now proposes to amend 

its Fees Schedule in connection with 

the planned implementation of CCS for 

SPX/SPXW. Particularly, the Exchange 

proposes to waive all transaction fees 

and applicable surcharges incurred as a 

result of CCS transactions in SPX/ 

SPXW. 

First, the proposed rule change 

amends footnote 41 so that transaction 

fees and applicable surcharges are 

waived for CCS transactions, as they 

currently are for Position Compression 

Cross (‘‘PCC’’) transactions, which TPHs 

may also use to compress their positions 

in SPX/SPXW. Specifically, the 

proposed rule change amends footnote 

41 to provide that the Exchange shall 

waive transaction fees, including the 

Index License Surcharge and SPX/ 

SPXW Execution Surcharge, for (i) PCC 

transactions executed electronically or 

in open outcry, as applicable, and (ii) 

CCS transactions, and that PCC and CCS 

transactions will not count towards any 

volume thresholds. The Exchange notes 

that Footnote 41 is currently appended 

to: (1) SPX/SPXW and SPESG Liquidity 

Provider Sliding Scale; (2) Clearing 

Trading Permit Holder Proprietary 

Products Sliding Scale; (3) Select 

Customer Options Reduction (‘‘SCORe’’) 

Program; (4) SPX/SPXW Market-Maker 

Tier Appointment Fees; (5) Floor Broker 

Trading Surcharge; (6) Floor Broker 

ADV Discount; (7) Floor Brokerage Fees 

Discount Scale; and (8) Frequent Trader 

Program; 6 therefore, CCS transactions, 

like PCC transactions, will not count 

towards any volume thresholds for these 

programs. The proposed rule change 

also appends footnote 41 to the line 

item for SPX (incl SPXW) and SPESG 

that corresponds to Joint Back-Office 

(‘‘JBO’’), Non-TPH Market-Maker and 

Professional transaction fees to make it 

clear that all SPX/SPXW-related 

transaction fees and applicable 

surcharges for PCC transactions and 

CCS transactions, as proposed, are 

waived. Next, the proposed rule change 

amends footnote 17 of the Fees 

Schedule to explicitly exclude CCS 

transactions from the FLEX Surcharge 

Fee.7 Finally, the proposed rule change 

amends footnote 21 of the Fees 

Schedule to explicitly exclude PCC 

orders and CCS transactions from the 

SPX, SPXW and SPESG Execution 

Surcharge. The Exchange notes that the 

SPX, SPXW and SPESG Surcharge does 

not currently apply to PCC transactions, 

as provided in footnote 41; the proposed 

rule change merely adds PCC to footnote 

21 to provide additional clarity in the 

Fees Schedule. 

The Exchange wishes to waive 

transaction fees and surcharges for CCS 

transactions to encourage TPHs to use 

the service. The Exchange believes 

compression of SPX positions using the 

CCS would improve market liquidity by 

freeing TPHs’ capital currently covering 

nearly worthless positions and allow 

them to put that capital back into the 

markets to facilitate execution of 

customer orders. As CCS transactions 


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48458 Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Notices 

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

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

10 15 U.S.C. 78f(b)(4). 

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

12 17 CFR 240.19b–4(f)(2). 

will not incur any fees or surcharges, 

the Exchange does not believe that CCS 

volume should be counted towards 

volume thresholds for the applicable 

incentive programs. The Exchange again 

notes this is in line with the manner in 

which PCC orders, which is another 

compression tool available to TPHs, are 

currently treated pursuant to the Fees 

Schedule. 

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 

Section 6(b)(4) of the Act,10 which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Trading Permit Holders and other 

persons using its facilities. 

The Exchange believes the proposed 

rule change to waive SPX/SPXW 

transaction fees, including the SPX, 

SPXW and SPESG Execution Surcharge, 

and applicable SPX/SPXW surcharges, 

including the FLEX Surcharge Fee, for 

CCS transactions is reasonable because 

market participants will not be subject 

to transaction fees or surcharges for 

these executions. As such, the proposed 

waivers are reasonably designed to 

incentivize TPHs to submit compression 

lists to the Exchange and compress 

positions, which the Exchange believes 

would improve market liquidity by 

freeing TPHs’ capital currently covering 

nearly worthless positions and allow 

them to put that capital back into the 

markets to facilitate execution of 

customer orders. The Exchange believes 

the proposed rule change to not count 

CCS volume towards volume thresholds 

for any applicable incentive program is 

reasonable, as such transactions will not 

incur any fees or surcharges for such 

volume. The Exchange also notes that it 

is reasonable to exclude such volume 

from the volume thresholds for the SPX/ 

SPXW Market-Maker Tier Appointment 

Fee and SPX/SPXW Floor Broker 

Trading Surcharge because, like for PCC 

transactions, the Exchange does not 

want to discourage such compression 

transactions. The Exchange also believes 

that the proposed rule change is 

reasonable as the Exchange already 

waives SPX/SPXW transaction fees and 

applicable surcharges for PCC orders, 

which is another compression tool 

available to TPHs, and also excludes 

PCC volume from the same incentive 

programs. 

The Exchange believes that the 

proposed fee/surcharge waivers and 

exclusion from incentive program 

volume calculations for CCS 

transactions are equitable and not 

unfairly discriminatory because they 

apply uniformly to all market 

participants who choose to use CCS to 

compress their SPX/SPXW positions, in 

the same manner in which fee/surcharge 

waivers and exclusions from incentive 

program volume calculations for PCC 

orders are applied uniformly to all 

market participants that submit PCC 

orders today. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition that are not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed changes apply 

equally to all similarly situated market 

participants, i.e., all market participants 

who choose to use CCS to compress 

their SPX/SPXW positions. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intermarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed rule change 

applies only to an Exchange proprietary 

product, which is traded exclusively on 

Cboe Options. The Exchange believes 

the proposed rule change will promote 

competition, as it may incentivize TPHs 

to use the CCS to compress SPX 

positions, which the Exchange believes 

would improve market liquidity by 

freeing TPHs’ capital currently covering 

nearly worthless positions and allow 

them to put that capital back into the 

markets to facilitate execution of 

customer orders. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 11 and Rule 

19b–4(f)(2) 12 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: (i) 

Necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission 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– 

CBOE–2021–048 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–2021–048. 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 


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Federal Register / Vol. 86, No. 165 / Monday, August 30, 2021 / Notices 48459 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3BX Rule 1050 (subsequently renumbered as 

General 9, Section 51) originally referred to NASD 

Rule 1120, Continuing Education Requirements. 

See Securities Exchange Act Release Nos. 84353 

(October 3, 2018), 83 FR 50999 (October 10, 2018) 

(SR–BX–2018–047) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend, 

Reorganize and Enhance Membership, Registration 

and Qualification Rules, and To Make Conforming 

Changes to Certain Other Rules); and 87468 

(November 5, 2019), 84 FR 61091 (November 12, 

2019) (SR–BX–2019–039) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Relocate Rules From Its Current Rulebook Into 

Its New Rulebook Shell) (renumbering BX Rule 

1050 as General 9, Section 51). The SEC approved 

the adoption of NASD Rule 1120 (Continuing 

Education Requirements) as new FINRA Rule 1250 

(Continuing Education Requirements) subject to 

certain amendments, effective on October 17, 2011. 

See Securities Exchange Act Release No. 64687 

(June 16, 2011); 76 FR 36586 (June 22, 2011) (SR– 

FINRA–2011–013) (Notice of Filing of Amendment 

No. 1 and Order Granting Accelerated Approval of 

a Proposed Rule Change, as Modified by 

Amendment No. 1, Establishing a Registration 

Category, Qualification Examination and 

Continuing Education Requirements for Certain 

Operations Personnel, and Adopt FINRA Rule 1250 

(Continuing Education Requirements) in the 

Consolidated FINRA Rulebook). See also note 5 

below. 

4FINRA Rule 1250 was renumbered as FINRA 

Rule 1240. See note 5 below. 

5See Securities Exchange Act Release No. 81098 

(July 7, 2017), 82 FR 32419 (July 13, 2017) (SR– 

FINRA–2017–007) (Order Approving Proposed Rule 

Change To Adopt Consolidated Registration Rules, 

Restructure the Representative-Level Qualification 

Examination Program, Allow Permissive 

Registration, Establish Exam Waiver Process for 

Persons Working for Financial Services Affiliate of 

Member, and Amend the Continuing Education 

Requirements). 

6 Id. 

7See Securities Exchange Act Release No. 84353 

(October 3, 2018), 84 FR 50999 (October 10, 2018) 

(SR–BX–2018–047) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend, 

Reorganize and Enhance Membership, Registration 

and Qualification Rules, and To Make Conforming 

Changes to Certain Other Rules). 

8See note 5 above. 

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–2021–048 and 

should be submitted on or before 

September 20, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18554 Filed 8–27–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92737; File No. SR–BX– 

2021–035] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend General 9, 

Section 51, Research Analysts 

August 24, 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 August 

12, 2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I 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 

General 9, Section 51, Research 

Analysts. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, at the principal office 

of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

General 9, Section 51, Research 

Analysts. Specifically, the Exchange 

proposes to (1) remove references to 

FINRA Rules 1120 3 and 1250; 4 and (2) 

add references to FINRA Rules 1240 and 

1220(a)(6), (a)(14) and (b)(6). 

By way of background, FINRA 

previously deleted in their entirety the 

NASD Rule 1000 Series relating to 

registration of Principals and 

Representatives and adopted rules 

relating to qualification and registration 

requirements in the Consolidated 

FINRA Rulebook.5 In that rule change, 

FINRA Rule 1250 was renumbered to 

FINRA Rule 1240.6 FINRA Rule 1240 

describes continuing education 

requirements applicable to registered 

persons and consists of a Regulatory 

Element and a Firm Element. 

BX subsequently filed a rule change 7

to amend, reorganize and enhance 

certain of its corresponding 

membership, registration and 

qualification requirements rules in part 

in response to the FINRA Rule 

Changes,8 and also in order to facilitate 


khammond on DSKJM1Z7X2PROD with NOTICES