Federal Register / Vol. 86, No. 161 / Tuesday, August 24, 2021 / Notices 47343 

20 15 U.S.C. 78s(b)(3)(A)(iii). 

21 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

22 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. 

4Today, Market Makers can log into an interface 

to send a message to the Exchange to initiate the 

Kill Switch. 

5The term ‘‘System’’ means the automated system 

for order execution and trade reporting owned and 

operated by The Nasdaq Options Market LLC 

(‘‘NOM’’). See Options 1, Section 1(a)(59). 

6 Identifiers include Exchange accounts, ports, 

and/or badges or mnemonics. Thus, a Market Maker 

using Kill Switch may elect to remove quotes for 

an individual Identifier (e.g., badge) or any group 

of Identifiers (e.g., all badges within one Market 

Maker firm). Permissible groups must reside within 

a single member firm. 

7See Options 3, Section 17. The Kill Switch tool 

also currently allows NOM Participants to cancel 

open orders and prevent new order submission. The 

Exchange is not proposing to decommission the 

order cancellation portion of the Kill Switch tool at 

this time. 

8No Market Makers have used the Kill Switch for 

quote removal in 2021. 

19(b)(3)(A)(iii) of the Act 20 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.21

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 

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– 

Phlx–2021–45 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–Phlx–2021–45. 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–Phlx–2021–45 and should 

be submitted on or before September 14, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18117 Filed 8–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92697; File No. SR– 

NASDAQ–2021–063] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Options 3, Section 17 (Kill Switch) 

August 18, 2021. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on August 9, 

2021, The Nasdaq Stock Market LLC 

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

Securities and Exchange Commission 

(‘‘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 

decommission the Exchange’s quote 

removal Kill Switch functionality at 

Options 3, Section 17. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Options 3, Section 17 to decommission 

the Exchange’s quote removal Kill 

Switch functionality, which is an 

optional tool that allows Market Makers 

to initiate a message (or messages) 4 to 

the System 5 to promptly remove their 

quotes from the market. Market Makers 

may submit a request to the System to 

remove quotes based on certain 

identifier(s) on either a user or group 

level (‘‘Identifier’’).6 If quotes are 

cancelled by the Market Maker using 

Kill Switch, it will result in the removal 

of all quotes requested for the 

Identifier(s). The Market Maker will be 

unable to enter any additional quotes for 

the affected Identifier(s) until the 

Market Maker sends a re-entry request 

to the Exchange.7

Due to the lack of demand for the 

quote removal Kill Switch by Market 

Makers, the Exchange proposes to 

decommission this optional tool by the 

end of Q4 2021.8 The Exchange will 

provide market participants with prior 

notice of the decommission. With the 


lotter on DSK11XQN23PROD with NOTICES1
47344 Federal Register / Vol. 86, No. 161 / Tuesday, August 24, 2021 / Notices 

9 ‘‘SQF’’ is an interface that allows Market Makers 

to connect, send, and receive messages related to 

quotes and Immediate-or-Cancel Orders into and 

from the Exchange. Features include the following: 

(1) Options symbol directory messages (e.g., 

underlying instruments); (2) system event messages 

(e.g., start of trading hours messages and start of 

opening); (3) trading action messages (e.g., halts and 

resumes); (4) execution messages; (5) quote 

messages; (6) Immediate-or-Cancel Order messages; 

(7) risk protection triggers and purge notifications; 

and (8) opening imbalance messages. The SQF 

Purge Interface only receives and notifies of purge 

requests from the Market Maker. Market Makers 

may only enter interest into SQF in their assigned 

options series. See Options 3, Section 7(e)(1)(B). 

10See Options 3, Section 19. 11The rapid fire risk controls automatically 

remove Market Maker quotes submitted over SQF 

when certain firm-set thresholds are met. Once the 

thresholds are triggered, the Market Maker must 

send a re-entry indicator to re-enter the System. See 

Options 3, Section 15(c)(2). 12When the SQF Port detects the loss of 

communication with a NOM Participant’s Client 

Application because the Exchange’s server does not 

receive a Heartbeat message for a certain time 

period (‘‘nn’’ seconds), the Exchange will 

automatically logoff the NOM Participant’s affected 

Client Application and automatically cancel all of 

the NOM Participant’s open quotes. Quotes will be 

cancelled across all Client Applications that are 

associated with the same NOM Options Market 

Maker ID and underlying issues. See Options 3, 

Section 18(a). 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

proposed changes, the Exchange seeks 

to streamline its product offerings and 

to reallocate Exchange resources to 

other business and risk management 

initiatives. While the Exchange will no 

longer offer this optional functionality 

to Market Makers, it will continue to 

offer similar quote management tools 

that would assist Market Makers with 

their efforts to manage their risk with 

respect to quotes on the Exchange. For 

example, Market Makers are currently 

able to send a mass purge request 

through Specialized Quote Feed 

(‘‘SQF’’) to pull their existing quotes 

from the market and inhibit the entry of 

new quotes until the Market Maker 

sends a message to the Exchange to reenter the System.9 Indeed, the Exchange 

has found that Market Makers utilize 

this SQF purge functionality instead of 

the Kill Switch quote removal tool when 

they want to remove their quotes from 

the market. 

In addition, all Participants, including 

Market Makers, may contact the 

Exchange’s market operations staff to 

request that the Exchange cancel any of 

their existing bids, offers, or orders in 

any series of options.10 Furthermore, the 

Exchange will continue to have 

mandatory System-enforced risk 

mechanisms that automatically remove 

quotes for the Market Maker once 

certain pre-set thresholds or conditions 

are met. This includes risk protections 

such as rapid fire risk controls 11 and 

cancel on disconnect.12

To effect the decommissioning of the 

quote removal Kill Switch, the 

Exchange proposes to amend Options 3, 

Section 17 by eliminating all references 

to quote removal within this Rule. In 

connection with this change, the 

Exchange will also renumber current 

Options 3, Section 17(a)(ii) and (a)(iii) 

as Options 3, Section 17(a)(i) and (a)(ii), 

respectively. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,13 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,14

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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 that 

the proposed rule change is consistent 

with the Section 6(b)(5) requirement 

that the rules of an exchange not be 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

Specifically, the Exchange does not 

believe that the proposed rule change 

will affect the protection of investors or 

the public interest or the maintenance of 

a fair and orderly market because no 

Market Makers have used the quote 

removal Kill Switch risk control in 

2021. In addition, the Exchange notes 

that the use of this tool is completely 

optional, and the Exchange will 

continue to offer Market Makers similar 

risk management tools such as the SQF 

mass quote purge functionality. As 

discussed above, the Exchange has 

found that Market Makers use the SQF 

purge functionality much more 

frequently than the quote removal Kill 

Switch to pull their quotes from the 

market. Furthermore, Market Makers 

will retain the ability to contact market 

operations staff to manually purge their 

quotes from the market. In addition, the 

Exchange will continue to implement 

mandatory System-enforced risk 

mechanisms that automatically remove 

quotes for the Market Maker once 

certain pre-set thresholds or conditions 

are met (i.e., rapid fire and cancel on 

disconnect). 

Also, the Exchange believes that the 

low usage rate for the quote removal Kill 

Switch does not warrant the continuous 

resources necessary for System support 

of such tools. As a result, the Exchange 

also believes that the proposal will 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

allowing the Exchange to reallocate 

System capacity and resources currently 

used to maintain this functionality to 

the development and maintenance of 

other business initiatives and risk 

management products. 

As noted above, the Exchange will 

retain the ability for Participants to 

utilize Kill Switch to cancel orders and 

prevent new order submission. The 

Exchange does not believe that 

decommissioning the quote removal 

portion of the Kill Switch tool for 

Market Makers is unfairly 

discriminatory because Market Makers 

are professional traders with their own 

risk settings, and have more 

sophisticated infrastructures than most 

other market participants. Furthermore, 

as discussed above, the Exchange has 

determined that Market Makers 

currently use the mass purge 

functionality on SQF to pull their 

quotes from the market instead of using 

the quote removal Kill Switch tool to 

achieve the same result. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change will allow the 

Exchange to decommission a risk 

management tool that is rarely, if ever, 

used on the Exchange. As discussed 

above, Market Makers currently have a 

variety of similar tools like the quote 

removal Kill Switch that allow them to 

pull their quotes from the market and 

inhibit the entry of new quotes, 

including the mass quote purge 

functionality on SQF that the Exchange 

has found Market Makers use much 

more frequently than the quote removal 

Kill Switch to achieve the same result. 

As noted above, the Exchange will 

retain the ability for Participants to 

utilize Kill Switch to cancel orders and 

prevent new order submission. The 

Exchange does not believe that 

decommissioning the quote removal 

portion of the Kill Switch tool for 

Market Makers will impose an undue 

burden on competition because Market 

Makers are professional traders with 

their own risk settings, and have more 

sophisticated infrastructures than most 

other market participants. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 86, No. 161 / Tuesday, August 24, 2021 / Notices 47345 

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

16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 17 17 CFR 200.30–3(a)(12). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 15 and Rule 19b– 

4(f)(6) thereunder.16

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. 

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– 

NASDAQ–2021–063 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–NASDAQ–2021–063. 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–NASDAQ–2021–063, and 

should be submitted on or before 

September 14, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18118 Filed 8–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–629, OMB Control No. 

3235–0719] 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Extension: 

Exchange Act Rules 13n–1—13n–12; Form 

SDR 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rules 13n–1 through 13n–12 (17 CFR 

240.13n–1 through 240.13n–12) and 

Form SDR (‘‘Rules’’), under the 

Securities Exchange Act of 1934 (15 

U.S.C. 78m(n)(3) et seq.). 

Under the Rules, security-based swap 

data repositories (‘‘SDRs’’) are required 

to register with the Commission by 

filing a completed Form SDR (the filing 

of a completed Form SDR also 

constitutes an application for 

registration as a securities information 

processor (‘‘SIP’’)). SDRs are also 

required to abide by certain minimum 

standards set out in the Rules, including 

a requirement to update Form SDR, 

abide by certain duties and core 

principles, maintain data in accordance 

with the rules, keep systems in 

accordance with the Rules, keep 

records, provide reports to the 

Commission, maintain the privacy of 

security-based swaps (‘‘SBSs’’) data, 

make certain disclosures, and designate 

a Chief Compliance Officer. In addition, 

there are a number of collections of 

information contained in the Rules. The 

information collected pursuant to the 

Rules is necessary to carry out the 

mandates of the Dodd-Frank Act and 

help ensure an orderly and transparent 

market for SBSs. 

Assuming a maximum of ten SDRs, 

the Commission estimates that the total 

reporting burden for all of the Rules and 

Form SDR for all respondents is 463,493 

hours initially, with a total annual 

burden thereafter of 270,511.70 hours 

totaling approximately 1,275,028 hours. 

This equates to approximately 

425,009.29 hours per year when 

annualized over three years. In addition, 

the Commission estimates that the total 

cost for all of the Rules and Form SDR 

for all respondents is approximately 

$103,364,700 initially, with a total 

annual cost thereafter of $65,227,720 

totaling approximately $299,047,860. 

This equates to $99,682,619.90 per year 

when annualized over three years. A 

detailed break-down of the estimated 

burdens and costs is provided in the 

supporting statement. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view background 

documentation for this information 

collection at the following website: 

>www.reginfo.gov<. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. 

Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to (i) >MBX.OMB.OIRA.SEC_

desk_officer@omb.eop.gov< and (ii) 


lotter on DSK11XQN23PROD with NOTICES1