51408 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b-4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) 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. 16 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. 

4 15 U.S.C. 78s(b)(3)(A)(iii). 

5 17 CFR 240.19b–4(f)(6). 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because it 

will apply equally to all Market-Maker 

quotes that do not meet the applicable 

minimum initial quote size requirement 

for a class. 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 it is related 

to compliance with quoting 

requirements that are applicable only to 

Market-Makers on the Exchange. 

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: (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 14 and Rule 19b– 

4(f)(6) thereunder.15 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– 

CBOE–2021–051 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–2021–051. 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–2021–051, and 

should be submitted on or before 

October 6, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19857 Filed 9–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92913; File No. SR–CBOE– 

2021–052] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 5.32 in 

Connection With Participation 

Entitlements 

September 9, 2021. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that, on 

September 2, 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 

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

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

the Act 4 and Rule 19b–4(f)(6) 

thereunder.5 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 

Rule 5.32 in connection with 

participation entitlements. 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 IV below. The 


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Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 51409 

6The proposed rule change removes ‘‘PMM’’ from 

this provision and adopts language in connection 

with participation entitlement percentages 

application to PMMs, as described in further detail 

in this proposal. 

7Specifically, prior Rule 8.13(c) provided that the 

PMM participation entitlement is the greater of one 

contract or 40% when there are two or more other 

Market-Maker quotes or broker-dealer orders at the 

BBO, and 50% when there is one other MarketMaker quote or broker-dealer order at the BBO. The 

Exchange notes that the current application of the 

base algorithm, as opposed to one contract, was the 

only substantive change intended to be made to this 

provision. DPMs, LMMs, and PMMs were intended 

to continue to be subject to the obligations that were 

set forth in the applicable Rules in place prior to 

the 2019 technology migration. See Securities 

Exchange Act Release No. 86374 (July 15, 2019), 84 

FR 34963 (July 19, 2019) (SR–CBOE–2019–033) at 

footnote 68. 

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

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

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 

Rule 5.32(a)(2)(B), in connection with 

participation entitlements, to clarify the 

manner in which the System treats nonPriority Customers with orders and 

quotes at the same price and to correct 

certain inadvertent rule text regarding 

the manner in which the System applies 

the PMM participation entitlement 

percentages. In particular, Rule 

5.32(a)(2)(B) governs participation 

entitlements for Designated MarketMakers (‘‘DPMs’’), Lead Market-Makers 

(‘‘LMMs’’) and Preferred Market-Makers 

(‘‘PMMs’’) and currently provides that 

the Exchange may apply one or more of 

the DPM, LMM, and PMM participation 

entitlements (in any sequence) to a 

class. If the DPM, LMM, or PMM, as 

applicable, has a quote at the highest 

bid or lowest offer, it will receive the 

greater of (i) the number of contracts it 

would receive pursuant to the 

applicable base allocation algorithm and 

(ii) 50% of the contracts if there is one 

other non-Priority Customer order or 

quote, 40% of the contracts if there are 

two non-Priority Customer orders or 

quotes, or 30% of the contracts if there 

are three or more non-Priority Customer 

orders or quotes on the Book at that 

price. 

First, the proposed rule change 

updates Rule 5.32(a)(2)(B) to clarify the 

manner in which the System treats nonPriority Customer orders and quotes. 

For the purposes of the participation 

entitlement, the System currently 

counts the number of firms at each price 

level, aggregating orders or quotes per 

firm, rather than counting the number of 

each separate order or quote. Therefore, 

to reflect current System functionality, 

the proposed rule change removes 

references to individual non-Priority 

Customer orders and quotes in Rule 

5.32(a)(2)(B) and updates the language 

to provide that, if the DPM or LMM,6 as 

applicable, has a quote at the highest 

bid or lowest offer, it will receive the 

greater of (i) the number of contracts it 

would receive pursuant to the 

applicable base allocation algorithm and 

(ii) 50% of the contracts if there is one 

other non-Priority Customer, 40% of the 

contracts if there are two non-Priority 

Customers, or 30% of the contracts if 

there are three or more non-Priority 

Customers with orders or quotes on the 

Book at that price. 

Second, the proposed rule change 

updates Rule 5.32(a)(2)(B) to be 

consistent with the manner in which the 

System currently applies the 

participation entitlement percentages 

for PMMs. The System currently applies 

a 50%/40% participation entitlement 

percentage structure to PMMs, as 

opposed to the 50%/40%/30% 

participation entitlement percentage 

structure that, pursuant to Rule 

5.32(a)(2)(B), applies to all three MarketMaker types. Therefore, to reflect 

current System functionality, the 

proposed rule change adopts language 

in Rule 5.32(a)(2)(B) to provide that, if 

the PMM, as applicable, has a quote at 

the highest bid or lower offer, it will 

receive the greater of (i) the number of 

the contracts it would receive pursuant 

to the applicable base allocation 

algorithm and (ii) 50% of the contracts 

if there is one other non-Priority 

Customer, or 40% of the contracts if 

there are two or more non-Priority 

Customers with orders or quotes on the 

Book at that price. The current 

participation entitlement percentage 

structure for DPMs and LMMs (i.e., 

50%/40%/30%) will remain the same 

and the Exchange may continue to 

apply one or more of the participation 

entitlements for DPMs and LMMs, and 

for PMMs, as proposed, (in any 

sequence) to a class. The Exchange 

notes that it previously restructured its 

Rules related to order entry and 

allocation, including the participation 

entitlement provisions, in connection 

with a 2019 technology migration. Prior 

to this restructuring, separate provisions 

governed the participation entitlement 

percentages for PMMs, DPMs, and 

LMMs. The provision that governed the 

PMM participation entitlements 

provided for the same 40%/50% 

participation entitlement structure as 

proposed herein 7 and the provisions 

that governed the DPM and LMM 

participation entitlements provided for 

the same participation entitlement 

percentage structure for DPMs and 

LMMs as Rule 5.32(a)(2)(B) currently 

provides for today. Upon the migrationrelated restructuring of its Rules, the 

Exchange intended to continue to apply 

the 50%/40% participation entitlement 

percentage structure to PMMs and the 

50%/40%/30% participation 

entitlement percentage structure to 

DPMs and LMMs. Indeed, following the 

restructuring, the System today 

continues to apply the 50%/40% 

participation entitlement percentage 

structure to PMMs and the 50%/40%/ 

30% participation entitlement 

percentage structure to DPMs and 

LMMs. However, in the migrationrelated filing that restructured the rules 

governing participation entitlements by 

combining such rules, the Exchange 

inadvertently applied the 50%/40%/ 

30% participation entitlement 

percentage structure to all three MarketMaker types. Therefore, the proposed 

rule change updates the Rule to correct 

this inadvertent rule change and make 

explicit that the 50%/40% participation 

entitlement percentage structure 

continues to apply to PMMs, consistent 

with the pre-migration provision that 

was previously filed with the 

Commission. 

The Exchange notes the proposed rule 

changes reflect how the System 

currently treats non-Priority Customer 

with orders or quotes at the same price 

for the purposes of the participation 

entitlement and reflect the participation 

entitlement percentages that the System 

continues to apply to PMMs today. The 

proposed rule changes are merely a 

clarification and a correction to 

inadvertently changed rule text that do 

not alter any current functionality nor 

the current participation entitlement 

percentage structures, but instead add 

clarity to the Rule by more accurately 

reflecting the current participation 

entitlement process. 

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 


khammond on DSKJM1Z7X2PROD with NOTICES
51410 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 

10 Id. 

11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) 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. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 Exchange believes 

that the proposed rule changes 

regarding the manner in which the 

System treats non-Priority Customer 

with orders and quotes at the same price 

for the purposes of the participation 

entitlement and applies the PMM 

participation entitlement percentages 

removes impediments to and perfects 

the mechanism of a free and open 

market and national market system by 

amending Rule 5.32(a)(2)(B) to be 

consistent with current functionality. 

The proposed changes are merely a 

clarification and a correction to 

inadvertently changed rule text in the 

Rule intended to more accurately reflect 

how the System currently works, 

thereby increasing transparency in the 

Rule and ultimately benefitting 

investors. The proposed clarification 

and correction do not alter any current 

functionality nor the current 

participation entitlement percentage 

structures, which are consistent with 

pre-migration provisions as previously 

filed with the Commission, but instead 

provide clarity to the Rule by more 

accurately describing the current 

participation entitlement process. 

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 changes to Rule 

5.32(a)(2)(B) are not competitive in 

nature but are merely a clarification and 

correction in the Rule, consistent with 

existing System functionality and 

intended to provide clarity to the Rule 

by more accurately reflecting the current 

participation entitlement process. 

DPMs, LMMs and PMMs will continue 

to receive participation entitlements in 

the same manner as they do today. 

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: (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 11 and Rule 19b– 

4(f)(6) thereunder.12 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– 

CBOE–2021–052 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–2021–052. 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–2021–052, and 

should be submitted on or before 

October 6, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19858 Filed 9–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92926; File No. SR–BOX– 

2021–19] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing of 

Proposed Rule Change Related to BOX 

Exchange LLC and BOX Holdings 

Group LLC Ownership Transfer 

Transactions 

September 9, 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 


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