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Federal Register / Vol. 86, No. 51 / Thursday, March 18, 2021 / Notices II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
under Section 5cc of the Commodity Exchange Act CEA 3 on March 1, 2021.

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I. Self-Regulatory Organizations Description of the Proposed Rule Change CFE Trading Privilege Holders TPHs may interface with CFEs trading system CFE System by utilizing either the Financial Information Exchange FIX protocol or the Binary Order Entry BOE
protocol. CFE plans to enhance the BOE
protocol by implementing a new version of the Binary Order Entry protocol BOE Version 3. In reviewing its rules in connection with the preparation for the implementation of BOE Version 3, the Exchange identified proposed rule updates to further clarify how certain existing system attributes function which are not changing as a result of the implementation of BOE Version 3. The proposed rule change includes rule updates of this type that the Exchange is making in connection with CFEs implementation of BOE Version 3.
The scope of this filing is limited solely to the application of the rule amendments to security futures that may be traded on CFE. Although no security futures are currently listed for trading on CFE, CFE may list security futures for trading in the future.
CFE is making the rule amendments included in this proposed rule change in conjunction with other rule amendments being made by CFE in connection with its implementation of the BOE Version 3 that are not required to be submitted to the Commission pursuant to Section 19b7 of the Act 4
and thus are not included as part of this rule change.
The rule amendments included as part of this proposed rule change are to apply to all products traded on CFE, including both non-security futures and any security futures that may be listed for trading on CFE. CFE is submitting these rule amendments to the Commission under Section 19b7 of the Act 5 because they relate to reporting requirements that would apply with respect to any security futures that may be traded on CFE.
The text of the proposed rule change is attached as Exhibit 4 to the filing but is not attached to the publication of this notice.
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In its filing with the Commission, CFE
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. CFE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CFE Rule 403 Order Entry and Maintenance of Front-End Audit Trail Information currently requires that single Orders, Bulk Messages, and Quotes submitted to the CFE System must contain specified information or they will be rejected or canceled back to the sender. CFE is proposing to amend Rule 403 to further clarify certain of its provisions.
Specifically, CFE is proposing to amend Rule 403 in the following ways:
Current Rule 403b enumerates the information that a single Order is required to contain. CFE is proposing to revise Rule 403b to clarify that the provisions of Rule 403b do not apply to Cancel Orders or to Cancel Replace/
Modify Orders.
CFE is proposing to add new Rule 403c to address the information that a Cancel Order is required to contain.
Specifically, proposed new Rule 403c provides that each Cancel Order must contain i the Client Order ID of the Order to be canceled; ii the Executing Firm ID EFID; iii the Order Entry Operator ID; iv a manual Order indicator; and v any additional information as may be prescribed from time to time by the Exchange.
Similarly, CFE is proposing to add new Rule 403d to address the information that a Cancel Replace/
Modify Order is required to contain. In particular, proposed new Rule 403d provides that each Cancel Replace/
Modify Order must contain i a Client Order ID; ii the Client Order ID of the Order to be canceled; iii the EFID; iv the Order Entry Operator ID; v a manual Order indicator; vi the Order type; vii the price or premium; viii the quantity; and ix any additional information as may be prescribed from time to time by the Exchange.

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To account for the proposed addition of paragraphs c and d to Rule 403, CFE proposes to change the paragraph lettering of current paragraphs c through g of Rule 403 to be paragraphs e through i of Rule 403.
Current Rule 403e which is now proposed to be Rule 403g provides that any single Order, Bulk Message, or Quote that does not contain required information in a form and manner prescribed by the Exchange will be rejected or canceled back to the sender by the CFE System. CFE proposes to revise this provision to make clear that any single Order, Bulk Message, or Quote that does not contain required or permitted information in a form and manner prescribed by the Exchange will be rejected or canceled back to the sender by the CFE System or the match capacity allocation through which the single Order, Bulk Message, or Quote was submitted will be disconnected by the CFE System.
For example, with the implementation of BOE Version 3, any Order submitted through a unit match capacity allocation must be for a CFE
contract processed by the matching unit for that unit match capacity allocation.
If the Order contains a contract identifier for a contract processed by a different matching unit, it would contain information that is not permitted to be included in an Order from that unit match capacity allocation. Accordingly, the Order would rejected or canceled back to the sender by the CFE System.
In other more limited situations, there may be invalid information included in an Order message submitted by a TPH
which triggers the match capacity allocation through which the Order was submitted to be disconnected by the CFE System. For example, if a TPH
submits an Order with a message type that is not a documented message type for CFE, the match capacity allocation through which the Order was submitted would be disconnected. Disconnecting a match capacity allocation in these situations allows the TPH to ascertain why an invalid message was submitted before the TPH reconnects the match capacity allocation and recommences sending Orders through the match capacity allocation.
2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6b of the Act,6 in general, and furthers the objectives of Sections 6 15

U.S.C. 78fb.

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