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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
promotes just and equitable principles of trade and fosters cooperation and coordination with persons regulating, settling, and facilitating transactions in securities by providing a clear and expedient process to appeal determinations made by an Official.
BSTX Participants benefit from having a quick resolution to potentially clearly erroneous executions and giving the Chief Regulatory Officer discretion to decide any appeals of an Officials determination provides an efficient means to resolve potential appeals that applies equally to all BSTX Participants and therefore does not permit unfair discrimination among BSTX
Participants, consistent with Section 6b5 of the Exchange Act. The Exchange notes that, with respect to options trading on the Exchange, the Exchanges Chief Regulatory Officer similarly has sole authority to overturn or modify obvious error determinations made by an Exchange Official and that such determination constitutes final Exchange action on the matter at issue.236 In addition, proposed Rule 25110e2iii provides that any determination made by an Official or the Chief Regulatory Officer of BSTX
under proposed Rule 25110 shall be rendered without prejudice as to the rights of the parties to the transaction to submit their dispute to arbitration.
Accordingly, there is an additional safeguard in place for BSTX Participants to seek further review of the Exchanges clearly erroneous determination.
To the extent Securities become tradeable on other national securities exchanges or other changes arise that may necessitate changes to proposed Rule 25110 to conform more closely with the clearly erroneous execution rules of other exchanges, the Exchange intends to implement changes as necessary through a proposed rule change filed with the Commission pursuant to Section 19 of the Exchange Act 237 at such future date.

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Rule 25120Short Sales Proposed Rule 25120 sets forth certain requirements with respect to short sale orders submitted to the BSTX System that is virtually identical to similar rules on other exchanges.238 Specifically, proposed Rule 25120 requires BSTX
Participants to appropriately mark orders as long, short, or short exempt and provides that the BSTX System will not execute or display a short sale order not marked short exempt with respect to 236 See
BOX Rule 7170n.
U.S.C. 78s.
238 See e.g., IEX Rule 11.290.
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a covered security 239 at a price that is less than or equal to the current national best bid if the price of that security decreases by 10% or more, as determined by the listing market for the covered security, from the covered securitys closing price on the listing market as of the end of Regular Trading Hours on the prior day the Trigger Price. The proposed rule further specifies the duration of the Short Sale Price Test and that the BSTX System shall determine whether a transaction in a covered security has occurred at a Trigger Price and shall immediately notify the responsible single plan processor.240
The Exchange believes that proposed Rule 25120 is consistent with Section 6b5 of the Exchange Act,241 because it would promote just and equitable principles of trade and further the protection of investors and the public interest by enforcing rules consistent with Regulation SHO. Pursuant to Regulation SHO, broker-dealers are required to appropriately mark orders as long, short, or short exempt,242 and trading centers are required to establish, maintain, and enforce written policies and procedures reasonably designed to, among other things, prevent the execution or display of a short sale order of a covered security at a price that is less than or equal to the current national best bid if the price of that covered security decreases by 10% or more from its closing price on the primary listing market on the prior day.243 Proposed Rule 25120 is designed to promote compliance with Regulation SHO, is nearly identical to similar rules of other exchanges, and would apply equally to all BSTX Participants.
Rule 25130Locking or Crossing Quotations in NMS Stocks Proposed Rule 25130 sets forth provisions related to locking or crossing quotations. The proposed rule is substantially similar to the rules of other national securities exchanges.244
Proposed Rule 25130 is designed to promote compliance with Regulation NMS and prohibits BSTX participants 239 Proposed Rule 25120b provides that the terms covered security, listing market, and national best bid shall have the same meaning as in Rule 201 of Regulation SHO. 17 CFR 242.201a.
240 Proposed Rule 25120d. The proposed rule further provides in paragraph d1 that if a covered security did not trade on BSTX on the prior trading day, BSTXs determination of the Trigger Price shall be based on the last sale price on the BSTX System for that Security on the most recent day on which the Security traded.
241 15 U.S.C. 78fb5.
242 17 CFR 242.200g.
243 17 CFR 242.201b1.
244 See IEX Rule 11.310.

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from engaging in a pattern or practice of displaying quotations that lock or cross a protected quotation unless an exception applies. The Exchange proposes in Rule 25130d that the BSTX System will reject any order or quotation that would lock or cross a protected quotation of another exchange at the time of entry.
The Exchange believes proposed Rule 25130 is consistent with Section 6b5
of the Exchange Act 245 because it is designed to promote just and equitable principles of trade and foster cooperation and coordination with persons facilitating transactions in securities by ensuring that the Exchange prevents display of quotations that lock or cross any protected quotation in an NMS stock, in compliance with applicable provisions of Regulation NMS.
Rule 25140Clearance and Settlement:
Anonymity Proposed Rule 25140 provides that each BSTX Participant must either 1
be a member of a registered clearing agency that uses a CNS system, or 2
clear transactions executed on the Exchange through another Participant that is a member of such a registered clearing agency. The Exchange would maintain connectivity and access to the UTC of NSCC for transmission of executed transactions. The proposed Rule requires a Participant that clears through another participant to obtain a written agreement, in a form acceptable to the Exchange, that sets out the terms of such arrangement. The proposed Rule also provides that BSTX transaction reports shall not reveal contra party identities and that transactions would be settled and cleared anonymously. In certain circumstances, such as for regulatory purposes, the Exchange may reveal the identity of a Participant or its clearing firm such as to comply with a court order.
The Exchange believes that proposed Rule 25140 is consistent with Section 6b5 of the Exchange Act 246 because it would foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities.
Proposed Rule 25140 is similar to rules of other exchanges relating to clearance and settlement.247
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U.S.C. 78fb5.
U.S.C. 78fb5.
247 See e.g. IEX Rule 11.250.
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