Quiero saber acerca de...

Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Notices
jbell on DSKJLSW7X2PROD with NOTICES2

The Exchange believes that adding this explanation regarding the P
modifier in Exchange rules would provide transparency regarding which rules and definitions would be operative during the symbol migration to Pillar.
Summary of Proposed Rule Changes In this filing, the Exchange proposes the following new Pillar rules: Rules 6.1PO Applicability, 6.37APO
Market Maker Quotations, 6.40PO
Pre-Trade and Activity-Based Risk Controls, 6.41PO Price Reasonability ChecksOrders and Quotes, 6.62PO
Orders and Modifiers, 6.64PO
Auction Process, 6.76PO Order Ranking and Display, and 6.76APO
Order Execution and Routing. The Exchange also proposes to amend Rules 1.1 Definitions, 6.1O Applicability, Definitions and References, and 6.1A
O Definitions and ReferencesOX to reflect definitions that would be applicable for options trading on Pillar and make conforming amendments to Rules 6.37O Obligations of Market Makers, 6.65AO Limit-Up and LimitDown During Extraordinary Market Volatility, and 6.96O Operation of Routing Broker. These proposed rules would set forth the foundation of the Exchanges options trading model on Pillar and would use existing Pillar terminology currently in effect for the Exchanges cash equity platform.
Because certain proposed rules have definitions and functions that carry forward to other proposed rules, the Exchange proposes to describe the new rules in the following order rather than by rule number order: Definitions, applicability, ranking and display, execution and routing, orders and modifiers, market maker quotations, pre-trade and activity-based risk controls, price reasonability checks, and auctions.
To promote clarity and transparency, the Exchange further proposes to add a preamble to the following current rules specifying that they would not be applicable to trading on Pillar: Rule 6.1
O Applicability, Definitions and References, 6.1AO Definitions and ReferencesOX, Rule 6.37AO Market Maker Quotations, 6.40O Risk Limitation Mechanism, 6.60O Price ProtectionOrders, 6.61O Price ProtectionsQuotes, 6.62O Certain Types of Orders Defined, 6.64O OX
Opening Process, 6.76O Order Ranking and DisplayOX, 6.76AO
Order ExecutionOX, 6.88O
Securities Exchange Act Release Nos. 75494 July 20, 2015, 80 FR 44170 July 24, 2015 SR
NYSEArca201538 Approval Order and 74951
May 13, 2015, 80 FR 28721 May 19, 2015
Notice.

VerDate Sep<11>2014

20:01 Jul 08, 2021

Jkt 253001

Directed Orders, and 6.90O
Qualified Contingent Crosses.
As discussed in greater detail below, the Exchange is not proposing fundamentally different functionality applicable to options trading on Pillar than on the OX system. However, with Pillar, the Exchange would introduce new terminology, and as applicable, new or updated functionality that would be available for options trading on the Pillar platform.
The Exchange notes that new rules relating to electronic complex trading on Pillar will be addressed in separate proposed rule change.
Proposed Rule Changes Rule 1.1Definitions Rule 1.1 sets forth definitions that are applicable to both the Exchanges cash equity and options markets. Rule 6.1
Ob sets forth definitions that are applicable to the trading of option contracts on the Exchange. Rule 6.1A
O sets forth definitions that are applicable to trading on the Exchanges current OX system. In connection with the transition of options trading to Pillar, the Exchange proposes to copy the definitions currently set forth in Rules 6.1O and 6.1AO into to Rule 1.1, with changes as described below.
This proposed rule change would streamline the Exchanges rules by consolidating definitions that would be applicable for trading on Pillar into Rule 1.1. Once the transition to Pillar is complete, the Exchange will file a subsequent proposed rule change to delete current Rules 6.1O and 6.1AO.
In connection with adding definitions to Rule 1.1, the Exchange proposes to delete the sub-paragraph numbering currently set forth in Rule 1.1. The Exchange does not believe that the subparagraph numbering is necessary because the definitions are organized in alphabetical order and would continue to be organized in alphabetical order. In addition, removing the sub-paragraph numbering would make any future amendments to Rule 1.1 easier to process as any new definitions would simply be added in alphabetical order.
Certain definitions in Rule 1.1
currently specify that they are only for equities trading. With the proposed consolidation of definitions, some of those definitions will become applicable to both options and cash equity trading, and others will continue to be applicable only to cash equity trading.
With the proposed consolidation, the Exchange proposes to remove existing language limiting those definitions to equities traded on the Exchange if the definition would be equally applicable
PO 00000

Frm 00003

Fmt 4701

Sfmt 4703

36441

to options trading. In addition, to the extent that a proposed definition would continue to be applicable only to cash equity trading, the Exchange proposes to make a global change to update references to equities traded on the Exchange to cash equity securities traded on the Exchange. The Exchange believes these proposed modifications would add clarity and consistency to Exchange rules.
The Exchange proposes the following amendments to Rule 1.1.
First, definitions set forth in Rule 6.1
Ob would be added to Rule 1.1 in alphabetical order without any substantive differences.8 To promote clarity, if the definition that is being copied is not specifically about options trading, the Exchange proposes to add an introductory clause to the definition to specify that the term is for options traded on the Exchange. The Exchange does not propose to copy the definition of Quote with Size, which is currently defined in Rule 6.1Ob33, to Rule 1.1
because that term would not be used in the Pillar rules, and does not propose to copy the definition of Short Term Options Series, because it is duplicative of Commentary .07 to Rule 6.4O. In addition, the Exchange is not including the definition of Foreign Broker/Dealer, which is currently defined in Rule 6.1Ob31, in Rule 1.1, as this term is not used anywhere else in Exchange rules.9 The Exchange also proposes the following clarifying, non-substantive changes to definitions that are being copied from Rule 6.1Ob to Rule 1.1:
The Exchange proposes to provide that the term class of options or class would mean all series of options, both puts and calls, overlying the same underlying security.
The Exchange proposes to streamline the definitions of Closing 8 Rule 6.1Ob has definitions for: Options Clearing Corporation, Rules of the Options Clearing Corporation, Clearing Member, Participating Exchange, Option Contract, Exchange Option Transaction and Exchange Transaction, Type of Option, Call, Put, Class of Options, Series of Options, Option Issue, Underlying Stock or Underlying Security, Exercise Price, Aggregate Exercise Price, Expiration Month, Expiration Date, Long Position, Short Position, Opening Purchase Transaction, Opening Writing Transaction, Closing Sale Transaction, Closing Purchase Transaction, Covered, Uncovered, Outstanding, Primary Market, Options Trading, Customer, Trading Crowd, Foreign Broker/Dealer, Exchange-Traded Fund Share, Quote with Size, Trading Official, Non-OTP
Firm or Non-OTP Holder Market Maker, Firm, Consolidated Book, Crowd Participants, Electronic Order Capture System, Short Term Option Series, and Quarterly Options Series.
9 The Exchange is not proposing to delete the definitions of either Quote with Size or Foreign Broker/Dealer at this time as such terms would be deleted in the subsequent filing to delete Rule 6.1
O.

E:FRFM09JYN2.SGM

09JYN2