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Federal Register / Vol. 86, No. 149 / Friday, August 6, 2021 / Notices
via a Cancel/Replace message.23 Again, nothing in this proposal alters a Members obligations under Regulation SHO. The Exchange notes that the proposed rule change removes impediments to and perfects the mechanism of a free and open market and a national market system because it is designed to address a discrete and potentially limited scenario of a Short Sale Period being in effect when the a position change is made via a Cancel/
Replace message. If a Short Sale Period is not in effect, an order would retain its timestamp when its position is changed via a Cancel/Replace message. This proposed rule change is narrowly focused to address only where an order would lose priority where its position is changed via a Cancel/Replace message during a Short Sale Period.
The proposed rule change would also remove impediments to and promote just and equitable principles of trade because it reflects a necessary technology change that would ensure continued System resiliency and stability. As a national securities exchange, the Exchange is subject to Regulation Systems Compliance and Integrity Reg. SCI.24 Reg. SCI Rule 1001a requires that the Exchange establish, maintain, and enforce written policies and procedures reasonably designed to ensure among other things that its Reg. SCI systems have levels of capacity adequate to maintain the Exchanges operational capability and promote the maintenance of fair and orderly markets.25 The proposed rule change is necessary to ensure the ongoing resiliency of the Exchanges infrastructure and underling technology to ensure the Exchange continues to satisfy its requirements under Reg. SCI.
The Exchange takes pride in the reliability and availability of its System.
The proposed rule change is necessary due to technological complexity and to continue to ensure the System operates consistent with the Exchanges rules and in accordance with the Exchanges obligations under Reg. SCI.
Lastly, the proposed clarifying changes to Exchange Rules 2614e3
and 2616a5 removes impediments to and perfect a free and open market system because they simply clarify each rule and ensure the use of consistent terminology across the Exchanges rulebook. Neither of these changes amend the meaning or operation of either rule.
23 The Exchange will continue to surveil for compliance with Exchange Rules 2623 and 2603 as well as Regulation SHO.
24 17 CFR 242.10001007.
25 17 CFR 242.1001a.

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B. Self-Regulatory Organizations Statement on Burden on Competition
may choose to price their orders more aggressively.

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 change is not being proposed for competitive reasons. As discussed above, the need for the proposed rule change became apparent when making technology changes related to the Exchanges upcoming implementation of the Reserve Quantity and Minimum Execution Quantity order instructions.26 Further, this proposed rule change to cause an order to lose priority when the orders position is changed during a Short Sale Period via a Cancel/Replace message is no different than where an Equity Member seek to change the position of their order by cancelling that order and re-submitting a new order. In each case, the order will receive a new timestamp at the time the position was changed via a cancel or replace message.
Adjusting the orders timestamp due to a position change via a Cancel/
Replace message during a Short Sale Period does not impose any burden on inter-market competition that is not necessary or appropriate in furtherance of the Act. Equity Members may take into consideration that their order may experience a loss in priority when they change their orders position during a Short Sale Period when determining where to send their order for execution.
Equity Members are free to consider this change as part of their overall experience on the Exchange, including the quality of executions and other functionality offerings, which are part of their order routing decisions.
Lastly, adjusting the orders timestamp due to a position change via a Cancel/Replace message during a Short Sale Period does not also impose any burden on intra-market competition that is not necessary or appropriate in furtherance of the Act because it is similar to functionality on other exchanges.27 Also, like above for intramarket competition, Equity Members may take into consideration that their order may experience a loss in priority when they change their orders position during a Short Sale Period when determining where to send their order for execution. Equity Members who make position changes during a Short Sale Period may consider the potential that their order may lose priority and
C. Self-Regulatory Organizations Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received.

26 See 27 See
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supra note 9.
supra notes 19 and 20.

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III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register, or such longer period up to 90
days i as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or ii as to which the self-regulatory organization consents, the Commission will:
A By order approve or disapprove the proposed rule change, or B institute proceedings to determine whether the proposed rule change should be 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 Commissions internet comment form http www.sec.gov/
rules/sro.shtml; or Send an email to rule-comments@
sec.gov. Please include File Number SR
PEARL202135 on the subject line.
Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 205491090.
All submissions should refer to File Number SRPEARL202135. 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 Commissions 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
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