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Federal Register / Vol. 86, No. 161 / Tuesday, August 24, 2021 / Notices II. Self-Regulatory Organizations 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 III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.

David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
Dated: August 18, 2021.
Jill M. Peterson, Assistant Secretary.
FR Doc. 202118105 Filed 82321; 8:45 am BILLING CODE 801101P

SECURITIES AND EXCHANGE
COMMISSION
Release No. 3492702; File No. SRCBOE
2021045

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change To Amend Rule 13.15, Which Governs the Exchanges Minor Rule Violation Plan August 18, 2021.

Pursuant to Section 19b1 of the Securities Exchange Act of 1934 the Act,1 and Rule 19b4 thereunder,2
notice is hereby given that on August 3, 2021, Cboe Exchange, Inc. 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and approving the proposal on an accelerated basis.

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I. Self-Regulatory Organizations Statement of the Terms of Substance of the Proposed Rule Change Cboe Exchange, Inc. the Exchange or Cboe Options proposes to amend Rule 13.15, which governs the Exchanges Minor Rule Violation Plan MRVP, in connection with certain minor rule violations, applicable fines, as well as other clarifying, nonsubstantive changes. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchanges website http www.cboe.com/
AboutCBOE/
CBOELegalRegulatoryHome.aspx, at the Exchanges Office of the Secretary, and at the Commissions Public Reference Room.
1 15
2 17

U.S.C. 78sb1.
CFR 240.19b4.

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A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its MRVP in Rule 13.15 in connection with certain minor rule violations, applicable fines, as well as other clarifying, nonsubstantive changes. Rule 13.15
provides for disposition of specific violations through assessment of fines in lieu of conducting a formal disciplinary proceeding. Rule 13.15g sets forth the list of specific Exchange Rules under which a Trading Permit Holder TPH or person associated with or employed by a TPH may be subject to a fine for violations of such Rules and the applicable fines that may be imposed by the Exchange.
Specifically, the proposed rule change amends Rule 13.15g by: 1
Eliminating certain rule violations that the Exchange no longer believes to be minor in nature; 2 updating the fine schedule applicable to minor rule violations related to a Market-Makers failure to meet Exchange quoting obligations; and 3 making other nonsubstantive changes.
First, the proposed rule change removes the following rule violations and applicable fines from Rule 13.15g: 3
Rule 13.15g4, which currently imposes certain fines for failure to submit trade information on time and failure to submit trade information to the Price Reporter pursuant to Rule 6.1
Report Transactions to the Exchange; 4
3 As a result of the proposed elimination of certain rule violations listed under Rule 13.15g, the proposed rule change subsequently renumbers current Rules 13.15g6, 8, 9, 11, 13, 14, 15, 16, 17, 18, 19 and 20, to Rules 13.15g4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15, respectively.
4 See Rule 6.1a, which provides that a participant in each transaction to be designated by the Exchange must report or ensure the transaction is reported to the Exchange within 90 seconds of
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Rule 13.15g5, which currently imposes certain fines for failure to honor the firm quote requirements of Rules 5.52 Market-Maker Quotes 5 and 5.59 Firm Disseminated Market Quotes, to honor the priority of marketable priority customer orders pursuant to Rules 5.32 and 5.85 which among other things, govern customer priority on the Exchanges trading floor,6, and to use due diligence in the execution of orders for which the floor Trading Permit Holder maintains an agency obligation pursuant to Rule 5.91
Floor Broker Responsibilities; 7
Rule 13.15g7, which currently imposes certain fines for any individual Trading Permit Holder who fails for more than 5% of the Trading Permit Holders transactions in any month to submit on the date that a transaction is the execution in a form and manner prescribed by the Exchange so that the trade information may be reported to time and sales reports; and Rule 6.1c, which provides the Exchange-established procedure for reporting transactions pursuant to Rule 6.1a.
5 See Rule 5.52a, which provides, in relevant part, that Market-Maker bids and offers are firm for all orders under this Rule and Rule 602 of Regulation NMS under the Exchange Act Rule 602 for the number of contracts specified in the bid or offer, except if: 1 A system malfunction or other circumstance impairs the Exchanges ability to disseminate or update market bids and offers in a timely and accurate manner; 2 the level of trading activities or the existence of unusual market conditions is such that the Exchange is incapable of collecting, processing, and making available to quotation vendors the data for the option in a manner that accurately reflects the current state of the market on the Exchange; 3 prior to the conclusion of the Opening Auction Process; or 4
any of the circumstances provided in Rule 602c4
exist.
6 Rule 5.85a2A, which provides that Priority Customer orders in the Book have first priority. If there are two or more Priority Customer orders in the Book at the same price, the System prioritizes them in the order in which the System received them i.e., in time priority. The Exchange notes that customer priority for electronic executions is systematically enforced. See Rule 5.32a2A.
7 See Rule 5.91a, which provides that a Floor Broker handling an order must use due diligence to execute the order at the best price or prices available to him or, in accordance with the Rules.
Use of due diligence in handling and executing an order includes: 1 Announcing to the trading crowd a request for quotes; 2 taking the necessary measures to ensure the proper execution of an order in accordance with firm quote obligations in Rule 5.52, including the executable quantity of a quote from the trading crowd; 3 the immediate and continuous representation at the trading station where the applicable class trades of the following types of orders: A Market orders; B limit orders to sell where the specified price is at or below the current offer or; and C limit orders to buy where the specified price is at or above the current bid;
4 subject to the requirement to systematize orders prior to representation pursuant to Rule 5.7f, electronically recording the time via a PAR
workstation at which the Floor Broker initially represents the order to the trading crowd; and 5
prioritizing the Floor Brokers agency business over the Floor Brokers liquidation orders which liquidation orders are described in Rule 5.91d.

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