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Federal Register / Vol. 86, No. 162 / Wednesday, August 25, 2021 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29
Jill M. Peterson, Assistant Secretary.
FR Doc. 202118237 Filed 82421; 8:45 am BILLING CODE 801101P

SECURITIES AND EXCHANGE
COMMISSION
Release No. 3492709; File No. SRCBOE
2021046

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend Rule 5.4 and Make Corresponding Changes to Other Rules August 19, 2021.

Pursuant to Section 19b1 1 of the Securities Exchange Act of 1934 the Act,2 and Rule 19b4 thereunder,3
notice is hereby given that on August 6, 2021, Cboe Exchange, Inc. the Exchange or Cboe Options filed with the Securities and Exchange Commission the Commission the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
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 5.4 and make corresponding changes to other Rules. The text of the proposed rule change is provided below.
additions are italicized; deletions are bracketed

Rules of Cboe Exchange, Inc.

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Rule 5.4. Minimum Increments for Bids and Offers a No change.
b Except as provided in Rule 5.33, the minimum increment for bids and offers on complex orders with any ratio equal to or greater than one-to-three .333 and less than or equal to three-to-one 3.00 for equity and index options, and for Index Combo orders, is $0.01 or greater, which may be determined by the Exchange on a class-by-class basis, and the legs may be executed in $0.01
increments. The minimum increment for 29 17

CFR 200.303a12.
15 U.S.C. 78sb1.
2 15 U.S.C. 78a.
3 17 CFR 240.19b4.
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bids and offers on complex orders with any ratio less than one-to-three .333 or greater than three-to-one 3.00 for equity and index options except for Index Combo orders is the standard increment for the class pursuant to paragraph a, and the legs may be executed in the minimum increment applicable to the class pursuant to paragraph a. Notwithstanding the foregoing, the minimum increment for bids and offers on complex orders in options on the S&P 500
Index SPX or on the S&P 100 Index OEX
and XEO, except for box/roll spreads, is $0.05 or greater, or in any increment, which may be determined by the Exchange on a class-by-class basis.

Rule 5.33. Complex Orders Trading of complex orders as defined in Rule 1.1 is subject to all other Rules applicable to the trading of orders, unless otherwise provided in this Rule 5.33.
ae No change.
f Minimum Increments, Execution Prices, and Priority.
1 Minimum Increments. No change.
2 Execution Prices and Complex Order Priority.
A Complex Orders. The System does not execute a complex order pursuant to this Rule 5.33 at a net price:
iiv No change.
v that would cause any component of the complex strategy to be executed at a price ahead of a Priority Customer Order on the Simple Book without improving the BBO of a at least one component of the complex strategy, if the complex order has a ratio equal to or greater than one-to-three .333
and less than or equal to three-to-one 3.00, or is an Index Combo order, or b each component of the complex strategy with a Priority Customer Order at the BBO, if the complex order has a ratio less than one-tothree .333 or greater than three-to-one 3.00.

The text of the proposed rule change is also available on the Exchanges website http www.cboe.com/
AboutCBOE/CBOELegalRegulatory Home.aspx, at the Exchanges Office of the Secretary, and at the Commissions Public Reference Room.
II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization 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 those statements may be examined at the places specified in Item IV below.
The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.

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A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The proposed rule change amends the minimum increment for complex orders with ratios of greater than three-to-one or less than one-to-three. Currently, Rule 5.4b provides that the minimum increment for bids and offers on complex orders with any ratio greater than or equal to one-to-three .333 and less than or equal to three-to-one 3.00
for equity and index options, and for Index Combo 4 orders, is $0.01 or greater, which may be determined by the Exchange on a class-by-class basis, and the legs may be executed in $0.01
increments. However, the minimum increment for bids and offers on complex orders with any ratio less than one-to-three .333 or greater than threeto-one 3.00 for equity and index options except for Index Combo orders is the standard increment for the class pursuant to Rule 5.4a, and the legs may be executed in the minimum increment applicable to the class pursuant to paragraph 5.4a.5 The Exchange currently only permits complex orders with ratios greater than three-to-one or less than one-to-three for execution on the Exchanges trading floor.6 The proposed rule change provides that the minimum increment for bids and offers on complex orders with any ratio may be in $0.01 or greater, as determined by the Exchange on a class-by-class basis. This will provide TPHs with the same pricing flexibility with respect to all complex orders they submit to the Exchange, regardless of their ratios.
Complex orders involve special pricing and handling. Bids and offers for 4 An Index Combo order is an order to purchase or sell one or more index option series and the offsetting number of Index Combinations with an Index Combination defined as a purchase sale of an index option call and sale purchase of an index option put with the same underlying index, expiration date, and strike price defined by the delta defined as the positive negative number of Index Combinations that must be sold purchased to establish a market neutral hedge with one or more series of the same index option. See Rule 5.33b5.
5 The minimum increment for bids and offers on complex orders in options on the S&P 500 Index SPX or on the S&P 100 Index OEX and XEO, except for box/roll spreads, is $0.05 or greater, or in any increment, which may be determined by the Exchange on a class-by-class basis. Rule 5.4c sets forth the minimum increment applicable to other types of options.
6 If the Securities and Exchange Commission the Commission approves the proposed rule change, the Exchange intends to begin accepting complex orders with ratios greater than three-to-one or less than one-to-three for electronic execution, in addition to open outcry.

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