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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices disseminate a new scheduled time for the Quote-Only Period and opening match.187 Similarly, when a disruption occurs that prevents the execution of a Halt Auction, the Exchange will publicly announce that no Halt Auction will occur, and all orders in the halted Security on the BSTX Book will be canceled after which the Exchange will open the Security for trading without an auction.188
The opening process with respect to non-BSTX-listed securities is set forth in proposed Rule 25040e. Pursuant to that Rule, BSTX Participants who wish to participate in the opening process may submit orders and quotes for inclusion in the BSTX Book, but such orders and quotes cannot execute until the termination of the Pre-Opening Phase Opening Process. Orders that are canceled before the Opening Process will not participate in the Opening Process. The Exchange will attempt to perform the Opening Process and will match buy and sell orders that are executable at the midpoint of the NBBO.189 Generally, the price of the Opening Process will be at the midpoint of the first NBBO subsequent to the first two-sided quotation published by the listing exchange after 9:30:00 a.m.
Eastern Time. Pursuant to proposed Rule 25040e4, if the conditions to establish the price of the Opening Process set forth above do not occur by 9:45:00 a.m. Eastern Time, orders will be handled in time sequence, beginning with the order with the oldest time stamp, and will be placed on the BSTX
Book cancelled, or executed in accordance with the terms of the order.
A similar process will occur for reopening a non-BSTX-listed security subject to a halt.190 The proposed opening process for Securities listed on another exchange serves as a placeholder in anticipation of other exchanges eventually listing and trading Securities, or the equivalent thereof, given that there are no other exchanges currently trading Securities. The proposed process for opening Securities listed on another exchange is similar to existing exchange rules governing the 187 See
proposed Rule 25040d1.
proposed Rule 25040d2. The Exchange notes that these contingency procedures are substantially similar to those of another exchange see e.g., IEX Rule 11.350c4 and are designed to ensure that the Exchange has appropriate mechanisms in place to address possible disruptions that may arise in an Initial Security Offering Auction or Halt Auction, consistent with the protection of investors and the public interest pursuant to Section 6b5 of the Exchange Act. 15
U.S.C. 78fb5.
189 See proposed Rule 25040e2.
190 See proposed Rule 25040e5.

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opening of trading of a security listed on another exchange.191
Consistent with Section 6b5 of the Exchange Act,192 the Exchange believes that the proposed process for opening trading in BSTX-listed Securities and Securities listed on other exchanges will promote just and equitable principles of trade and will help perfect the mechanism of a free and open market by establishing a uniform process to determine the opening price of Securities.193 Proposed Rule 25040
provides a mechanism by which BSTX
Participants may submit orders in advance of the start of regular trading hours, perform an opening cross, and commence regular hours trading in Securities listed on BSTX or otherwise.
Where an opening cross is not possible in a BSTX-listed Security, the Exchange will proceed by opening regular hours trading in the Security anyway, which is consistent with the manner in which other exchanges open trading in securities.194 With respect to initial public offerings of Securities and openings after a Limit Up-Limit Down halt or trading pause, BSTX proposes to use a process with features similar to its normal opening process. There are a variety of different ways in which an exchange can open trading in securities, including with respect to an initial public offering of a Security, and the Exchange believes that proposed Rule 25040 provides a simple and clear method for opening transactions that is consistent with the protection of investors and the public interest.195
Additionally, proposed Rule 25040
applies to all BSTX Participants in the 191 See
e.g., Cboe BZX Rule 11.24.
U.S.C. 78fb5.
193 The Exchange has not proposed to operate a closing auction at this time. As a result, the closing price of a Security on BSTX would be the last regular way transaction occurring on BSTX, which the Exchange believes is a simple and fair way to establish the closing price of a Security that does not permit unfair discrimination among customers, issuers, or broker-dealers consistent with Section 6b5 of the Exchange Act. Id. This proposed process is consistent with the overall proposed simplified market structure for BSTX, which does not include a variety of order types offered by other exchanges such as market-on-close and limit-onclose orders. The Exchange believes that a simplified market structure, including the proposed manner in which a closing price would be determined, promotes the public interest and the protection of investors consistent with Section 6b5 of the Exchange Act through reduced complexity. Id.
194 See e.g., BOX Rule 7070.
195 The Exchange notes that its proposed opening, Initial Security Offering Auction, and Halt Auction processes are substantially similar to those of another exchange. See Cboe BZX Rule 11.23. The key differences between the Exchanges proposed processes and those of the Cboe BZX exchange are that the Exchange has substantially fewer order types, which make its opening process less complex.
192 15

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same manner and is therefore not designed to permit unfair discrimination among BSTX
Participants.
Rule 25050Trading Halts BSTX proposes to adopt rules relating to trading halts 196 that are substantially similar to other exchange rules adopted in connection with the NMS Plan to Address Extraordinary Market Volatility LULD Plan, with certain exceptions that reflect Exchange functionality.
BSTX intends to join the LULD Plan prior to the commencement of trading Securities. Below is an explanation of BSTXs approach to certain categories of orders during a trading halt:
Short SalesBSTX cancels all orders on the book during a halt and rejects any new orders, so rules relating to the repricing of short sale orders during a trading halt that certain other exchanges have adopted have been omitted.
Pegged OrdersBSTX would not support pegged orders, at least initially, so rules relating to pegged orders during a trading halt have been omitted.
Routable OrdersPursuant to proposed Rule 25130, the BSTX System will reject any order or quotation that would lock or cross a protected quotation of another exchange rather than routing such order or quotation, and therefore rules relating to handling of routable orders during a trading halt have been omitted.
Limit OrdersBecause BSTX
would cancel resting order interest and reject incoming orders during a trading halt, specific rules relating to the repricing of limit-priced interest that certain other exchanges have adopted have been omitted.197
Auction Orders, Market Orders, and FOK OrdersBSTX would not support these order types, at least initially, so rules relating to these order types during a trading halt have been omitted.198
Pursuant to proposed Rule 25050d, the Exchange would cancel all resting orders in a non-BSTX listed security subject to a trading halt, reject any incoming orders in that Security, and will only resume accepting orders following a broadcast message to BSTX
Participants indicating a forthcoming reopening of trading.199
BSTX believes that it is in the public interest and furthers the protection of 196 The Exchange notes that rules on opening trading for non-BSTX-listed security are set forth in proposed Rule 25040e.
197 See e.g., Cboe BZX 11.18e5B.
198 IOC orders would be handled pursuant to proposed Rule 25050g5.
199 Trading would resume pursuant to proposed Rule 25040e5. See proposed Rule 25050g7.

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