Quiero saber acerca de...

49434

Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
investors, consistent with Section 6b5 of the Exchange Act 200 to provide for a mechanism to halt trading in Securities during periods of extraordinary market volatility consistent with the LULD Plan.
However, the Exchange has excluded rules relating to order types and other aspects of the LULD Plan that would not be supported by the Exchange, such as market orders and auction orders. The Exchange has also reserved the right in proposed Rule 25050f to halt or suspend trading in other circumstances where the Exchange deems it necessary to do so for the protection of investors and in the furtherance of the public interest.
The Exchange believes that canceling resting order interest during a trading halt and rejecting incoming orders received during the trading halt is consistent with Section 6b5 of the Exchange Act 201 because it is not designed to permit unfair discrimination among BSTX
Participants. The orders and trading interest of all BSTX Participants would be canceled in the event of a trading halt and each BSTX Participant would be required to resubmit any orders they had resting on the order book.
Rule 25060Order Entry Proposed Rule 25060 sets forth the manner in which BSTX Participants may enter orders to the BSTX System.
The BSTX System would initially only support limit orders.202 Orders that do not designate a limit price would be rejected.203 The BSTX System would also only support two time-in-force TIF designations initially: i DAY;
and ii immediate or cancel IOC.
DAY orders will queue during the PreOpening Phase, may trade during regular market hours, and, if unexecuted at the close of the trading day 4:00 p.m.
ET, are canceled by the BSTX
System.204 All orders are given a default TIF of DAY. BSTX Participants may also designate orders as IOC, which designation overrides the default TIF of DAY. IOC orders are not accepted by the BSTX System during the Pre-Opening Phase. During regular trading hours, IOC
orders will execute in whole or in part 200 15

U.S.C. 78fb5.

lotter on DSK11XQN23PROD with NOTICES2

201 Id.
202 The BSTX System will also accept incoming Intermarket Sweep Orders ISO pursuant to proposed Rule 25060c2. ISOs must be limit orders, are ineligible for routing, may be submitted with a limit price during Regular Trading Hours, and must have a time-in-force of IOC. Proposed Rule 25060c2 is substantially similar to rules of other national securities exchanges. See e.g., Cboe BZX Rule 11.9d.
203 Proposed Rule 25060c1.
204 Proposed Rule 25060d1.

VerDate Sep<11>2014

18:03 Sep 01, 2021

Jkt 253001

immediately upon receipt by the BSTX
System. The BSTX System will not support modification of resting orders.
To change the price or quantity of an order resting on the BSTX Book, a BSTX
Participant must cancel the resting order and submit a new order, which will result in a new time stamp for purposes of BSTX Book priority. In addition, all orders on BSTX will be displayed, and the BSTX System will not support hidden orders or undisplayed liquidity, as set forth in proposed Rule 25100. The Exchange has also proposed an additional order parameter for BSTX
Participants to indicate a preference for T+0 or T+1 settlement, as previously described in Item 3, Part II.I.
Consistent with Section 6b5 of the Exchange Act,205 the Exchange believes that the proposed order entry rules will promote just and equitable principles of trade and help perfect the mechanism of a free and open market by establishing the types of orders and modifiers that all BSTX Participants may use in entering orders to the BSTX System. Because these order types and TIFs are available to all BSTX Participants, the proposed rule does not unfairly discriminate among market participants, consistent with Section 6b5 of the Exchange Act. The proposed rule sets forth a very simple exchange model whereby there is only one order typelimit orders and two TIFs. Upon the initial launch of BSTX, there will be no hidden orders, price sliding, pegged orders, or other order type features that add complexity.
The Exchange believes that creating a simplified exchange model is designed to protect investors and is in the public interest because it reduces complexity, thereby helping market participants better understand how orders would operate on the BSTX System.
Rule 25070Audit Trail Proposed Rule 25070 Audit Trail is designed to ensure that BSTX
Participants provide the Exchange with information to be able to identify the source of a particular order and other information necessary to carry out the Exchanges oversight functions. The proposed rule is substantially similar to existing BOX Rule 7120 but eliminates certain information unique to orders for options contracts e.g., exercise price because Securities are equity securities.
The proposed rule also provides that BSTX Participants that employ an electronic order routing or order management system that complies with Exchange requirements will be deemed to comply with the Rule if the required information is recorded in an electronic 205 15

PO 00000

U.S.C. 78fb5.

Frm 00020

Fmt 4701

Sfmt 4703

format. The proposed rule also specifies that order information must be kept for no less than three years and that where specific customer or account number information is not provided to the Exchange, BSTX Participants must maintain such information on their books and records.
The Exchange believes that proposed Rule 25070 is designed to protect investors and the public interest, consistent with Section 6b5 of the Exchange Act,206 because it will provide the Exchange with information necessary to carry out its oversight role.
Without being able to identify the source and terms of a particular order, the Exchanges ability to adequately surveil its market, with or through another SRO, for trading inconsistent with applicable regulatory requirements would be impeded. In order to promote compliance with Rule 201 of Regulation SHO, proposed Rule 25080b3
provides that when a short sale price test restriction is in effect, the execution price of the short sale order must be higher than i.e., above the best bid, unless the sell order is marked short exempt pursuant to Regulation SHO.
Rule 25080Execution and Price Time Priority Proposed Rule 25080 governs the execution of orders on the BSTX
System, providing a price-time priority model. The proposed rule provides that orders of BSTX Participants shall be ranked and maintained in the BSTX
Book according to price-time priority, such that within each price level, all orders shall be organized by the time of entry. The proposed rule further provides that sell orders may not execute a price below the best bid in the marketplace and buy orders cannot execute at a price above the best offer in the marketplace. Further, the proposed rule ensures compliance with Regulation SHO, Regulation NMS, and the LULD Plan, in a manner consistent with the rulebooks of other national securities exchanges.207
The Exchange believes that proposed Rule 25080 is consistent with Section 6b5 of the Exchange Act 208 because it is designed to promote just and equitable principles of trade and foster cooperation and coordination with persons facilitating transactions in securities by setting forth the order execution priority scheme for Security transactions. Numerous other exchanges similarly operate a price-time priority 206 15

U.S.C. 78fb5.
e.g., Cboe BZX Rule 11.13a23
governing regular trading hours.
208 15 U.S.C. 78fb5.
207 See
E:FRFM02SEN2.SGM

02SEN2