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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
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The Exchange also proposes a process for reopening trading following a Limit Up-Limit Down Halt or trading pause Halt Auctions. For Halt Auctions, the Exchange proposes that in advance of reopening, the Exchange shall announce a Quote-Only Period that shall be five 5 minutes prior to the Halt Auction.191 This Quote-Only Period may be extended in certain circumstances.192 The Exchange proposes to disseminate the same Broadcast Information as it does for an Initial Security Offering Auction and would similarly provide notification of any extension to the quote-only period as with an Initial Security Offering Auction.193 The transition to normal trading would also occur in the same manner as Initial Security Offering Auctions, as described above.194
The Exchange also proposes to adopt certain contingency procedures in proposed Rule 25040d that would provide that when a disruption occurs that prevents the execution of an Initial Security Offering Auction the Exchange will publicly announce the Quote-Only Period for the Initial Security Offering Auction, and the Exchange will then cancel all orders on the BSTX Book and disseminate a new scheduled time for the Quote-Only Period and opening match.195 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 191 See proposed Rule 25040c1. Orders marked IOC submitted during the Quote-Only Period would be rejected. In addition, Halt Auctions would be subject to the proposed Halt Auction Collar, as set forth in proposed Rule 25040c2i and ii. These proposed collars for Halt Auctions are substantially similar to those provided by Cboe BZX, and are designed to make sure that the Exchange is able to reopen trading in a Security in a fair and orderly manner. See Cboe BZX Rule 11.23d. To the extent an Halt Auction would occur at an Impermissible Price i.e., a price outside of the proposed Halt Auction collars, the Exchange would extend the period of Halt Auction and gradually expand the scope of the collar price range over time until it is able to re-open trading in the Security in a manner consistent with proposed Rule 25040c2.
192 See proposed Rule 25040c2. The QuoteOnly Period shall be extended for an additional five 5 minutes should a Halt Auction be unable to be performed due to the absence of a TOP Initial Extension Period. After the Initial Extension Period, the Exchange proposes that the Quote-Only Period shall be extended for additional five 5
minute periods should a Halt Auction be unable to be performed due to absence of a TOP Additional Extension Period until a Halt Auction occurs.
Under the proposed Rule, the Exchange shall attempt to conduct a Halt Auction during the course of each Additional Extension Period. Id.
193 See proposed Rule 25040c35.
194 Id.
195 See proposed Rule 25040d1.

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open the Security for trading without an auction.196
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.197 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.198 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 opening of trading of a security listed on another exchange.199
Consistent with Section 6b5 of the Exchange Act,200 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 196 See 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.
197 See proposed Rule 25040e2.
198 See proposed Rule 25040e5.
199 See e.g., Cboe BZX Rule 11.24.
200 15 U.S.C. 78fb5.

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mechanism of a free and open market by establishing a uniform process to determine the opening price of Securities.201 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.202 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.203
Additionally, proposed Rule 25040
applies to all BSTX Participants in the 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 204 that are substantially 201 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.
202 See e.g., BOX Rule 7070.
203 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.
204 The Exchange notes that rules on opening trading for non-BSTX-listed security are set forth in proposed Rule 25040e.

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