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Federal Register / Vol. 86, No. 150 / Monday, August 9, 2021 / Notices permit a Virtual Trading Floor if the physical Trading Floor becomes inoperable is consistent with the Act.
The Commission believes that the proposal is reasonably designed to facilitate open outcry trading when circumstances restrict in person human interaction on the physical Trading Floor. The Exchange notes that it has conducted meetings with Floor Participants in which the Exchange presented the functionality of the Virtual Trading Floor and has made the Virtual Trading Floor available for testing so that the Exchange will be ready to implement the Virtual Trading Floor if necessary. The Exchange further notes that it has received positive feedback from Floor Participants regarding the Virtual Trading Floor and has committed to continue to make updates as necessary and appropriate in response to comments.32 As a result, the Commission finds that the Virtual Trading Floor is reasonably designed to allow continuous access to open outcry trading, which may remove impediments to a free and open market and may ultimately benefit investors, particularly those facilitating executions of large orders and complex trading strategies.
Additionally, the design of the Virtual Trading Floor to closely replicate the physical Trading Floor could help facilitate a more seamless rollout of the Virtual Trading Floor to Floor Participants and thus help remove impediments to a free and open market if the physical Trading Floor becomes unavailable. The Virtual Trading Floor could help provide Floor Participants the ability to interact in a substantially similar way as they do on the physical Trading Floor. Furthermore, the proposed chat functionality and electronic blotter, which are functionality not otherwise available on the physical Trading Floor, are reasonably designed to create a virtual environment that promotes fair and orderly markets by providing Floor Participants with additional tools to communicate information to one another to the extent necessary given the potential inherent limitations of communication software.
Finally, the Commission finds that the design of the Virtual Trading Floor could help prevent fraudulent and manipulative acts and practices, and promote just and equitable principles of trade by requiring that the current Rules and regulatory requirements apply in substantially the same manner as open outcry trading on the physical Trading Floor. Specifically, the Exchange 32 See
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represents that all Rules related to open outcry trading on the physical Trading Floor will apply to open outcry trading on the Virtual Trading Floor.33 Floor Participants participating in a Virtual Trading Crowd will be subject to the same regulatory requirements on the Virtual Trading Floor as they are on the physical Trading Floor, including those set forth in the Rule Series 3000 and 4000.34 Orders represented in the Virtual Trading Crowd must be systematized and represented, and transactions reported, in the same manner as on the physical Trading Floor.35 Therefore, according to the Exchange, the audit trail for open outcry trading on the Virtual Trading Floor will capture the same information that it does for open outcry trading on the physical Trading Floor.36 Further, according to the Exchange, the Regulatory Division will be able to utilize preexisting Trading Floor surveillances to surveil for the activity occurring on the Virtual Trading Floor, and Regulatory Staff will always be present on the Virtual Trading Floor.37
Moreover, the Exchange represents that it will retain records of the chats, Participant logs, electronic blotter, and any other records related to the Virtual Trading Floor consistent with the Exchanges record retention obligations under the Act.38
IV. Solicitation of Comments on Amendment No. 1
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic Comments Use the Commissions internet comment form http www.sec.gov/
rules/sro.shtml; or Send an email to rule-comments@
sec.gov. Please include File Number SR
BOX202107 on the subject line.
Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 205491090.
All submissions should refer to File No.
SRBOX202107. The file numbers should be included on the subject line 33 See
id. at 6.
id. at 14.
35 See id.
36 See id.
37 See id. at 1415.
38 See id. at 1213.
34 See
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if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commissions internet website http www.sec.gov/
rules/sro.shtml. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commissions Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change.
Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File No.
SRBOX202107 and should be submitted on or before August 30, 2021.
V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1
The Commission finds good cause for approving the proposed rule change, as amended by Amendment No. 1, prior to the 30th day after the date of publication of notice in the Federal Register. As described above, in Amendment No. 1, the Exchange: 1
Amends the proposed rule text to specify that Floor Brokers would be required to enter their orders into the electronic blotter at the same time they open outcry the order to the Virtual Trading Crowd; 2 makes revisions and technical corrections to the proposed rule text for consistency and to more clearly reflect the description of the proposed rule change; 3 makes technical corrections and revisions to the description of the proposed rule change for readability and consistency;
and 4 provides additional detail to certain aspects of the description of the proposed rule change.39 The Commission believes that the changes made in Amendment No. 1 do not raise any material or novel regulatory issues, 39 See
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Amendment No. 1, supra note 6.

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