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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES2

For each Rule in the 28000 Series, the Exchange proposes provisions that are substantially similar to provisions in the NYSE Arca rulebook, with adjustments made to ensure appropriate reference to concepts in other parts of the BSTX
Rulebook. For example, in cases where the precedent NYSE Arca rule referred to a specific provision regarding delisting procedures, the Exchange has modified the proposed Rules to reference to the proposed Rule 27000
Series, which set forth the Exchanges proposed Rules governing suspension and delisting.298 As another example, the proposed definition of ETP
Holder, which closely parallels the same definition in the NYSE Arca Rulebook, but is located in a different place in the proposed BSTX Rulebook as compared to the NYSE Arca rulebook.299 In addition, certain products or concepts that are supported by NYSE Arca but are not supported by the Exchange have not been included in the proposal. For example, the Exchange notes that the NYSE Arca rulebook provides for trading of a Nasdaq-100
Index product, Currency Trust Shares, and Commodity Index Trust Shares,300
whereas the Exchange will not support trading in these specific ETPs and therefore has not included provisions relating to the listing and trading of such products in its proposal. The discussion below describes other notable variations from the NYSE Arca rules set forth in the proposed Rule Series 28000.
The Exchange believes that the proposals in the Rule 28000 Series help remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general promote the protecting of investors and the public interest because they will facilitate an additional exchange on which ETPs can be listed and traded. This adds competition to the marketplace for the listing of ETPs, providing greater choice for issuers of ETPs and an additional trading venue on which market participants can trade such products. As noted, the proposed Rule 28000 Series is substantially similar to the rules of NYSE Arca relating to ETPs, with only non298 As another example, the concept of Core Trading Hours in the NYSE Arca Rulebook as defined therein has no analog in the BSTX
Rulebook. The BSTX Rulebook only allows for Regular Trading Hours and thus the proposal references the concept of Regular Trading Hours.
299 See proposed IM280001g. In the NYSE Arca rule book, the comparable definition is set forth in NYSE Arca Rulebook Rule 1.
300 Specifically, Section 2 of Rule 8E in the NYSE Arca rulebook allows for trading of a Nasdaq100 Index product, Currency Trust Shares, and Commodity Index Trust Shares.

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substantive differences, which differences appropriately reflect the differences between the two exchanges e.g., internal cross-references within each rule book or excluding provisions related to products that the Exchange will not support.
Fees Rule 29000 Series The Exchange proposes to set forth as its Rule 29000 Series Fees the Exchanges authority to prescribe reasonable dues, fees, assessments or other charges as it may deem appropriate. As provided in proposed Rule 29000 Authority to Prescribe Dues, Fees, Assessments and Other Charges, these fees may include membership dues, transaction fees, communication and technology fees, regulatory fees, and other fees, which will be equitably allocated among BSTX
Participants, issuers, and other persons using the Exchanges facilities.301
Proposed Rule 29010 Regulatory Revenues generally provides that any revenues received by the Exchange from fees derived from its regulatory function or regulatory fines will not be used for non-regulatory purposes or distributed to the stockholder, but rather, shall be applied to fund the legal and regulatory operations of the Exchange including surveillance and enforcement activities.
The Exchange believes that the proposed Rule 29000 Series Fees is consistent with Sections 6b5 of the Exchange Act because these proposed rules are designed to protect investors and the public interest by setting forth the Exchanges authority to assess fees on BSTX Participants, which would be used to operate the BSTX System and surveil BSTX for compliance with applicable laws and rules. The Exchange believes that the proposed Rule 29000 Series Fees is also consistent with Sections 6b3 of the Exchange Act 302 because the proposed Rules specify that all fees assessed by the Exchange shall be equitably allocated among BSTX Participants, issuers and other persons using the Exchanges facilities. The Exchange notes that the proposed Rule 29000
Series is substantially similar to the existing rules of another exchange.303
The Exchange intends to submit a proposed rule change to the Commission setting forth the proposed fees relating to trading on BSTX and 301 Proposed Rule 29000 further provides authority for the Exchange to charge BSTX
Participants a regulatory transaction fee pursuant to Section 31 of the Exchange Act 15 U.S.C. 78ee and that the Exchange will set forth fees pursuant to publicly available schedule of fees.
302 15 U.S.C. 78fb5.
303 See Cboe BZX Rules 15.1 and 15.2.

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market data products in advance of the launch of BSTX.
Minor Rule Violation Plan The Exchanges disciplinary rules, including Exchange Rules applicable to minor rule violations, are set forth in the Rule 12000 Series of the Exchanges current Rules. Such disciplinary rules would apply to BSTX Participants and their associated persons pursuant to proposed Rule 24000. The Exchanges Minor Rule Violation Plan MRVP
specifies those uncontested minor rule violations with sanctions not exceeding $2,500 that would not be subject to the provisions of Rule 19d1c1 under the Exchange Act 304 requiring that an SRO
promptly file notice with the Commission of any final disciplinary action taken with respect to any person or organization.305 The Exchanges MRVP includes the policies and procedures set forth in Exchange Rule 12140 Imposition of Fines for Minor Violations.
The Exchange proposes to amend its MRVP and Rule 12140 to include proposed Rule 24010 Penalty for Minor Rule Violations. The Rules included in proposed Rule 24010 as appropriate for disposition under the Exchanges MRVP
are: a Rule 20000 Maintenance, Retention and Furnishing of Records;
b Rule 25070 Audit Trail; c Rule 25210a1 Two-Sided Quotation Obligations of BSTX Market Makers;
and Rule 25120 Short Sales. The rules included in proposed Rule 12140 are the same as the rules included in the MRVPs of other exchanges.306 Upon implementation of this proposal, the Exchange will include the enumerated trading rule violations in the Exchanges standard quarterly report of actions taken on minor rule violations under the MRVP. The quarterly report includes:
The Exchanges internal file number for the case, the name of the individual and/or organization, the nature of the violation, the specific rule provision violated, the sanction imposed, the 304 17

CFR 240.19d1c1.
Commission adopted amendments to paragraph c of Rule 19d1 to allow SROs to submit for Commission approval plans for the abbreviated reporting of minor disciplinary infractions. See Exchange Act Release No. 21013
June 1, 1984, 49 FR 23828 June 8, 1984. Any disciplinary action taken by an SRO against any person for violation of a rule of the SRO which has been designated as a minor rule violation pursuant to such a plan filed with and declared effective by the Commission will not be considered final for purposes of Section 19d1 of the Exchange Act if the sanction imposed consists of a fine not exceeding $2,500 and the sanctioned person has not sought an adjudication, including a hearing, or otherwise exhausted his administrative remedies.
306 See e.g., IEX Rule 9.218 and Cboe BZX Rule 8.15.01.
305 The
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