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Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices be submitted on or before February 18, 2021.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20
J. Matthew DeLesDernier, Assistant Secretary.
FR Doc. 202101836 Filed 12721; 8:45 am BILLING CODE 801101P

SECURITIES AND EXCHANGE
COMMISSION
Release No. 3490968; File No. SR
CboeBZX2021009

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Opening Process for Simple Orders January 22, 2021.

Pursuant to Section 19b1 of the Securities Exchange Act of 1934 the Act,1 and Rule 19b4 thereunder,2
notice is hereby given that on January 11, 2021, Cboe BZX Exchange, Inc. the Exchange or BZX filed with the Securities and Exchange Commission the Commission the proposed rule change as described in Items I and II, below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a non-controversial proposed rule change pursuant to Section 19b3Aiii of the Act 3 and Rule 19b4f6 thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organizations Statement of the Terms of Substance of the Proposed Rule Change Cboe BZX Exchange, Inc. the Exchange or BZX Options proposes to amend its opening process for simple orders. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchanges website http markets.cboe.com/us/
equities/regulation/rule_filings/bzx/, at the Exchanges Office of the Secretary, and at the Commissions Public Reference Room.
20 17

CFR 200.303a12.
15 U.S.C. 78sb1.
2 17 CFR 240.19b4.
3 15 U.S.C. 78sb3Aiii.
4 17 CFR 240.19b4f6.
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II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 21.7 regarding its opening process for simple orders. Currently, following the occurrence of an opening rotation trigger pursuant to Rule 21.7d, the System conducts an opening rotation for an option series. Following the opening rotation trigger, the System conducts the Maximum Composite Width Check pursuant to Rule 21.7e1 to determine if a series is eligible to open. If the Composite Market 5 of a series is not crossed, and the Composite Width 6 of the series is less than or equal to the Maximum Composite Width as defined in Rule 21.7a, the series is eligible to open. Additionally, if the Composite Market of a series is not crossed, and the Composite Width of the series is greater than the Maximum Composite Width, but there are i no non-M Capacity a market orders or b buy sell limit orders with prices higher lower than the Composite Market midpoint and ii no orders or quotes marketable against each other, the series is eligible to open.
Once a series become eligible to open, the System conducts the opening auction for the series i.e., determines the opening trade price pursuant to Rule 21.7e2 and opens the series pursuant to Rule 21.7e3. The Exchange may also determine to compel a series to 5 The term Composite Market means the market for a series comprised of 1 the higher of the thencurrent best appointed Market-Maker bulk message bid on the Exchange and the away best bid ABB
if there is an ABB and 2 the lower of the thencurrent best appointed Market-Maker bulk message offer on the Exchange and the away best offer ABO if there is an ABO. The term Composite Bid Offer means the bid offer used to determine the Composite Market. See Rule 21.7a.
6 The term Composite Width means the width of the Composite Market i.e., the width between the Composite Bid and the Composite Offer of a series. See Rule 21.7a.

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open in the interest of fair and orderly markets, including if the opening width is wider than the Maximum Composite Width, pursuant to Rule 21.7h.
Currently, if a series cannot satisfy these conditions described above and thus is not eligible to open, the series is ineligible to open.7 When that occurs, the Queuing Period 8 for the series continues including the dissemination of opening auction updates until the Maximum Composite Width Check is satisfied or the Exchange determines to open the series pursuant to Rule 21.7h.
The proposed rule change adds that such a series may open pursuant to a forced opening as set forth in proposed Rule 21.7f.9 Specifically, as proposed, if a series in an equity or exchangetraded product ETP option class 10 is unable to open because it does not satisfy the Maximum Composite Width Check described above within a time period which the Exchange determines for all equity and ETP option classes 11
after the occurrence of the opening rotation trigger for the class pursuant to Rule 21.7d, and the Composite Market is not crossed, the System forces the series to open after that time period upon the Systems observation of an away best bid and offer ABBO with a non-zero offer 12 for the series. For a 7 See Rule 21.7e1C. The proposed rule change codifies in this provision that a series is not eligible to open if there is no Composite Market or if the Composite Market is crossed. This is true today and implied by the current rule text. Rule 21.7e1A and B both state that the Maximum Composite Width Check is only satisfied if the Composite Market of a series is not crossed, and the proposed rule change merely adds the same language to subparagraph C i.e., if the Composite Market of a series is crossed, then neither of the conditions in subparagraph A or B could be satisfied, and the series would be ineligible to open. Additionally, if there were no Composite Market or if it were crossed, the System would be unable to perform the Maximum Composite Width Check, thus meaning the series could not satisfy that check and thus would not be eligible to open.
This proposed change merely adds detail to the Rules for additional transparency.
8 The term Queuing Period means the time period prior to the initiation of an opening rotation during which the System accepts orders and quotes in the Queuing Book the book into which Users may submit orders for participation in the opening rotation for participation in the opening rotation for the applicable trading session. See Rule 21.7a.
9 The proposed forced opening process has no impact on the modified opening auction process set forth in Rule 21.7j.
10 The proposed rule change is limited to series in equity and ETP option classes because these classes are eligible for listing on all U.S. options exchanges.
11 As the Exchange currently does with respect to all other determinations it makes pursuant to Rule 21.7, the Exchange will announce these determinations and changes thereto pursuant to Exchange Notice or technical specifications.
12 Such an ABBO would indicate that an away exchange is open, as it would have disseminated an opening quote.

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