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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
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prices; 116 xiii payments involving publications that influence the market price of a security; 117 xiv customer confirmations; 118 xv disclosure of a control relationship with an issuer of Securities; 119 xvi discretionary accounts; 120 xvii improper use of customers securities or funds and a prohibition against guarantees and sharing in accounts; 121 xviii the extent to which sharing in accounts is permissible; 122 xix communications with customers and the public; 123 xx gratuities; 124 xxi telemarketing; 125
and xxii mandatory systems testing.126
The Exchange notes that the proposed financial responsibility rules are virtually identical to those of other national securities exchanges other than changes to defined terms and certain or quotation information unless the BSTX
Participant believes it to be bona fide.
116 Proposed Rule 19110 Offers at Stated Prices generally prohibits a BSTX Participant from offering to transact in a security at a stated price unless it is in fact prepared to do so.
117 Proposed Rule 19120 Payments Involving Publications that Influence the Market Price of a Security generally prohibits direct or indirect payments with the aim of disseminating information that is intended to effect the price of a security.
118 Proposed Rule 19130 Customer Confirmations requires that BSTX Participants comply with Rule 10b10 of the Exchange Act. 17
CFR 240.10b10.
119 Proposed Rule 19140 Disclosure of Control Relationship with Issuer generally requires BSTX
Participants to disclose any control relationship with an issuer of a security before effecting a transaction in that security for the customer.
120 Proposed Rule 19150 Discretionary Accounts generally provides certain restrictions on BSTX
Participants handling of discretionary accounts, such as by effecting excessive transactions or obtained authorization to exercise discretionary powers.
121 Proposed Rule 19160 Improper Use of Customers Securities or Funds and Prohibition against Guarantees and Sharing in Accounts generally prohibits BSTX Participants from making improper use of customers securities or funds and prohibits guarantees to customers against losses.
122 Proposed Rule 19170 Sharing in Accounts;
Extent Permissible generally prohibits BSTX
Participants and their associated persons from sharing directly or indirectly in the profit or losses of the account of a customer unless certain exceptions apply such as where an associated person receives prior written authorization from the BSTX Participant with which he or she is associated.
123 Proposed Rule 19180 Communications with Customers and the Public generally provides that BSTX Participants and their associated persons shall comply with FINRA Rule 2210 as if such rule were part of the Exchange Rules.
124 Proposed Rule 19190 Gratuities requires BSTX Participants to comply with the requirements set forth in BOX Exchange Rule 3060 Gratuities.
125 Proposed Rule 19200 Telemarketing requires that BSTX Participants and their associated persons comply with FINRA Rule 3230 as if such rule were part of the Exchanges Rules.
126 Proposed Rule 19210 Mandatory Systems Testing requires that BSTX Participants comply with Exchange Rule 3180 Mandatory Systems Testing.

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other provisions that would not apply to the trading of Securities on the BSTX
System.127
The Exchange believes that the proposed Rule 19000 Series Business Conduct is consistent with Section 6b5 of the Exchange Act 128 because these proposed rules are designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, and protect investors and the public interest by setting forth appropriate standards of conduct applicable to BSTX Participants in carrying out their business activities.
For example, proposed Rule 19000 Just and Equitable Principles of Trade and 19010 Adherence to Law would prohibit BSTX Participants from engaging in acts or practices inconsistent with just and equitable principles of trade or that would violate applicable laws and regulations.
Similarly, proposed Rule 19050 Fair Dealing with Customers would require that BSTX Participants deal fairly with their customers and proposed Rule 19030 False Statements would generally prohibit BSTX Participants, or their associated persons from making false statements or misrepresentations to the Exchange. The Exchange believes that requiring that BSTX Participants comply with the proposed business conduct rules in the Rule 19000 Series would further the protection of investors and the public interest by promoting high standards of commercial honor and integrity. In addition, each of the rules in the proposed Rule 19000
Series Business Conduct is substantially similar to supervisory rules of other exchanges.129
Financial and Operational Rules for BSTX Participants Rule 20000 Series The Exchange proposes to adopt as its Rule 20000 Series Financial and Operational Rules, ten rules relating to financial and operational requirements for BSTX Participants that are substantially similar to financial and operational rules of other exchanges.130
The proposed Rule 20000 Series would specify financial and operational requirements with respect to: i 127 For example, the Exchange is not proposing to adopt a rule contained in other exchanges business conduct rules relating to disclosures that brokerdealers give to their customers regarding the risks of effecting securities transactions during times other than during regular trading hours e.g., higher volatility, possibly lower liquidity because executions may only occur during regular trading hours on the BSTX System. See e.g., IEX Rule 3.290, Cboe BZX Rule 3.21.
128 15 U.S.C. 78fb5.
129 See supra note 1044.
130 See Cboe BZX Chapter 6 rules and IEX
Chapter 5 rules.

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Maintenance and furnishing of books and records; 131 ii financial reports; 132
iii net capital compliance; 133 iv early warning notifications pursuant to Rule 17a11 under the Exchange Act; 134 v authority of the Chief Regulatory Officer to impose certain restrictions; 135 vi margin; 136 vii day-trading margin; 137
viii customer account information; 138
ix maintaining records of customer complaints; 139 and x disclosure of financial condition.140
The Exchange believes that the proposed Rule 20000 Financial and Operational Rules Series is consistent with Section 6b5 of the Exchange Act 141 because these proposed rules are designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, and protect investors and the public interest by subjecting BSTX
Participants to certain recordkeeping, 131 Proposed Rule 20000 Maintenance, Retention and Furnishing of Books, Records and Other Information requires that BSTX Participants comply with current Exchange Rule 1000
Maintenance, Retention and Furnishing of Books, Records and Other Information and that BSTX
Participants shall submit to the Exchange order, market and transaction data as the Exchange may specify by Information Circular.
132 Proposed Rule 20010 Financial Reports provides that BSTX Participants shall comply with the requirements of current Exchange Rule 10020
Financial Reports.
133 Proposed Rule 20020 Capital Compliance provides that each BSTX Participant subject to Rule 15c31 under the Exchange Act 17 CFR 240.15c3
1 shall comply with such rule and other financial and operational rules contained in the proposed Rule 20000 series.
134 17 CFR 240.17a11. Proposed Rule 20030
Early Warning Notification provides that BSTX
Participants subject to the reporting or notifications requirements of Rule 17a11 under the Exchange Act 17 CFR 240.17a11 or similar early warning requirements imposed by other regulators shall provide the Exchange with certain reports and financial statements.
135 Proposed Rule 20040 Power of CRO to Impose Restrictions generally provides that the Exchanges Chief Regulatory Officer may impose restrictions and conditions on a BSTX Participant subject to the early warning notification requirements under certain circumstances.
136 Proposed Rule 20050 Margin sets forth the required margin amounts for certain securities held in a customers margin account.
137 Proposed Rule 20060 Day Trading Margin sets forth additional requirements with respect to customers that engage in day trading.
138 Proposed Rule 20070 Customer Account Information requires that BSTX Participants comply with FINRA Rule 4512 as if such rule were part of the Exchange Rules and further clarifies certain cross-references within FINRA Rule 4512.
139 Proposed Rule 20080 Record of Written Customer Complaints requires that BSTX
Participants comply with FINRA Rule 4513 as if such rule were part of the Exchange Rules.
140 Proposed Rule 20090 Disclosure of Financial Condition generally requires that BSTX
Participants make available certain information regarding the BSTX Participants financial condition upon request of a customer.
141 15 U.S.C. 78fb5.

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