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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices Rule 25030Minimum Price Variant Proposed Rule 25030 provides the minimum price variant for Securities shall be $0.01. The Exchange believes that proposed Rule 25030 is consistent with Section 6b5 of the Exchange Act because it fosters cooperation and coordination of persons engaged in facilitating transactions in securities by specifying the minimum price variant for Securities and promotes compliance with Rule 612 of Regulation NMS.176
Under Rule 612 of Regulation NMS, the Exchange is, among other things, prohibited from displaying, ranking or accepting from any person a bid or offer or order in an NMS stock in an increment smaller than $0.01 if that bid or offer or order is priced equal to or greater than $1.00 per share. Where a bid or offer or order is priced less than or equal to $1.00 per share, the minimum acceptable increment is $0.0001. Proposed Rule 25030 sets a uniform minimum price variant for all Securities of $0.01 irrespective of whether the Security is trading below $1.00.
Rule 25040Opening the Marketplace
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Proposed Rule 25040 sets forth the opening process for the BSTX System for BSTX-listed Securities and nonBSTX-listed securities. For BSTX-listed Securities, the Exchange proposes to allow for order entry to commence at 8:30 a.m. ET during the Pre-Opening Phase. Proposed Rule 25040a provides that orders will not execute during the Pre-Opening Phase, which lasts until regular trading hours begin at 9:30 a.m.
ET.177 Similar to how the Exchanges opening process works for options trading, BSTX would disseminate a theoretical opening price TOP to BSTX Participants, which is the price at which the opening match would occur at a given moment in time.178 Under the proposed rule, the Exchange will also broadcast other information during the Pre-Opening Phase. Specifically, in addition to the TOP, the Exchange would disseminate pursuant to proposed Rule 25040a3: i Paired Securities, which is the quantity of Securities that would execute at the TOP; ii the Imbalance Quantity, which is the number of Securities that may not be matched with other orders at the TOP at the time of dissemination;
and iii the Imbalance Side, which is 176 17

CFR 242.611.
a result, orders marked IOC submitted during the Pre-Opening Phase would be rejected by the BSTX System. See proposed Rule 25040a7.
178 The TOP can only be calculated where the BSTX Book is crossed during the Pre-Opening Phase. See proposed Rule 25040a2.
177 As
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the buy/sell direction of any imbalance at the time of dissemination collectively, with the TOP, Broadcast Information.179 Broadcast Information would be recalculated and disseminated every time a new order is received or cancelled and where such event causes the TOP or Paired Securities to change.
With respect to priority during the opening match for all Securities, consistent with proposed Rule 25080
Execution and Price/Time Priority, among multiple orders at the same price, execution priority during the opening match is determined based on the time the order was received by the BSTX System.
Consistent with the manner in which the Exchange opens options trading, the BSTX System would determine a single price at which a BSTX-listed Security would be opened by calculating the optimum number of Securities that could be matched at a price, taking into consideration all the orders on the BSTX Book.180 Proposed Rule 25040a6 provides that the opening match price is the price which results in the matching of the highest number of Securities. If two or more prices would satisfy this maximum quantity criteria, the price leaving the fewest resting Securities in the BSTX Book will be selected at the opening price and where two or more prices would satisfy the maximum quantity criteria and leave the fewest Securities in the BSTX Book, the price closest to the previous days closing price will be selected.181 The opening price must also be within the Collar Price Range as set forth in proposed Rule 25040a5, which is designed to ensure that a Security opens in an fair and orderly manner and under market conditions where there is sufficient quotation interest e.g., a national best bid and offer, the market is not crossed, and where the opening price will not drastically depart from the market at the time of the auction or the preceding days closing price.182
Unexecuted trading interest during the opening match will move to the BSTX
Book and will preserve price time 179 Pursuant to proposed Rule 25040a3, any orders which are at a better price i.e., bid higher or offer lower than the TOP would be shown only as a total quantity on the BSTX Book at a price equal to the TOP.
180 See proposed Rule 25040a4ii.
181 With respect to an initial public offering of a Security where there is no previous days closing price, the opening price would be the price assigned to the Security by the underwriter for the offering, referred to as the Initial Security Offering Reference Price. See Proposed Rule 25040a5ii3.
182 See proposed Rule 25040a5. The Exchange notes that the auction collars proposed in Rule 25040a5 are substantially similar to those of Cboe BZX. See Cboe BZX Rule 11.23.

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priority.183 When the BSTX System cannot determine an opening price of a BSTX-listed Security at the start of regular trading hours, BSTX would nevertheless open the Security for trading and move all trading interest received during the Pre-Opening Phase to the BSTX Book.184
For initial public offerings of Securities Initial Security Offerings, the process would be generally the same as regular market openings. However, in advance of an Initial Security Offering auction Initial Security Offering Auction, the Exchange shall announce a Quote-Only Period that shall be between fifteen 15 and thirty 30
minutes plus a short random period prior to the Initial Security Offering Auction.185 The Quote-Only Period may be extended in certain cases.186 As with regular market openings the Exchange would disseminate Broadcast Information at the commencement of the Quote Only Period, and Broadcast Information would be re-calculated and disseminated every time a new order is received or cancelled and where such event causes the TOP price or Paired Securities to change.187 In the event of any extension to the Quote-Only Period or a trading pause, the Exchange will notify market participants regarding the circumstances and length of the extension.188 Orders will be matched and executed at the conclusion of the Quote-Only Period, rather than at 9:30
a.m. Eastern Time.189 Following the initial cross at the end of the QuoteOnly Period wherein orders will execute based on price/time priority consistent with proposed Rule 25080, the Exchange will transition to normal trading pursuant to proposed Rule 25040a6.190
183 See
proposed Rule 25040a7.

184 Id.
185 See
proposed Rule 25040b1.
cases are when: i There is no TOP; ii the underwriter requests an extension; iii the TOP
moves the greater of 10% or fifty 50 cents in the fifteen 15 seconds prior to the initial cross; or iv in the event of a technical or systems issue at the Exchange that may impair the ability of BSTX
Participants to participate in the Initial Security Offering or of the Exchange to complete the Initial Security Offering. See proposed Rule 25040b2.
187 See proposed Rule 25040b3.
188 See proposed Rule 25040b4. The Exchange also proposes that if a trading pause is triggered by the Exchange or if the Exchange is unable to reopen trading at the end of the trading pause due to a systems or technology issue, the Exchange will immediately notify the single plan processor responsible for consolidation of information for the security pursuant to Rule 603 of Regulation NMS
under the Securities Exchange Act of 1934. Id.
189 See proposed Rule 25040b5.
190 As with the regular opening process, orders marked IOC submitted during the Pre-Opening Phase of an Initial Security Offering Auction would be rejected. See proposed Rule 25040b6.
186 Such
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