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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices Exchanges facilities. The Exchange notes that the proposed Rule 29000
Series is substantially similar to the existing rules of another exchange.311
The Exchange intends to submit a proposed rule change to the Commission setting forth the proposed fees relating to trading on BSTX 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 312 requiring that an SRO
promptly file notice with the Commission of any final disciplinary action taken with respect to any person or organization.313 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.314 Upon implementation of this proposal, the Exchange will include the enumerated trading rule violations in the Exchanges 311 See
Cboe BZX Rules 15.1 and 15.2.
CFR 240.19d1c1.
313 The 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.
314 See e.g., IEX Rule 9.218 and Cboe BZX Rule 8.15.01.

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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 number of times the rule violation has occurred, and the date of disposition.
The Exchanges MRVP, as proposed to be amended, is consistent with Sections 6b1, 6b5 and 6b6 of the Exchange Act,315 which require, in part, that an exchange have the capacity to enforce compliance with, and provide appropriate discipline for, violations of the rules of the Commission and of the exchange. In addition, because amended Rule 12140 will offer procedural rights to a person sanctioned for a violation listed in proposed Rule 24010, the Exchange will provide a fair procedure for the disciplining of members and associated persons, consistent with Section 6b7 of the Exchange Act.316
This proposal to include the rules listed in Rule 24010 in the Exchanges MRVP is consistent with the public interest, the protection of investors, or otherwise in furtherance of the purposes of the Exchange Act, as required by Rule 19d1c2 under the Exchange Act,317
because it should strengthen the Exchanges ability to carry out its oversight and enforcement responsibilities as an SRO in cases where full disciplinary proceedings are unsuitable in view of the minor nature of the particular violation. In requesting the proposed change to the MRVP, the Exchange in no way minimizes the importance of compliance with Exchange Rules and all other rules subject to the imposition of fines under the MRVP. However, the MRVP
provides a reasonable means of addressing rule violations that do not rise to the level of requiring formal disciplinary proceedings, while providing greater flexibility in handling certain violations. The Exchange will continue to conduct surveillance with due diligence and make a determination based on its findings, on a case-by-case basis, whether a fine of more or less than the recommended amount is appropriate for a violation under the MRVP or whether a violation requires a formal disciplinary action.
Amendments to Existing BOX Rules Due to the new BSTX trading facility and the introduction of trading in Securities= sic on the Exchange, the 315 15

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317 17 CFR 240.19d1c2.
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Exchange proposes to amend those Exchange Rules that would apply to BSTX Participants, but that currently only contemplate trading in options.
Therefore, the Exchange is seeking to amend the following Exchange Rules, each of which is set forth in Exhibit 5B
submitted with the proposal:
Rule 100a Definitions Options Participant or Participant: The Exchange proposes to change the definition of Options Participant or Participant to Participant to reflect Options Participants and BSTX
Participants and to amend the definition as follows: The term Participant means a firm, or organization that is registered with the Exchange pursuant to the Rule 2000 Series for purposes of participating in trading on a facility of the Exchange and includes an Options Participant and BSTX Participant.
Rule 100a Definitions Options Participant: The Exchange proposes to add a definition of Options Participant that would be defined as follows: The term Options Participant is a Participant registered with the Exchange for purposes of participating in options trading on the Exchange. 318
Rule 2020g2 Participant Eligibility and Registration: The Exchange proposes to delete subsection g2 and replace it with the following:
2 Persons associated with a Participant whose functions are related solely and exclusively to transactions in municipal securities; 3 persons associated with a Participant whose functions are related solely and exclusively to transactions in commodities; 4 persons associated with a Participant whose functions are related solely and exclusively to transactions in securities futures, provided that any such person is appropriately registered with a registered futures association; and 5
persons associated with a Participant who are restricted from accessing the Exchange and that do not engage in the securities business of the Participant relating to activity that occurs on the Exchange. 319
Rule 2060 Revocation of Participant Status or Association with a Participant: The Exchange proposes to amend Rule 2060 to refer to securities 318 In addition, as a result of these new defined terms, the Exchange proposes to renumber definitions set forth in Rule 100a to keep the definitions in alphabetical order.
319 In addition to revising Rule 2020g2 to broaden it to include securities activities beyond just options trading, the Exchange proposes to add greater specificity to define persons that are exempt from registration, consistent with the approach adopted by other exchanges. See e.g., IEX Rule 2.160m.

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