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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Notices Proposed Rule 6.76POf2 would provide that an order or quote would be assigned a new working time if: A The display price of an order or quote changes, even if the working price does not change, or B the working price of an order or quote changes, unless the working price is adjusted to be the same as the display price of an order or quote.
This proposed text uses Pillar terminology based in part on Rule 7.36
Ef2, which provides that an order is assigned a new working time any time the working price of an order changes.
The Exchange is proposing to provide greater specificity when the working time of an order would change as compared to current Rule 7.36Ef.
Proposed Rule 6.76POf3 would provide that an order or quote would be assigned a new working time if the size of an order or quote increases and that an order or quote retains its working time if the size of the order or quote is decreased. This process for assigning a new working time when the size of an order changes is the same as currently used by the Exchange and uses Pillar terminology based on Rule 7.36Ef3
without any substantive differences.
Proposed Rule 6.76POg would specify that the Exchange would apply ranking restrictions applicable to specified order or modifier instructions.
These order and modifier instructions would be identified in proposed new Rule 6.62PO, described below.
Proposed Rule 6.76POg uses Pillar terminology based on Rule 7.36Eg, without any substantive differences.
Current Rule 6.76Oa2CE discuss ranking of certain order types with contingencies, but the Exchange proposes that for Pillar, ranking details regarding orders with contingencies would be described in proposed Rule 6.62PO.
Finally, proposed Rule 6.76POh would be applicable to Orders Executed Manually and would contain the same text as set forth in Rule 6.76
Od without any substantive differences except for the nonsubstantive change of capitalizing the defined term Trading Crowd per proposed Rule 1.1, removing the superfluous clause in addition, and updating the cross-reference to reflect the new Pillar rule.16
In connection with proposed Rule 6.76PO, the Exchange proposes to add the following preamble to Rule 6.76O:
This Rule will not be applicable to 16 See proposed Rule 6.76POh1 removing in addition B regarding Trading Crowd and D
updating the cross-reference to new subparagraph B in connection with the Section 11a1G of the Exchange Act and Rule 11a11T thereunder G
exemption rule.

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trading on Pillar. This proposed preamble is designed to promote clarity and transparency in Exchange rules that Rule 6.76O would not be applicable to trading on Pillar.
Proposed Rule 6.76APO: Order Execution and Routing Current Rule 6.76AO, titled Order ExecutionOX, governs order execution and routing at the Exchange.
The Exchange proposes that Rule 6.76APO would set forth the order execution and routing rules for options trading on Pillar. The Exchange proposes that the title for new Rule 6.76APO would be Order Execution and Routing instead of Order ExecutionOX because the Exchange does not propose to use the term OX
in connection with Pillar. The Exchange believes that because proposed Rule 6.76APO, like Rule 6.76AO, would specify the Exchanges routing procedures, referencing to Routing in the rules title would provide additional transparency in Exchange rules regarding what topics would be covered in new Rule 6.76APO. This proposed rule is based on Rule 7.37E, which describes the order execution and routing rules for cash equity securities trading on the Pillar platform.
Proposed Rule 6.76APOa and its subparagraphs would set forth the Exchanges order execution process and would cover the same subject as the preamble to Rule 6.76AO. However, the proposed rule would use Pillar terminology of Aggressing Order and Aggressing Quoterather than refer to an incoming marketable bid or offer. As proposed, an Aggressing Order or Aggressing Quote would be matched for execution against contraside orders or quotes in the Consolidated Book according to the price-time priority ranking of the resting interest, subject to specified parameters.
Proposed Rule 6.76APOa1 would set forth the LMM Guarantee, which is substantively the same as the current LMM Guarantee, as described in Rule 6.76AOa1. The Exchange proposes a substantive difference because on Pillar, the Exchange would no longer support Directed Order Market Makers or Directed Orders. Accordingly, rule text relating to Directed Order Market Makers or Directed Orders will not be included in proposed Rule 6.76APO.17
Proposed Rule 6.76APOa1 would provide that an LMM would be entitled to an allocation guarantee when the execution price is equal to the NBB
Exchange proposes to add a preamble to Rule 6.88O Directed Orders to provide that the Rule would not be applicable to trading on Pillar.

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NBO and there is no displayed Customer interest in time priority at the NBBO in the Consolidated Book. In such cases, the Aggressing Order or Aggressing Quote would be matched against the quote of the LMM for an amount equal to 40% of the Aggressing Order or Aggressing Quote, up to the size of the LMMs quote the LMM
Guarantee. With respect to how the LMM Guarantee would function on Pillar, the Exchange does not propose any substantive differences from current Rule 6.76AOa1.
Proposed Rule 6.76APOa1A
proposes new functionality under Pillar and provides that if an LMM has more than one quote at a price, the LMM
Guarantee would be applied among such quotes in time priority, provided there is no displayed Customer interest with time priority at each quote.
Proposed Rule 6.76APOa1B, which is substantively identical to current Rule 6.76AOa1B, would provide that if an LMM is entitled to an LMM Guarantee pursuant to proposed paragraph a1 and the Aggressing Order or Aggressing Quote had an original size of five 5 contracts or fewer, then such order or quote would be matched against the quote of the LMM for an amount equal to 100%, up to the size of the LMMs quote. The Exchange also proposes to add Commentary .01 to the proposed rule which is substantively identical to Commentary .02 of current Rule 6.76A
O to make clear that on a quarterly basis, the Exchange would evaluate what percentage of the volume executed on the Exchange comprised of orders for five 5 contracts or fewer that was allocated to LMMs and would reduce the size of the orders included in this provision if such percentage is over 40%.18
Proposed Rule 6.76APOa1C
would specify that if the result of applying the LMM Guarantee is a fractional allocation of contracts, the LMM Guarantee would be rounded down to the nearest contract and if the result of applying the LMM Guarantee results in less than one contract, the LMM Guarantee would be equal to one contract. The Exchange believes that including this additional detail in the proposed rule would add transparency to Exchange rules.
Finally, the Exchange proposes Rule 6.76APOa1D, which would provide that after applying any LMM
Guarantee, the Aggressing Order or 18 See proposed Rule 6.76APO, Commentary .01, which will not include cross-reference that appears in the current rule Commentary .02 to Rule 6.76A
O.

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