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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Notices
Aggressing Quote would be allocated pursuant to proposed paragraph a of this Rule, i.e., that such orders or quotes would be matched for execution against contra-side interest resting in the Consolidated Book according to pricetime priority. This proposed text is substantively identical to Rule 6.76A
Oa1C and uses Pillar terminology.
Consistent with the Exchanges proposed approach to new Rule 6.76P
O, proposed Rule 6.76APO would not include references to specific order types and instead would state the Exchanges general order execution methodology. Any exceptions to such general requirements would be set forth in connection with specific order or modifier definitions in proposed Rule 6.62PO, described below.
Proposed Rule 6.76APOb would set forth the Exchanges routing process and is intended to address the same subject as Rule 6.76AOc, which is currently referred to as Step 3 in order processing, without any substantive differences.
Proposed Rule 6.76APOb would provide that, absent an instruction not to route, the Exchange would route marketable orders to Away Markets after such orders are matched for execution with any contra-side interest in the Consolidated Book in accordance with proposed paragraph a of this Rule regarding Order Execution. Proposed Rule 6.76APOb also uses Pillar terminology based on current Rule 7.37
Eb, which governs the Exchanges routing process on the Exchanges cash equity platform.
The proposed rule would then set forth additional details regarding routing:
Proposed Rule 6.76APOb1
would provide that an order that cannot meet the pricing parameters of proposed Rule 6.76APOa may be routed to Away Markets before being matched for execution against contra-side interest in the Consolidated Book. The Exchange believes that this proposed rule text provides transparency that an order may be routed before being matched for execution, for example, to prevent locking or crossing or trading through the NBBO. This rule uses Pillar terminology based on Rule 7.37Eb1, with no substantive differences.
Proposed Rule 6.76APOb2
would provide that an order with an instruction not to route would be processed as provided for in proposed Rule 6.62PO. As described in greater detail below, the Exchange proposes to describe how orders and quotes with an instruction not to route would be processed in proposed Rule 6.62POe.

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Proposed Rule 6.76APOb3
would provide that any order or portion thereof that has been routed would not be eligible to trade on the Consolidated Book, unless all or a portion of the order returns unexecuted. This routing methodology is current functionality and covers that same subject as current Rule 6.76AOc2 with no substantive differences and is based in part on Pillar terminology used in Rule 7.37Eb6.
In contrast to Rule 6.76AOc2, however, the Exchange proposes that Rule 6.76APOb3 would focus on the fact that once routed, an order would not be eligible to trade on the Consolidated Book, rather than stating the obvious that it would be subject to the routing destinations trading rules once routed. In addition, because, as discussed above, the working time assigned to orders that are routed is being proposed to be addressed in new Rule 6.76POf1A and B, the Exchange believes it would be unnecessary to restate this information in new Rule 6.76APO.
Proposed Rule 6.76APOb4
would provide that requests to cancel an order that has been routed in whole or part would not be processed unless and until all or a portion of the order returns unexecuted. This proposed rule is based on Pillar terminology used in Rule 7.37
Eb7A without any substantive differences.
Finally, proposed Rule 6.76APOc would provide that after trading with eligible contra-side interest on the Consolidated Book and/or returning unexecuted after routing to Away Markets, any unexecuted nonmarketable portion of an order would be ranked consistent with new Rule 6.76P
O. This rule represents current functionality and is based on Rule 6.76AO generally and paragraph c2C as it pertains to orders that were routed away without any substantive differences. This proposed rule is also based on Pillar terminology used in Rule 7.37Ec without any substantive differences.
The Exchange believes that the specific routing methodologies for an order type or modifier should be included with how the order type is defined, which will be in proposed Rule 6.62PO. Accordingly, the Exchange does not believe it needs to specify in proposed Rule 6.76APO whether an order is eligible to route, and if so, whether there are any specific routing instructions applicable to the order and therefore will not be carrying over such specifics that are currently included in Rule 6.76AO.
In connection with proposed Rule 6.76APO, the Exchange proposes to
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add the following preamble to Rule 6.76AO: This Rule will not be applicable to trading on Pillar. This proposed preamble is designed to promote clarity and transparency in Exchange rules that Rule 6.76AO
would not be applicable to trading on Pillar.
Proposed Rule 6.62PO: Orders and Modifiers Current Rule 6.62O Certain Types of Orders Defined defines the order types that are currently available for options trading both on the OX system and for open outcry trading on the Exchange.
The Exchange proposes that new Rule 6.62PO would set forth the order types and modifiers that would be available for options trading both on Pillar i.e., electronic order entry and in open outcry trading. The Exchange proposes to specify that Rule 6.62O would not be applicable to trading on Pillar.
Because certain order types and modifiers that would be available for options trading on Pillar are based on, or similar to, order types and modifiers available on the Exchanges cash equity market, the Exchange proposes to structure proposed Rule 6.62PO based on Rule 7.31E and use similar terminology. The Exchange also proposes to title proposed Rule 6.62P
O as Orders and Modifiers, which is the title of Rule 7.31E.
Primary Order Types. Proposed Rule 6.62POa would specify the Exchanges primary order types, which would be Market Orders and Limit Orders, and is based on Rule 7.31Ea, which sets forth the Exchanges cash equity primary order types. Similar to Rule 7.31Ea, proposed Rule 6.62P
Oa would also set forth the Exchanges proposed Limit Order Price Protection functionality and Trading Collars.
Market Orders. Proposed Rule 6.62P
Oa1 would define a Market Order as an unpriced order message to buy or sell a stated number of option contracts at the best price obtainable, subject to the Trading Collar assigned to the order, and would further specify that unexecuted Market Orders may be designated Day or GTC, which represents current functionality,19 and 19 The ability for a Market Order to be designated Day or GTC is based on current Rules 6.62Om describing a Day Order and 6.62On describing a Good-til-Cancelled Order or GTC
Order and Commentary .01 to Rule 6.62O, which requires all orders to be either day, immediate or cancel, or good til cancelled. As described in more detail below, on Pillar, the time-in-force designation, e.g., Day or GTC, would be a modifier that can be added to an order type and will not be described in the rules as a separate order type.
Similar to Rule 7.31E, the Exchange will specify which time-in-force designations are available for each order type.

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