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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Notices
transactions in securities, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes that the proposed rules to support Pillar would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rules would promote transparency in Exchange rules by using consistent terminology governing trading on both the Exchanges cash equity and options trading platforms, thereby ensuring that members, regulators, and the public can more easily navigate the Exchanges rulebook and better understand how options trading is conducted on the Exchange.
Generally, the Exchange believes that adding new rules with the modifier P
to denote those rules that would be operative for the Pillar trading platform would remove impediments to and perfect the mechanism of a free and open market and a national market system by providing transparency of which rules would govern trading once a symbol has been migrated to the Pillar platform. The Exchange similarly believes that adding a preamble to those current rules that would not be applicable to trading on Pillar would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would promote transparency regarding which rules would govern trading on the Exchange during and after the transition to Pillar.
In addition, the Exchange believes that incorporating functionality currently available on the Exchanges cash equity market for options trading would remove impediments to and perfect the mechanism of a free and open market and a national market system because the Exchange would be able to offer consistent functionality across both its options and cash equity trading platforms, adapted as applicable for options trading. Accordingly, with the transition to Pillar, the Exchange will be able to offer additional features to its OTP Holders and OTP Firms that are currently available only on the Exchanges cash equity platform. For similar reasons, the Exchange believes that using Pillar terminology for the proposed new rules would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would promote consistency in the Exchanges rules across both its options and cash equity platforms.

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Definitions and Applicability The Exchange believes that the proposed amendments to Rule 1.1, including moving definitions from Rule 6.1O and Rule 6.1AO to Rule 1.1, would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed changes are designed to promote clarity and transparency in Exchange rules by consolidating into Rule 1.1 definitions relating to both cash equity and options trading. The Exchange believes that the proposed changes to eliminate obsolete definitions and make non-substantive edits to existing definitions would further remove impediments to and perfect the mechanism of a free and open market and a national market system because it would ensure that the definitions used in Exchange rules are updated and consistent. Finally, the Exchange believes that organizing Rule 1.1 alphabetically and eliminating subparagraph numbering would make the proposed rules easier to navigate.
The Exchange further believes that proposed new Rule 6.1PO relating to applicability would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule would include those elements of current Rule 6.1O that would remain applicable and eliminates duplicative text that would no longer be necessary after the transition to Pillar.
The Exchange further notes that proposed Rule 6.1PO is similar to NYSE American Rule 900.1NY.
Order Ranking and Display The Exchange believes that proposed new Rule 6.76PO would remove impediments to and perfect the mechanism of a free and open market and a national market system because the Exchange is not proposing substantive changes to how the Exchange would rank and display orders and quotes on Pillar as compared to the OX system. Rather, the proposed revisions to the Exchanges options trading rules would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed changes are designed to simplify the structure of the Exchanges options rules and use consistent Pillar terminology for both cash equity and options trading, without changing the underlying functionality. For example, the Exchange believes the proposed definitions set forth in Rule 6.76PO, i.e., display price, limit price, working price, working time, and Aggressing
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Order/Aggressing Quote, would promote transparency in Exchange rules and make them easier to navigate because these proposed definitions would be used in other proposed Pillar options trading rules. The Exchange notes that these proposed definitions are consistent with the definitions set forth in Rule 7.36E for cash equity trading with differences only as necessary to address functionality associated with options trading that are not applicable to cash equity trading, e.g., reference to quotes.
The Exchange further believes that moving descriptions of order type behavior, which are currently set forth in Rule 6.76O, to proposed Rule 6.62P
O, and therefore not include such detail in proposed Rule 6.76PO, would make Exchange rules easier to navigate because information regarding how a specific order type would operate would be in a single location in the Exchanges rulebook. The Exchange notes that this proposed structure is consistent with the Exchanges cash equity rules, which similarly set forth information relating to an order types ranking in Rule 7.31
E. Moreover, the Exchange is not proposing any functional changes to how it would rank and display orders and quotes on Pillar as compared to the OX system.
Order Execution and Routing The Exchange believes that proposed new Rule 6.76APO would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule would set forth a price-time priority model for Pillar that is substantively the same as the Exchanges current price-time priority model as set forth in Rule 6.76AO. The proposed differences as compared to Rule 6.76AO are designed to use Pillar terminology that is based in part on Rule 7.37E, if applicable, without changing the functionality that is currently available for options trading.
The Exchange believes that the proposed modifications to the LMM
Guarantee would remove impediments to and perfect the mechanism of a free and open market and a national market system because it provides clarity of how multiple quotes from an LMM
would be allocated. The Exchange similarly believes that eliminating Directed Order Market Makers and Directed Orders would remove impediments to and perfect the mechanism of a free and open market and a national market system because these features are not currently used on the Exchange, and therefore eliminating Directed Orders and Directed Order
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