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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 24000 Discipline and Summary Suspension, which provides that the provisions of the Exchange Rule 11000
Series Summary Suspension, 12000
Series Discipline, 13000 Series Review of Certain Exchange Actions, and 14000 Series Arbitration of the Exchange Rules shall be applicable to BSTX Participants and trading on the BSTX System. The Exchange already has Rules pertaining to discipline and suspension of Exchange Participants that it proposes to extend to BSTX
Participants and trading on the BSTX
System. The Exchange also proposes to adopt as Rule 24010 a minor rule violation plan with respect to transactions on BSTX.163
Proposed Rule 24000 incorporates by reference existing rules that have already been approved by the Commission.

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Trading Rules and the BSTX System Rule 25000 Series Rule 25000Access to and Conduct on the BSTX Marketplace The Exchange proposes to adopt Rule 25000 Access to and Conduct on the BSTX Marketplace to set forth rules relating to access to the BSTX System and certain conduct requirements applicable to BSTX Participants.
Specifically, proposed Rule 25000
provides that only BSTX Participants, including their associated persons, that are approved for trading on the BSTX
System shall effect any transaction on the BSTX System. Proposed Rule 25000b generally requires that a BSTX
Participant maintain a list of authorized traders that may obtain access to the BSTX System on behalf of the BSTX
Participant, have procedures in place reasonably designed to ensure that all authorized traders comply with Exchange Rules and to prevent unauthorized access to the BSTX
System, and to provide the list of authorized traders to the Exchange upon request. Proposed Rule 25000c and d restate provisions that are already set forth in Exchange Rule 7000, generally providing that BSTX Participants shall not engage in conduct that is inconsistent with the maintenance of a fair and orderly market or the ordinary and efficient conduct of business, as well as conduct that is likely to impair public confidence in the operations of the Exchange. Examples of such prohibited conduct include failure to abide by a determination of the Exchange, refusal to provide information requested by the Exchange, 163 The proposed additions to the Exchanges minor rule violation plan pursuant to proposed Rule 24010 are discussed below in Part IV.

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and failure to adequately supervise employees. Proposed Rule 25000f provides the Exchange with authority to suspend or terminate access to the BSTX System under certain circumstances.
The Exchange believes that proposed Rule 25000 is consistent with Section 6b5 of the Exchange Act 164 because it is designed to protect investors and the public interest and promote just and equitable principles of trade by ensuring that BSTX Participants would not allow for unauthorized access to the BSTX
System and would not engage in conduct detrimental to the maintenance of fair and orderly markets.
Rule 25010Days/Hours Proposed Rule 25010 sets forth the days and hours during which BSTX
would be open for business and during which transactions may be effected on the BSTX System. Under the proposed rule, transactions may be executed on the BSTX System between 9:30 a.m. and 4:00 p.m. Eastern Time. The proposed rule also specifies certain holidays BSTX would be not be open e.g., New Years Day and provides that the Chief Executive Officer, President, or Chief Regulatory Officer of the Exchange, or such persons designee who is a senior officer of the Exchange, shall have the power to halt or suspend trading in any Securities, close some or all of BSTXs facilities, and determine the duration of any such halt, suspension, or closing, when such person deems the action necessary for the maintenance of fair and orderly markets, the protection of investors, or otherwise in the public interest.
The Exchange believes that proposed Rule 25010 is designed to protect investors and the public interest, consistent with Section 6b5 of the Exchange Act,165 by setting forth the days and hours that trades may be effected on the BSTX System and by providing officers of the Exchange with the authority to halt or suspend trading when such officers believe that such action is necessary or appropriate to maintain fair and orderly markets or to protect investors or in the public interest.
Rule 25020Units of Trading Proposed Rule 25020 sets forth the minimum unit of trading on the BSTX
System, which shall be one Security.
The Exchange believes that proposed Rule 25020 is consistent with Section 6b5 of the Exchange Act 166 because 164 15

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it fosters cooperation and coordination of persons engaged in facilitating transactions in securities by specifying the minimum unit of trading of Securities on the BSTX System. In addition, other exchanges similarly provide that the minimum unit of trading is one share for their market and/or for certain securities.167
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.168
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 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.169 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.170 Under the proposed rule, the Exchange will also broadcast other information during the Pre-Opening Phase. Specifically, in 167 See
e.g., IEX Rule 11.180.
CFR 242.611.
169 As a result, orders marked IOC submitted during the Pre-Opening Phase would be rejected by the BSTX System. See proposed Rule 25040a7.
170 The TOP can only be calculated where the BSTX Book is crossed during the Pre-Opening Phase. See proposed Rule 25040a2.
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