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Federal Register / Vol. 86, No. 183 / Friday, September 24, 2021 / Notices according to Options 4, Section 5 and will continue to delist in that manner.
Current BX Options 3, Section 26b provides that BX will implement a replace on queue functionality whereby an outbound quote message that has not been sent, but is about to be sent, will not be sent if a more current quote message for the same series is available for sending. Further, the rule provides that this replace on queue functionality will be applied to all options series listed on BX in real time and will not delay the sending of any messages.
Options 3, Section 26b was intended to mitigate message traffic by implementing the replace on queue functionality to reduce the message traffic by disseminating only the most current quote in certain instances where a quote was recently updated. The Exchange did not implement the replace on queue functionality, so it is unavailable and has never been utilized on BX. To date, BX has been mitigating quotations by delisting pursuant to Options 4, Section 5 and mitigating pursuant to Options 3, Section 26c as described below in greater detail. BXs quote mitigation process would remain unchanged with this proposal. Also, BXs quote mitigation process is consistent with Phlxs current process for mitigating quotes. The Exchange believes that despite not implementing the replace on queue functionality, it continues to mitigate quotes in a fair and equitable manner consistent with Phlxs process for mitigating quotes. At this time, the Exchange proposes to delete Options 3, Section 26b. BXs message traffic mitigation would not be impacted by the removal of Options 3, Section 26b because, today, BX does not have the functionality described within Options 3, Section 26b and would not be changing its quote mitigation practice as a result of deleting the rule text.
Current Options 3, Section 26c provides that when the size associated with a bid or offer increases by an amount less than or equal to a percentage never to exceed 20% of the size associated with the previously disseminated bid or offer, BX will not disseminate the new bid or offer.
Options 3, Section 26c was intended to mitigate message traffic by disseminating quotes only when the size associated with a bid or offer increases by an amount greater than or equal to a certain percentage established by the Exchange. Today, the Exchanges System is not disseminating quotes as specified within Options 3, Section 26c, rather BX is disseminating quotes as specified in Phlx Options 3, Section
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26.8 The Exchanges current practice is aligned with the original intent. Today, BX mitigates quotes by disseminating them only when the size associated with a bid or offer increases by an amount greater than or equal to a certain percentage established by the Exchange.
At this time, the Exchange proposes to update BX Options 3, Section 26 to reflect BXs current practice, which is identical to Phlxs practice, and adopt rule text identical to Phlx Options 3, Section 26. Because BX is not amending its practice with respect to the dissemination of quotes, the Exchange notes that there would be no change in the number of quotes that will be disseminated by the Exchange and the proposed change aligns with the original intent of the rule.
BXs rule also proposes to adopt rule text identical to Phlx to permit it to determine the percentage by which it will disseminate an updated bid or offer price based on the size on an issue-byissue basis.9 Phlx Options 3, Section 26a3 permits it to determine the percentage in this matter. BX proposes to amend its rule to provide for the same flexibility as Phlx to permit it to determine the way it will mitigate quotes among options. Also, with this proposed change, BX would commence posting the percentage specified within proposed Options 3, Section 26a3 on the Exchanges website. The Exchange believes that posting the percentage will provide transparency to Participants.
Finally, Options 3, Section 26d provides that all message traffic mitigation mechanisms which are used on BX will be identical for the OPRA
top of the book broadcast. The text of Options 3, Section 26d is unnecessary as OPRA publishes messages disseminated by each options exchange in a similar fashion. Further, BX
Options 5, Section 117 describes the type of information disseminated by OPRA.
Today, and over the years, Phlxs number of listed underlyings exceeds the underlyings listed on BX and, therefore, utilizing a message traffic 8 Current Options 3, Section 26c refers to an amount less than or equal to a percentage. The phrase equal to is incorrect. Today, when the size associated with a bid or offer increases by an amount less sic than a percentage never to exceed 20% of the size associated with the previously disseminated bid or offer, BX does not and will not disseminate the new bid or offer. This substantive change also adopts rule text identical to Phlx Options 3, Section 26.
9 BXs current rule is silent regarding the Exchanges ability to set the percentage on an issueby-issue basis and post the percentage to its website. Today, Phlx and BX both specify the percentage on the Exchanges website. Today, the Exchange has set the same percentage for all options listed on BX.

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protocol identical to Phlx Options 3, Section 26c would permit BX to sufficiently mitigate quotes.
Options 3, Section 27
The Exchange proposes to update a citation to Rule 4626 within Options 3, Section 27, Limitation of Liability. The Exchange relocated Rule 4626 to Equity 2, Section 17 in a prior rule change.10
The Exchange proposes to update the erroneous citation. The proposed amendment is non-substantive.
Options 10, Sections 5, 6 and 9
In 2018, BXs registration requirements 11 were updated to mirror changes made by FINRA to its qualification rules.12 At that time, BX
Options 10, Sections 5, 6 and 9 should have been amended to update certain terminology to align with General 4
terminology.13 At this time, the 10 See Securities Exchange Act Release No. 91830
May 10, 2021, 86 FR 26567 May 14, 2021 SR
BX2021012 Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Relocate Its Equity and General Rules From Its Current Rulebook Into Its New Rulebook Shell.
11 See Securities Exchange Act No. 84353
October 3, 2018, 83 FR 50999 October 10, 2018
SRBX2018047 Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend, Reorganize and Enhance Membership, Registration and Qualification Rules, and To Make Conforming Changes to Certain Other Rules.
12 See Securities Exchange Act Release No. 81098
July 7, 2017, 82 FR 32419 July 13, 2017 SR
FINRA2017007 Order Approving Proposed Rule Change To Adopt Consolidated Registration Rules, Restructure the Representative-Level Qualification Examination Program, Allow Permissive Registration, Establish Exam Waiver Process for Persons Working for Financial Services Affiliate of Member, and Amend the Continuing Education Requirements.
13 Specifically, in 2018, BX amended then Chapter II, Section 2g as Rule 1220a8 current General 4, Section 1220 to rename the registration category from Registered Options and Security Futures Principal to Registered Options Principal. Further, Rule 1220b, Supplementary Material .02 was amended to provide that each person who is registered with the Exchange as a Registered Options Principal or as a General Securities Representative, Options Representative, or General Securities Sales Supervisor shall be eligible to engage in security futures activities as a principal, as applicable, provided that such individual completes a Firm Element program as set forth in proposed Rule 1240 that addresses security futures products before such person engages in security futures activities. All references to a revised examination that includes security futures products were removed and FINRA shortened references to Registered Options and Security Futures Principal in its rulebook to Registered Options Principal. See Securities Exchange Act Release No. 58932 November 12, 2008, 73 FR
69696 November 19, 2008 SRFINRA2008032.
Rule 1220b, Supplementary Material .02 was amended to provide that each person who is registered with the Exchange as a Registered Options Principal or as a General Securities Representative, Options Representative, or General Securities Sales Supervisor shall be eligible to engage in security futures activities as a principal,
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