Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 3, Section 17, To Decommission the Exchange's Quote Removal Kill Switch Functionality, 52540-52542 [2021-20337]

Download as PDF 52540 Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–NYSEArca– 2021–53). SECURITIES AND EXCHANGE COMMISSION For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–20330 Filed 9–20–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission Small Business Capital Formation Advisory Committee will hold a public meeting on Monday, September 27, 2021, via videoconference. TIME AND DATE: The meeting will begin at 10:00 a.m. (ET) and will be open to the public. The meeting will be conducted by remote means (videoconference) and/or at the Commission’s headquarters, 100 F Street NE, Washington, DC 20549. Members of the public may watch the webcast of the meeting on the Commission’s website at www.sec.gov. PLACE: On September 2, 2021, the Commission published notice of the Committee meeting (Release No. 33– 10976), indicating that the meeting is open to the public and inviting the public to submit written comments to the Committee. This Sunshine Act notice is being issued because a majority of the Commission may attend the meeting. STATUS: The agenda for the meeting includes matters relating to rules and regulations affecting small and emerging businesses and their investors under the federal securities laws. MATTERS TO BE CONSIDERED: CONTACT PERSON FOR MORE INFORMATION: For further information and to ascertain what, if any, matters have been added, deleted or postponed; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551–5400. lotter on DSK11XQN23PROD with NOTICES1 Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 3, Section 17, To Decommission the Exchange’s Quote Removal Kill Switch Functionality September 15, 2021. Sunshine Act Meetings Dated: September 17, 2021. Vanessa A. Countryman, Secretary. [Release No. 34–93011; File No. SR–BX– 2021–037] Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on September 2, 2021, Nasdaq BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to decommission the Exchange’s quote removal Kill Switch functionality at Options 3, Section 17. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/bx/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. [FR Doc. 2021–20533 Filed 9–17–21; 4:15 pm] BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 7 17 CFR 200.30–3(a)(31). VerDate Sep<11>2014 21:03 Sep 20, 2021 Jkt 253001 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Options 3, Section 17 to decommission the Exchange’s quote removal Kill Switch functionality, which is an optional tool that allows Market Makers 4 to initiate a message (or messages) 5 to the System 6 to promptly remove their quotes from the market. Market Makers may submit a request to the System to remove quotes based on certain identifier(s) on either a user or group level (‘‘Identifier’’).7 If quotes are cancelled by the Market Maker using Kill Switch, it will result in the removal of all quotes requested for the Identifier(s). The Market Maker will be unable to enter any additional quotes for the affected Identifier(s) until the Market Maker sends a re-entry request to the Exchange.8 Due to the lack of demand for the quote removal Kill Switch by Market Makers, the Exchange proposes to decommission this optional tool by the end of Q4 2021.9 Through consultation with individual Market Maker firms prior to filing this rule change, the Exchange did not receive any negative feedback for its proposal to decommission the quote removal Kill Switch functionality. The Exchange has also provided all market participants with advance notice that it will decommission this functionality in Q4 2021.10 With the proposed changes, the Exchange seeks to streamline its product offerings and to reallocate Exchange resources to other business and risk management initiatives. While the 4 For purposes of this filing, Market Makers include BX Options Market Makers and Options Market Makers. See Options 1, Section 1(a)(10). 5 Today, Market Makers can log into an interface to send a message to the Exchange to initiate the Kill Switch. 6 For purposes of this filing, the term ‘‘System’’ means the automated system for order execution and trade reporting owned and operated by BX as the BX Options market. See Options 1, Section 1(a)(59). 7 Identifiers include Exchange accounts, ports, and/or badges or mnemonics. Thus, a Market Maker using Kill Switch may elect to remove quotes for an individual Identifier (e.g., badge) or any group of Identifiers (e.g., all badges within one Market Maker firm). Permissible groups must reside within a single member firm. 8 See Options 3, Section 17. The Kill Switch tool also currently allows BX Participants to cancel open orders and prevent new order submission. The Exchange is not proposing to decommission the order cancellation portion of the Kill Switch tool at this time. 9 No Market Makers have used the Kill Switch for quote removal in 2021. 10 See Options Trader Alert #2021–49. E:\FR\FM\21SEN1.SGM 21SEN1 Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices lotter on DSK11XQN23PROD with NOTICES1 Exchange will no longer offer this optional functionality to Market Makers, it will continue to offer similar quote management tools that would assist Market Makers with their efforts to manage their risk with respect to quotes on the Exchange. For example, Market Makers are currently able to send a mass purge request through Specialized Quote Feed (‘‘SQF’’) to pull their existing quotes from the market and inhibit the entry of new quotes until the Market Maker sends a message to the Exchange to re-enter the System.11 Indeed, the Exchange has found that Market Makers utilize this SQF purge functionality instead of the Kill Switch quote removal tool when they want to remove their quotes from the market. In addition, all Participants, including Market Makers, may contact the Exchange’s market operations staff to request that the Exchange cancel any of their existing bids, offers, or orders in any series of options.12 Furthermore, the Exchange will continue to have mandatory System-enforced risk mechanisms that automatically remove quotes for the Market Maker once certain pre-set thresholds or conditions are met. This includes risk protections such as rapid fire risk controls 13 and cancel on disconnect.14 To effect the decommissioning of the quote removal Kill Switch, the Exchange proposes to amend Options 3, Section 17 by eliminating all references to quote removal within this Rule. In 11 ‘‘SQF’’ is an interface that allows Market Makers to connect, send, and receive messages related to quotes, Immediate-or-Cancel Orders, and auction responses into and from the Exchange. Features include the following: (1) Options symbol directory messages (e.g., underlying instruments); (2) system event messages (e.g., start of trading hours messages and start of opening); (3) trading action messages (e.g., halts and resumes); (4) execution messages; (5) quote messages; (6) Immediate-or-Cancel Order messages; (7) risk protection triggers and purge notifications; (8) opening imbalance messages; (9) auction notifications; and (10) auction responses. The SQF Purge Interface only receives and notifies of purge requests from the Market Maker. Market Makers may only enter interest into SQF in their assigned options series. See Options 3, Section 7(e)(1)(B). 12 See Options 3, Section 19. 13 The rapid fire risk controls automatically remove Market Maker quotes submitted over SQF when certain firm-set thresholds are met. Once the thresholds are triggered, the Market Maker must send a re-entry indicator to re-enter the System. See Options 3, Section 15(c)(2). 14 When the SQF Port detects the loss of communication with a Participant’s Client Application because the Exchange’s server does not receive a Heartbeat message for a certain time period (‘‘nn’’ seconds), the Exchange will automatically logoff the Participant’s affected Client Application and automatically cancel all of the Participant’s open quotes. Quotes will be cancelled across all Client Applications that are associated with the same BX Options Market Maker ID and underlying issues. See Options 3, Section 18(a). VerDate Sep<11>2014 21:03 Sep 20, 2021 Jkt 253001 connection with this change, the Exchange will also renumber current Options 3, Section 17(a)(ii) and (a)(iii) as Options 3, Section 17(a)(i) and (a)(ii), respectively. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,15 in general, and furthers the objectives of Section 6(b)(5) of the Act,16 in particular, in that it is designed to promote just and equitable principles of trade, 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. Additionally, the Exchange believes that the proposed rule change is consistent with the Section 6(b)(5) requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. Specifically, the Exchange does not believe that the proposed rule change will affect the protection of investors or the public interest or the maintenance of a fair and orderly market because no Market Makers have used the quote removal Kill Switch risk control in 2021. In addition, the Exchange notes that the use of this tool is completely optional, and the Exchange will continue to offer Market Makers similar risk management tools such as the SQF mass quote purge functionality. As discussed above, the Exchange has found that Market Makers use the SQF purge functionality much more frequently than the quote removal Kill Switch to pull their quotes from the market. Furthermore, Market Makers will retain the ability to contact market operations staff to manually purge their quotes from the market. In addition, the Exchange will continue to implement mandatory System-enforced risk mechanisms that automatically remove quotes for the Market Maker once certain pre-set thresholds or conditions are met (i.e., rapid fire and cancel on disconnect). Also, the Exchange believes that the low usage rate for the quote removal Kill Switch does not warrant the continuous resources necessary for System support of such tools. As a result, the Exchange also believes that the proposal will remove impediments to and perfect the mechanism of a free and open market and a national market system by allowing the Exchange to reallocate System capacity and resources currently used to maintain this functionality to 15 15 16 15 PO 00000 Fmt 4703 the development and maintenance of other business initiatives and risk management products. As noted above, the Exchange will retain the ability for Participants to utilize Kill Switch to cancel orders and prevent new order submission. The Exchange does not believe that decommissioning the quote removal portion of the Kill Switch tool for Market Makers is unfairly discriminatory because Market Makers are professional traders with their own risk settings, and have more sophisticated infrastructures than most other market participants. Furthermore, as discussed above, the Exchange has determined that Market Makers currently use the mass purge functionality on SQF to pull their quotes from the market instead of using the quote removal Kill Switch tool to achieve the same result. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change will allow the Exchange to decommission a risk management tool that is rarely, if ever, used on the Exchange. As discussed above, Market Makers currently have a variety of similar tools like the quote removal Kill Switch that allow them to pull their quotes from the market and inhibit the entry of new quotes, including the mass quote purge functionality on SQF that the Exchange has found Market Makers use much more frequently than the quote removal Kill Switch to achieve the same result. As noted above, the Exchange will retain the ability for Participants to utilize Kill Switch to cancel orders and prevent new order submission. The Exchange does not believe that decommissioning the quote removal portion of the Kill Switch tool for Market Makers will impose an undue burden on competition because Market Makers are professional traders with their own risk settings, and have more sophisticated infrastructures than most other market participants. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00104 52541 Sfmt 4703 E:\FR\FM\21SEN1.SGM 21SEN1 52542 Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 17 and Rule 19b– 4(f)(6) thereunder.18 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BX–2021–037 on the subject line. lotter on DSK11XQN23PROD with NOTICES1 Paper Comments • Send paper comments in triplicate to: Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2021–037. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the 17 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 18 17 VerDate Sep<11>2014 21:03 Sep 20, 2021 Jkt 253001 Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BX–2021–037 and should be submitted on or before October 12, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–20337 Filed 9–20–21; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE Notice of Receipt of Request From the Former Government of the Islamic Republic of Afghanistan Under Article 9 of the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property Department of State. Public notice. AGENCY: Notice of receipt of request from Afghanistan for cultural property protection. FOR FURTHER INFORMATION CONTACT: Anne Compton, Cultural Heritage Center, Bureau of Educational and Cultural Affairs: 202–632–6571; culprop@state.gov; include ‘‘Afghanistan’’ in the subject line. SUPPLEMENTARY INFORMATION: The former Government of the Islamic Republic of Afghanistan made a request to the Government of the United States under Article 9 of the 1970 UNESCO Convention on the Means of Prohibiting SUMMARY: 19 17 PO 00000 CFR 200.30–3(a)(12). Frm 00105 Fmt 4703 Sfmt 4703 Allison Davis, Executive Director CPAC, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. 2021–20341 Filed 9–20–21; 8:45 am] BILLING CODE 4710–05–P DEPARTMENT OF STATE [Public Notice 11541] Notice of Determinations; Culturally Significant Objects Being Imported for Exhibition—Determinations: ‘‘AfroAtlantic Histories’’ Exhibition Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the exhibition ‘‘Afro-Atlantic Histories’’ at the Museum of Fine Arts, Houston, in Houston, Texas; the National Gallery of Art, Washington, District of Columbia; the Los Angeles County Museum of Art, Los Angeles, California; and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the Federal Register. FOR FURTHER INFORMATION CONTACT: Chi D. Tran, Program Administrator, Office of the Legal Adviser, U.S. Department of State (telephone: 202–632–6471; email: section2459@state.gov). The mailing address is U.S. Department of State, L/PD, 2200 C Street NW (SA–5), Suite 5H03, Washington, DC 20522–0505. SUPPLEMENTARY INFORMATION: The foregoing determinations were made SUMMARY: [Public notice 11545] ACTION: and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. The United States Department of State received this request on April, 28, 2021. The former Government of Afghanistan’s request seeks U.S. import restrictions on archaeological and ethnological material representing Afghanistan’s cultural patrimony. Pursuant to the authority vested in the Assistant Secretary of State for Educational and Cultural Affairs, and pursuant to 19 U.S.C. 2602(f)(1), notification of the request is hereby published. A public summary of the former Government of Afghanistan’s request and information about U.S. implementation of the 1970 UNESCO Convention will be available at the Cultural Heritage Center website: https:// culturalheritage.state.gov. E:\FR\FM\21SEN1.SGM 21SEN1

Agencies

[Federal Register Volume 86, Number 180 (Tuesday, September 21, 2021)]
[Notices]
[Pages 52540-52542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20337]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93011; File No. SR-BX-2021-037]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Options 3, 
Section 17, To Decommission the Exchange's Quote Removal Kill Switch 
Functionality

September 15, 2021.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on September 2, 2021, Nasdaq BX, Inc. (``BX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to decommission the Exchange's quote removal 
Kill Switch functionality at Options 3, Section 17.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Options 3, Section 17 to 
decommission the Exchange's quote removal Kill Switch functionality, 
which is an optional tool that allows Market Makers \4\ to initiate a 
message (or messages) \5\ to the System \6\ to promptly remove their 
quotes from the market. Market Makers may submit a request to the 
System to remove quotes based on certain identifier(s) on either a user 
or group level (``Identifier'').\7\ If quotes are cancelled by the 
Market Maker using Kill Switch, it will result in the removal of all 
quotes requested for the Identifier(s). The Market Maker will be unable 
to enter any additional quotes for the affected Identifier(s) until the 
Market Maker sends a re-entry request to the Exchange.\8\
---------------------------------------------------------------------------

    \4\ For purposes of this filing, Market Makers include BX 
Options Market Makers and Options Market Makers. See Options 1, 
Section 1(a)(10).
    \5\ Today, Market Makers can log into an interface to send a 
message to the Exchange to initiate the Kill Switch.
    \6\ For purposes of this filing, the term ``System'' means the 
automated system for order execution and trade reporting owned and 
operated by BX as the BX Options market. See Options 1, Section 
1(a)(59).
    \7\ Identifiers include Exchange accounts, ports, and/or badges 
or mnemonics. Thus, a Market Maker using Kill Switch may elect to 
remove quotes for an individual Identifier (e.g., badge) or any 
group of Identifiers (e.g., all badges within one Market Maker 
firm). Permissible groups must reside within a single member firm.
    \8\ See Options 3, Section 17. The Kill Switch tool also 
currently allows BX Participants to cancel open orders and prevent 
new order submission. The Exchange is not proposing to decommission 
the order cancellation portion of the Kill Switch tool at this time.
---------------------------------------------------------------------------

    Due to the lack of demand for the quote removal Kill Switch by 
Market Makers, the Exchange proposes to decommission this optional tool 
by the end of Q4 2021.\9\ Through consultation with individual Market 
Maker firms prior to filing this rule change, the Exchange did not 
receive any negative feedback for its proposal to decommission the 
quote removal Kill Switch functionality. The Exchange has also provided 
all market participants with advance notice that it will decommission 
this functionality in Q4 2021.\10\ With the proposed changes, the 
Exchange seeks to streamline its product offerings and to reallocate 
Exchange resources to other business and risk management initiatives. 
While the

[[Page 52541]]

Exchange will no longer offer this optional functionality to Market 
Makers, it will continue to offer similar quote management tools that 
would assist Market Makers with their efforts to manage their risk with 
respect to quotes on the Exchange. For example, Market Makers are 
currently able to send a mass purge request through Specialized Quote 
Feed (``SQF'') to pull their existing quotes from the market and 
inhibit the entry of new quotes until the Market Maker sends a message 
to the Exchange to re-enter the System.\11\ Indeed, the Exchange has 
found that Market Makers utilize this SQF purge functionality instead 
of the Kill Switch quote removal tool when they want to remove their 
quotes from the market.
---------------------------------------------------------------------------

    \9\ No Market Makers have used the Kill Switch for quote removal 
in 2021.
    \10\ See Options Trader Alert #2021-49.
    \11\ ``SQF'' is an interface that allows Market Makers to 
connect, send, and receive messages related to quotes, Immediate-or-
Cancel Orders, and auction responses into and from the Exchange. 
Features include the following: (1) Options symbol directory 
messages (e.g., underlying instruments); (2) system event messages 
(e.g., start of trading hours messages and start of opening); (3) 
trading action messages (e.g., halts and resumes); (4) execution 
messages; (5) quote messages; (6) Immediate-or-Cancel Order 
messages; (7) risk protection triggers and purge notifications; (8) 
opening imbalance messages; (9) auction notifications; and (10) 
auction responses. The SQF Purge Interface only receives and 
notifies of purge requests from the Market Maker. Market Makers may 
only enter interest into SQF in their assigned options series. See 
Options 3, Section 7(e)(1)(B).
---------------------------------------------------------------------------

    In addition, all Participants, including Market Makers, may contact 
the Exchange's market operations staff to request that the Exchange 
cancel any of their existing bids, offers, or orders in any series of 
options.\12\ Furthermore, the Exchange will continue to have mandatory 
System-enforced risk mechanisms that automatically remove quotes for 
the Market Maker once certain pre-set thresholds or conditions are met. 
This includes risk protections such as rapid fire risk controls \13\ 
and cancel on disconnect.\14\
---------------------------------------------------------------------------

    \12\ See Options 3, Section 19.
    \13\ The rapid fire risk controls automatically remove Market 
Maker quotes submitted over SQF when certain firm-set thresholds are 
met. Once the thresholds are triggered, the Market Maker must send a 
re-entry indicator to re-enter the System. See Options 3, Section 
15(c)(2).
    \14\ When the SQF Port detects the loss of communication with a 
Participant's Client Application because the Exchange's server does 
not receive a Heartbeat message for a certain time period (``nn'' 
seconds), the Exchange will automatically logoff the Participant's 
affected Client Application and automatically cancel all of the 
Participant's open quotes. Quotes will be cancelled across all 
Client Applications that are associated with the same BX Options 
Market Maker ID and underlying issues. See Options 3, Section 18(a).
---------------------------------------------------------------------------

    To effect the decommissioning of the quote removal Kill Switch, the 
Exchange proposes to amend Options 3, Section 17 by eliminating all 
references to quote removal within this Rule. In connection with this 
change, the Exchange will also renumber current Options 3, Section 
17(a)(ii) and (a)(iii) as Options 3, Section 17(a)(i) and (a)(ii), 
respectively.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\15\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\16\ in particular, in that it is designed to 
promote just and equitable principles of trade, 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. Additionally, the Exchange believes that the proposed rule 
change is consistent with the Section 6(b)(5) requirement that the 
rules of an exchange not be designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Specifically, the Exchange does not believe that the proposed rule 
change will affect the protection of investors or the public interest 
or the maintenance of a fair and orderly market because no Market 
Makers have used the quote removal Kill Switch risk control in 2021. In 
addition, the Exchange notes that the use of this tool is completely 
optional, and the Exchange will continue to offer Market Makers similar 
risk management tools such as the SQF mass quote purge functionality. 
As discussed above, the Exchange has found that Market Makers use the 
SQF purge functionality much more frequently than the quote removal 
Kill Switch to pull their quotes from the market. Furthermore, Market 
Makers will retain the ability to contact market operations staff to 
manually purge their quotes from the market. In addition, the Exchange 
will continue to implement mandatory System-enforced risk mechanisms 
that automatically remove quotes for the Market Maker once certain pre-
set thresholds or conditions are met (i.e., rapid fire and cancel on 
disconnect).
    Also, the Exchange believes that the low usage rate for the quote 
removal Kill Switch does not warrant the continuous resources necessary 
for System support of such tools. As a result, the Exchange also 
believes that the proposal will remove impediments to and perfect the 
mechanism of a free and open market and a national market system by 
allowing the Exchange to reallocate System capacity and resources 
currently used to maintain this functionality to the development and 
maintenance of other business initiatives and risk management products.
    As noted above, the Exchange will retain the ability for 
Participants to utilize Kill Switch to cancel orders and prevent new 
order submission. The Exchange does not believe that decommissioning 
the quote removal portion of the Kill Switch tool for Market Makers is 
unfairly discriminatory because Market Makers are professional traders 
with their own risk settings, and have more sophisticated 
infrastructures than most other market participants. Furthermore, as 
discussed above, the Exchange has determined that Market Makers 
currently use the mass purge functionality on SQF to pull their quotes 
from the market instead of using the quote removal Kill Switch tool to 
achieve the same result.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change will 
allow the Exchange to decommission a risk management tool that is 
rarely, if ever, used on the Exchange. As discussed above, Market 
Makers currently have a variety of similar tools like the quote removal 
Kill Switch that allow them to pull their quotes from the market and 
inhibit the entry of new quotes, including the mass quote purge 
functionality on SQF that the Exchange has found Market Makers use much 
more frequently than the quote removal Kill Switch to achieve the same 
result.
    As noted above, the Exchange will retain the ability for 
Participants to utilize Kill Switch to cancel orders and prevent new 
order submission. The Exchange does not believe that decommissioning 
the quote removal portion of the Kill Switch tool for Market Makers 
will impose an undue burden on competition because Market Makers are 
professional traders with their own risk settings, and have more 
sophisticated infrastructures than most other market participants.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

[[Page 52542]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BX-2021-037 on the subject line.

Paper Comments

     Send paper comments in triplicate to: Secretary, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549-1090.

All submissions should refer to File Number SR-BX-2021-037. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BX-2021-037 and should be submitted on 
or before October 12, 2021.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20337 Filed 9-20-21; 8:45 am]
BILLING CODE 8011-01-P
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