Notice2021-23926
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay the Implementation of Request for PRISM
Primary source
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Published
November 3, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 210 (Wednesday, November 3, 2021)</title>
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[Federal Register Volume 86, Number 210 (Wednesday, November 3, 2021)]
[Notices]
[Pages 60694-60695]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-23926]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93451; File No. SR-BX-2021-048]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Delay the
Implementation of Request for PRISM
October 28, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 14, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to delay the implementation of an amendment
to Options 3, Section 7(d)(1)(A) relating to ``Financial Information
eXchange'' or ``FIX'' in connection with offering BX Participants the
ability to utilize FIX to submit orders to its Price Improvement
Auction (``PRISM'') mechanism.
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
BX received approval \3\ to amend Options 3, Section 7(d)(1)(A),
relating to FIX, to offer BX Participants the ability to utilize FIX to
submit orders to its PRISM mechanism. BX's amendment permitted it to
offer Participants a manner in which to send messages through FIX, to
other BX Participants, for the specific purpose of requesting another
BX Participant submit an ``Initiating Order'' \4\ along with the
sender's PRISM Order \5\ into the PRISM mechanism \6\ for execution
pursuant to Options 3, Section 13.
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\3\ See Securities Exchange Act Release No. 91124 (February 12,
2021), 86 FR 10363 (February 19, 2021) (SR-BX-2020-033) (Order
Granting Approval of a Proposed Rule Change To Utilize the FIX
Protocol To Submit Orders to BX's Price Improvement Auction
Mechanism) (``Approval Order'').
\4\ An Initiating Order is an order executed against principal
interest or against any other order it represents as agent. See
Options 3, Section 13.
\5\ A PRISM Order is an order submitted by a BX Participant that
it represents as agent on behalf of a Public Customer, broker
dealer, or any other entity, electronically, for execution. See
Options 3, Section 13.
\6\ This proposal does not amend the PRISM rule within Options
3, Section 13 in connection with offering Participants the ability
to submit a Request for PRISM through FIX.
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Specifically, the amendment expanded the capabilities of the FIX
protocol to allow a BX Participant (sender) to utilize FIX to send a
message to other BX Participants (responders) with an order the sender
represents as agent (``PRISM Order'') on behalf of a Public Customer,
broker dealer or other entity requesting the responders provide a
contra-side Initiating Order (a ``response'') and begin a PRISM auction
(collectively a ``Request for PRISM'').\7\ If a BX Participant desires
to respond to the request, the BX Participant adds an Initiating Order
to the sender's PRISM Order and submits the paired order directly into
PRISM, through FIX, for processing in accordance with Options 3,
Section 13.\8\
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\7\ The Request for PRISM, if accepted and submitted into PRISM,
would become the ``PRISM Order'' pursuant to Options 3, Section 13.
\8\ BX Participants may elect to ``opt in'' to receive Requests
for PRISM. BX Participants that do not elect to ``opt in'' will not
receive such requests. Once a BX Participant elects to receive
Requests for PRISM, they would receive all requests from any BX
Participant submitting a Request for PRISM. The BX Participant
cannot elect to only receive requests from certain Participants and
the sender may not elect to send the request to a select group of BX
Participants.
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The Exchange originally intended to begin implementation of the
proposed rule change by June 30, 2021 \9\ and subsequently extended the
implementation until November 1, 2021.\10\ At this time, the Exchange
proposes to delay the implementation so that it would begin
implementation prior to June 30, 2022. The Exchange will issue an
Options Trader Alert to Participants with the date of implementation.
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\9\ See Approval Order page 10364, ``The Exchange intends to
begin implementation of the proposed rule change by June 30, 2021.''
\10\ See Securities Exchange Act Release No. 91864 (May 12,
2021), 86 FR 27003 (May 18, 2021) (SR-BX-2021-022) (Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Delay the
Implementation of BX's Request for PRISM).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\12\ 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, by delaying the implementation of its amendment to Options 3,
Section 7(d)(1)(A) to allow the Exchange additional time to develop and
test this functionality. The Exchange believes that additional time to
develop and test this functionality will ensure a successful launch of
the functionality.
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\11\ 15 U.S.C. 78f(b)
\12\ 15 U.S.C. 78f(b)(5).
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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 Exchange's proposal to
delay the adoption of the amendment to Options 3, Section 7(d)(1)(A)
does not impose an undue burden on competition. Delaying the
implementation of the functionality will allow the Exchange additional
time to develop and test the functionality.
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.
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
[[Page 60695]]
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)(iii) of the Act \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 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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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay the
Exchange can extend the implementation date of the Request for PRISM
functionality, consistent with this filing, prior to the November 1,
2021 date specified in its previous filing. The Commission believes
that waiver of the operative delay is consistent with the protection of
investors and the public interest. Accordingly, the Commission waives
the 30-day operative delay and designates the proposed rule change
operative upon filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#dcaea9b0b9f1bfb3b1b1b9b2a8af9cafb9bff2bbb3aa"><span class="__cf_email__" data-cfemail="2250574e470f414d4f4f474c5651625147410c454d54">[email protected]</span></a>. Please include
File Number SR-BX-2021-048 on the subject line.
Paper Comments
<bullet> 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-2021-048. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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-2021-048 and should be submitted on
or before November 24, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-23926 Filed 11-2-21; 8:45 am]
BILLING CODE 8011-01-P
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