[Federal Register Volume 86, Number 94 (Tuesday, May 18, 2021)]
[Notices]
[Pages 27003-27005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10386]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91864; File No. SR-BX-2021-022]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Delay the 
Implementation of BX's Request for PRISM

May 12, 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 May 4, 2021, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I, II, and III, 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\ 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 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.
    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
    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

[[Page 27004]]

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    The Exchange intended to begin implementation of the proposed rule 
change by June 30, 2021.\9\ At this time, the Exchange proposes to 
delay the implementation so that it would begin implementation prior to 
November 1, 2021. The Exchange will issue an Options Trader Alert to 
Participants with the date of implementation.
---------------------------------------------------------------------------

    \9\ See Approval Order page 10364, ``The Exchange intends to 
begin implementation of the proposed rule change by June 30, 2021.''
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\10\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\11\ 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 testing 
will ensure a successful launch of the functionality.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 
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 \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 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.
---------------------------------------------------------------------------

    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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BX-2021-022 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-2021-022. 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 (http://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-2021-022 and should be submitted on 
or before June 8, 2021.


[[Page 27005]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10386 Filed 5-17-21; 8:45 am]
BILLING CODE 8011-01-P


