[Federal Register Volume 86, Number 198 (Monday, October 18, 2021)]
[Notices]
[Pages 57722-57724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22576]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93289; File No. SR-CboeBZX-2021-066]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a 
Rule Regarding the Allowance of Off-Exchange Transactions by a Member 
Acting as Agent Otherwise Than on BZX in Accordance With Rule 19c-1 
Under the Securities Exchange Act of 1934

October 12, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on

[[Page 57723]]

September 29, 2021, Cboe BZX Exchange, Inc. (the ``Exchange'') filed 
with the Securities and Exchange Commission (the ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange filed the proposal as 
a ``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
adopt a rule regarding the allowance of off-exchange transactions by a 
Member acting as agent otherwise than on BZX in accordance with Rule 
19c-1 under the Securities Exchange Act of 1934 (the ``Act'').\5\ The 
text of the proposed rule change is provided in Exhibit 5.
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    \5\ See 17 CFR 240.19c-1.
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    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, 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 adopt a rule regarding off-exchange 
transactions by a Member acting as agent. Rule 19c-1 and Rule 19c-3 
under the Act \6\ describe rule provisions that each national 
securities exchange must include in its Rules regarding the ability of 
members to engage in transactions off an exchange. While the Exchange 
already incorporates the required provision in Rule 19c-3 under the Act 
into Rule 13.6, and its stated policies and practices are consistent 
with these provisions of the Act, the Exchange Rules do not currently 
include the provisions in Rule 19c-1 under the Act. Therefore, the 
proposed rule change adopts this provision in new Rule 13.6(a) \7\ in 
accordance with Rule 19c-1 under the Act. Specifically, proposed Rule 
13.6(a) (in accordance with Rule 19c-1 under the Act) provides that no 
rule, stated policy, or practice of this Exchange shall prohibit or 
condition, or be construed to prohibit or condition, or otherwise 
limit, directly or indirectly, the ability of any Member acting as 
agent to effect any transaction otherwise than on this Exchange with 
another person (except when such Member also is acting as agent for 
such other person in such transaction) in any equity security listed on 
this Exchange or to which unlisted trading privileges on this Exchange 
have been extended.
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    \6\ See 17 CFR 240.19c-1 and Sec.  240.19c-3.
    \7\ The proposed rule change also updates the provision in 
current Rule 13.6 (which incorporate Rule 19c-3 under the Act) to be 
Rule 13.6(b).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes proposed Rule 13.16(a) is 
consistent with the Act, because it adopts an Exchange Rule 
specifically required by Rule 19c-1 regarding off-exchange transactions 
for members' agency transactions. The Exchange's current Rule 13.6 and 
stated policies and procedures currently comply with provisions 
governing off-exchange trading in Rule 19c-3 under the Act. The 
proposed rule change is designed to prevent fraudulent and manipulative 
practices, promote just and equitable principles of trade and remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system as it will add transparency to the Exchange 
Rules by making it explicit in its Rules the provisions of Rule 19c-1 
under the Act, as is required by all national exchanges.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not intended as a competitive trading tool, rather it makes explicit 
the provisions governing off-exchange trading by a Member acting as 
agent in Rule 19c-1 of the Act within the Exchange Rules, which were 
previously inadvertently excluded. The provisions regarding off-
exchange trading by a Member acting as agent apply equally to all 
Members, and each national securities exchange is required to include 
the provision of Rule 19c-1 under the Act in its rules.

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

    The Exchange neither solicited nor received comments on the 
proposed rule change.

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 \10\ and Rule 19b-
4(f)(6) thereunder).\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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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[[Page 57724]]

    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay for this filing. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because such waiver will allow the Exchange to immediately update its 
rules to reflect the requirements of Rule 19c-1 of the Act.\14\ 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposed rule change as operative upon filing.\15\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ 17 CFR 240.19c-1.
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 change 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 [email protected]. Please include 
File Number SR-CboeBZX-2021-066 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-CboeBZX-2021-066. 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-CboeBZX-2021-066, and should be 
submitted on or before November 8, 2021.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22576 Filed 10-15-21; 8:45 am]
BILLING CODE 8011-01-P