[Federal Register Volume 86, Number 82 (Friday, April 30, 2021)]
[Notices]
[Pages 22982-22989]
[FR Doc No: 2021-09021]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91671; File No. SR-BX-2021-015]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 7,
Section 2, ``BX Options Market- Fees and Rebates''

April 26, 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 April 13, 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 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\ 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 amend BX Options 7, Section 2, ``BX
Options Market- Fees and Rebates.''
    The Exchange originally filed the proposed pricing changes on March
29, 2021 (SR-BX-2021-010). On April 13, 2021, the Exchange withdrew
that filing and submitted this filing.
    While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on April 1,
2021.
    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 BX's Pricing Schedule at Options 7,
Section 2, ``BX Options Market-Fees and Rebates.'' The Exchange
proposes to amend Options 7, Section 2(1) to qualify the Customer Non-
Penny Symbol Maker Rebate and add certain rule text to make clear the
manner in which Options 7, Section 2(1) pricing applies today. The
Exchange also proposes to amend Options 7, Section 2(2) to amend the
pricing for the Opening Cross. Each change will be described below.
Options 7, Section 2(1)
    Today, Customers are paid a Non-Penny Symbol Maker Rebate of $0.90
per contract for adding liquidity in Non-Penny Symbols, regardless of
contra-party. Customers are assessed a Non-Penny Symbol Taker Fee of
$0.65 per contract for removing liquidity in Non-Penny Symbols,
regardless of counterparty.
    The Exchange proposes to amend the Customer Non-Penny Symbol Maker
Rebate of $0.90 per contract. The Exchange proposes to continue to pay
a Customer Non-Penny Symbol Maker Rebate of $0.90 per contract unless
the

contra-side is also a Customer, in which case the Exchange will pay a
reduced Customer Non-Penny Symbol Market Rebate of $0.45 per contract
if the quantity of transactions where the contra-side is also a
Customer is greater than 25% of Participant's total Customer Non-Penny
Symbol volume which adds liquidity in that month. The aforementioned
calculation of 25% will not consider orders within the Opening Process
\3\ per Options 3, Section 8, orders that generate an order exposure
alert per Options 5, Section 4, or orders transacted in the Price
Improvement Auction (``PRISM'') per Options 3, Section 13. The Exchange
proposes to add this rule text to Options 7, Section 2(1) at new note
``3''.
---------------------------------------------------------------------------

    \3\ The Exchange proposes to rename ``Opening Cross'' within
Options 7, Section 2(2) as `Opening Process.'' Hereafter, the
Exchange will refer to Options 7, Section 2(2) as the Opening
Process and the previous process as the Opening Cross throughout
this rule change.
---------------------------------------------------------------------------

    The Exchange also proposes to amend Options 7, Section 2(1) to add
a new note ``*'' which makes clear that orders executed in the Opening
Process per Options 3, Section 8, orders that generate an order
exposure alert per Options 5, Section 4, and orders transacted in the
Price Improvement Auction (``PRISM'') per Options 3, Section 13 are not
subject to Options 7, Section 2(1) pricing, instead, these orders are
subject to the pricing within Options 7, Sections 2(2), (4) and (5),
respectively. The Exchange believes that this note will guide
Participants to the correct pricing within Options 7, Section 2. This
new note ``*'' does not represent a substantive change. The proposed
new note ``*'' is intended to serve as a guidepost to Participants
referring to the BX Pricing Schedule.
Options 7, Section 2(2)
    As noted above, the Exchange proposes to amend the title of Options
7, Section 2(2) to align with the title of Options 3, Section 8. The
Exchange also proposes to add a citation to the rule for the Opening
Process. The current title, ``Opening Cross'' would be amended to state
``Opening Process per Options 3, Section 8.'' The Exchange also
proposes to change the phrase ``Opening Cross'' to ``Opening Process''
throughout Options 7, Section 2(2) as well. These amendments are non-
substantive.
    Currently, Options 7, Section 2(2) provides,

    All orders executed in the Opening Cross:
    Customer orders will receive the Rebate to Remove Liquidity
during the Exchange's Opening Cross, unless the contra-side is also
a Customer (in which case no Fee to Remove Liquidity is assessed and
no Rebate to Remove Liquidity is received). Lead Market Makers, BX
Options Market Makers,\4\ Non-Customers, and Firms will be assessed
the Fee to Remove Liquidity during the Exchange's Opening Cross.
---------------------------------------------------------------------------

    \4\ The Prior Fee Change renamed ``BX Options Market Maker'' as
``Market Maker.''

The Exchange recently filed to amend the pricing within Options 7,
Section 2(1) to remove the current fees, rebates and tier schedules
applicable to Penny Symbols and Non-Penny Symbols and replace it with a
new maker/taker fee structure.\5\ Currently, Options 7, Section 2(2)
continues to reference pricing which was removed with the Prior Fee
Change. As the current pricing refers to Rebates to Remove Liquidity
and Fees to Remove Liquidity which no longer exist on the Pricing
Schedule within Options 7, Section 2(1), the Exchange did not assess
any Participant a fee nor pay a rebate in March 2021 with respect to
the Opening Cross.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 91473 (April 5,
2021) 86 FR 18562 (April 9, 2021) (April 9, 2021) [sic] (SR-BX-2021-
009) (``Prior Fee Change'').
---------------------------------------------------------------------------

    At this time, the Exchange proposes to amend Options 7, Section
2(2) to provide,

    All orders executed in the Opening Process:
    Customer orders will receive the Maker Rebate during the
Exchange's Opening Process, unless the contra-side is also a
Customer, in which case a Maker Rebate will not be paid and a Taker
Fee will not be assessed. Lead Market Makers, Market Makers, Non-
Customers, and Firms will be assessed the Taker Fee during the
Exchange's Opening Process and will receive Maker Rebates.

This proposed new rule text would continue to pay Customers a rebate
during the Exchange's Opening Process, unless the Customer order is
contra another Customer order as explained in greater detail below.
Penny Symbols
    Previously, during the Opening Cross, Customer orders received a
Rebate to Remove Liquidity, unless the contra-side was also a Customer,
in which case no Fee to Remove Liquidity was assessed and no Rebate to
Remove Liquidity was received. Previously, during the Opening Cross, BX
paid a Penny Symbol Rebate to Remove Liquidity when trading against a
Non-Customer, Lead Market Maker, BX Options Market Maker, Customer or
Firm which ranged from $0.00 to $0.35 per contract.\6\ The proposed new
pricing which would be applicable to the Exchange's Opening Process
would pay Customers a Maker Rebate of $0.30 per contract, unless the
contra-side is also a Customer, in which case a Maker Rebate would not
be paid and a Taker Fee would not be assessed. The proposed new Penny
Symbol Customer Maker Rebate of $0.30 per contract would pay
Participants that previously qualified for now defunct Tiers 1 and 2
\7\ a higher Customer rebate than was previously paid. Participants
that qualified for now defunct Tier 3 would receive a lower Customer
rebate than was previously paid, provided the contra-side was not a
Customer. Previously, during the Opening Cross, no Rebate was paid to
Remove Liquidity when a Customer was contra another Customer. With the
proposed pricing, during the Opening Process, when a Customer is contra
another Customer a Maker Rebate would not be paid and a Taker Fee would
not be assessed.
---------------------------------------------------------------------------

    \6\ Participants that executed less than 0.05% of total industry
customer equity and ETF option ADV contracts per month received no
Penny Symbol Rebate to Remove Liquidity in Tier 1. Participants that
executed 0.05% to less than 0.15% of total industry customer equity
and ETF option ADV contracts per month received a $0.25 per contract
Penny Symbol Rebate to Remove Liquidity in Tier 2. Participants that
executed 0.15% or more of total industry customer equity and ETF
option ADV contracts per month received a $0.35 per contract Penny
Symbol Rebate to Remove Liquidity in Tier 3.
    \7\ The Prior Fee Change eliminated Tiers 1-3 described herein.
---------------------------------------------------------------------------

    Previously, during the Opening Cross, Lead Market Makers and
Options Market Makers were assessed the Fee to Remove Liquidity while
Lead Market Makers and Market Makers paid the Penny Symbol Fee to
Remove Liquidity when trading against a Customer that ranged from $0.39
to $0.30 per contract.\8\ Previously, during the Opening Cross, Lead
Market Makers and Market Makers paid a Penny Symbol Fee to Remove
Liquidity when trading against a Non-Customer, Lead Market Maker, BX
Options Market Maker or Firm of $0.46 per contract, regardless of
tier.\9\ With the proposed new Opening

Process pricing, the Penny Symbol Taker Fee for Lead Market Maker and
Market Maker orders of $0.46 per contract would be higher than the
prior Lead Market Maker and Market Maker tiered Penny Symbol Fee to
Remove Liquidity when trading against a Customer which ranged from
$0.39 to $0.30 per contract and would be the same as the previous Lead
Market Maker and Market Maker tiered Penny Symbol Fees to Remove
Liquidity when trading against a Non-Customer, Lead Market Maker,
Options Market Maker or Firm of $0.46 per contract regardless of tier.
With the proposed new pricing, Lead Market Makers and Market Makers
would not receive Maker Rebates during the Opening Process.
---------------------------------------------------------------------------

    \8\ Participants that executed less than 0.05% of total industry
customer equity and ETF option ADV contracts per month pay a Penny
Symbol Fee to Remove Liquidity of $0.39 per contract in Tier 1.
Participants that execute 0.05% to less than 0.15% of total industry
customer equity and ETF option ADV contracts per month pay a Penny
Symbol Fee to Remove Liquidity of $0.39 per contract in Tier 2.
Participants that execute 0.15% or more of total industry customer
equity and ETF option ADV contracts per month pay a Penny Symbol Fee
to Remove Liquidity of $0.30 per contract in Tier 3.
    \9\ Participants that executed less than 0.05% of total industry
customer equity and ETF option ADV contracts per month pay a Penny
Symbol Fee to Remove Liquidity of $0.46 per contract in Tier 1.
Participants that execute 0.05% to less than 0.15% of total industry
customer equity and ETF option ADV contracts per month pay a Penny
Symbol Fee to Remove Liquidity of $0.46 per contract in Tier 2.
Participants that execute 0.15% or more of total industry customer
equity and ETF option ADV contracts per month pay a Penny Symbol Fee
to Remove Liquidity of $0.46 per contract in Tier 3.
---------------------------------------------------------------------------

    Previously, during the Opening Cross, Non-Customers and Firms were
assessed the Fee to Remove Liquidity. The prior Penny Symbol Fee to
Remove Liquidity was a flat fee of $0.46 per contract. The proposed new
Penny Symbol Taker Fee of $0.46 per contract would be the same as the
prior Penny Symbol Fee to Remove Liquidity of $0.46 per contract. With
this pricing, Non-Customers and Firms would not receive Maker Rebates
during the Opening Process.
Non-Penny Symbols
    Previously, during the Opening Cross, Customer orders received a
Rebate to Remove Liquidity, unless the contra-side was also a Customer,
in which case no Fee to Remove Liquidity was assessed and no Rebate to
Remove Liquidity was received. Previously, during the Opening Cross, BX
paid a Non-Penny Symbol Customer Rebate to Remove Liquidity of $0.80
per contract,\10\ regardless of the tier and regardless of the contra-
party. The proposed new pricing would similarly pay Customers a Maker
Rebate during the Exchange's Opening Process, unless the contra-side is
also a Customer, in which case a Maker Rebate would not be paid and a
Taker Fee would not be assessed. The proposed new Non-Penny Symbol
Customer Maker Rebate of $0.90 per contract during the Opening Process
would be higher than the prior rebates, provided the contra-side is not
a Customer. During the Opening Process, no Rebate to Remove Liquidity
was paid when a Customer was contra another Customer. With the proposed
new pricing, during the Opening Process, when a Customer is contra
another Customer a Maker Rebate would not be paid and a Taker Fee would
not be assessed.
---------------------------------------------------------------------------

    \10\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month
received an $0.80 per contract Non-Penny Symbol Rebate to Remove
Liquidity in Tier 1. Participants that executed 0.05% to less than
0.15% of total industry customer equity and ETF option ADV contracts
per month received an $0.80 per contract Non-Penny Symbol Rebate to
Remove Liquidity in Tier 2. Participants that executed 0.15% or more
of total industry customer equity and ETF option ADV contracts per
month received an $0.80 per contract Non-Penny Symbol Rebate to
Remove Liquidity in Tier 3.
---------------------------------------------------------------------------

    Previously, during the Opening Cross, Lead Market Makers and BX
Options Market Makers were assessed the Fee to Remove Liquidity while
Lead Market Makers and Market Makers paid an $0.89 per contract Non-
Penny Fee to Remove Liquidity when the Lead Market Maker or Market
Maker traded with any market participant other than a Customer.\11\
Previously, during the Opening Cross, if the contra-party was a
Customer, the Lead Market Maker and Market Maker were charged a Fee to
Remove Liquidity that ranged from $0.89 to $0.60 per contract depending
on the volume tier achieved.\12\ The proposed new Taker Fee of $1.10
per contract for removing liquidity for Lead Market Makers and Market
Makers in Non-Penny Symbols, during the Opening Process, regardless of
contra-party would be higher than the prior fees assessed to Lead
Market Makers and Market Makers for removing liquidity in Non-Penny
Symbols. With the proposed new pricing, during the Opening Process,
Lead Market Makers and Market Makers would not receive Maker Rebates.
---------------------------------------------------------------------------

    \11\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 1. Participants that executed 0.05% to less than 0.15% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 2. Participants that executed 0.15% or more of total industry
customer equity and ETF option ADV contracts per month paid an $0.89
per contract Non-Penny Symbol Fee to Remove Liquidity in Tier 3.
    \12\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 1. Participants that executed 0.05% to less than 0.15% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 2. Participants that executed 0.15% or more of total industry
customer equity and ETF option ADV contracts per month paid an $0.60
per contract Non-Penny Symbol Fee to Remove Liquidity in Tier 3.
---------------------------------------------------------------------------

    Previously, during the Opening Cross, Non-Customers and Firms were
assessed the Non-Penny Symbol Fee to Remove Liquidity. During the
Opening Cross, the prior Non-Penny Symbol Fee to Remove Liquidity was a
flat fee of $0.89 per contract. During the Opening Process, the
proposed new Non-Penny Symbol Taker Fee of $1.10 per contract for
removing liquidity for Non-Customers and Firms in Non-Penny Symbols,
would be higher than the prior Fee to Remove Liquidity. With this
pricing, Non-Customers and Firms would not receive Maker Rebates during
the Opening Process.
Options 7, Section 2(5)
    The Exchange proposes to add the words ``per Options 3, Section
13'' at the end of the title to Options 7, Section 2(5) to provide the
citation to the BX Price Improvement Auction rule. This amendment is
non-substantive.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\13\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\14\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78 f(b).
    \14\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange's proposed changes to its Pricing Schedule are
reasonable in several respects. As a threshold matter, the Exchange is
subject to significant competitive forces in the market for options
securities transaction services that constrain its pricing
determinations in that market. The fact that this market is competitive
has long been recognized by the courts. In NetCoalition v. Securities
and Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .'' \15\
---------------------------------------------------------------------------

    \15\ NetCoalition v. SEC, 615 F.3d 525, 539 (DC Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the

current market model, the Commission highlighted the importance of
market forces in determining prices and SRO revenues and, also,
recognized that current regulation of the market system ``has been
remarkably successful in promoting market competition in its broader
forms that are most important to investors and listed companies.'' \16\
---------------------------------------------------------------------------

    \16\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
options security transaction services. The Exchange is only one of
sixteen options exchanges to which market participants may direct their
order flow. Within this environment, market participants can freely and
often do shift their order flow among the Exchange and competing venues
in response to changes in their respective pricing schedules. As such,
the proposal represents a reasonable attempt by the Exchange to
increase its liquidity and market share relative to its competitors.
Options 7, Section 2(1)
    The Exchange's proposal to amend the Customer Non-Penny Symbol
Maker Rebate of $0.90 per contract for adding liquidity in Non-Penny
Symbols, regardless of contra-party and, instead, pay a $0.45 per
contract Customer Non-Penny Symbol Maker Rebate if the quantity of
transactions where the contra-side is also a Customer is greater than
25% of Participant's total Customer Non-Penny Symbol volume which adds
liquidity \17\ in that month is reasonable. BX's current $0.90 per
contract flat Customer Non-Penny Symbol Maker Rebate is the highest
simple order base rebate paid that does not consider volume or contra-
party.\18\ Other exchanges have higher simple order rebates, provided
certain volume criteria are met.\19\ The Exchange's proposal to add a
volume consideration for the ratio of Customer to Customer orders as
compared to total Participant volume which adds Non-Penny Symbol
liquidity in order to receive the $0.90 per contract Customer Non-Penny
Symbol rebate as compared to the reduced $0.45 per contract rebate is
reasonable. The Exchange currently assess a $0.65 per contract Customer
Non-Penny Taker Fee, the lowest BX Taker Fee for Non-Penny Symbols,\20\
and, currently, the Exchange pays the highest Customer Maker Rebate of
$0.90 per contract. The Exchange offers Customers the highest Non-Penny
Maker Rebate on BX by assessing higher Non-Penny Taker Fees to Non-
Customers.\21\ To the extent a Participant submits a Non-Penny Customer
order to add liquidity which interacts with a Non-Penny Customer order
that removes liquidity, both Participants benefit from the higher Non-
Penny Maker Rebate and lower Non-Penny Taker Fee. The Exchange's
intention for assessing Customer orders with the reduced Non-Penny
Taker Fee was designed to bolster interaction with Non-Customer
participants. Today, Non-Penny Customer orders which add liquidity have
priority \22\ ahead of Non-Penny Non-Customer orders and, therefore,
the Exchange's intention to enhance Non-Customer liquidity is subverted
when a Non-Penny Customer order transacts with another Non-Penny
Customer order. As a result, when Non-Penny Customers interact with
other Non-Penny Customer orders more than by happenstance, the Exchange
believes it is reasonable to pay Customer orders which add liquidity a
lower rebate. The Exchange notes that Participants do occasionally
submit Non-Penny Customer orders which add liquidity in Non-Penny
Symbols to the order book that trade against Non-Penny Customer orders
that remove liquidity in Non-Penny Symbols. The Exchange believes that
type of behavior occurs, by happenstance, a small percentage of the
time in a given month. Therefore, the Exchange selected 25% as a number
to demarcate the point at which a Participant should receive the lower
Customer Non-Penny Symbol Maker Rebate of $0.45 per contract because it
does not believe that the type of behavior outlined herein should occur
more than 25% of a Participant's total Customer Non-Penny Symbol volume
unless the trading behavior intended. Further, the Exchange believes
that although Customer orders may receive lower rebates if they
transact the requisite number of Customer-to Customer trades, the
Exchange's rebate of $0.45 per contract remains competitive and equal
to or greater than the rebates that other Participants are
afforded.\23\ The Exchange's proposal to exclude orders executed in the
Opening Process per Options 3, Section 8, orders that generate an order
exposure alert per Options 5, Section 4, and orders transacted in the
Price Improvement Auction (``PRISM'') per Options 3, Section 13 from
the aforementioned calculation of 25% is reasonable because orders
executed in the Opening Process, orders that generate an order exposure
alert, and orders transacted in PRISM have separate pricing within
Options 7, Sections 2(2), (4) and (5), respectively. The Exchange's
proposal to exclude orders executed in the Opening Process, orders that
generate an order exposure alert, and orders transacted in PRISM from
the aforementioned calculation of 25% is equitable and not unfairly
discriminatory as the Exchange will

uniformly exclude these orders from the aforementioned calculation of
25%.
---------------------------------------------------------------------------

    \17\ As proposed, the 25% calculation will not consider orders
within the Opening Process per Options 3, Section 8, orders that
generate an order exposure alert per BX Options 5, Section 4, or
orders transacted in the Price Improvement Auction (``PRISM'') per
Options 3, Section 13.
    \18\ BOX Exchange LLC (``BOX'') pays no Non-Penny Interval Class
Public Customer Maker Rebate. See BOX's Fee Schedule at Section I,
A. Cboe Exchange, Inc. (``Cboe'') pays a Non-Penny Class rebate to
customers of $0.18 per contract only if the original order is <100
contracts and removing liquidity. See Cboe's Fee Schedule. Cboe C2
Exchange, Inc. (``C2'') pays a Non-Penny Class rebate to customers
of $0.80 per contract to transactions which add liquidity. See C2's
Fee Schedule. Cboe BZX Exchange, Inc. (``CboeBZX'') pays Non-Penny
Program Securities rebates to customers which range from $0.85 to
$1.06 per contract to transactions which add liquidity. See
CboeBZX's Fee Schedule. Cboe EDGX Exchange, Inc. (``CboeEDGX'') pays
Non-Penny Program Securities rebates to customers which range from
$0.01 to $0.21 based on customer volume tiers. See CboeEDGX's Fee
Schedule. Miami International Securities Exchange, LLC (``MIAX'')
pays no customer rebate for non-penny classes. See MIAX's Fee
Schedule. MIAX PEARL, LLC (``PEARL'') pays Priority Customer Non-
Penny Classes Maker Rebates which range from $0.85 to $1.04 based on
volume. See PEARL's Fee Schedule. MIAX Emerald, LLC (``EMERALD'')
pays Priority Customer Maker Rebates which range from $0.43 to
$0.53, except that SPY, QQQ and IWM rebates are $0.45 and Priority
Customer Simple Order rebates when contra is an Affiliated Market
Maker are $0.49. See EMERALD's Fee Schedule. NYSE Arca, Inc.
(``NYSEArca'') pays a Customer a $0.75 rebate to post liquidity
unless contra a lead market maker, in which case no rebate is paid.
See NYSE Arca Options Fees and Charges. NYSE American LLC
(``NYSEAmerican'') pays no Customer rebates. See NYSE American
Options Fee Schedule. The Nasdaq Stock Market LLC (``NOM'') pays an
$0.80 per contract Customer Non-Penny Symbol Rebate and in some
cases $1.00, or $1.05 if other criteria are met. See NOM's Pricing
Schedule. Nasdaq Phlx LLC (``Phlx'') pays Customer Non-Penny rebates
which range from $0.00 to $0.27. See Phlx's Pricing Schedule. Nasdaq
ISE, LLC (`ISE'') pays no Non-Penny Priority Customer rebates. See
ISE's Pricing Schedule. Nasdaq GEMX, LLC (``GEMX'') pays Priority
Customer Non-Penny Symbol Maker Rebates which range from $0.25 to
$0.70. See GEMX's Pricing Schedule. Nasdaq MRX, LLC (`MRX'') pays no
Priority Customer Non-Penny Symbol rebates. See MRX's Pricing
Schedule.
    \19\ Id.
    \20\ Non-Customer orders are assessed a $1.10 Non-Penny Symbol
Taker Fee.
    \21\ A Non-Customer includes a Professional, Broker-Dealer and
Non-BX Options Market Maker. See BX Options 7, Section 1.
    \22\ See Options 3, Section 10.
    \23\ Today, Lead Market Makers are paid $0.45 per contract Non-
Penny Symbol Maker Rebates and Market Maker are paid $0.40 per
contract Non-Penny Symbol Maker Rebates. Firms and Non-Customers are
not eligible for Non-Penny Symbol Maker Rebates and instead are
charged a Maker Fee of $0.45 per contract.
---------------------------------------------------------------------------

    The Exchange's proposal to amend the Customer Non-Penny Symbol
Maker Rebate of $0.90 per contract for adding liquidity in Non-Penny
Symbols, regardless of contra-party and, instead, pay a $0.45 per
contract Customer Non-Penny Symbol Maker Rebate if the quantity of
transactions where the contra-side is also a Customer is greater than
25% of Participant's total Customer Non-Penny Symbol volume which adds
liquidity \24\ in that month is equitable and not unfairly
discriminatory. The Exchange would uniformly apply the criteria to all
Customer orders to determine the applicable rebate.
---------------------------------------------------------------------------

    \24\ As proposed, the 25% calculation will not consider orders
within the Opening Process per Options 3, Section 8, orders that
generate an order exposure alert per BX Options 5, Section 4, or
orders transacted in the Price Improvement Auction (``PRISM'') per
Options 3, Section 13.
---------------------------------------------------------------------------

    The Exchange's proposal to pay a lower $0.45 per contract Customer
Non-Penny Symbol Maker Rebate when a Participant executes against a
Customer more than 25% of that Participant's total Customer Non-Penny
Symbol volume which adds liquidity in a month is equitable and not
unfairly discriminatory. The Exchange noted above that when Non-Penny
Customers interact with other Non-Penny Customer orders more than by
happenstance, the Exchange believes it is reasonable to pay Customer
orders which add liquidity a lower rebate. The Exchange also noted that
Participants do occasionally submit Non-Penny Customer orders which add
liquidity in Non-Penny Symbols to the order book that trade against
Non-Penny Customer orders that remove liquidity in Non-Penny Symbols.
The Exchange believes that type of behavior occurs, by happenstance, a
small percentage of the time in a given month. Therefore, the Exchange
believes that it is equitable and not unfairly discriminatory to pay a
lower rebate to Non-Penny Customer orders which interact with other
Non-Penny Customer orders more than by happenstance, because the
Exchange's intention to enhance Non-Customer liquidity is subverted. In
addition, the Exchange notes that Customers may continue to receive the
highest Non-Penny Symbol Maker Rebate paid by BX,\25\ provided they do
not execute greater than 25% of that Participant's total Customer Non-
Penny Symbol volume which adds liquidity in a month.
---------------------------------------------------------------------------

    \25\ Id.
---------------------------------------------------------------------------

    The Exchange's proposal to amend Options 7, Section 2(1) to add a
new note ``*'' which makes clear that orders executed in the Opening
Process per Options 3, Section 8, orders that generate an order
exposure alert per Options 5, Section 4, and orders transacted in the
Price Improvement Auction (``PRISM'') per Options 3, Section 13 are not
subject to Options 7, Section 2(1) pricing, rather, these orders are
subject to the pricing within Options 7, Sections 2(2), (4) and (5),
respectively, is reasonable, equitable and not unfairly discriminatory.
The Exchange believes that this rule text will be informative in
guiding Participants to the correct pricing within Options 7, Section 2
which applies to a specific transaction. This new note ``*'' does not
represent a substantive change. The proposed new note ``*'' is intended
to serve as a guidepost to Participants referring to the BX Pricing
Schedule.
Options 7, Section 2(2)
    The Exchange's proposal to amend the title of Options 7, Section
2(2) from ``Opening Cross'' to ``Opening Process per Options 3, Section
8,'' as well as similar changes throughout Options 7, Section 2(2), is
reasonable, equitable and not unfairly discriminatory. The amendment is
non-substantive. The proposed title will align with the title of
Options 3, Section 8.
    The Exchange's proposal to amend the pricing within Options 7,
Section 2(2) is reasonable, equitable and not unfairly discriminatory
for the below reasons.
Penny Symbols
Customers
    The Exchange believes that the proposed Opening Process Customer
pricing in Penny Symbols is reasonable. Previously, during the Opening
Cross, Customer orders received a Rebate to Remove Liquidity, unless
the contra-side was also a Customer, in which case no Fee to Remove
Liquidity was assessed and no Rebate to Remove Liquidity was received.
Previously, during the Opening Cross, BX paid a Penny Symbol Rebate to
Remove Liquidity when trading against a Non-Customer, Lead Market
Maker, BX Options Market Maker, Customer or Firm which ranged from
$0.00 to $0.35 per contract.\26\ The proposed new pricing which would
be applicable to the Exchange's Opening Process would pay Customers a
Maker Rebate of $0.30 per contract, unless the contra-side is also a
Customer, in which case a Maker Rebate would not be paid and a Taker
Fee would not be assessed. The proposed new Penny Symbol Customer Maker
Rebate of $0.30 per contract would pay Participants that previously
qualified for now defunct Tiers 1 and 2 \27\ a higher Customer rebate
than was previously paid. Participants that qualified for now defunct
Tier 3 would receive a lower Customer rebate than was previously paid,
provided the contra-side was not a Customer. Previously, during the
Opening Cross, no Rebate was paid to Remove Liquidity when a Customer
was contra another Customer. With the proposed pricing, during the
Opening Process, when a Customer is contra another Customer a Maker
Rebate would not be paid and a Taker Fee would not be assessed. The
Exchange believes that the proposed pricing will continue to attract
order flow to BX because, during the Opening Process, unlike other
market participants Customers will continue to receive rebates, except
if the Customer order trades against another Customer order.
Furthermore, Customers would not be assessed a fee during the Opening
Process. During the Opening Process, the Exchange desires to attract
Customer liquidity, similar to intra-day, and therefore continuing to
pay Customer orders a rebate, provided the Customer order is not contra
another customer order is reasonable. Also, during the Opening Process,
when a Customer order is contra another Customer order, the Exchange
notes that neither Customer order is assessed a Taker Fee. The Exchange
believes that it is reasonable to not pay each Customer order a Maker
Rebate in these circumstances when no Taker Fees are being assessed to
those Customer orders. Finally, the Exchange notes that the Opening
Process seeks liquidity for price discovery and therefore the
incentives are distinct from trading intra-day, where Participants have
an opportunity to interact with the order book. Also, the Exchange
believes that the Non-Penny Symbol Customer pricing during the Opening
Process remains competitive.\28\
---------------------------------------------------------------------------

    \26\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month
received no Penny Symbol Rebate to Remove Liquidity in Tier 1.
Participants that executed 0.05% to less than 0.15% of total
industry customer equity and ETF option ADV contracts per month
received a $0.25 per contract Penny Symbol Rebate to Remove
Liquidity in Tier 2. Participants that executed 0.15% or more of
total industry customer equity and ETF option ADV contracts per
month received a $0.35 per contract Penny Symbol Rebate to Remove
Liquidity in Tier 3.
    \27\ The Prior Fee Change eliminated Tiers 1-3 described herein.
    \28\ NYSEArca currently assesses Customers a Take Liquidity fee
of $0.49 per contract in Penny Issues. See NYSEArca Options Fees and
Charges, Transaction Fee for Electronic Executions--Per Contract.

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

Lead Market Makers and Market Makers
    The Exchange believes that the proposed Opening Process Lead Market
Maker and Market Maker pricing in Penny Symbols is reasonable.
Previously, during the Opening Cross, Lead Market Makers and Options
Market Makers were assessed the Fee to Remove Liquidity. During the
Opening Cross, Lead Market Makers and Market Makers previously paid a
Penny Symbol Fee to Remove Liquidity when trading against a Customer
which ranged from $0.39 to $0.30 per contract \29\ and paid a Penny
Symbol Fee to Remove Liquidity when trading against a Non-Customer,
Lead Market Maker, BX Options Market Maker or Firm of $0.46 per
contract, regardless of tier.\30\ With the proposed new Opening Process
pricing, the Penny Symbol Taker Fee for Lead Market Maker and Market
Maker orders of $0.46 per contract would be higher than the prior Lead
Market Maker and Market Maker tiered Penny Symbol Fee to Remove
Liquidity when trading against a Customer which ranged from $0.39 to
$0.30 per contract and would be the same as the current Lead Market
Maker and Market Maker tiered Penny Symbol Fees to Remove Liquidity
when trading against a Non-Customer, Lead Market Maker, Options Market
Maker or Firm of $0.46 per contract regardless of tier. With the
proposed new pricing, Lead Market Makers and Market Makers would not
receive Maker Rebates during the Opening Process. The Exchange believes
its proposed pricing will continue to attract liquidity because the
pricing remains competitive with other pricing.\31\
---------------------------------------------------------------------------

    \29\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month pay
a Penny Symbol Fee to Remove Liquidity of $0.39 per contract in Tier
1. Participants that execute 0.05% to less than 0.15% of total
industry customer equity and ETF option ADV contracts per month pay
a Penny Symbol Fee to Remove Liquidity of $0.39 per contract in Tier
2. Participants that execute 0.15% or more of total industry
customer equity and ETF option ADV contracts per month pay a Penny
Symbol Fee to Remove Liquidity of $0.30 per contract in Tier 3.
    \30\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month pay
a Penny Symbol Fee to Remove Liquidity of $0.46 per contract in Tier
1. Participants that execute 0.05% to less than 0.15% of total
industry customer equity and ETF option ADV contracts per month pay
a Penny Symbol Fee to Remove Liquidity of $0.46 per contract in Tier
2. Participants that execute 0.15% or more of total industry
customer equity and ETF option ADV contracts per month pay a Penny
Symbol Fee to Remove Liquidity of $0.46 per contract in Tier 3.
    \31\ NYSEArca currently assesses LMMs and NYSE Arca Maker Makers
a Take Liquidity fee of $0.50 per contract in Penny Issues. See
NYSEArca Options Fees and Charges, Transaction Fee for Electronic
Executions--Per Contract.
---------------------------------------------------------------------------

Non-Customers and Firms
    The Exchange believes that the proposed Opening Process Non-
Customer and Firm pricing in Penny Symbols is reasonable. Previously,
during the Opening Cross, Non-Customers and Firms were assessed the Fee
to Remove Liquidity. The prior Penny Symbol Fee to Remove Liquidity was
a flat fee of $0.46 per contract. The proposed new Penny Symbol Taker
Fee of $0.46 per contract would be the same as the prior Penny Symbol
Fee to Remove Liquidity of $0.46 per contract. With this pricing, Non-
Customers and Firms would not receive Maker Rebates during the Opening
Process. The Exchange believes its proposed pricing will continue to
attract liquidity because the pricing remains competitive with other
pricing.\32\
---------------------------------------------------------------------------

    \32\ NYSEArca assesses all market participants except Customers
a Take Liquidity fee of $0.50 per contract in Penny Issues. See
NYSEArca's Options Fees and Charges, Transaction Fee for Electronic
Executions--Per Contract.
---------------------------------------------------------------------------

Non-Penny Symbols
Customers
    The Exchange believes that the proposed Opening Process Customer
pricing in Non-Penny Symbols is reasonable. Previously, during the
Opening Cross, Customer orders received a Rebate to Remove Liquidity,
unless the contra-side was also a Customer, in which case no Fee to
Remove Liquidity was assessed and no Rebate to Remove Liquidity was
received. Previously, during the Opening Cross, BX paid a Non-Penny
Symbol Customer Rebate to Remove Liquidity of $0.80 per contract,\33\
regardless of the tier and regardless of the contra-party. The proposed
new pricing would similarly pay Customers a Maker Rebate during the
Exchange's Opening Process, unless the contra-side is also a Customer,
in which case a Maker Rebate would not be paid and a Taker Fee would
not be assessed. The proposed new Non-Penny Symbol Customer Maker
Rebate of $0.90 per contract during the Opening Process would be higher
than the prior rebates, provided the contra-side is not a Customer.
Previously, during the Opening Cross, no Rebate to Remove Liquidity was
paid when a Customer was contra another Customer. With the proposed new
pricing, during the Opening Process, when a Customer is contra another
Customer a Maker Rebate would not be paid and a Taker Fee would not be
assessed. The Exchange believes that the proposed pricing will continue
to attract order flow to BX because, during the Opening Process, unlike
other market participants Customers will continue to receive rebates,
except if the Customer is contra another Customer order, and Customers
would not be assessed a fee during the Opening Process. The Exchange
believes that it is reasonable to not pay a Customer a rebate during
the Opening Process if the Customer is contra another Customer because
unlike intra-day trading where Participants have the opportunity to
interact with the order book, the Opening Process seeks liquidity for
price discovery and therefore the incentives are distinct from the
trading intra-day. Also, the Exchange believes that the Non-Penny
Symbol Customer pricing during the Opening Process remains
competitive.\34\
---------------------------------------------------------------------------

    \33\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month
received an $0.80 per contract Non-Penny Symbol Rebate to Remove
Liquidity in Tier 1. Participants that executed 0.05% to less than
0.15% of total industry customer equity and ETF option ADV contracts
per month received an $0.80 per contract Non-Penny Symbol Rebate to
Remove Liquidity in Tier 2. Participants that executed 0.15% or more
of total industry customer equity and ETF option ADV contracts per
month received an $0.80 per contract Non-Penny Symbol Rebate to
Remove Liquidity in Tier 3.
    \34\ NYSEArca currently assesses Customers a Take Liquidity fee
of $1.10 per contract in Non-Penny Issues. See NYSEArca Options Fees
and Charges, Transaction Fee for Electronic Executions--Per
Contract.
---------------------------------------------------------------------------

Lead Market Makers and Market Makers
    The Exchange believes that the proposed Opening Process Lead Market
Maker and Market Maker pricing in Non-Penny Symbols is reasonable.
Previously, during the Opening Cross, Lead Market Makers and BX Options
Market Makers were assessed the Fee to Remove Liquidity. Previously,
during the Opening Cross, Lead Market Makers and Market Makers paid an
$0.89 per contract Non-Penny Fee to Remove Liquidity when the Lead
Market Maker or Market Maker traded with any market participant other
than a Customer.\35\ Previously, during the Opening Cross, if the
contra-party was a Customer, the Lead Market Maker and Market Maker
were charged a Fee to Remove Liquidity that ranged from $0.89 to $0.60
per contract depending on the volume tier

achieved.\36\ The proposed new Taker Fee of $1.10 per contract for
removing liquidity for Lead Market Makers and Market Makers in Non-
Penny Symbols, during the Opening Process, regardless of contra-party
would be higher than the prior fees assessed to Lead Market Makers and
Market Makers for removing liquidity in Non-Penny Symbols. With the
proposed new pricing, during the Opening Process, Lead Market Makers
and Market Makers would not be subject to Maker Rebates. The Exchange
believes that the Non-Penny Symbol Lead Market Maker and Market Maker
pricing during the Opening Process remains competitive.\37\
---------------------------------------------------------------------------

    \35\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 1. Participants that executed 0.05% to less than 0.15% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 2. Participants that executed 0.15% or more of total industry
customer equity and ETF option ADV contracts per month paid an $0.89
per contract Non-Penny Symbol Fee to Remove Liquidity in Tier 3.
    \36\ Participants that executed less than 0.05% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 1. Participants that executed 0.05% to less than 0.15% of total
industry customer equity and ETF option ADV contracts per month paid
an $0.89 per contract Non-Penny Symbol Fee to Remove Liquidity in
Tier 2. Participants that executed 0.15% or more of total industry
customer equity and ETF option ADV contracts per month paid a $0.60
per contract Non-Penny Symbol Fee to Remove Liquidity in Tier 3.
    \37\ NYSEArca assesses LMMs and NYSE Arca Market Makers a Take
Liquidity fee of $1.10 per contract in Non-Penny Issues. See
NYSEArca Options Fees and Charges.
---------------------------------------------------------------------------

Non-Customers and Firms
    The Exchange believes that the proposed Opening Process Non-
Customer and Firm pricing in Non-Penny Symbols is reasonable.
Previously, during the Opening Cross, Non-Customers and Firms were
assessed the Non-Penny Symbol Fee to Remove Liquidity. During the
Opening Cross, the prior Non-Penny Symbol Fee to Remove Liquidity was a
flat fee of $0.89 per contract. During the Opening Process, the
proposed new Non-Penny Symbol Taker Fee of $1.10 per contract for
removing liquidity for Non-Customers and Firms in Non-Penny Symbols
would be higher than the prior Fee to Remove Liquidity. With this
pricing, Non-Customers and Firms would not receive Maker Rebates during
the Opening Process. The Exchange believes that the Non-Penny Symbol
Non-Customer and Firm pricing during the Opening Process remains
competitive.\38\
---------------------------------------------------------------------------

    \38\ NYSEArca assesses all market participants except Customers
a Take Liquidity fee of $1.10 per contract in Non-Penny Issues. See
NYSEArca Options Fees and Charges.
---------------------------------------------------------------------------

    The Exchange's proposal to amend the Opening Process pricing is
equitable and not unfairly discriminatory. During the Opening Process,
Customers will continue to receive rebates, unlike other market
participants, except if the Customer is contra another Customer order.
Also, unlike other Participants, Customers would not be assessed a fee
during the Opening Process. The Exchange believes that it is equitable
and not unfairly discriminatory to pay rebates to Customers, provided
they are not contra another customer, and not assess fees to Customers,
because unlike other Participants, Customer liquidity benefits all
market participants by offering additional trading opportunities.
Additionally, Market Makers seeking to interact with Customer liquidity
are incentivized to tighten quote spreads to interact with the order
flow. With respect to Customer orders during the Opening Process that
are contra other Customer orders, the Exchange would not pay the
Customer a rebate, nor would the Customer be assessed a fee, unlike
other Non-Customer Participants who would pay a fee during the Opening
Process. While the Exchange desires to attract Customer liquidity
during the Opening Process, unlike intra-day trading where Participants
have the opportunity to interact with the order book, the Opening
Process seeks liquidity for price discovery and therefore the
incentives are distinct from the trading intra-day. Finally, the
Exchange's proposal will uniformly assess all Non-Customers the same
Taker Fee and pay no Maker Rebates to these Participants during the
Opening Process.
Options 7, Section 2(5)
    The Exchange's proposal to add the words ``per Options 3, Section
13'' at the end of the title to Options 7, Section 2(5) is reasonable,
equitable and not unfairly discriminatory. This non-substantive
amendment simply provides the citation to the BX Price Improvement
Auction rule.

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.
Inter-market Competition
    The proposal does not impose an undue burden on inter-market
competition. The Exchange believes its proposal remains competitive
with other options markets and will offer market participants with
another choice of where to transact options. The Exchange notes that it
operates in a highly competitive market in which market participants
can readily favor competing venues if they deem fee levels at a
particular venue to be excessive, or rebate opportunities available at
other venues to be more favorable. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
options exchanges. Because competitors are free to modify their own
fees in response, and because market participants may readily adjust
their order routing practices, the Exchange believes that the degree to
which fee changes in this market may impose any burden on competition
is extremely limited.
Intra-market Competition
Options 7, Section 2(1)
    The Exchange's proposal to amend the Customer Non-Penny Symbol
Maker Rebate of $0.90 per contract for adding liquidity in Non-Penny
Symbols, regardless of contra-party and, instead, pay a $0.45 per
contract Customer Non-Penny Symbol Maker Rebate if the quantity of
transactions where the contra-side is also a Customer is greater than
25% of Participant's total Customer Non-Penny Symbol volume which adds
liquidity \39\ in that month does not impose an undue burden on
competition as the Exchange would uniformly apply the criteria to all
Customer orders to determine the applicable rebate. The Exchange's
proposal to exclude orders executed in the Opening Process, orders that
generate an order exposure alert, and orders transacted in PRISM from
the aforementioned calculation of 25% does not impose an undue burden
on competition as the Exchange will uniformly exclude these orders from
the aforementioned calculation of 25%.
---------------------------------------------------------------------------

    \39\ As proposed, the 25% calculation will not consider orders
within the Opening Process per Options 3, Section 8, orders that
generate an order exposure alert per BX Options 5, Section 4, or
orders transacted in the Price Improvement Auction (``PRISM'') per
Options 3, Section 13.
---------------------------------------------------------------------------

    The Exchange's proposal to pay a lower $0.45 per contract Customer
Non-Penny Symbol Maker Rebate when a Participant executes against a
Customer more than 25% of that Participant's total Customer Non-Penny
Symbol volume which adds liquidity in a month does not impose an undue
burden on competition. Customers may continue to be able to achieve the
highest Non-Penny Symbol Maker Rebate paid by BX,\40\ provided they do
not execute greater than 25% of that Participant's total Customer Non-
Penny Symbol volume which adds liquidity in a month.
---------------------------------------------------------------------------

    \40\ Id.
---------------------------------------------------------------------------

    The Exchange's proposal to amend Options 7, Section 2(1) to add a
new note ``*'' which makes clear that orders executed in the Opening
Process per Options 3, Section 8, orders that

generate an order exposure alert per Options 5, Section 4, and orders
transacted in the Price Improvement Auction (``PRISM'') per Options 3,
Section 13 are not subject to Options 7, Section 2(1) pricing, rather
these orders are subject to the pricing within Options 7, Sections
2(2), (4) and (5), respectively, does not impose an undue burden on
competition. This amendment is non-substantive. The Exchange believes
that this rule text will be informative in guiding Participants to the
correct pricing within Options 7, Section 2 which applies to a specific
transaction.
Options 7, Section 2(2)
    The Exchange's proposal to amend the Opening Process pricing does
not impose an undue burden on competition. During the Opening Process,
Customers would continue to receive rebates, unlike other market
participants, except if the Customer is contra another Customer order.
Also, unlike other Participants, Customers would not be assessed a fee
during the Opening Process. Paying rebates to Customers, provided they
are not contra another customer, and not assessing fees to Customers
does not impose an undue burden on competition, because unlike other
Participants, Customer liquidity benefits all market participants by
offering additional trading opportunities. Additionally, Market Makers
seeking to interact with Customer liquidity are incentivized to tighten
quote spreads to interact with the order flow. With respect to Customer
orders during the Opening Process that are contra other Customer
orders, the Exchange would not pay the Customer a rebate, nor would the
Customer be assessed a fee, unlike other Non-Customer Participants who
would pay a fee during the Opening Process. While the Exchange desires
to attract Customer liquidity during the Opening Process, unlike intra-
day trading where Participants have the opportunity to interact with
the order book, the Opening Process seeks liquidity for price discovery
and therefore the incentives are distinct from the trading intra-day.
Finally, the Exchange's proposal will uniformly assess all Non-
Customers the same Taker Fee and pay no Maker Rebates to these
Participants during the Opening Process.
Options 7, Section 2(5)
    The Exchange's proposal to add the words ``per Options 3, Section
13'' at the end of the title to Options 7, Section 2(5) does not impose
an undue burden on competition. This non-substantive rule change simply
provides the citation to the BX Price Improvement Auction rule.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \41\ and paragraph (f) of Rule 19b-4
thereunder.\42\
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \42\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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<EMAIL_ADDRESS>Please include
File Number SR-BX-2021-015 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-2021-015. 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
20549-1090, 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-2021-015 and should
be submitted on or before May 21, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\43\
---------------------------------------------------------------------------

    \43\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09021 Filed 4-29-21; 8:45 am]
BILLING CODE 8011-01-P