Quote has been sent, the Exchange would conduct an Auction provided
there is both a Legal Width Quote and, if applicable, a Market Maker
quote with a non-zero offer in the series (which would be subject to
the proposed requirements relating to Market Maker quotes, including
the proposed new Opening MMQ Timer(s), as discussed further below per
proposed Rule 6.64P-O(d)(3)). The proposed rule would further provide
that the Exchange would wait a minimum of two milliseconds after
disseminating the Rotational Quote before an Auction could be
conducted, which delay would be new and is designed to enhance market
quality by promoting price-forming displayed liquidity to the benefit
of all market participants. Because the Rotational Quote is intended to
provide notice that the Exchange will begin transitioning from a pre-
open state, the Exchange believes this short delay will provide market
participants with an opportunity to participate in the Auction Process.
This proposed rule text is designed to provide transparency and
determinism in Exchange rules regarding the earliest potential time
that a series could be opened (after the Exchange receives an Auction
Trigger), and subject to the

series meeting all other requirements for opening or reopening
discussed herein.
    Subject to the requirements specified in proposed Rule 6.64P-
O(d)(2), proposed Rule 6.64P-O(d)(2)(A) would provide that if there is
Matched Volume that can trade at or within the Auction Collars, the
Auction would result in a trade at the Indicative Match Price. Proposed
Rule 6.64P-O(d)(2)(B) would provide that if there is no Matched Volume
that can trade at or within the Auction Collars, the Auction would not
result in a trade and the Exchange would transition to continuous
trading as described in proposed Rule 6.64P-O(f) below. This proposed
rule text is new, uses Pillar terminology, and is designed to provide
transparency of when an Auction would result in a trade.
    Proposed Rule 6.64P-O(d)(3) would specify the parameters of the
Opening MMQ Timers, which are designed to encourage (but would not
require) Market Makers to submit Legal-Width Quotes in connection with
the automated opening or reopening of a series. On the OX system, the
Exchange does not impose on Market Makers assigned to a series any
special obligations in connection with the opening process. On Pillar,
the Exchange will likewise not impose on such Market Makers any
additional obligations at the open.\183\ The Exchange believes that,
rather than layer additional requirements on the Market Making
community, it would be more beneficial to all market participants to
employ alternative methods to help ensure an orderly transition to
continuous trading. As such, the Exchange believes that the proposed
so-called ``waterfall'' approach to opening, would offer a number of
checks that are intended to provide adequate opportunity for a greater
number of Market Makers to provide their liquidity interest and help
ensure increased liquidity at a level commensurate with which the
market is accustomed during continuous trading on the Exchange. In
short, although the Exchange does not require a Market Maker assigned
to a series to quote on the Exchange in order to open or reopen a
series for trading, the Exchange believes that providing Market Makers
assigned to a series the opportunity to do so would promote a fair and
orderly Auction process and facilitate a fair and orderly transition to
continuous trading.\184\ Accordingly, the Exchange proposes a new
process for Auctions on Pillar that would provide time for Market
Makers assigned to a series to quote within the specified bid-ask
differentials before a series would be opened or reopened for trading.
---------------------------------------------------------------------------

    \183\ Although the Exchange does not require that Market Makers
assigned to a series quote at the open, once a series is opened for
trading, Market Makers are nonetheless required to continuously
fulfill their obligations to engage in a course of dealings
reasonably calculated to contribute to the maintenance of a fair and
orderly market.
    \184\ Currently, neither Market Makers nor LMMs are obligated to
provide a quote before a series is opened or reopened, which is why
the proposed Pillar options Auction rule is designed to provide
Market Makers with time to submit their quotes so a series can be
opened.
---------------------------------------------------------------------------

    Overall, the Exchange believes that the proposed waterfall approach
of setting minimum time periods for a Market Maker assigned to a series
to quote within the specified bid-ask differential before opening a
series, even if there is a Legal Width Quote, would appropriately
balance the benefits of increasing the opportunities for Market Makers
assigned to a series to enter quotations within the specified bid-ask
differential, with a timely series opening or reopening when there is a
Legal Width Quote even when it does not include Market Makers assigned
to the series.
    In addition, the Exchange proposes to expand opportunities for its
designated liquidity providers--i.e., Market Makers--to enter the
market. As described in more detail below, the Exchange proposes
different time lengths depending on the number of Market Makers
assigned to a series. For example, if there are no Market Makers
assigned to a series, there is no need to wait to open or reopen a
series if there is a Legal Width Quote based upon the disseminated
ABBO. If there is one Market Maker assigned to the series, the Exchange
will delay opening (even if there is a Legal Width Quote based upon the
ABBO) to give the Market Maker additional opportunity to provide
liquidity. Furthermore, if there is more than one Market Maker assigned
to a series, the Exchange designates longer periods to provide time for
multiple Market Makers assigned to the series the chance to quote
within the specified bid-ask differentials. The Exchange believes that
providing additional opportunity for its liquidity providers to enter
the market would result in deeper liquidity--which market participants
have come to expect in options with multiple assigned Market Makers,
and a more stable trading environment.
    The Exchange does not believe that the proposed waterfall approach
would result in an undue burden on competition. Market Makers are
encouraged but not required to quote in their assigned series at the
open, thus they are not subject to additional obligations. The Exchange
believes that encouraging, rather than requiring, participation of such
Market Makers at the open, may increase the availability of Legal Width
Quotes in more series, thereby allowing more series to open. Improving
the validity of the opening price benefits all market participants and
also benefits the reputation of the Exchange as being a venue that
provides accurate price discovery.
    As part of the Auction Process the Exchange proposes to utilize
``Opening MMQ Timers,'' which will be 30 seconds unless otherwise
specified by Trader Update. As proposed, once the Auction Process
begins, the Exchange would begin one or more Opening MMQ Timer for the
Market Maker(s) assigned to a series to (opt to) submit a quote with a
non-zero offer.\185\ The Opening MMQ Timers are designed to provide
transparency in Exchange rules of the circumstances of when the
Exchange would wait to open or reopen a series for trading if the
assigned Market Maker(s) has not submitted a quote within the specified
time periods, as follows:
---------------------------------------------------------------------------

    \185\ A Market Maker may send quotations only in the issues
included in its appointment, i.e., in series to which such Market
Maker is assigned. See proposed Rule 6.37AP-O(a). See also proposed
Rule 6.37AP-O(b) and (c) (setting forth continuous quoting
obligations of LMMs and Market Makers, respectively, which
obligations are identical to those set forth in Rule 6.37A-O(b) and
(c)).
---------------------------------------------------------------------------

     Proposed Rule 6.64P-O(d)(3)(A) would provide that if there
are no Market Makers assigned to a series, the Exchange would conduct
an Auction in that series based solely on a Legal Width Quote, without
waiting for the Opening MMQ Timer to end. As set forth in proposed Rule
6.64P-O(d)(2)(A) and (B), if there is Matched Volume, this Auction
would result in a trade, otherwise, the series would transition to
continuous trading as described in proposed Rule 6.64P-O(f) below.
     Proposed Rule 6.64P-O(d)(3)(B) would provide that if there
is only one Market Maker assigned to a series:
    [cir] The Exchange would conduct the Auction, without waiting for
the Opening MMQ Timer to end, as soon as there is both a Legal Width
Quote and the assigned Market Maker has submitted a quote with a non-
zero offer (proposed Rule 6.64P-O(d)(3)(B)(i)). As set forth in
proposed Rule 6.64P-O(d)(2)(A) and (B), if there is Matched Volume,
this Auction would result in a trade, otherwise, the series would
transition to continuous trading as described in proposed Rule 6.64P-
O(f) below.
    [cir] If the Market Maker assigned to the series has not submitted
a quote with a non-zero offer by the end of the Opening

MMQ Timer and there is a Legal Width Quote, the Exchange would conduct
the Auction (proposed Rule 6.64P-O(d)(3)(B)(ii)). As set forth in
proposed Rule 6.64P-O(d)(2)(A) and (B), if there is Matched Volume,
this Auction would result in a trade, otherwise, the series would
transition to continuous trading as described in proposed Rule 6.64P-
O(f) below.
     Proposed Rule 6.64P-O(d)(3)(C) would provide that if there
are two or more Market Makers assigned to a series:
    [cir] The Exchange would conduct the Auction, without waiting for
the Opening MMQ Timer to end, as soon as there is both a Legal Width
Quote and at least two assigned Market Makers have submitted a quote
with a non-zero offer (proposed Rule 6.64P-O(d)(3)(C)(i)). As set forth
in proposed Rule 6.64P-O(d)(2)(A) and (B), if there is Matched Volume,
this Auction would result in a trade, otherwise, the series would
transition to continuous trading as described in proposed Rule 6.64P-
O(f) below.
    [cir] If at least two Market Makers assigned to a series have not
submitted a quote with a non-zero offer by the end of the Opening MMQ
Timer, the Exchange would begin a second Opening MMQ Timer (of the same
length) and during the second Opening MMQ Timer, the Exchange would
conduct the Auction, if there is both a Legal Width Quote and at least
one Market Maker assigned to the series has submitted a quote with a
non-zero offer (proposed Rule 6.64P-O(d)(3)(C)(ii)). In such case, the
Exchange would not wait for the second Opening MMQ Timer to end.
Because the Exchange does not require a Market Maker assigned to a
series to quote before conducting an Auction, to reduce the potential
delay in opening or reopening a series, the Exchange believes that
during the second Opening MMQ Timer, it is appropriate to wait for only
one Market Maker, instead of two, to quote. As set forth in proposed
Rule 6.64P-O(d)(2)(A) and (B), if there is Matched Volume, this Auction
would result in a trade, otherwise, the series would transition to
continuous trading as described in proposed Rule 6.64P-O(f) below.
    [cir] If no Market Maker assigned to a series has submitted a quote
with a non-zero offer by the end of the second Opening MMQ Timer and
there is a Legal Width Quote, the Exchange would conduct the Auction
(proposed Rule 6.64P-O(d)(3)(C)(iii). As set forth in proposed Rule
6.64P-O(d)(2)(A) and (B), if there is Matched Volume, this Auction
would result in a trade, otherwise, the series would transition to
continuous trading as described in proposed Rule 6.64P-O(f) below.
    As noted above, the proposed Auction Process is designed to attract
the highest quality quote for each series at the open to attract order
flow from any resting interest best quality quotes at the open of each
series. As such, the Exchange believes it is reasonable to require more
than one Opening MMQ Timer (with a maximum run time of one minute--30
seconds x 2) to run when there are at least two Market Markers because
it allows the Exchange time to attract the best quote from these market
participants, which in turn should attract order flow to the Exchange
at the open (i.e., the Exchange can leverage the highest bid and lowest
offer from the various Marker Makers that submit quotes). The Exchange
believes that if a Legal Width Quote is not obtained in the first 30-
second Opening MMQ Timer, it is to the benefit of all market
participants to begin a second Opening MMQ Timer to allow the bid-ask
differential to tighten before a series is opened.
    Proposed Rule 6.64P-O(d)(4) would provide that, unless otherwise
specified by Trader Update, that for the first ninety seconds of the
Auction Process (inclusive of the 30-second Opening MMQ Timer(s)), if
there is no Legal Width Quote, the Exchange would not conduct an
Auction, even if there is Matched Volume, i.e., the series would not
transition to continuous trading. This proposed rule text provides
transparency that, in the absence of a Legal Width Quote, the Exchange
would not conduct an Auction that results in a trade even if there is
Matched Volume. In such case, because there is Matched Volume, the
Exchange could not open that series and would wait for a Legal Width
Quote before conducting the Auction. Consistent with proposed Rule
6.64P-O(d)(3)(A), if at any time during this ninety-second period there
is a Legal Width Quote, the Exchange would proceed immediately with an
Auction and would not wait for the ninety-second period to end (subject
to any applicable Opening MMQ Timer(s)). In other words, if there is a
Legal Width Quote available 20 seconds after the Auction Trigger (for
example), the requirements specified in proposed Rule 6.64P-O(d)(3)
would need to be met before the series could be opened or reopened.
    The Exchange proposes new functionality for Pillar to allow the
Exchange to open a series without a trade after ninety seconds have
elapsed without a Legal Width Quote, i.e., transition to continuous
trading as described in proposed Rule 6.64P-O(f), when there is a
Calculated NBBO that is wider than the Legal Width Quote. This option
to open or reopen a series would not be available if there is Matched
Volume. As proposed, ninety seconds after the Auction Process begins:
     Proposed Rule 6.64P-O(d)(4)(A) would provide that if there
is no Matched Volume and the Calculated NBBO is wider than the Legal
Width Quote, is not crossed, and does not contain a zero offer, the
Exchange would transition to continuous trading as described below in
paragraph (f) of this Rule (as described below, a trade could occur
during the transition to continuous trading, but there would not be a
trade resulting from Matched Volume in the Auction). As further
proposed, in such case, the Auction would not be intended to end with a
trade, but it may result in a trade (even if there is no Legal Width
Quote) if orders or quotes arrive when the Exchange is evaluating the
status of orders and quotes, but before the Auction Processing Period
begins.\186\ The Exchange believes this proposed rule would facilitate
the opening or reopening of a series so that it can begin continuous
trading when there is a Calculated NBBO in a series that is wider than
the Legal Width Quote and is not crossed and does not contain a zero
offer.\187\
---------------------------------------------------------------------------

    \186\ The Exchange expects this to be a rare race condition that
would result when the Exchange receives orders and quotes at
virtually the same time that it is evaluating whether it can open a
series on a quote based on a wide Calculated NBBO (and before the
Auction Processing Period begins) and that, as a result of that race
condition, those new orders or quotes are marketable against contra-
side interest, i.e., results in Matched Volume for the Auction, at
the same time that the Exchange concludes, based on interest that
had previously been received, that it can proceed with an Auction in
the absence of a Legal Width Quote. In such case, the Auction could
result in a trade.
    \187\ Such opening is similar to Cboe's ``Forced Opening''
process because it allows a series to open without a trade after a
specified time period when the market is wider than the specified
bid-ask differentials. See Cboe Rule 5.31(e)(4).
---------------------------------------------------------------------------

     Proposed Rule 6.64P-O(d)(4)(A)(i) would provide that any
time a series is opened or reopened when there is no Legal Width Quote,
i.e., the Auction would end without a trade, Market Orders and MOO
Orders would not participate in the Auction and would be cancelled
before the Exchange transitions to continuous trading, which would
protect such orders from trading at unintended prices.
     Proposed Rule 6.64P-O(d)(4)(B) would provide that if the
Exchange still cannot conduct an Auction as provided under paragraph
(A) (above), the Exchange would continue to evaluate

both the Calculated NBBO and interest on the Consolidated Book until
the earlier of: (i) A Legal Width Quote is established and an Auction
can be conducted; (ii) the series can be opened as provided for in
proposed Rule 6.64P-O(d)(4)(A); (iii) the series is halted; or (iv) the
end of Core Trading Hours. The proposed rule provides transparency that
the Exchange would continue to look for an opportunity to open or
reopen a series based on changes to the Calculated NBBO or orders and
quotes on the Consolidated Book.
    Proposed Rule 6.64P-O(d)(5) would provide that the Exchange may
deviate from the standard manner of the Auction Process, including
adjusting the timing of the Auction Process in any option series or
opening or reopening a series when there is no Legal Width Quote, when
it believes it is necessary in the interests of a fair and orderly
market. This proposed rule is based on Rule 6.64-O(b)(F) and,
consistent with current functionality, is designed to provide the
Exchange with flexibility to open a series even if there is no Legal
Width Quote.\188\ For example, a Floor Broker may have a two-sided open
outcry order. If the series is not opened, that trade could not be
consummated. Accordingly, this proposed rule would allow the Exchange
to open a series for trading to facilitate open outcry trading.
---------------------------------------------------------------------------

    \188\ See Rule 6.64-O(b)(F) (providing that ``[t]he Exchange may
deviate from the standard manner of the Auction Process, including
adjusting the timing of the Auction Process in any option class,
when it believes it is necessary in the interests of a fair and
orderly market'').
---------------------------------------------------------------------------

    Order Processing during an Auction Processing Period. As described
above, the Auction Processing Period is the abbreviated time period
(i.e., generally measured in less than a second) when the Exchange
conducts the Auction and therefore transitions a series from a pre-open
state to continuous trading. For example, if there is a Legal Width
Quote, Market Maker quotes, and Matched Volume, the Auction Processing
Period is when that Matched Volume will trade at the Indicative Match
Price. New orders and quotes received during the Auction Processing
Period would not be eligible to participate in that Auction trade.
Because the Exchange would be using the same Pillar auction
functionality for options trading that is used for its cash equity
market, the Exchange proposes that proposed Rule 6.64P-O(e) would be
based on Rule 7.35-E(g) and sub-paragraphs (1) and (2), with
differences only to reference quotes in addition to orders. The
proposed rule promotes granularity and transparency of how orders and
quotes that arrive during the Auction Processing Period would be
processed.
    Accordingly, as proposed, new order and quote messages received
during the Auction Processing Period would be accepted but would not be
processed until after such Auction Processing Period. As with Rule
7.35-E(g), for purposes of proposed Rule 6.64P-O(e) and (f), an ``order
instruction'' would likewise refer to a request to cancel, cancel and
replace, or modify an order or quote.
    As further proposed, during the Auction Processing Period, order
instructions would be processed as follows:
     An order instruction that arrives during the Auction
Processing Period would not be processed until after the Auction
Processing Period if it relates to an order or quote that was received
before the Auction Processing Period. Any subsequent order instructions
relating to such order would be rejected (proposed Rule 6.64P-O(e)(1)).
     An order instruction that arrives during the Auction
Processing Period would be processed on arrival if it relates to an
order that was received during the Auction Processing Period (proposed
Rule 6.64P-O(e)(2)).
    Transition to Continuous Trading. After the Auction Processing
Period concludes, i.e., once the Auction concludes either with or
without a trade, the Exchange transitions to continuous trading. During
this transition, the way in which orders, quotes, and order
instructions are processed would differ depending on when such messages
arrived at the Exchange. Proposed Rule 6.64P-O(f) would describe how
the Exchange would transition to continuous trading after the Auction
Processing Period concludes, which would detail new functionality for
options trading under Pillar, and is based on how the Exchange
transitions to continuous trading on its cash equity market following
an Auction, as described in Rule 7.35-E(h). The Exchange believes that
the proposed rule provides granularity regarding how orders and quotes
would be processed in connection with the transition to continuous
trading for options trading.\189\ As proposed, the transition to
continuous trading would proceed as follows.
---------------------------------------------------------------------------

    \189\ See, e.g., Cboe Rule 5.31(f) (describing Cboe's process
for orders and quotes not executed in its opening process).
---------------------------------------------------------------------------

    Proposed Rule 6.64P-O(f)(1) would provide that orders that are no
longer eligible to trade would be cancelled. This proposed rule text is
based on Pillar terminology used in Rule 7.35-E(h)(1). For options
trading, the only orders that would no longer be eligible to trade
after the Auction Processing Period concludes would be Auction-Only
Orders and such orders would cancel (rather than ``expire'').
    Proposed Rule 6.64P-O(f)(2) would provide that order instructions
would be processed as follows:
     An order instruction that relates to an order or quote
that was received before the Auction Processing Period or that has
already transitioned to continuous trading and that arrives during
either the transition to continuous trading or the Auction Processing
Period under paragraph (e)(1) of this Rule would be processed in time
sequence with the processing of orders and quotes as specified in
paragraphs (f)(3)(A) or (B) of this Rule. In addition, any subsequent
order instructions relating to such order or quote would be rejected
(proposed Rule 6.64P-O(f)(2)(A)). This proposed rule text is based on
Rule 7.35-E(h)(2)(A), except that it does not include reference to
order instructions received during an Auction Imbalance Freeze, which,
as discussed above, is a concept on the cash equity platform that is
not applicable to options trading. This proposed rule text provides
transparency regarding how order instructions that arrived during the
Auction Processing Period would be processed if they relate to orders
or quotes that were received before the Auction Processing Period.\190\
---------------------------------------------------------------------------

    \190\ See id. (unexecuted orders and quotes will be entered into
the Cboe book in time sequence).
---------------------------------------------------------------------------

     An order instruction that arrives during the transition to
continuous trading would be processed on arrival if it relates to an
order or quote that was entered during either the Auction Processing
Period or the transition to continuous trading and such order or quote
has not yet transitioned to continuous trading (proposed Rule 6.64P-
O(f)(2)(B)). This proposed rule text is based on Rule 7.35-E(h)(2)(B)
without any substantive differences.
    Proposed Rule 6.64P-O(f)(3) would set forth how orders and quotes
would be processed during the transition to continuous trading
following an Auction. The proposed process for transitioning to
continuous trading is consistent with current functionality (with
differences described below) relating to draining the queue of
unexecuted orders and quotes following the current Auction Process. The
Exchange believes that the proposed rule provides granularity of this
process as compared to the current Rule.

Specifically, the Exchange proposes that it would process Auction-
eligible orders and quotes that were received before the Auction
Processing Period and orders ranked under the proposed category of
``Priority 3--Non-Display Orders'' (which interest was not eligible to
participate in an Auction) received before a trading halt as follows:
     Proposed Rule 6.64P-O(f)(3)(A)(i) would provide that Limit
Orders and quotes would be subject to the Limit Order Price Check,
Arbitrage Check, and Intrinsic Value Check, as applicable. This
proposed rule differs from current functionality, whereby risk checks
are applied before an Auction. This proposed rule text is consistent
with the proposed rule changes, described above, regarding when the
Limit Order Price Check, Arbitrage Check, and Intrinsic Value Check
(per proposed Rules 6.62P-O(a)(3) and 6.41P-O, respectively) would be
applied to orders and quotes that were received during a pre-open
state. The Exchange proposes to apply these checks to orders and quotes
before they become eligible for trading or routing during continuous
trading.
     Proposed Rule 6.64P-O(f)(3)(A)(ii) would provide that
Limit Orders and Market Orders would be assigned a Trading Collar. This
proposed rule is consistent with the proposed changes to Trading
Collars on Pillar, described above (per Rule 6.62P-O(a)(4)), that an
order received during a pre-open state would be assigned a Trading
Collar after an Auction concludes, or that an order would be reassigned
a Trading Collar after a halt.
     Proposed Rule 6.64P-O(f)(3)(A)(iii) would provide that
orders eligible to route that are marketable against Away Market
Protected Quotations would route based on the ranking of such orders as
set forth in Rule 6.76P-O(c). This proposed rule is consistent with
current functionality and uses Pillar terminology based on Rule 7.35-
E(h)(3)(A)(ii)(a), with differences to use the term ``Away Market
Protected Quotations'' instead of ``protected quotations on Away
Markets'' and to cross reference proposed Rule 6.76P-O(c).\191\ As with
current functionality, routable orders would be routed to Away Markets
to avoid either trading through or locking or crossing an Away Market
Protected Quotation.
---------------------------------------------------------------------------

    \191\ See supra note 112 (citing definitions of ``Protected
Bid,'' ``Protected Offer,'' and ``Quotation'' set forth in Rule
6.92-O(a)(15) and (16) and of ``Away Market'' as set forth in
proposed Rule 1.1).
---------------------------------------------------------------------------

     Proposed Rule 6.64P-O(f)(3)(A)(iv) would provide that
after routing eligible orders, orders and quotes not eligible to route
that are marketable against Away Market Protected Quotations would
cancel. This functionality would be new for options trading (such
orders and quotes would currently reprice) and this proposed rule is
based on Rule 7.35-E(h)(3)(A)(ii)(b), with differences to use the term
``Away Market Protected Quotations'' instead of ``protected quotations
on Away Markets.'' By cancelling non-routable orders and quotes
marketable against Away Market Protected Quotations, the Exchange would
avoid locking or crossing such Away Market Protected Quotations.
     Proposed Rule 6.64P-O(f)(3)(A)(v) would provide that once
there are no more unexecuted orders marketable against Away Market
Protected Quotations, orders and quotes that are marketable against
other orders and quotes in the Consolidated Book would trade or be
repriced. This proposed rule is based on Rule 7.35-E(h)(3)(A)(ii)(c),
with a difference that an order could be repriced based on this
assessment, which would be unique to options trading because as
described above, an ALO Order that would be marketable against a
contra-side order or quote on the Consolidated Book cannot take
liquidity and in such case, the Exchange would reprice an ALO Order
that is marketable as provided for in proposed Rule 6.62P-O(e)(2).\192\
The Exchange further notes that, similar to the Exchange's cash equity
market, the Exchange could transition to continuous trading without the
Auction resulting in a trade, but that a trade(s) may occur during the
transition to continuous trading, which trade(s) would be published to
OPRA before the Exchange publishes a quote to OPRA.\193\ The Exchange
would not consider a trade that occurs during the transition to
continuous trading to be an Auction that results in a trade.\194\
---------------------------------------------------------------------------

    \192\ As described above, the Exchange proposes a difference on
Pillar because ALO Orders would be eligible to participate in an
Auction. Currently, ALOs will be rejected if entered outside of Core
Trading Hours or during a trading halt or, if resting, will be
cancelled in the event of a trading halt. See discussion supra
regarding Rule 6.62-O(t).
    \193\ For example, the Exchange may determine that, as described
in proposed Rule 6.64P-O(d)(4)(A), if there is no Matched Volume but
there is a Calculated NBBO that meets the requirements specified in
that Rule, it can conduct an Auction without a trade and transition
to continuous trading pursuant to proposed Rule 6.64P-O(f). In such
case, there would not be an Auction that results in a trade, but a
trade(s) could occur among orders and quotes that trade during the
transition to continuous trading.
    \194\ OPRA does not distinguish between a trade that results
from an opening auction and a trade that occurs during the
transition to continuous trading. By contrast, the Exchange's
proprietary data feed would distinguish a trade that resulted from
an Auction from a trade that occurred during the transition to
continuous trading.
---------------------------------------------------------------------------

     Proposed Rule 6.64P-O(f)(3)(A)(vi) would provide that
Market Orders received during a pre-open state would be subject to the
validation specified in proposed Rule 6.62P-O(a)(1)(C). The Exchange
notes that because such Market Orders would already have been received
by the Exchange, if such orders fail one of those validations, they
would be cancelled instead of rejected. This would be new rule text as
compared to the Exchange's cash equity rules to reflect the validations
that would be applicable to Market Orders for options trading on Pillar
and would add transparency and granularity to Exchange rules.
     Proposed Rule 6.64P-O(f)(3)(A)(vii) would provide that the
display quantity of Reserve Orders would be replenished. This proposed
rule is based on Rule 7.35-E(h)(3)(A)(ii)(d), without any substantive
differences. This proposed rule is based on current functionality and
provides granularity in Exchange rules.
     Proposed Rule 6.64P-O(f)(3)(A)(viii) would describe the
last step in this process regarding Auction-eligible interest received
before the Auction Processing Period and orders ranked under the
proposed category of ``Priority 3--Non-Display Orders'' received before
a trading halt. Specifically, the Exchange would send a quote to OPRA
and proprietary data feeds representing the highest-priced bid and
lowest-priced offer of any remaining, unexecuted Auction-eligible
orders and quotes that were received before the Auction Processing
Period. This proposed rule is consistent with current options
functionality and is also based on current cash equity functionality,
as set forth in Rule 7.35-E(h)(3)(A)(ii). Although the functionality
would be the same for both markets, for options traded on the Exchange,
the Exchange proposes to describe this aspect of the process in
sequence, and reference both orders and quotes. The Exchange notes that
this quote sent to OPRA would be different than the Rotational Quote
sent at the beginning of the Auction Process because it could be
comprised of both orders and quotes. At a high level, this represents
current functionality because after a series opens, the Exchange
disseminates its best bid and offer of its quotes and orders to OPRA.
    Proposed Rule 6.64P-O(f)(3)(B) would provide that next, orders
ranked under the proposed category of ``Priority 3--Non-Display
Orders'' that were received during a pre-open state would be assigned a
new working time, in time sequence relative to one another based on
original entry time, and would be

subject to the Limit Order Price Check, Arbitrage Check, and Intrinsic
Value Check, as applicable, and if not cancelled, would be traded or
repriced. This proposed functionality would be new for Pillar and
applicable only for options traded on the Exchange. Even though orders
ranked Priority 3--Non-Display Orders would not be eligible to trade in
an Auction (other than the reserve interest of Reserve Orders), the
Exchange proposes to accept such orders during a pre-open state. These
orders would transition to continuous trading after any unexecuted
Auction-eligible interest transitions to continuous trading, as
described above in proposed Rule 6.64P-O(f)(3)(A)(i)-(viii). The
Exchange believes that waiting to process non-displayed orders in this
sequence would ensure that there is an NBBO against which such orders
could be priced, as described in proposed Rule 6.62P-O(d) (regarding
Orders with a Conditional or Undisplayed Price and/or Size) above.
    Proposed Rule 6.64P-O(f)(3)(C) would provide that next, orders and
quotes that were received during the Auction Processing Period would be
assigned a new working time in time sequence relative to one another,
based on original entry time and would be subject to the Limit Order
Price Check, Pre-Trade Risk Controls, Arbitrage Check, Intrinsic Value
Check, and validations specified in proposed Rule 6.62P-O(a)(1)(A), as
applicable to certain Market Orders, and if not cancelled would be
processed consistent with the terms of the order or quote. This
proposed rule text is designed to reflect that orders and quotes
received during the Auction Processing Period would not be subjected to
these price/risk validations until after the Exchange has transitioned
to continuous trading, and that if such interest fails these
validations, those orders or quotes would be cancelled instead of
rejected. This proposed rule text is based on Rule 7.35-E(h)(3)(B),
with differences to reflect the price/risk validations that would be
applicable to orders and quotes for options trading.
    Proposed Rule 6.64P-O(f)(3)(D) would further provide that when
transitioning to continuous trading:
     The display price and working price of orders and quotes
would be adjusted based on the contra-side interest in the Consolidated
Book or ABBO, as provided for in Rule 6.62P-O (proposed Rule 6.64P-
O(f)(3)(D)(i)). This proposed rule is based on Rule 7.35-E(h)(3)(C),
with differences to reflect that, for options trading, the display
price or working price of an order may be adjusted based either on
contra-side interest on the Consolidated Book (e.g., for ALO Orders) or
the ABBO (as opposed to the PBBO or NBBO for cash equities trading).
     The display price and working price of a Day ISO would be
adjusted in the same manner as a Non-Routable Limit Order until the Day
ISO is either traded in full or displayed at its limit price and the
display price and working price of a Day ISO ALO would be adjusted in
the same manner as an ALO Order until the Day ISO ALO is either traded
in full or displayed at its limit price (proposed Rule 6.64P-
O(f)(3)(D)(ii)). This proposed rule is new for options trading because,
as described above, the Exchange would be offering Day ISO and Day ISO
ALO for options trading for the first time with the transition to
Pillar. The rule text is based in part on Rule 7.35-E(h)(3)(D), with
differences to reflect how a Day ISO ALO would be processed on options
as compared to how similarly-named orders trade on the Exchange's cash
equity market, as described in more detail above in connection with
proposed Rule 6.62P-O(e)(3).
    Proposed Rule 6.64P-O(g) would describe order processing during a
trading halt. The proposed rule is based in part on Rule 7.18-E(c),
with differences to reflect how options would trade on Pillar as
described below. The proposed Rule is designed to provide granularity
in Exchange rules about how new and existing orders, quotes, and order
instructions would be processed during a trading halt. As proposed, the
Exchange would process new and existing orders and quotes in a series
during a trading halt as follows:
     Cancel any unexecuted quantity of orders for which the
500-millisecond Trading Collar timer has started and all resting Market
Maker quotes (proposed Rule 6.64P-O(g)(1)). This proposed rule would be
unique for options traded on the Exchange. The Exchange proposes to
cancel resting Market Maker quotes when a trading halt is triggered,
which represents current functionality, and as noted below, would
accept new Market Maker quotes during a trading halt, which would be
the basis for the Rotational Quote that would be published for a
Trading Halt Auction. The Exchange also proposes to cancel any
unexecuted quantity of orders for which the 500-millisecond Trading
Collar has started because such timer would have ended during a trading
halt, and therefore such orders were subject to cancellation already.
This would be new functionality on Pillar and reflects the proposed new
Trading Collar behavior that orders would be priced at their collar for
only 500 milliseconds and then would cancel.
     Re-price all other resting orders on the Consolidated Book
to their limit price. This would be new functionality on Pillar for
options trading; currently, during a halt, resting orders do not
reprice to their limit price.\195\ The repricing of a Non-Routable
Limit Order, ALO Order, or Day ISO ALO to its limit price during a
trading halt would not be counted toward the (limited) number of times
such order may be repriced, and any subsequent repricing of such order
during the transition to continuous trading would be permitted as the
additional (uncounted) repricing event as provided for in proposed
Rules 6.62P-O(e)(1)(B) and (e)(2)(C) (proposed Rule 6.64P-O(g)(2)). As
described above, once resting, a Non-Routable Limit Order, ALO Order,
or Day ISO ALO that was repriced on arrival is eligible to be repriced
only one additional time. This proposed rule provides transparency that
the repricing of such orders to their limit price during a trading halt
would not count towards that ``one'' additional repricing, but that any
subsequent repricing after the Auction concludes would count.
---------------------------------------------------------------------------

    \195\ On its cash equities market, for trading halts in
Exchange-listed securities, the Exchange reprices resting orders to
their limit price. See Rule 7.18-E(c)(3).
---------------------------------------------------------------------------

     Accept and process all cancellations (proposed Rule 6.64P-
O(g)(3)). This proposed rule is based on Rule 7.18-E(c)(4), without any
differences, and is consistent with current functionality.
     Reject incoming Limit Orders designated IOC or FOK
(proposed Rule 6.64P-O(g)(4)). This proposed rule is based on Rule
7.18-E(c)(5), with a difference to add orders designated FOK and not
include non-displayed orders and is consistent with current
functionality.
     Accept all other incoming order and quote messages and
instructions until the Auction Processing Period for the Trading Halt
Auction ends, at which point, paragraph (e) of proposed Rule 6.64P-O
would govern the entry of incoming orders, quotes, and order
instructions (proposed Rule 6.64P-O(g)(5)). This proposed rule is based
on Rule 7.18-E(c)(6), with differences to cross reference the options
rule relating to the transition to continuous trading and is consistent
with current functionality.
     Disseminate a zero bid and zero offer quote to OPRA and
proprietary data feeds (proposed Rule 6.64P-O(g)(6)). This proposed
rule is based on

current functionality and is designed to promote clarity and
transparency in Exchange rules that when a trading halt begins, the
Exchange will ``zero'' out the Exchange's BBO.
    Finally, proposed Rule 6.64P-O(h) would provide that whenever, in
the judgment of the Exchange, the interests of a fair and orderly
market so require, the Exchange may adjust the timing of or suspend the
Auctions set forth in this Rule with prior notice to OTP Holders and
OTP Firms. This proposed rule is based on Rule 7.35-E(i), with a
difference to reference OTP Holders instead of ETP Holders and also
reference OTP Holders and OTP Firms.
    In connection with proposed Rule 6.64P-O, the Exchange proposes to
add the following preamble to Rule 6.64-O: ``This Rule is not
applicable to trading on Pillar.'' This proposed preamble is designed
to promote clarity and transparency in Exchange rules that Rule 6.64-O
would not be applicable to trading on Pillar.
* * * * *
    As discussed above, because of the technology changes associated
with the migration to the Pillar trading platform, subject to approval
of this proposed rule change, the Exchange will announce by Trader
Update when rules with a ``P'' modifier will become operative and for
which symbols. The Exchange believes that keeping existing rules on the
rulebook pending the full migration of Pillar will reduce confusion
because it will ensure that the rules governing trading on the OX
system will continue to be available pending the full migration to
Pillar.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\196\ in general, and
furthers the objectives of Section 6(b)(5),\197\ in particular, because
it is 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 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. The Exchange
believes that the proposed rules to support Pillar would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because the proposed rules would promote
transparency in Exchange rules by using consistent terminology
governing trading on both the Exchange's cash equity and options
trading platforms, thereby ensuring that members, regulators, and the
public can more easily navigate the Exchange's rulebook and better
understand how options trading is conducted on the Exchange.
---------------------------------------------------------------------------

    \196\ 15 U.S.C. 78f(b).
    \197\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Generally, the Exchange believes that adding new rules with the
modifier ``P'' to denote those rules that would be operative for the
Pillar trading platform would remove impediments to and perfect the
mechanism of a free and open market and a national market system by
providing transparency of which rules would govern trading once a
symbol has been migrated to the Pillar platform. The Exchange similarly
believes that adding a preamble to those current rules that would not
be applicable to trading on Pillar would remove impediments to and
perfect the mechanism of a free and open market and a national market
system because it would promote transparency regarding which rules
would govern trading on the Exchange during and after the transition to
Pillar.
    In addition, the Exchange believes that incorporating functionality
currently available on the Exchange's cash equity market for options
trading would remove impediments to and perfect the mechanism of a free
and open market and a national market system because the Exchange would
be able to offer consistent functionality across both its options and
cash equity trading platforms, adapted as applicable for options
trading. Accordingly, with the transition to Pillar, the Exchange will
be able to offer additional features to its OTP Holders and OTP Firms
that are currently available only on the Exchange's cash equity
platform. For similar reasons, the Exchange believes that using Pillar
terminology for the proposed new rules would remove impediments to and
perfect the mechanism of a free and open market and a national market
system because it would promote consistency in the Exchange's rules
across both its options and cash equity platforms.
Definitions and Applicability
    The Exchange believes that the proposed amendments to Rule 1.1,
including copying certain definitions from Rule 6.1-O and Rule 6.1A-O
to Rule 1.1, would remove impediments to and perfect the mechanism of a
free and open market and a national market system because the proposed
changes are designed to promote clarity and transparency in Exchange
rules by consolidating into Rule 1.1 definitions relating to both cash
equity and options trading and specifying, where applicable, the
differences in definitions for each trading platform. The Exchange
believes that the proposed changes to eliminate definitions no longer
applicable to options trading and to modify the text of certain
existing definitions relating to options trading that are being copied
to Rule 1.1, would further remove impediments to and perfect the
mechanism of a free and open market and a national market system
because it would ensure that the definitions used in Exchange rules are
updated to accurately reflect functionality and are internally
consistent. In particular, the Exchange believes that the proposed
updates to definitions being copied to proposed Rule 1.1. from Rules
6.1-O(b) and 6.1A-O would add further granularity, clarity and
transparency to Exchange rules making them easier for the investing
public to navigate. The Exchange believes that new terms it proposes to
include in Rule 1.1 for options trading (i.e., MPID, ABBO) would
promote clarity and transparency in Exchange rules.\198\ Finally, the
Exchange believes that organizing Rule 1.1 alphabetically and
eliminating sub-paragraph numbering would make the proposed rules
easier to navigate.
---------------------------------------------------------------------------

    \198\ See supra note 27 (regarding Cboe Rule 1.1. defined term
``ABBO'').
---------------------------------------------------------------------------

    The Exchange further believes that proposed new Rule 6.1P-O
relating to applicability would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because the proposed rule would include those elements of current Rule
6.1-O that would remain applicable to options trading and eliminates
duplicative text that would no longer be necessary after the transition
to Pillar. The Exchange further notes that proposed Rule 6.1P-O is
similar to NYSE American Rule 900.1NY.
Order Ranking and Display
    The Exchange believes that proposed new Rule 6.76P-O would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because the Exchange is not proposing
substantive changes to how the Exchange would rank and display orders
and quotes on Pillar as compared to the OX system. Rather, the proposed
revisions to the Exchange's options trading rules would remove
impediments to and perfect the mechanism of a free and open market

and a national market system because the proposed changes are designed
to simplify the structure of the Exchange's options rules and use
consistent Pillar terminology for both cash equity and options trading,
without changing the underlying functionality for options trading. For
example, the Exchange believes the proposed definitions set forth in
Rule 6.76P-O, i.e., display price, limit price, working price, working
time, and Aggressing Order/Aggressing Quote, would promote transparency
in Exchange rules and make them easier to navigate because these
proposed definitions would be used in other proposed Pillar options
trading rules. The Exchange notes that these proposed definitions are
consistent with the definitions set forth in Rule 7.36-E for cash
equity trading with terminology differences only as necessary to
address functionality associated with options trading that are not
applicable to cash equity trading, e.g., reference to quotes.
    The Exchange further believes that copying descriptions of order
type behavior, which are currently set forth in Rule 6.76-O, to
proposed Rule 6.62P-O, and therefore not include such detail in
proposed Rule 6.76P-O, would make Exchange rules easier to navigate
because information regarding how a specific order type would operate
would be in a single location in the Exchange's rulebook. The Exchange
notes that this proposed structure is consistent with the Exchange's
cash equity rules, which similarly set forth information relating to an
order type's ranking in Rule 7.31-E.
    Moreover, the Exchange is not proposing any functional changes to
how it would rank and display orders and quotes on Pillar as compared
to the OX system, except (as noted herein) with regard to the treatment
of reduced quote sizes which would be handled the same as orders with
reduced size under Pillar, which would add consistency and transparency
to Exchange rules.\199\ The Exchange believes that using new
terminology to describe ranking and display, including the proposed
priority categories of Priority 1--Market Orders, Priority 2--Display
Orders, and Priority 3--Non-Display Orders, would remove impediments to
and perfect the mechanism of a free and open market and a national
market system because the proposed rule would provide more granularity
and use Pillar terminology to describe functionality that is consistent
with the OX system functionality currently referred to as the ``Display
Order Process'' and the ``Working Order Process'' in Rule 6.76-O.
---------------------------------------------------------------------------

    \199\ See supra note 54 (regarding existing handling of quotes
with reduced size).
---------------------------------------------------------------------------

Order Execution and Routing
    The Exchange believes that proposed new Rule 6.76AP-O would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because the proposed rule would set forth a
price-time priority model for Pillar that is substantively the same as
the Exchange's current price-time priority model as set forth in Rule
6.76A-O. The proposed differences as compared to Rule 6.76A-O are
designed to use Pillar terminology that is based in part on Rule 7.37-
E, if applicable, without changing the functionality that is currently
available for options trading.
    The Exchange believes that the proposed modifications to the LMM
Guarantee would remove impediments to and perfect the mechanism of a
free and open market and a national market system because it provides
clarity of how multiple quotes from an LMM would be allocated (i.e.,
only the first quote in time priority would be eligible for the LMM
Guarantee and trade at an execution price equal to the NBBO). The
Exchange similarly believes that eliminating Directed Order Market
Makers and Directed Orders would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because these features are not currently used on the Exchange, and
therefore eliminating Directed Orders and Directed Order Market Makers
would streamline the Exchange's rules. The Exchange notes that the
remaining differences in proposed Rule 6.76AP-O relating to the LMM
Guarantee are designed to promote clarity and transparency in Exchange
rules and would not introduce new functionality.
    The Exchange believes that the structure and content of the rule
text in proposed Rule 6.76AP-O promotes transparency by using
consistent Pillar terminology. The Exchange also believes that adding
more detail regarding current functionality in new Rule 6.76AP-O, as
described above, would promote transparency by providing notice of when
orders would be executed or routed by the Exchange.
Orders and Modifiers
    The Exchange believes that proposed new Rule 6.62P-O would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it would use existing Pillar
terminology to describe the order types and modifiers that would be
available on the Exchange's options Pillar trading system. As noted
above, the Exchange proposes to offer order types and modifiers that
are either based on existing order types available on the OX system as
described in Rule 6.62-O, or orders and modifiers available on the
Exchange's cash equity trading platform, as described in Rule 7.31-E,
with differences as applicable to reflect differences in options
trading from cash equity trading. The Exchange believes that
structuring proposed Rule 6.62P-O based on the structure of Rule 7.31-E
would remove impediments to and perfect the mechanism of a free and
open market and a national market system because it would promote
transparency and consistency in the Exchange's rulebook.
    In addition to the terminology changes to describe the order types
and modifiers that are currently available on the Exchange, the
Exchange further believes that the order types and modifiers proposed
for options trading on Pillar that either differ from order types and
modifiers available on the OX system or that would be new would remove
impediments to and perfect the mechanism of a free and open market and
national market system because:
     Market Orders on Pillar would function similarly to how
Market Orders function under current options trading rules, including
being subject to Trading Collars. However, the proposed functionality
would expand the circumstances under which Market Orders may be
rejected, which functionality is designed to ensure that Market Orders
do not execute either when there is no prevailing market in a series,
which can occur if there is no NBO, no NBB and an NBO higher than
$0.50, or an absence of contra-side Market Maker quotations or the
ABBO. In addition, the proposed functionality would provide that if the
displayed prices are too wide to assure a fair and orderly execution of
a Market Order, such Market Order would be rejected. The Exchange
believes that the proposed ``wide-spread'' check for Market Orders is
consistent with similar price protections on other options exchanges
and is designed to prevent a Market Order trading at a price that could
be considered a Catastrophic Error.\200\ The Exchange believes that the
proposed rule describing Market Orders would promote transparency by
providing notice of when a Market

Order would be subject to such validations.
---------------------------------------------------------------------------

    \200\ See supra note 69 (citing Cboe's Market Order NBBO Width
Protection, which similarly looks to the midpoint of the NBBO in
applying this protection).
---------------------------------------------------------------------------

     The Exchange is not proposing any new or different
behavior for Limit Orders than is currently available for options
trading on the Exchange, other than the application of Limit Order
Price Protection and Trading Collars, which would differ on Pillar. The
Exchange believes using Pillar terminology based on Rule 7.31-E(a)(2)
to describe Limit Orders would promote consistency and clarity in
Exchange rules.
     The proposed Limit Order Price Protection functionality is
based in part on the existing ``Limit Order Filter'' for orders and
price protection filters for quotes because an order or quote would be
rejected if it is priced a specified percentage away from the contra-
side NBB or NBO. The proposed Limit Order Price Protection
functionality is also based in part on the functionality available on
the Exchange's cash equity trading platform, and therefore is not
novel. The Exchange believes that using the same mechanism for both
orders and quotes would simplify the operation of the Exchange and
achieve similar results as the current rules, which is to reject an
order or quote that is priced too far away from the prevailing market.
The Exchange believes that re-applying Limit Order Price Protection
after an Auction concludes would ensure that Limit Orders and quotes
continue to be priced consistent with the prevailing market, and that
using an Auction Price (if available, and if not available, Auction
Collars, and if not available, the NBBO) to assess Limit Orders and
quotes after an Auction concludes would ensure that the Exchange would
be applying the most recent price in a series in assessing whether such
orders or quotes should be cancelled. The Exchange further believes
that the proposed Specified Thresholds for determining whether to
reject a Limit Order or quote would remove impediments to and perfect
the mechanism of a free and open market and a national market system
because they are designed to be tailored to the applicable Reference
Price, and thus more granular than the current thresholds.
    The proposed Trading Collar functionality is based in part on how
trading collars currently function on the Exchange because the proposed
functionality would create a ceiling or floor price at which an order
could be traded or routed. The Exchange believes that the proposed
differences for Trading Collars on Pillar, including applying the same
Trading Collar logic to both Limit Orders and Market Orders, applying
them once per trading day (unless there is a trading halt), tailoring
the specified thresholds to be within the current parameters for
determining whether a trade would be an Obvious Error or Catastrophic
Error, and canceling orders that have been displayed at their Trading
Collar for 500 milliseconds, would remove impediments to and perfect
the mechanism of a free and open market and a national market system
because they are designed to provide a deterministic price protection
mechanism for orders. In addition, the proposed Pillar Trading Collar
functionality is designed to simplify the process by applying a static
ceiling price (for buy orders) or floor price (for sell orders) at
which such order could be traded or routed that would be applicable to
the order until it is traded or cancelled. The Exchange believes that
the proposal to explicitly add reference to Cross Orders being excluded
from Trading Collars would add granularity to the proposed rule
functionality. The Exchange believes that the proposed functionality
would provide greater determinism to an OTP Holder or OTP Firm of the
Trading Collar that would be applicable to its orders and when such
orders may be cancelled if it reaches its Trading Collar.
     The Exchange is not proposing any new or different Time-
in-Force modifiers than are currently available for options trading on
the Exchange. The Exchange believes using Pillar terminology based on
Rule 7.31-E(b) to describe the time-in-force modifiers would promote
consistency and clarity in Exchange rules.
     Auction-Only Orders, and specifically, the proposed MOO
and LOO Orders, would operate no differently than how ``Opening-Only
Orders'' currently function on the OX system. However, rather than
refer to Opening-Only Orders, the Exchange proposes to use Pillar
terminology that is based on Rule 7.31-E(c) terminology. The Exchange
further believes that offering its IO Order type for Auctions on the
options trading platform--both for Core Open Auctions and Trading Halt
Auctions--would provide OTP Holders and OTP Firms with new, optional
functionality to offset an Imbalance in an Auction. The proposed
availability of the IO Order on the options platform would be more
expansive than is currently available on the Exchange's cash equity
platform, which (unlike options) does not account for quotes in
determining an Imbalance and which limits the use of IO Orders solely
to Trading Halt Auctions. The Exchange believes this proposed
functionality would afford OTP Holders and OTP Firms with greater
flexibility for all Auctions on Pillar.
     The Exchange would continue to offer Reserve Orders, AON
Orders, Stop Orders, and Stop Limit Orders, which are currently
available on the OX system. The proposed differences to Reserve Orders
for options trading would harmonize with how Reserve Orders function on
the Exchange's cash equity market, with changes as applicable to
address options trading (e.g., no round lot/odd lot concept for options
trading). The proposal that the reserve interest of a Reserve Order
could never have a working price that is more aggressive than the
working price of the display quantity of the Reserve Order would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it is designed to ensure that the
reserve interest of a Reserve Order to buy (sell) would never trade at
a price higher (lower) than the working price of the display quantity
of the Reserve Order. The proposed changes to AON Orders would provide
greater execution opportunities for such orders by allowing them to be
integrated in the Consolidated Book and once resting, trade with
incoming orders and quotes. The changes are also based on how orders
with an MTS Modifier, which are also conditional orders, function on
the Exchange's cash equity market. The Exchange believes it is
appropriate to opt not to support Market Orders designated as AON on
Pillar because such functionality was not used often on the OX system,
indicating a lack of market participant interest in this functionality.
The proposed differences for Stop Orders and Stop Limit Orders are
designed to promote transparency by providing clarity of circumstances
when either order may be rejected on arrival (in the case of Stop Limit
Orders) or elected and make clear that, once elected, such orders are
subject to the price protection and risk checks applicable to Market
Orders and Limit Orders, respectively. Finally, the Exchange believes
that offering Non-Displayed Limit Orders for options trading on Pillar,
which are available on the Exchange's cash equity platform, would
provide additional, optional trading functionality for OTP Holders and
OTP Firms. The Exchange notes that the proposed Non-Displayed Limit
Order would function similarly to how a PNP Blind Order that locks or
crosses the contra-side NBBO would be processed because in such
circumstances, a PNP Blind Order is not displayed. A Non-Displayed
Limit

Order would differ from a PNP Blind Order only because it would never
be displayed, even if its limit price doesn't lock or cross the contra-
side NBBO.
     The Exchange believes that the proposed orders (and
quotes) with instructions not to route (i.e., Non-Routable Limit Order,
ALO Order, and ISOs) would streamline the offerings available for
options trading on the Exchange by making the functionality the same
for both orders and quotes and consolidating the description of non-
routable orders and quotes in proposed Rule 6.62P-O(e), thereby adding
clarity and transparency. The Exchange believes that using Pillar
terminology, including order type names (for orders and quotes), based
on the terminology used for cash equity trading would promote clarity
and consistency across the Exchange's cash equity and options trading
platforms.
     The Exchange believes that the proposed Non-Routable Limit
Order is not novel because it is based on how the PNP, RPNP, and MMRP
orders and quotes currently function on the OX system, including the
continued availability of the option to designate a non-routable order
either to cancel or reprice if it is marketable against an ABBO.\201\
As such, the Exchange believes that the proposed non-routable order/
quote types would continue to provide OTP Holders and OTP Firms with
the core functionality associated with existing non-routable order/
quote types, including that the proposed rules would provide for the
ability to either reprice or cancel such orders/quotes. The Exchange
believes that providing additional options to cancel a resting Non-
Routable Limit Order or ALO Order rather than reprice an additional
time would provide additional choice to market participants. And the
Exchange believes that not offering this second cancellation
designation to Market Makers would assist Market Makers in maintaining
quotes in their assigned series by reducing the potential to interfere
with a Market Maker's ability to maintain their continuous quoting
obligations.
---------------------------------------------------------------------------

    \201\ As discussed supra, the proposed Non-Routable Limit Order
functionality is also consistent with the treatment of Market Makers
quotes not designated as MMRP (i.e., such quotes cancel if locking
or crosses the NBBO). See supra note 9899.
---------------------------------------------------------------------------

    Similarly, the proposed ALO Order is not novel because it is based
in part on how the RALO and MMALO orders and quotes currently function
on the OX system, including the continued availability of the option to
cancel an ALO Order if it would lock or cross the ABBO.\202\ As such,
the Exchange believes that the proposed non-routable order/quote types
would continue to provide OTP Holders and OTP Firms with the core
functionality associated with existing non-routable order/quote types
that would not be offered under Pillar, including that the proposed
rules would provide for non-routable functionality and the ability to
either reprice or cancel such orders/quotes. The Exchange believes the
proposed functionality to allow an ALO Order (which can never be a
liquidity taker) to lock non-displayed interest (which is consistent
with the treatment of ALO Orders on the Exchange's cash equity
platform) or to reprice if such order crosses non-displayed interest,
would reduce potential repricing or cancellation events for an incoming
ALO Order and would likewise reduce potential information leakage about
non-displayed interest in the Consolidated Book. Further, the Exchange
believes the proposed functionality to reprice an ALO Order when its
limit price crosses non-displayed interest on the Consolidated Book, to
have a working price and display price equal to the best-priced non-
displayed interest on the Exchange, would remove impediments to and
perfect the mechanism of a free and open market and a national market
system because it would ensure that an ALO Order never trades as a
liquidity-taker, thereby eliminating the potential for an ALO Order to
cross non-displayed interest on the Consolidated Book. And the Exchange
believes that not offering the second cancellation designation to
Market Makers that designated an ALO Order as a quote would assist
Market Makers in maintaining quotes in their assigned series by
reducing the potential to interfere with a Market Maker's ability to
maintain their continuous quoting obligations.
---------------------------------------------------------------------------

    \202\ As discussed supra, the proposed ALO Order functionality
is also consistent with the treatment of Market Makers quotes not
designated as MMALO (i.e., such quotes cancel if locking or crosses
the NBBO). See supra note 98.
---------------------------------------------------------------------------

    Finally, the proposed IOC ISO is not novel for options trading on
the Exchange and the Exchange believes that the proposed Pillar
terminology to describe the same functionality would promote
transparency. The proposed Day ISO and Day ISO ALO functionality would
be new for options trading and are based in part on how such order
types function in the Exchange's cash equity market. In addition, the
proposed Day ISO functionality is consistent with existing Rule 6.95-
O(b)(3), which currently provides an exception to locking or crossing
an Away Market Protected Quotation if the OTP Holder or OTP Firm
simultaneously routed an ISO to execute against the full displayed size
of any locked or crossed Protected Bid or Protected Offer. The Exchange
notes that this exception is not necessary for IOC ISOs because such
orders would never be displayed at a price that would lock or cross a
Protected Quotation; they cancel if they cannot trade. Accordingly,
this existing exception in the Exchange's rules contemplates an ISO
that would be displayed, which would mean it would need a time-in-force
modifier of ``Day.'' In addition, Day ISOs are available for options
trading on other options exchanges, and therefore are not novel.\203\
---------------------------------------------------------------------------

    \203\ See supra notes 121, 122 (citing to availability of Day
ISO orders on Nasdaq and Cboe).
---------------------------------------------------------------------------

     The Exchange believes that the proposed additional detail
defining Complex Orders to define the ``legs'' and ``components'' of
such orders would promote transparency in Exchange rules.
     On Pillar, the only electronically-entered crossing orders
would be QCC Orders, which is consistent with current functionality.
The Exchange believes that the proposed differences to how QCC Orders
would function, including using Pillar terminology and consolidating
rule text relating to QCC Orders in proposed Rule 6.62P-O, would
promote transparency and clarity in Exchange rules. The proposed
description of Complex QCC Orders is designed to distinguish such
orders from single-leg QCC Orders and to promote clarity and
transparency in Exchange rules regarding the price requirements for a
Complex QCC Order. Further, Complex QCC are available for trading on
other options exchanges, and therefore are not novel.\204\
---------------------------------------------------------------------------

    \204\ See supra notes 124, 127, and 128 (citing Complex QCC
Order type, as offered on MIAX and Cboe).
---------------------------------------------------------------------------

     The Exchange believes that moving the descriptions of
orders available only in open outcry from Rule 6.62-O to proposed Rule
6.62P-O(h) would ensure that these order types remain in the rulebook
after the transition to Pillar is complete. For CTB Orders, the
Exchange believes that, because Floor Brokers have an existing
obligation to satisfy better-priced interest on the Consolidated Book,
the proposed change to automate such priority on Pillar (i.e., to allow
CTB Orders to satisfy any displayed interest (including non-Customer
interest) at better prices than the latest-arriving displayed

Customer interest) would not only make it easier for Floor Brokers to
comply with Exchange priority rules, but would also increase execution
opportunities and achieve the goal of a CTB Order. The Exchange also
believes that codifying this order type and the associated regulatory
obligations would add clarity and transparency in Exchange rules.
     The proposed Proactive if Locked/Crossed Modifier, STP
Modifier, and MTS Modifier are not novel and are based on the
Exchange's current cash equity modifiers of the same name. The Exchange
believes that extending the availability of these existing modifiers to
options trading would provide OTP Holders and OTP Firms with
additional, optional functionality that is not novel and is based on
existing Exchange rules. Further, such proposed optional functionality
would afford OTP Holders and OTP Firms with greater flexibility in
specifying how their trading interest should be handled. For example,
the proposed MTS Modifier works similarly to the existing (and
proposed) AON functionality, but provides the OTP Holder or OTP Firm
with the alternative to designate a portion smaller than the full
quantity as the minimum trade size. The Exchange further believes that
extending the availability of STP Modifiers to all orders and quotes,
and not just those of Market Makers, would provide additional
protections for OTP Holders and OTP Firms and facilitate their
compliance and risk management by assisting them in avoiding
unintentional wash-sale trading.
Market Maker Quotations
    The Exchange believes that proposed Rule 6.37AP-O would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it is based on current Rule 6.37A-O,
with such changes as necessary to clarify functionality and to use
Pillar terminology. The Exchange believes that the proposed detail
(consistent with current functionality) to make clear that same-side
quotations sent by a Market Maker over the same order/quote entry port
would be replaced would add clarity and transparency to Exchange
rules.\205\ The Exchange believes that consolidating into one rule
functionality for orders and quotes, such that Non-Routable Limit
Orders and ALO Orders may be designated as quotes per proposed Rule
6.37AP-O, would obviate the need to separately describe the same
functionality in two rules and therefore streamline the Exchange's
rules and promote transparency and consistency. As noted above, the
Exchange believes that the quoting functionality available in the
proposed Non-Routable Limit Order and ALO Order would continue to
provide Market Makers with the core functionality associated with
existing quote types, including that the proposed rules would provide
for the ability to either reprice or cancel such quotes.
---------------------------------------------------------------------------

    \205\ See supra note 139 (citing NYSE Arca Fee Schedule, Port
Fees, and the ability for Market Makers to pay for upwards of forty
order/quote entry ports per month).
---------------------------------------------------------------------------

Pre-Trade and Activity-Based Risk Controls
    The Exchange believes that the proposed Rule 6.40P-O, setting forth
pre-trade and activity-based risk controls, would remove impediments to
and perfect the mechanism of a free and open market and a national
market system and promote just and equitable principles of trade
because the proposed functionality would incorporate existing activity-
based risk controls, without any substantive differences, and augment
them with additional pre-trade risk controls and related functionality
that are based on the pre-trade risk controls currently available on
the Exchange's cash equity trading platform. The Exchange believes that
the proposed differences are designed to provide greater flexibility to
OTP Holders and OTP Firms in how to set risk controls for both orders
and quotes. The Exchange believes that using Pillar terminology based
on the cash equity rules, including using the term ``Entering Firm'' to
mean OTP Holders and OTP Firms, including Market Makers, would promote
transparency in Exchange rules. In addition, the proposed Single Order
Maximum Notional Value Risk Limit and Single Order Maximum Quantity
Risk Limit checks would provide Entering Firms with additional risk
protection mechanisms on an individual order or quote basis. Moreover,
the Exchange believes that aggregating a Market Maker's quotes and
orders for purposes of calculating activity-based risk controls would
better reflect the aggregate risk that a Market Maker has with respect
to its quotes and orders. The Exchange further believes that the
proposed Automated Breach Actions would provide Entering Firms with
additional flexibility in how they could set their risk mechanisms and
the automated responses if a risk mechanism is breached. The proposed
Kill Switch Action functionality would also provide OTP Holders and OTP
Firms with greater flexibility to provide bulk instructions to the
Exchange with respect to cancelling existing orders and quotes and
blocking new orders and quotes. Further, as noted herein, providing
``Kill Switch Action'' functionality in Exchange rules is consistent
with the rules of other options exchanges.\206\
---------------------------------------------------------------------------

    \206\ See supra note 146 (citing optional ``Kill Switch''
functionality available on Cboe).
---------------------------------------------------------------------------

Price Reasonability Checks--Orders and Quotes
    The Exchange believes that the proposed Rule 6.41P-O, setting forth
Price Reasonability Checks, would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because they are based on existing functionality, with differences
designed to use Pillar terminology and promote consistency and
transparency in Exchange rules. Specifically, on Pillar, the Exchange
proposes to apply the same types of Price Reasonability Checks to both
orders and quotes, and therefore proposes to describe those checks in a
single rule--proposed Rule 6.41P-O. The proposed rule would add an
Intrinsic Value Check for quotes under Pillar (in addition to orders)
and this check would enhance existing price protection features for
quotes and provide Market Makers greater control and flexibility over
setting risk tolerance and exposure for their quotes. The proposed rule
also provides specificity regarding when the Price Reasonability Checks
would be applied to an order or quote, which would promote transparency
and clarity in Exchange rules. In addition, the Exchange believes that
by utilizing the last sale on the Primary Market (rather than the
Consolidated Last Sale) for the Price Reasonability Checks, the Pillar
system would need to ingest and process less data, thereby improving
efficiency and performance of the system without compromising the price
protection features.
Auction Process
    With the proposed Auction Process, the Exchange endeavors to
attract the highest quality quote for each series at the open to
attract order flow for the auction. While the Exchange does not require
Market Makers assigned to a series to quote before a series can be
opened (or reopened)--which is consistent with the current rule--the
Exchange believes that providing time for such Market Makers to do so
would promote a fair and orderly market by providing both better and
more consistent prices on executions to OTP Holders and OTP Firms in an
Auction

and facilitate a fair and orderly transition to continuous trading.
    The Exchange believes that proposed Rule 6.64P-O would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because the proposed rule maintains the
fundamentals of an auction process that is tailored for options trading
while at the same time enhancing the process by incorporating certain
Pillar auction functionality that is currently available on the
Exchange's cash equity platform, as described in Rule 7.35-E. For
example, the Exchange proposes to augment the imbalance information
that would be disseminated in advance of an Auction to include fields
available on the Exchange's cash equity market (e.g., Book Clearing
Price, Far Clearing Price, Auction Collars, and Auction Indicators),
yet tailor such information to be specific to options trading (e.g.,
Auction Collars based on a Legal Width Quote and how the Auction
Indicator would be determined). The Exchange believes that the proposed
additional Auction Imbalance Information would promote transparency to
market participants in advance of an Auction. The Exchange also
proposes to transition to continuous trading following an Auction in a
manner similar to how the Exchange's cash equity market transitions to
continuous trading following a cash equity Trading Halt Auction,
including how orders and quotes that are received during an Auction
Processing Period would be processed, which the Exchange believes would
promote consistency across the Exchange's options and cash equity
trading platforms. The proposed rule describing how orders and quotes
that are received during the Auction Processing Period would be
handled, and how unexecuted quotes and orders would be transitioned to
continuous trading would provide granularity regarding the process,
thereby providing transparency in Exchange rules. Because the Exchange
would be harnessing Pillar technology to support Auctions for options
trading, the Exchange believes that structuring proposed Rule 6.64P-O
based on Rule 7.35-E (and NYSE Rule 7.35, in part, as well) would
promote transparency in the Exchange's trading rules.
    The Exchange further believes that the proposed Auction Process for
options trading on Pillar would remove impediments to and perfect the
mechanism of a free and open market and a national market system. The
proposed process maintains the core functionality of the current
options auction process, including that orders are matched based on
price-time priority and that an Auction would not be conducted if the
bid-ask differential is not within an acceptable range. As proposed,
the Auction Process on Pillar would begin with the proposed Rotational
Quote, which would provide notice not only of when the process would
begin, but also whether Market Makers on the Exchange have quoted in a
series. Similar to the current rule, the Exchange would require a
``Calculated NBBO,'' which is calculated using information consistent
with the information the Exchange receives from OPRA before the
Exchange opens a series, to meet specified requirements, including that
it not be crossed, not have a zero offer, and that it not exceed a
maximum differential that is determined by the Exchange on a class by
class basis and announced by Trader Update, i.e., be a ``Legal Width
Quote'' before a series can be opened with a trade.\207\ Allowing the
Exchange the flexibility to determine the maximum differential for the
Calculated NBBO for a Legal Width Quote is consistent with
functionality and accompanying discretion available on other options
exchanges and allows the Exchange to consider the different market
models and characteristics of different classes, as well as modify
amounts in response to then-current market conditions.\208\ In
addition, the proposed discretion to modify acceptable bid-ask
differential is also consistent with discretion Exchange has today on
the OX system.\209\ In addition, the Exchange believes that the
proposed Auction Trigger, which would begin the Auction Process, is
consistent with the current trigger for starting an auction. The
Exchange believes that the proposed difference to allow the trade on
the Primary Market to be odd-lot sized (in addition to having a quote
from the Primary Market, which means that the underlying security would
be open on the Primary Market), would allow for series overlaying low-
volume securities to open automatically and reduce the need to manually
trigger an Auction in a series.
---------------------------------------------------------------------------

    \207\ As noted herein, the concept of a Calculated NBBO is
consistent with similar concepts utilized on other options exchanges
and is therefore not new or novel. See, e.g., Cboe Rule 5.31(a)
(regarding used of ``Composite Market'' concept).
    \208\ See supra notes 174, 176.
    \209\ See supra note 171.
---------------------------------------------------------------------------

    As with the current rule, on Pillar, Market Makers are not
obligated to quote in their assigned series for an Auction. However,
the Exchange believes that providing Market Maker(s) assigned to a
series the opportunity to quote within the bid-ask differential before
opening a series for trading would promote fair and orderly Auctions
and facilitate a fair and orderly transition to continuous trading. In
particular, rather than layer additional quoting requirements on the
Market Making community, the Exchange believes it would be more
beneficial to all market participants to employ alternative methods to
help ensure an orderly transition to continuous trading. As such, the
Exchange believes that the proposed so-called ``waterfall'' approach to
opening, would offer a number of checks that are intended to provide
adequate opportunity for a greater number of Market Makers to provide
their liquidity interest and help ensure increased liquidity at a level
commensurate with which the market is accustomed during continuous
trading on the Exchange. In short, although the Exchange does not
require a Market Maker assigned to a series to quote on the Exchange in
order to open or reopen a series for trading, the Exchange believes
that providing Market Makers assigned to a series the opportunity to do
so would promote a fair and orderly Auction process and facilitate a
fair and orderly transition to continuous trading.\210\
---------------------------------------------------------------------------

    \210\ As noted, infra, although the Exchange does not require
that Market Makers assigned to a series quote at the open, once a
series is opened for trading, Market Makers are nonetheless required
to continuously fulfill their obligations to engage in a course of
dealings reasonably calculated to contribute to the maintenance of a
fair and orderly market.
---------------------------------------------------------------------------

    Accordingly, the Exchange proposes a difference on Pillar to
provide time for Market Maker(s) assigned to a series to enter quotes
within the specified bid-ask differentials before a series could be
opened or reopened for trading. The proposed Opening MMQ Timer(s) would
each be 30 seconds. The proposed rule provides transparency of how many
Market Makers assigned to a series would be required to quote in a
series and in what time periods. As noted above, the proposed Auction
Process is designed to attract the highest quality quote for each
series at the open to attract order flow from any resting interest best
quality quotes at the open of each series. As such, the Exchange
believes it is reasonable to require more than one Opening MMQ Timer
(with a maximum run time of one minute--30 seconds x 2) to run when
there are at least two Market Markers because it allows the Exchange
time to attract the best quote from these market participants, which in
turn should attract order flow to the Exchange at the open (i.e., the
Exchange can leverage the highest bid and lowest offer from the

various Marker Makers that submit quotes). The Exchange believes that
if a Legal Width Quote is not obtained in the first 30-second Opening
MMQ Timer, it is to the benefit of all market participants to begin a
second Opening MMQ Timer to allow the bid-ask differential to tighten
before a series is opened. If Market Makers do not quote within those
specified time periods, but at the end of the Opening MMQ Timer(s)
there is a Legal Width Quote based on the ABBO, the Exchange would open
or reopen that series for trading. The Exchange believes that the
proposed waterfall approach (i.e., setting minimum time periods for a
Market Maker assigned to a series to quote within the specified bid-ask
differential before opening a series, even if there is a Legal Width
Quote) would appropriately balance the benefits of increasing the
opportunities for Market Makers assigned to a series to enter
quotations within the specified bid-ask differential, with a timely
series opening or reopening when there is a Legal Width Quote even when
it does not include quotes of Market Makers assigned to the series. In
addition, the Exchange believes that expanding the opportunities for
Market Makers to enter the market would result in deeper liquidity--
which market participants have come to expect in options with multiple
assigned Market Makers, and a more stable trading environment.
    The Exchange believes that the proposed rule would promote
transparency in Exchange rules of when the Exchange could open or
reopen a series, including circumstances of when the Exchange would
wait to provide Market Makers time to submit a two-sided quotation in a
series and when the Exchange would proceed with opening or reopening a
series based on a Legal Width Quote even if there are no Market Maker
quotes in that series.
    The proposed rule would also provide transparency of when the
Exchange would open or reopen a series for trading when the Calculated
NBBO is wider than the Legal Width Quote for the series. The Exchange
believes that the proposed process is designed to provide additional
opportunities for a series to open or reopen not currently available on
the OX system, while at the same time preserving the existing
requirement that a series would not open on a trade if there is no
Legal Width Quote. The proposed functionality to provide additional
opportunities to open or reopen a series when the market is wider than
the specified bid-ask differentials is not novel, and the Exchange
believes that this proposed rule would allow for more automated
Auctions on the Exchange for series that may already be opened on
another exchange.\211\
---------------------------------------------------------------------------

    \211\ See, e.g., Cboe Rule 5.31.
---------------------------------------------------------------------------

    Finally, the proposed rule describing how existing and new orders
would be processed during a trading halt is designed to provide
additional granularity in Exchange rules. Certain of the proposed
functionality is based on current processes. The Exchange believes that
the proposed differences in order/quote handling would remove
impediments to and perfect the mechanism of a free and open market
because they align with the proposed differences in behavior for
specified orders and quotes on Pillar. For example, the Exchange
believes that repricing resting non-routable orders and quotes during a
trading halt to their limit price would be consistent with how such
orders would be processed in an Auction if they arrived during a pre-
open state. The proposed differences also reflect that on Pillar, ALO
Orders would be eligible to participate in an Auction. In addition, the
Exchange believes that canceling orders that are subject to the Trading
Collar 500 millisecond timer would be consistent with the intent of
such functionality, which is to cancel such collared orders after a
specified time period.

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 Exchange operates in a
competitive market and regularly competes with other options exchanges
for order flow. The Exchange believes that the transition to Pillar
would promote competition among options exchanges by offering a low-
latency, deterministic trading platform. The proposed rule changes
would support that inter-market competition by allowing the Exchange to
offer additional functionality to its OTP Holders and OTP Firms,
thereby potentially attracting additional order flow to the Exchange.
Otherwise, the proposed changes are not designed to address any
competitive issues, but rather to amend the Exchange's rules relating
to options trading to support the transition to Pillar. As discussed in
detail above, with this rule filing, the Exchange is not proposing to
change its core functionality regarding its price-time priority model,
and in particular, how it would rank, display, execute or route orders
and quotes. Rather, the Exchange believes that the proposed rule
changes would promote consistent use of terminology to support both
options and cash equity trading on the Exchange, making the Exchange's
rules easier to navigate. The Exchange does not believe that the
proposed rule changes would raise any intra-market competition as the
proposed rule changes would be applicable to all OTP Holders and OTP
Firms, and reflects the Exchange's existing price-time priority model,
including existing LMM Guarantee.
    The Exchange does not believe that the proposed waterfall approach
would result in an undue burden on intra-market competition. It would
apply equally to all similarly-situated Market Makers regarding their
assigned series. Market Makers are encouraged but not required to quote
in their assigned series at the open, thus they are not subject to
additional obligations. The Exchange believes that encouraging, rather
than requiring, participation of such Market Makers at the open, may
increase the availability of Legal Width Quotes in more series, thereby
allowing more series to open. Improving the validity of the opening
price benefits all market participants and also benefits the reputation
of the Exchange as being a venue that provides accurate price
discovery. With respect to inter-market competition, the Exchange notes
that most options markets do not require Market Makers to quote during
the opening.\212\
---------------------------------------------------------------------------

    \212\ See, e.g., Cboe and its affiliated exchanges.
---------------------------------------------------------------------------

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

    No written comments were solicited or received with respect to the
proposed rule change.

III. Discussion and Commission Findings

    After careful review of the proposal, the Commission finds that the
proposed rule change, as modified by Amendment No. 4, is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\213\ In
particular, the Commission finds that the proposed rule change, as
modified by Amendment No. 4, is consistent with Section 6(b)(5) of the
Act,\214\ which requires, among other things, that the rules of a
national securities 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 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, and that the rules of a national securities exchange
not be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \213\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \214\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    To enable the transition of its options trading platform to its
Pillar technology platform, the Exchange proposes several changes to
relevant Exchange rules. The Exchange states its equity markets, as
well as those of its national securities exchange affiliates' cash
equity markets are currently operating on Pillar, and that, for the
transition of its options trading platform, the Exchange proposes to
use the same Pillar technology already in operation for its cash equity
market. The Exchange represents that by migrating its options trading
to the Pillar trading platform, it will be able to offer not only
common specifications for connecting to both of its cash equity and
equity options markets, but also common trading functions.
Definitions and Applicability
    The Exchange states that the proposed amendments to Rule 1.1,
including copying certain definitions from Rule 6.1-O and Rule 6.1A-O
to Rule 1.1, would remove impediments to and perfect the mechanism of a
free and open market and a national market system because the proposed
changes are designed to promote clarity and transparency in Exchange
rules by consolidating into Rule 1.1 definitions relating to both cash
equity and options trading and specifying, where applicable, the
differences in definitions for each trading platform. The Exchange
further represents that the proposed changes to eliminate definitions
no longer applicable to options trading and to modify the text of
certain existing definitions relating to options trading that are being
copied to Rule 1.1 would further remove impediments to and perfect the
mechanism of a free and open market and a national market system
because it would ensure that the definitions used in Exchange rules are
updated to accurately reflect functionality and would also ensure an
internally consistent rulebook. In particular, the Exchange states that
the proposed updates to definitions being copied to proposed Rule 1.1
from Rules 6.1-O(b) and 6.1A-O would add further granularity, clarity
and transparency to Exchange rules, which the Exchange believes would
make them easier to navigate. The Exchange further states that the new
terms it proposes to include in Rule 1.1 for options trading (e.g.,
MPID, ABBO) would promote clarity and transparency in Exchange
rules.\215\ Finally, the Exchange believes that organizing Rule 1.1
alphabetically and eliminating sub-paragraph numbering would make the
proposed rules easier to navigate. Based on the Exchange's
representations, the Commission believes that the proposed changes to
the Exchange's definitions are consistent with Act because they are
designed to add clarity, transparency and consistency to the Exchange's
Rules. For these reasons, the Commission believes that the proposed
changes to the Exchange's definitions should remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and in general, protect investors and the public interest.
---------------------------------------------------------------------------

    \215\ See supra note 27 (regarding Cboe Rule 1.1. defined term
``ABBO'').
---------------------------------------------------------------------------

    The Exchange further represents that proposed new Rule 6.1P-O
relating to applicability would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because the proposed rule would include those elements of current Rule
6.1-O that would remain applicable to options trading and eliminate
duplicative text that would no longer be necessary after the transition
to Pillar. The Exchange further notes that proposed Rule 6.1P-O is
similar to NYSE American Rule 900.1NY. For these reasons, the
Commission believes that the adoption of proposed Rule 6.1P-O relating
to the continued applicability of certain rules after the transition to
the Pillar trading platform should remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and in general, protect investors and the public interest because it
would streamline rule text and clarify the application of certain
existing rules once options trading is transitioned to the Pillar
trading platform.
Order Ranking and Display
    The Exchange represents that changes proposed in Rule 6.76P-O are
designed to simplify the structure of the Exchange's options rules and
use consistent Pillar terminology for both cash equity and options
trading without substantively changing the underlying functionality for
options trading, and that they therefore do not represent a substantive
change from how the Exchange would rank and display orders and quotes
on Pillar as compared to the OX system today. The Exchange represents
that these proposed definitions are consistent with the definitions set
forth in Rule 7.36-E for cash equity trading with terminology
differences only as necessary to address functionality associated with
options trading that are not applicable to cash equity trading, e.g.,
reference to quotes.
    Moreover, the Exchange represents that it is not proposing any
functional changes to how it would rank and display orders and quotes
on Pillar as compared to the OX system, except with regard to the
treatment of reduced quote sizes which would be handled the same as
orders with reduced size under Pillar, which the Exchange states would
add consistency and transparency to Exchange rules. The Exchange states
it believes that using new terminology to describe ranking and display,
including the proposed priority categories of Priority 1--Market
Orders, Priority 2--Display Orders, and Priority 3--Non-Display Orders,
would provide more granularity and use Pillar terminology to describe
functionality that is consistent with the OX system functionality
currently referred to as the ``Display Order Process'' and the
``Working Order Process'' in Rule 6.76-O. The Commission believes that
proposed new Rule 6.76P-O would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because the proposed rule would not introduce substantive changes to
how the Exchange would rank and display orders and quotes on Pillar as
compared to the OX system; rather, the proposed revisions would
simplify the structure of the Exchange's options rules and use
consistent Pillar terminology for both cash equity and options trading,
without changing the underlying functionality for options trading.
Order Execution and Routing
    The Exchange represents that proposed new Rule 6.76AP-O would set
forth a price-time priority model for Pillar that is substantively the
same as the Exchange's current price-time priority model as set forth
in Rule 6.76A-O, and that proposed differences as compared to Rule
6.76A-O are (1) designed to use Pillar terminology that is based in
part on Rule 7.37-E, if applicable, without changing the functionality
that is currently available for options trading, (2) eliminate features
not currently used on the Exchange, and (3) promote clarity and
transparency without introducing new functionality. The Exchange states
it is

eliminating Directed Order Market Makers and Directed Orders because
these features are not currently used on the Exchange, and therefore
eliminating Directed Orders and Directed Order Market Makers would
streamline the Exchange's rules. The Exchange represents that the
remaining differences in proposed Rule 6.76AP-O relating to the LMM
Guarantee are designed to promote clarity and transparency in Exchange
rules and would not introduce new functionality. The Commission
believes that proposed new Rule 6.76AP-O would remove impediments to
and perfect the mechanism of a free and open market and a national
market system because the Exchange represents the proposed rule would
set forth a price-time priority model for Pillar that is substantively
the same as the Exchange's current price-time priority model as set
forth in Rule 6.76A-O, with proposed differences to use Pillar
terminology that is based in part on Rule 7.37-E, if applicable,
without changing the functionality that is currently available for
options trading.
Orders and Modifiers
    The Exchange proposes new Rule 6.62P-O to set forth the order types
and modifiers that would be available for options trading both on
Pillar and in open outcry trading. The Exchange represents that
proposed Rule 6.62P-O is based on existing order types available on the
OX system as described in Rule 6.62-O, and the orders and modifiers on
the Exchange's cash equity trading platform, as described in Rule 7.31-
E, with differences as applicable to reflect differences in options
trading from cash equity trading. The Commission believes that proposed
Rule 6.62P-O removes impediments to and perfect the mechanism of a free
and open market and a national market system because it promotes
transparency by using consistent terminology in the Exchange's
rulebook.
    In addition to the terminology changes to describe the order types
and modifiers, proposed Rule 6.62P-O proposes changes that differ from
order types and modifiers available on the OX system. The Exchange
proposes changes discussed above to its rules regarding Market Orders,
Limit Order Price Protection and Trading Collars, Auction-Only Orders,
orders with instructions not to route, IOC ISOs, AON Orders, Stop
Orders, Stop Limit Orders, and crossing orders that are designed to
streamline, and promote transparency in, the Exchange's rules, provide
additional clarity, and provide greater flexibility and execution
opportunities to market participants. The Commission believes that the
proposed changes remove impediments to and perfect the mechanism of a
free and open market and national market system by simplifying and
promoting transparency and granularity in the Exchange's rules, and by
providing opportunities for execution to market participants that are
consistent with the Act. In addition, the Commission believes that the
proposal promotes clarity and transparency by codifying the functioning
of Complex QCC in the Exchange's rules.
Market Maker Quotations
    Proposed Rule 6.37AP-O would set forth Market Makers' quoting
obligations on the Pillar trading platform. As discussed above, the
Exchange proposes to consolidate into one rule functionality for orders
and quotes such that Non-Routable Limit Orders and ALO Orders may be
designated as quotes. The Exchange represents that the quoting
functionality available in the proposed Non-Routable Limit Order and
ALO Order would continue to provide Market Makers with the core
functionality associated with its existing quote types, including that
the proposed rules would provide for the ability to either reprice or
cancel such quotes. In addition, the Exchange states that the ranking
and priority of quotes on the Pillar trading platform is consistent
with handling of such quotes on the current OX system, unless otherwise
noted and as described above. Further, the Exchange states that
proposed Rule 6.37AP-O would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because it is based on current Rule 6.37A-O, with such changes as
necessary to clarify functionality and to use Pillar terminology. The
Exchange further represents that the proposed rule provides an added
level of granularity and therefore would add clarity and transparency
to its rules by specifying that same-side quotations sent by a Market
Maker over the same order/quote entry port would be replaced. For these
reasons, the Commission believes the proposal would remove impediments
to and perfect the mechanism of a free and open market and national
market system by promoting transparency and granularity in the
Exchange's rules and is therefore consistent with the Act.
Pre-Trade and Activity-Based Risk Controls
    The Exchange represents that proposed Rule 6.40P-O would set forth
pre-trade and activity-based risk controls and incorporates existing
activity-based risk controls, without any substantive differences, and
augments them with additional pre-trade risk controls and related
functionality that are based on the pre-trade risk controls currently
available on the Exchange's cash equity trading platform. Specifically,
the proposed rule would: (i) Provide Single Order Maximum Notional
Value Risk Limit and Single Order Maximum Quantity Risk Limit; (ii)
aggregate a Market Maker's quotes and orders for purposes of
calculating activity-based risk controls; and (iii) provide a proposed
Kill Switch Functionality. The Commission believes that the proposed
rule would remove impediments to and perfect the mechanism of a free
and open market and a national market system and promote just and
equitable principles of trade by providing greater flexibility to firms
in setting risk controls for orders and quotes and would better reflect
the aggregate risk that a Market Maker has with respect to its quotes
and orders. The Commission also believes that the proposed Kill Switch
Action functionality would provide OTP Holders and OTP Firms with
greater flexibility to provide bulk instructions to the Exchange with
respect to cancelling existing orders and quotes and blocking new
orders and quotes.
Price Reasonability Checks
    The Exchange represents that proposed Rule 6.41P-O would set forth
Price Reasonability Checks for limit orders and quotes and is based on
existing functionality, with differences designed to use Pillar
terminology and promote consistency and transparency in Exchange rules,
and to expand the functionality to include quotes. The Commission notes
that proposed rule would add an Intrinsic Value Check for quotes under
Pillar (in addition to orders), provides greater specificity regarding
when the Price Reasonability Checks would be applied to an order or
quote, and would utilize the last sale on the Primary Market (rather
than the Consolidated Last Sale) for the Price Reasonability Checks.
The Exchange represents that the proposal to utilize the last sale on
the Primary Market would improve efficiency and performance of the
system without compromising the price protection features because the
Pillar system would need to ingest and process less data. The
Commission believes that proposed Rule 6.41P-O would remove impediments
to and perfect the mechanism of a free and open market and a national
market system by providing specificity regarding when

the Price Reasonability Checks would be applied to an order or quote,
and providing Market Makers greater control and flexibility over
setting risk tolerance and exposure for their quotes.
Auction Process
    The Exchange represents that proposed Rule 6.64P-O maintains the
fundamentals of an auction process that is tailored for options trading
while at the same time enhancing the process by incorporating certain
Pillar auction functionality that is currently available on the
Exchange's cash equity platform, as described in Rule 7.35-E. The
Exchange represents that the proposed Auction Process for options
trading on Pillar would not materially change how an option series
would be opened (or reopened) on the Exchange today because the
Exchange would continue to assess whether a series can be opened based
on whether the bid-ask differential for a series is within a specified
range and orders would continue to be matched based on price-time
priority. The Exchange represents that many of its proposed changes are
intended to provide greater detail about the Auction Process. In
addition, the Exchange proposes certain changes to the existing Auction
Process. The Exchange proposes providing additional opportunities for
an options series to open or reopen for trading even if the bid-ask
differential is wider than the specified guidelines. The Exchange
represents it is not novel for an options exchange to provide
additional opportunities for a series to open after a specified period
of time in a wide market so as to promote fair and orderly Auctions and
facilitate a fair and orderly transition to continuous trading. In
addition, the Exchange proposes to augment the imbalance information
currently disseminated in advance of an Auction to provider greater
Auction transparency. The Exchange also proposes specifying minimum
time periods to allow a Market Maker(s) to quote in an assigned series
before the series is opened or reopened. The Exchange represents this
offers checks that are intended to provide adequate opportunity for a
greater number of Market Makers to provide their liquidity interest and
help ensure increased liquidity on the Exchange thereby promoting a
fair and orderly auction process and facilitating a fair and orderly
transition to continuous trading. The Exchange also proposes
introducing additional enhancements that are based on existing Pillar
functionality for the Exchange's cash equity platform's electronic
auctions relating to how orders and quotes would be processed if they
arrive during the period when the Exchange is processing an Auction and
how the Exchange would process orders and quotes when it transitions to
continuous trading following an Auction. The Exchange represents these
are structured based in part on Rule 7.35-E, the Exchange's cash equity
rule governing auctions, and would promote consistency across exchange
rules as well as provide greater granularity regarding the process,
thereby providing transparency in Exchange rules. The Exchange also
proposes including in Rule 6.64P-O how the Exchange would process
orders and quotes during a trading halt, which the Exchange represents
is structured based in part on Rule 7.18-E(b) and (c), with proposed
differences in order/quote handling to align with the proposed
differences in behavior for specified orders and quotes on Pillar, such
as repricing resting non-routable orders and quotes during a trading
halt to their limit price. The proposed rule also would reflect that
ALO Orders would be eligible to participate in an Auction and that
orders subject to the Trading Collar would be canceled. The Exchange
states this would provide granularity and transparency with respect to
how the Exchange processes new and existing options orders during a
trading halt on its cash equity market. The Exchange states that,
because the Exchange would be harnessing Pillar technology to support
Auctions for options trading, the Exchange believes that proposed Rule
6.64P-O would promote transparency in the Exchange's trading rules.
    The Commission believes that proposed Rule 6.64P-O would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because, as the Exchange represents, the
proposed rule maintains the fundamentals of an auction process that is
tailored for options trading while at the same time enhancing the
process by incorporating certain Pillar auction functionality that is
currently available on the Exchange's cash equity platform, as
described in Rule 7.35-E, with certain differences which the Exchange
represents are designed to enhance liquidity, promote transparency, as
well as provide greater granularity in and consistency among Exchange
rules, which should facilitate a fair and orderly auction process and
transition to continuous trading.
    Based on the Exchange's representations, the Commission believes
that the proposed rule change does not raise any novel regulatory
considerations, as they are either based on existing options
functionality, equities markets functionality, other options market
rules, or otherwise enhance transparency and provide greater
specificity and determinism with respect to the functionality available
on the Exchange, which should promote a fair and orderly auction
process and transition to continuous trading. For these reasons, the
Commission believes that the proposal should help to prevent fraudulent
and manipulative acts and practices, promote just and equitable
principles of trade, remove impediments to and perfect the mechanism of
a free and open market and a national market system, and, in general,
protect investors and the public interest.

IV. Solicitation of Comments on Amendment No. 4 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 4
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-NYSEArca-2021-47 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-NYSEArca-2021-47. 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-
NYSEArca-2021-47 and should be submitted on or before February 22,
2022.

V. Accelerated Approval of Amendment No. 4

    As noted above,\216\ in Amendment No. 4, which supersedes and
replaces each of Amendment Nos. 1, 2, and 3 in their entirety, as
compared to the original proposal,\217\ the Exchange provides more
background information regarding the proposed rule changes, makes
clarifying changes to certain proposed rules without any substantive
differences as compared to the original filing, and makes the following
substantive changes from the original filing: (1) Adds a definition of
Away Market BBO (ABBO) to replace the term Away Market NBBO; (2)
revises the description of a Market Marker quotation, as described in
proposed Rule 6.37A-O(a)(1); (3) revises how the Specified Threshold
would be calculated for Limit Order Price Protection in proposed Rule
6.62P-O(a)(3)(A) to include prices equal to the Reference Price; (4)
revises how a Trading Collar would be assigned, as described in
proposed Rule 6.62P-O(4)(A) and (B), to provide that a Trading Collar
would be reassigned to an order after a trading halt, and makes related
changes to proposed Rule 6.64P-O(f)(3)(A)(ii); (5) revises proposed
Rule 6.62P-O(g) to reorganize and streamline the proposed rule to
specify that a Cross Order is a Qualified Contingent Cross Order and to
describe the order type in paragraph (g)(1)(A) and to add proposed
Complex QCC Orders; (6) revises proposed Rule 6.62P-O(h)(1) to specify
that a Clear-the-Book Order would be entered contemporaneous with
executing an order in open outcry; (7) revises proposed Rule 6.62P-
O(i)(2) to specify which order with a Minimum Trade Size modifier would
not be subject to self-trade prevention modifiers; (8) revises proposed
Rule 6.62P-O to remove the proposed Non-Display Remove Modifier; (9)
revises proposed Rule 6.64P-O(a) to add a definition for the term
``Auction Price'' and to modify the definition of ``Legal Quote
Width''; (10) revises proposed Rule 6.64P-O(g)(2) to provide that
during a trading halt, any unexecuted quantity of an order for which
the 500-millisecond Trading Collar timer has started would be
cancelled; (11) revises proposed Rule 6.64P-O(d)(3) and (4) to reduce
the length of the proposed Opening MMQ Timers (from one minute to 30
seconds) and reduce the time before commencing opening of a series when
there is a Calculated NBBO that is wider than the Legal Width Quote in
a series (from five minutes to 90 seconds), both of which measures
would shorten the time the Exchange would wait before automatically
opening a series in the specified circumstances; and (12) revises
proposed Rule 6.76AP-O(a)(1)(A) to provide that only the first LMM
quote in time priority would be eligible for the LMM Guarantee.
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    \216\ See supra note 11.
    \217\ See Notice, supra note 3.
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    The Exchange states that the non-substantive changes set forth in
Amendment No. 4, as enumerated above, are intended provide greater
clarity, granularity, and specificity to the proposed rule text as well
as additional information on the basis for and background of the
proposal. The Exchange represents that these proposed changes are non-
substantive in that they do not alter the functionality of the proposed
rule changes yet would add granularity to the proposal.
    Similarly, with respect to the substantive changes in Amendment No.
4, also as enumerated above, the Exchange states that such proposed
changes would improve the original filing by including additional
details about, or modifications to, functionality already described in
the original filing (e.g., adding a definition of ``ABBO'' and
``Auction Price''); revising the description of a Market Marker
quotation; describing proposed Complex QCC Orders; specifying the
treatment of unexecuted orders at the open during a trading halt;
clarifying the procedures for entering CTB Orders; and specifying and
clarifying the operation of: The Limit Order Protection Filter, Trading
Collars, the LMM Guarantee, orders with the an MTS modifier vis a vis
and the self-trade prevention modifier, and single-leg QCC Orders). The
Exchange states it believes that the proposal to modify Rule 6.64P-
O(d)(3) and (4) to reduce the length of both the MMQ Timers and the
time before commencing opening of a series would promote a fair and
orderly market as it would reduce the time the Exchange would wait
before opening a series, but would also allow the Exchange time to
attract the best quote from Market Makers assigned in the series, which
in turn should attract orders to the Exchange at the open (i.e., the
Exchange can leverage the highest bid and lowest offer from the various
Marker Makers that submit quotes). The Exchange represented that the
changes proposed in Amendment No. 4 would make it easier for market
participants to navigate and comprehend the proposed rule changes for
options trading under Pillar. Based on the representations of the
Exchange, the Commission believes the changes proposed in Amendment No.
4 would make it easier for market participants to navigate and
comprehend the proposed rule changes for options trading under Pillar.
    In addition, the Exchange states it believes that Amendment No. 4
is non-controversial, does not pose an undue burden on competition, and
does not raise any novel issues because the proposed changes (other
than the added description of Complex QCC Orders) would add clarity and
provide additional explanations related to the proposed rule changes.
The Exchange believes that the proposed description of Complex QCC
Orders, which orders it represents is not new or novel, is necessary to
permit fair competition among the options exchanges and to establish
more uniform auction rules on the various options exchanges.\218\
---------------------------------------------------------------------------

    \218\ See, e.g., Cboe Rule 5.6(c) (setting forth operation of
Complex QCC Orders) and MIAX Rule 515(h)(4) (same).
---------------------------------------------------------------------------

    Based on the representations of the Exchange, the Commission
believes that the changes proposed in Amendment No. 4 would not
significantly affect the protection of investors or the public
interest, but instead would provide greater clarity to the original
filing and provide greater transparency about the application of the
rule changes being adopted for options trading under Pillar.

    Therefore, the Commission finds that Amendment No. 4 to the
proposal raises no novel regulatory issues, that it is reasonably
designed to protect investors and the public interest, and that it is
consistent with the requirements of the Act. Accordingly, the
Commission finds good cause, pursuant to Section 19(b)(2) of the
Act,\219\ to approve the proposed rule change, as modified by Amendment
No. 4, on an accelerated basis.
---------------------------------------------------------------------------

    \219\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\220\ that the proposed rule change (SR-NYSEArca-2021-47), as
modified by Amendment No. 4, be, and hereby is, approved on an
accelerated basis.
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    \220\ 15 U.S.C. 78s(b)(2).
    \221\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\221\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01970 Filed 1-31-22; 8:45 am]
BILLING CODE 8011-01-P