Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add Commentary .03 to Rule 7.35A To Provide That, for a Temporary Period, the Exchange Would Permit a DMM Limited Entry To the Trading Floor To Effect Manually a Core Open Auction in Connection With a Listed Company's Post-IPO Public Offering, 19782-19785 [2020-07335]
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19782
Federal Register / Vol. 85, No. 68 / Wednesday, April 8, 2020 / Notices
A notice of consideration of issuance
of amendment to facility operating
license or COL, as applicable, proposed
no significant hazards consideration
determination, and opportunity for a
hearing in connection with these
actions, was published in the Federal
Register on February 11, 2020 (85 FR
7796). No comments were received
during the 30-day comment period.
The Commission has determined that
these amendments satisfy the criteria for
categorical exclusion in accordance
with 10 CFR 51.22. Therefore, pursuant
to 10 CFR 51.22(b), no environmental
impact statement or environmental
assessment need be prepared for these
amendments.
IV. Conclusion
Using the reasons set forth in the
combined safety evaluation, the staff
granted the exemption and issued the
amendment that SNC requested on
September 6, 2019 and January 31,
2020.
The exemption and amendment were
issued on March 19, 2020, as part of a
combined package to SNC (ADAMS
Accession No. ML20045F029).
Dated: April 3, 2020.
For the Nuclear Regulatory Commission.
Victor E. Hall,
Chief, Vogtle Project Office, Office of Nuclear
Reactor Regulation.
[FR Doc. 2020–07380 Filed 4–7–20; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88546; File No. SR–NYSE–
2020–28]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Add
Commentary .03 to Rule 7.35A To
Provide That, for a Temporary Period,
the Exchange Would Permit a DMM
Limited Entry To the Trading Floor To
Effect Manually a Core Open Auction
in Connection With a Listed
Company’s Post-IPO Public Offering
lotter on DSKBCFDHB2PROD with NOTICES
April 2, 2020.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on April 2,
2020, New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to add
Commentary .03 to Rule 7.35A to
provide that, for a temporary period that
begins April 2, 2020, and ends on the
earlier of the reopening of the Trading
Floor facilities or after the Exchange
closes on May 15, 2020, the Exchange
would permit a DMM limited entry to
the Trading Floor to effect manually a
Core Open Auction in connection with
a listed company’s post-IPO public
offering. The proposed rule change is
available on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to add
Commentary .03 to Rule 7.35A to
provide that, for a temporary period that
begins April 2, 2020, and ends on the
earlier of the reopening of the Trading
Floor facilities or after the Exchange
closes on May 15, 2020, the Exchange
would permit a DMM limited entry to
the Trading Floor to effect manually a
Core Open Auction in connection with
a listed company’s post-IPO public
offering.
Background
Since March 9, 2020, markets
worldwide have been experiencing
unprecedented market-wide declines
and volatility because of the ongoing
spread of COVID–19. Beginning on
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March 16, 2020, to slow the spread of
COVID–19 through social-distancing
measures, significant limitations were
placed on large gatherings throughout
the country.
On March 18, 2020, the CEO of the
Exchange made a determination under
Rule 7.1(c)(3) that, beginning March 23,
2020, the Trading Floor facilities located
at 11 Wall Street in New York City
would close and the Exchange would
move, on a temporary basis, to fully
electronic trading.4 Pursuant to Rule
7.1(e), the CEO notified the Board of
Directors of the Exchange of this
determination.
On March 26, 2020, the Exchange
amended Rule 7.35A to add
Commentary .02,5 which provides:
For a temporary period that begins on
March 26, 2020 and ends on the earlier of the
reopening of the Trading Floor facilities or
after the Exchange closes on May 15, 2020,
the Exchange will permit a DMM limited
entry to the Trading Floor to effect an IPO
Auction manually. For such an IPO Auction,
the Exchange will disseminate the following
Auction Imbalance Information provided by
the DMM via Trader Update: The Imbalance
Reference Price; the Paired Quantity; the
Unpaired Quantity; and the Side of the
Unpaired Quantity. The Exchange will
publish such Trader Update(s) promptly after
each publication by the DMM of a preopening indication for such security. The
Trader Update will also include the preopening indication range.
As described in the Rule 7.35A Filing,
the Exchange added this Commentary
because, while the Trading Floor is
temporarily closed, Designated Market
Makers (‘‘DMMs’’) cannot engage in any
manual actions, such as facilitating an
Auction manually or publishing preopening indications before a Core Open
or Trading Halt Auction. Commentary
.02 to Rule 7.35A permits entry to the
Trading Floor to a single employee from
the DMM member organization assigned
to such security so that this DMM can
access the Floor-based systems used to
effect an Auction manually, and
specifies the information that would be
included in a Trader Update in advance
of such IPO Auction.
On March 27, 2020, the Exchange
effected an IPO Auction pursuant to
Commentary .02 to Rule 7.35A.
4 The Exchange’s current rules establish how the
Exchange will function fully-electronically. The
CEO also closed the NYSE American Options
Trading Floor, which is located at the same 11 Wall
Street facilities, and the NYSE Arca Options
Trading Floor, which is located in San Francisco,
CA. See Press Release, dated March 18, 2020,
available here: https://ir.theice.com/press/pressreleases/all-categories/2020/03-18-2020-204202110.
5 See Securities Exchange Act Release No. 88488
(March 26, 2020) (SR–NYSE–2020–23), 85 FR 18286
(April 1, 2020) (Notice of filing and immediate
effectiveness of proposed rule change) (‘‘Rule 7.35A
Filing’’).
E:\FR\FM\08APN1.SGM
08APN1
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Federal Register / Vol. 85, No. 68 / Wednesday, April 8, 2020 / Notices
Proposed Rule Change
The Exchange proposes to add
Commentary .03 to Rule 7.35A to permit
a DMM limited entry to the Trading
Floor to effect manually a Core Open
Auction in connection with a listed
company’s post-IPO public offering, for
a temporary period that begins April 2,
2020, and ends on the earlier of the
reopening of the Trading Floor facilities
or after the Exchange closes on May 15,
2020.
As proposed, during this temporary
period, the Exchange would permit a
DMM limited entry to the Trading Floor
to effect manually a Core Open Auction
in connection with a listed company’s
post-IPO public offering. Such Core
Open Auction would be effected in a
manner similar to how an IPO Auction
would be conducted under Commentary
.02 to Rule 7.35A: A Floor Governor
would be present on the Trading Floor
to approve the publication of preopening indications 6 and Exchange staff
would be in communication with the
lead underwriter and would convey to
the DMM information that the
underwriter would normally convey to
the DMM via a Floor broker, such as
when the underwriter has entered all
interest for such auction.
Unlike an IPO Auction, this type of
Core Open Auction is eligible to be
effected electronically by a DMM. In
addition, the Exchange publishes
Auction Imbalance Information in
advance of a Core Open Auction for a
post-IPO public offering. However,
similar to IPO Auctions, when the
Trading Floor is open, DMMs generally
facilitate a post-IPO public offering
manually so that information about the
pricing of an Auction can be
communicated from an underwriter to
the DMM via a Floor broker. This
information is helpful for the DMM to
determine when to facilitate such Core
Open Auction and at what price. By
contrast, if a DMM were to facilitate
such Core Open Auctions electronically,
the DMM would not be able to take this
information into account when pricing
the Auction, and the DMM would not
have any flexibility with respect to the
timing of such Core Open Auctions.
Accordingly, for reasons similar to those
set forth in the Rule 7.35A Filing
regarding providing limited access to
the Trading Floor for IPO Auctions to be
effected manually, the Exchange
believes it would promote fair and
6 See Rule 7.35A(d)(4)(A) (‘‘Publication of a preopening indication requires the supervision and
approval of a Floor Governor.’’) The Exchange will
arrange for a qualified ICE employee that has been
designated as a Floor Governor to perform this
function. See Rule 46(b)(v).
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orderly markets to provide a DMM
limited entry to the Trading Floor to
effect manually a Core Open Auction in
connection with a listed company’s
post-IPO public offering for the
temporary period during which the
Trading Floor is closed.
To effect these changes, the Exchange
proposes to add Commentary .03 to Rule
7.35A, which would provide as follows:
For a temporary period that begins on
April 2, 2020 and ends on the earlier of the
reopening of the Trading Floor facilities or
after the Exchange closes on May 15, 2020,
the Exchange will permit a DMM limited
entry to the Trading Floor to effect manually
a Core Open Auction in connection with a
listed company’s post-IPO public offering.
On April 1, 2020, the CEO of the
Exchange determined pursuant to Rule
7.1(c) that, for the period while the
Trading Floor is temporarily closed as a
precautionary measure to prevent the
spread of COVID–19, the Trading Floor
will be partially reopened on trading
days when a Core Open Auction is
scheduled in connection with a listed
company’s post-IPO public offering, to
allow a DMM on the Trading Floor for
the limited purpose of effecting such
Core Open Auctions manually. During
this temporary reopening, the Trading
Floor will not be open to Floor brokers
or for the DMM to perform any
functions other than effecting the Core
Open Auction manually. Pursuant to
Rule 7.1(e), the CEO notified the Board
of Directors of the Exchange of this
determination.
The Exchange would be able to
implement the proposed rule change
immediately upon effectiveness of this
proposed rule change.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,7
in general, and furthers the objectives of
Section 6(b)(5) of the Act,8 in particular,
in that 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,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system.
As a result of uncertainty related to
the ongoing spread of COVID–19, the
U.S. equities markets are experiencing
unprecedented market volatility. In
addition, social-distancing measures
have been implemented throughout the
country, including in New York City, to
7 15
U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
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19783
reduce the spread of COVID–19.
Directly related to such socialdistancing measures, the CEO of the
Exchange made a determination under
Rule 7.1(c)(3) that beginning March 23,
2020, the Trading Floor facilities located
at 11 Wall Street in New York City
would close and the Exchange would
move, on a temporary basis, to fully
electronic trading.
The Exchange believes that the
proposed rule change would remove
impediments to and perfect the
mechanism of a free and open market
and a national market system because it
would promote fair and orderly Core
Open Auctions in connection with a
listed company’s post-IPO public
offering. The Exchange believes that it
would promote fair and orderly markets
to provide the DMM with mechanisms
to facilitate such Core Open Auctions
manually because it would provide
flexibility for the DMM to consider
information from the underwriter when
determining when to conduct the Core
Open Auction and at what price.
The Exchange believes that, by clearly
stating that this relief will be in effect
through the earlier of the reopening of
the Trading Floor facilities or the close
of the Exchange on May 15, 2020,
market participants will have advance
notice that a Core Open Auction in
connection with a post-IPO public
offering may be effected manually by
the DMM during this period, and
therefore may not be conducted at 9:30
a.m.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not designed to
address any competitive issues but
rather is designed to ensure fair and
orderly Core Open Auctions in
connection with a post-IPO public
offering by providing a DMM with
limited entry to the Trading Floor to
effect such Core Open Auction
manually during a temporary period
when the Exchange Trading Floor has
been closed in response to socialdistancing measures designed to reduce
the spread of the COVID–19 virus.
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.
E:\FR\FM\08APN1.SGM
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19784
Federal Register / Vol. 85, No. 68 / Wednesday, April 8, 2020 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 9 and Rule
19b–4(f)(6) thereunder.10 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
for 30 days from the date on which it
was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 11 and Rule 19b–4(f)(6)
thereunder.12
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
become operative for 30 days after the
date of the filing. However, pursuant to
Rule 19b–4(f)(6)(iii),14 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposed rule change may become
operative immediately.
During the temporary period when
the Exchange’s Trading Floor has been
closed in response to social-distancing
measures designed to reduce the spread
of the COVID–19 virus time, the
Exchange has proposed to provide a
DMM with limited entry to the Trading
Floor to effect manually a Core Open
Auction in connection with a listed
company’s post-IPO public offering. The
Exchange contends that this proposed
rule change would promote fair and
orderly markets because it would
provide flexibility for the DMM to
consider information from the
underwriter when determining when to
conduct the Core Open Auction and at
what price. The Exchange also asserts
that, by clearly stating that this relief
will be in effect through the earlier of
the reopening of the Trading Floor
facilities or the close of the Exchange on
9 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Commission
has waived that requirement for this proposed rule
change.
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
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10 17
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May 15, 2020, market participants will
have advance notice that a Core Open
Auction in connection with a post-IPO
public offering may be effected
manually by the DMM during this
period, and therefore may not be
conducted at 9:30 a.m. In addition, the
Exchange represents that a post-IPO
public offering in an Exchange-listed
security has been priced to proceed for
the Core Open Auction on April 2, 2020,
and that the Exchange is able to
implement this proposed rule change
immediately. The Commission notes
that the proposed rule change provides
the DMM with limited entry to effect
manually Core Open Auctions in
connection with post-IPO public
offerings, which is similar to what is
currently provided for DMMs effecting
IPO Auctions under Commentary .02 of
NYSE Rule 7.35A. The Commission also
notes that the proposed rule change
would provide DMMs the ability to
consider information from the
underwriter when determining when to
conduct the Core Open Auction and at
what price, and would inform market
participants on how and when a Core
Open Auction in connection with a
post-IPO public offering may be effected
manually by the DMM during this
period. Moreover, the Commission notes
that the proposal is a temporary
measure designed to respond to current,
unprecedented market conditions.
Finally, the Commission notes that
waiving the 30-day operative would
allow the Exchange to implement the
proposed rule change immediately, and
thereby enable it to enact the proposed
procedures for the post-IPO public
offering in an Exchange-listed security
that has been priced to proceed for the
Core Open Auction on April 2, 2020.
For these reasons, the Commission
believes that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest. Accordingly, the Commission
hereby waives the 30-day operative
delay and designates the proposal
operative upon filing.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
15 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2020–28 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–NYSE–2020–28. 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 (https://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–NYSE–2020–28, and
should be submitted on or before April
29, 2020.
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Federal Register / Vol. 85, No. 68 / Wednesday, April 8, 2020 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
be examined at the places specified in
Item IV below. ICC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.
[FR Doc. 2020–07335 Filed 4–7–20; 8:45 am]
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change, Security-Based
Swap Submission, or Advance Notice
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88545; File No. SR–ICC–
2020–004]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Notice of Filing of
Proposed Rule Change, SecurityBased Swap Submission, or Advance
Notice Relating to the ICC CDS
Instrument On-Boarding Policies and
Procedures
April 2, 2020.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934,1 and
Rule 19b–4,2 notice is hereby given that
on March 30, 2020, ICE Clear Credit LLC
(‘‘ICC’’) filed with the Securities and
Exchange Commission the proposed
rule change, security-based swap
submission, or advance notice as
described in Items I, II and III below,
which Items have been prepared by ICC.
The Commission is publishing this
notice to solicit comments on the
proposed rule change, security-based
swap submission, or advance notice
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change, Security-Based Swap
Submission, or Advance Notice
The principal purpose of the
proposed rule change is to update and
formalize the ICC CDS Instrument Onboarding Policies and Procedures
(‘‘Instrument On-boarding Policy’’).
These revisions do not require any
changes to the ICC Clearing Rules (the
‘‘Rules’’).
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II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change, Security-Based
Swap Submission, or Advance Notice
In its filing with the Commission, ICC
included statements concerning the
purpose of and basis for the proposed
rule change, security-based swap
submission, or advance notice and
discussed any comments it received on
the proposed rule change, securitybased swap submission, or advance
notice. The text of these statements may
16 17
CFR 200.30–3(a)(12), (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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(a) Purpose
ICC proposes to update and formalize
the Instrument On-boarding Policy. ICC
believes such changes will facilitate the
prompt and accurate clearance and
settlement of securities transactions and
derivative agreements, contracts, and
transactions for which it is responsible.
ICC proposes to formalize the
Instrument On-boarding Policy
following Commission approval of the
proposed rule change. The proposed
rule change is described in detail as
follows.
The Instrument On-boarding Policy
provides an overview of ICC’s onboarding process for new instruments,
which includes selecting new
instruments for clearing, configuring
internal systems, notifying and
receiving feedback from stakeholders,
and ensuring operational readiness by
ICC and its Clearing Participants
(‘‘CPs’’). Specifically, the on-boarding
process includes the following
components that are described in detail
in the document: instrument selection,
on-boarding governance, operational
setup, risk evaluation, pricing
evaluation, and dress rehearsal.
The Instrument On-boarding Policy
contains procedures for instrument
selection. The document memorializes
the guiding principles that ICC
maintains for considering instruments
for clearing, which contemplate various
factors such as instrument open interest
and volume, whether instruments can
be cleared through existing systems and
processes, and industry wide initiatives
and protocols. Additionally, the
document details how ICC identifies an
initial universe of proposed instruments
and applies the guiding principles to
this universe, including the analysis
performed by ICC to identify the
specific list of instruments that meet the
guiding principles from such universe
of proposed instruments.
Further, the Instrument On-boarding
Policy documents the governance
process that follows the determination
that the proposed instruments meet
ICC’s guiding principles. The
Instrument On-boarding Policy sets
forth the roles and responsibilities of
various stakeholders as part of the onboarding governance process, including
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19785
the role of the ICC Legal Department in
determining appropriate governance
actions and the role of relevant
committees and working groups in
reviewing certain analyses. Moreover,
proposed instruments are classified into
four categories: (1) A new instrument
that falls under a previously approved
instrument type, such as a previously
approved CDS corporate single name
instrument type (e.g., North American
Corporate Single Names) or a previously
approved CDS sovereign single name
instrument type (e.g., Emerging Market
Sovereign Single Names); (2) a new
instrument that falls under a new
instrument type that is not considered
in the ICC Rules; (3) a new instrument
that falls under a new product category
(e.g., CDS on indices and CDS on single
names) that is not considered in the ICC
Rules; and (4) a new instrument that
falls out of scope of the standard onboarding process, relating to, for
example, index roll dates and credit
events. For each category, the
Instrument On-boarding Policy explains
the governance process, including
notification to and review and approval
by relevant stakeholders such as the
Board, committees and working groups,
and regulators.
The Instrument On-boarding Policy
illustrates the operational configuration
necessary to allow ICC’s clearing, risk
management and pricing systems to
evaluate and accept transactions,
process and net transactions in the
proposed instruments and price the
proposed instruments. For this
operational setup, the document notes a
particular product attribute that must be
defined, specific lists or documents that
are maintained, and certain information
that is loaded into ICC’s databases and
risk systems.
Regarding risk and pricing evaluation,
ICC ensures that its risk models
adequately capture the risks associated
with the new instruments and that the
price dynamics of the new instruments
are appropriately captured by the endof-day price discovery process. The
Instrument On-boarding Policy
describes the performance of backtesting and stress-testing to demonstrate
that the risks associated with the
proposed instruments are appropriately
accounted for by ICC’s risk models and
that Initial Margin and Guaranty Fund
requirements will provide adequate
protection to ICC and its CPs. For the
pricing evaluation, the Instrument Onboarding Policy further discusses how
ICC ensures that its end-of-day price
discovery process operates effectively
with the proposed instruments.
Before launch, ICC performs a dress
rehearsal, lasting at least two weeks,
E:\FR\FM\08APN1.SGM
08APN1
]]>Agencies
[Federal Register Volume 85, Number 68 (Wednesday, April 8, 2020)]
[Notices]
[Pages 19782-19785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07335]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88546; File No. SR-NYSE-2020-28]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Add Commentary .03 to Rule 7.35A To Provide That, for a Temporary
Period, the Exchange Would Permit a DMM Limited Entry To the Trading
Floor To Effect Manually a Core Open Auction in Connection With a
Listed Company's Post-IPO Public Offering
April 2, 2020.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on April 2, 2020, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to add Commentary .03 to Rule 7.35A to
provide that, for a temporary period that begins April 2, 2020, and
ends on the earlier of the reopening of the Trading Floor facilities or
after the Exchange closes on May 15, 2020, the Exchange would permit a
DMM limited entry to the Trading Floor to effect manually a Core Open
Auction in connection with a listed company's post-IPO public offering.
The proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to add Commentary .03 to Rule 7.35A to
provide that, for a temporary period that begins April 2, 2020, and
ends on the earlier of the reopening of the Trading Floor facilities or
after the Exchange closes on May 15, 2020, the Exchange would permit a
DMM limited entry to the Trading Floor to effect manually a Core Open
Auction in connection with a listed company's post-IPO public offering.
Background
Since March 9, 2020, markets worldwide have been experiencing
unprecedented market-wide declines and volatility because of the
ongoing spread of COVID-19. Beginning on March 16, 2020, to slow the
spread of COVID-19 through social-distancing measures, significant
limitations were placed on large gatherings throughout the country.
On March 18, 2020, the CEO of the Exchange made a determination
under Rule 7.1(c)(3) that, beginning March 23, 2020, the Trading Floor
facilities located at 11 Wall Street in New York City would close and
the Exchange would move, on a temporary basis, to fully electronic
trading.\4\ Pursuant to Rule 7.1(e), the CEO notified the Board of
Directors of the Exchange of this determination.
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\4\ The Exchange's current rules establish how the Exchange will
function fully-electronically. The CEO also closed the NYSE American
Options Trading Floor, which is located at the same 11 Wall Street
facilities, and the NYSE Arca Options Trading Floor, which is
located in San Francisco, CA. See Press Release, dated March 18,
2020, available here: https://ir.theice.com/press/press-releases/all-categories/2020/03-18-2020-204202110.
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On March 26, 2020, the Exchange amended Rule 7.35A to add
Commentary .02,\5\ which provides:
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\5\ See Securities Exchange Act Release No. 88488 (March 26,
2020) (SR-NYSE-2020-23), 85 FR 18286 (April 1, 2020) (Notice of
filing and immediate effectiveness of proposed rule change) (``Rule
7.35A Filing'').
For a temporary period that begins on March 26, 2020 and ends on
the earlier of the reopening of the Trading Floor facilities or
after the Exchange closes on May 15, 2020, the Exchange will permit
a DMM limited entry to the Trading Floor to effect an IPO Auction
manually. For such an IPO Auction, the Exchange will disseminate the
following Auction Imbalance Information provided by the DMM via
Trader Update: The Imbalance Reference Price; the Paired Quantity;
the Unpaired Quantity; and the Side of the Unpaired Quantity. The
Exchange will publish such Trader Update(s) promptly after each
publication by the DMM of a pre-opening indication for such
security. The Trader Update will also include the pre-opening
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indication range.
As described in the Rule 7.35A Filing, the Exchange added this
Commentary because, while the Trading Floor is temporarily closed,
Designated Market Makers (``DMMs'') cannot engage in any manual
actions, such as facilitating an Auction manually or publishing pre-
opening indications before a Core Open or Trading Halt Auction.
Commentary .02 to Rule 7.35A permits entry to the Trading Floor to a
single employee from the DMM member organization assigned to such
security so that this DMM can access the Floor-based systems used to
effect an Auction manually, and specifies the information that would be
included in a Trader Update in advance of such IPO Auction.
On March 27, 2020, the Exchange effected an IPO Auction pursuant to
Commentary .02 to Rule 7.35A.
[[Page 19783]]
Proposed Rule Change
The Exchange proposes to add Commentary .03 to Rule 7.35A to permit
a DMM limited entry to the Trading Floor to effect manually a Core Open
Auction in connection with a listed company's post-IPO public offering,
for a temporary period that begins April 2, 2020, and ends on the
earlier of the reopening of the Trading Floor facilities or after the
Exchange closes on May 15, 2020.
As proposed, during this temporary period, the Exchange would
permit a DMM limited entry to the Trading Floor to effect manually a
Core Open Auction in connection with a listed company's post-IPO public
offering. Such Core Open Auction would be effected in a manner similar
to how an IPO Auction would be conducted under Commentary .02 to Rule
7.35A: A Floor Governor would be present on the Trading Floor to
approve the publication of pre-opening indications \6\ and Exchange
staff would be in communication with the lead underwriter and would
convey to the DMM information that the underwriter would normally
convey to the DMM via a Floor broker, such as when the underwriter has
entered all interest for such auction.
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\6\ See Rule 7.35A(d)(4)(A) (``Publication of a pre-opening
indication requires the supervision and approval of a Floor
Governor.'') The Exchange will arrange for a qualified ICE employee
that has been designated as a Floor Governor to perform this
function. See Rule 46(b)(v).
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Unlike an IPO Auction, this type of Core Open Auction is eligible
to be effected electronically by a DMM. In addition, the Exchange
publishes Auction Imbalance Information in advance of a Core Open
Auction for a post-IPO public offering. However, similar to IPO
Auctions, when the Trading Floor is open, DMMs generally facilitate a
post-IPO public offering manually so that information about the pricing
of an Auction can be communicated from an underwriter to the DMM via a
Floor broker. This information is helpful for the DMM to determine when
to facilitate such Core Open Auction and at what price. By contrast, if
a DMM were to facilitate such Core Open Auctions electronically, the
DMM would not be able to take this information into account when
pricing the Auction, and the DMM would not have any flexibility with
respect to the timing of such Core Open Auctions. Accordingly, for
reasons similar to those set forth in the Rule 7.35A Filing regarding
providing limited access to the Trading Floor for IPO Auctions to be
effected manually, the Exchange believes it would promote fair and
orderly markets to provide a DMM limited entry to the Trading Floor to
effect manually a Core Open Auction in connection with a listed
company's post-IPO public offering for the temporary period during
which the Trading Floor is closed.
To effect these changes, the Exchange proposes to add Commentary
.03 to Rule 7.35A, which would provide as follows:
For a temporary period that begins on April 2, 2020 and ends on
the earlier of the reopening of the Trading Floor facilities or
after the Exchange closes on May 15, 2020, the Exchange will permit
a DMM limited entry to the Trading Floor to effect manually a Core
Open Auction in connection with a listed company's post-IPO public
offering.
On April 1, 2020, the CEO of the Exchange determined pursuant to
Rule 7.1(c) that, for the period while the Trading Floor is temporarily
closed as a precautionary measure to prevent the spread of COVID-19,
the Trading Floor will be partially reopened on trading days when a
Core Open Auction is scheduled in connection with a listed company's
post-IPO public offering, to allow a DMM on the Trading Floor for the
limited purpose of effecting such Core Open Auctions manually. During
this temporary reopening, the Trading Floor will not be open to Floor
brokers or for the DMM to perform any functions other than effecting
the Core Open Auction manually. Pursuant to Rule 7.1(e), the CEO
notified the Board of Directors of the Exchange of this determination.
The Exchange would be able to implement the proposed rule change
immediately upon effectiveness of this proposed rule change.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\7\ in general, and furthers the objectives of Section 6(b)(5) of
the Act,\8\ in particular, in that 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, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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As a result of uncertainty related to the ongoing spread of COVID-
19, the U.S. equities markets are experiencing unprecedented market
volatility. In addition, social-distancing measures have been
implemented throughout the country, including in New York City, to
reduce the spread of COVID-19. Directly related to such social-
distancing measures, the CEO of the Exchange made a determination under
Rule 7.1(c)(3) that beginning March 23, 2020, the Trading Floor
facilities located at 11 Wall Street in New York City would close and
the Exchange would move, on a temporary basis, to fully electronic
trading.
The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it would promote fair and orderly Core
Open Auctions in connection with a listed company's post-IPO public
offering. The Exchange believes that it would promote fair and orderly
markets to provide the DMM with mechanisms to facilitate such Core Open
Auctions manually because it would provide flexibility for the DMM to
consider information from the underwriter when determining when to
conduct the Core Open Auction and at what price.
The Exchange believes that, by clearly stating that this relief
will be in effect through the earlier of the reopening of the Trading
Floor facilities or the close of the Exchange on May 15, 2020, market
participants will have advance notice that a Core Open Auction in
connection with a post-IPO public offering may be effected manually by
the DMM during this period, and therefore may not be conducted at 9:30
a.m.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not designed to address any competitive issues but rather is designed
to ensure fair and orderly Core Open Auctions in connection with a
post-IPO public offering by providing a DMM with limited entry to the
Trading Floor to effect such Core Open Auction manually during a
temporary period when the Exchange Trading Floor has been closed in
response to social-distancing measures designed to reduce the spread of
the COVID-19 virus.
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.
[[Page 19784]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Commission has waived that requirement for this proposed rule
change.
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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During the temporary period when the Exchange's Trading Floor has
been closed in response to social-distancing measures designed to
reduce the spread of the COVID-19 virus time, the Exchange has proposed
to provide a DMM with limited entry to the Trading Floor to effect
manually a Core Open Auction in connection with a listed company's
post-IPO public offering. The Exchange contends that this proposed rule
change would promote fair and orderly markets because it would provide
flexibility for the DMM to consider information from the underwriter
when determining when to conduct the Core Open Auction and at what
price. The Exchange also asserts that, by clearly stating that this
relief will be in effect through the earlier of the reopening of the
Trading Floor facilities or the close of the Exchange on May 15, 2020,
market participants will have advance notice that a Core Open Auction
in connection with a post-IPO public offering may be effected manually
by the DMM during this period, and therefore may not be conducted at
9:30 a.m. In addition, the Exchange represents that a post-IPO public
offering in an Exchange-listed security has been priced to proceed for
the Core Open Auction on April 2, 2020, and that the Exchange is able
to implement this proposed rule change immediately. The Commission
notes that the proposed rule change provides the DMM with limited entry
to effect manually Core Open Auctions in connection with post-IPO
public offerings, which is similar to what is currently provided for
DMMs effecting IPO Auctions under Commentary .02 of NYSE Rule 7.35A.
The Commission also notes that the proposed rule change would provide
DMMs the ability to consider information from the underwriter when
determining when to conduct the Core Open Auction and at what price,
and would inform market participants on how and when a Core Open
Auction in connection with a post-IPO public offering may be effected
manually by the DMM during this period. Moreover, the Commission notes
that the proposal is a temporary measure designed to respond to
current, unprecedented market conditions. Finally, the Commission notes
that waiving the 30-day operative would allow the Exchange to implement
the proposed rule change immediately, and thereby enable it to enact
the proposed procedures for the post-IPO public offering in an
Exchange-listed security that has been priced to proceed for the Core
Open Auction on April 2, 2020. For these reasons, the Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\15\
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\15\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSE-2020-28 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-NYSE-2020-28. 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 (https://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-NYSE-2020-28, and should be submitted on
or before April 29, 2020.
[[Page 19785]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12), (59).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-07335 Filed 4-7-20; 8:45 am]
BILLING CODE 8011-01-P
