Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Shorten the Exchange's Post-Market Session To End at 5:00 p.m. Eastern Time, 64536-64539 [2020-22640]

Download as PDF 64536 Federal Register / Vol. 85, No. 198 / Tuesday, October 13, 2020 / Notices khammond on DSKJM1Z7X2PROD with NOTICES preparation. Submissions are subject to Freedom of Information Act (FOIA) disclosure and may be posted, without change, on a Federal website. FOR FURTHER INFORMATION CONTACT: Patrice Pages at info@nnco.nano.gov or 202–517–1041. SUPPLEMENTARY INFORMATION: Background Information: This request is in alignment with the 21st Century Nanotechnology Research and Development Act as amended (15 U.S.C. 7501), which calls for an update to the NNI Strategic Plan every 5 years. The NNI is a U.S. Government research and development (R&D) program of 20 departments and independent agencies working together toward the common vision of a future in which the ability to understand and control matter at the nanoscale level leads to a revolution in technology and industry that benefits society. Additional information, including participating agencies, is available at www.nano.gov/about-nni. The NNI Strategic Plan provides the framework that underpins the nanotechnology activities of the NNI agencies and ensures continued advances in nanotechnology R&D and their applications. The plan describes the NNI vision and goals, as well as the mechanisms used to support progress. ‘‘A Quadrennial Review of the National Nanotechnology Initiative’’ (https://www.nap.edu/catalog/25729/aquadrennial-review-of-the-nationalnanotechnology-initiative-nanoscienceapplications) was recently released by the National Academies of Sciences, Engineering, and Medicine and will inform the planning process. The report recommends that the NNI continue and be reorganized and relaunched to promote a renewed focus on nanotechnology and respond to the dynamic global research environment. Information Requested: The NSET Subcommittee seeks responses to the questions below to identify effective mechanisms, strategies for communication, and priority topics to inform the future directions of the NNI. Additional background information and points for consideration are available at www.nano.gov/2021StrategicPlanRFI. Mechanisms • What is your understanding of how the Federal Government has supported the nanotechnology community since the launch of the NNI? • How should this support evolve into 2030 and beyond? What mechanisms and programs are necessary to support the broad NNI R&D portfolio? • What key elements and intersections are necessary to form an VerDate Sep<11>2014 18:52 Oct 09, 2020 Jkt 253001 agile framework that will enable response to new developments along the nanotechnology continuum, from discovery and design to development and deployment? • How can the government engage effectively with stakeholders in industry and academia to advance nanotechnology research, development, and eventual commercialization? What are some best practices for this kind of engagement? • How could public-private partnerships contribute to progress towards the NNI goals? Are there any examples (domestic or international) of productive partnership mechanisms that should be considered as a model? • What are exemplary models (domestic or international) for accessing NNI resources, including user facilities and laboratories? Communication The NNCO serves as the public-facing entity of the NNI in addition to and in support of NNI agency communication efforts. NNCO maintains Nano.gov and shares information through numerous communication means. However, the NNI community is complex and multifaceted, and diverse stakeholder groups consume information in different ways. • How can the NNCO facilitate communication and collaboration throughout the nanotechnology R&D ecosystem to enhance research and ultimately commercialization? How can the NNI/NNCO best communicate opportunities, resources, and advancements to the community? How can the NNI/NNCO best engage with the stakeholder community to understand their advancements and needs? • Beyond the media platforms used by NNCO, what additional means should be considered to better reach the public and various stakeholder groups? • What are effective strategies for improving communication of desired nanotechnology workforce skills and capabilities between industry and academia? • How can the NNI participating agencies or NNCO best raise awareness among teachers regarding the educational resources that have been developed over the past 20 years and help get these resources into their classrooms? Topics • What are the high priority open scientific questions in nanoscience and nanotechnology? • What are challenges facing the United States and the world where PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 nanotechnology is poised to make significant contributions? • What nanotechnology-enabled ‘‘moonshots’’ should be considered? • How does nanotechnology support other foundational fields/initiatives? What future technical topics are likely to emerge from advancements in nanotechnology? • What are the gaps in the fabrication, characterization, and modeling and simulation tools available through the NNI user facilities (listed on Nano.gov)? What other tools are necessary to conduct nanotechnology R&D? • What specific nanotechnology topics could be accelerated to commercialization by public-private partnerships? • As concepts surrounding responsible development have evolved over the past twenty years, what factors may contribute to the responsible development of nanotechnology going forward? Thank you for taking the time to respond to this Request for Information. We appreciate your input. Dated: October 7, 2020. Stacy L. Murphy, Operations Manager, White House Office of Science and Technology Policy. [FR Doc. 2020–22556 Filed 10–9–20; 8:45 am] BILLING CODE 3270–F1–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–90119; File No. SR–MEMX– 2020–11) Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Shorten the Exchange’s Post-Market Session To End at 5:00 p.m. Eastern Time October 7, 2020. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on October 2, 2020, MEMX LLC (‘‘MEMX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4. 2 17 E:\FR\FM\13OCN1.SGM 13OCN1 Federal Register / Vol. 85, No. 198 / Tuesday, October 13, 2020 / Notices 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 is filing with the Commission a proposed rule change to proposed rule change to amend Exchange Rule 1.5(w) to shorten the length of the Exchange’s after-hours trading session (i.e., the Post-Market Session 5) to end at 5:00 p.m. Eastern Time 6 rather 8:00 p.m., and to make conforming changes to Exchange Rules 1.5(k) and 11.1(a). The text of the proposed rule change is provided in Exhibit 5. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change khammond on DSKJM1Z7X2PROD with NOTICES 1. Purpose The Exchange offers three distinct trading sessions in which the Exchange accepts orders from members of the Exchange (‘‘Members’’) for potential execution: (1) The ‘‘Pre-Market Session,’’ which begins at 7:00 a.m. and continues until 9:30 a.m.,7 (2) ‘‘Regular Trading Hours,’’ which begin at 9:30 a.m. and continue until 4:00 p.m.,8 and (3) the ‘‘Post-Market Session,’’ which begins at 4:00 p.m. and continues until 8:00 p.m.9 Members may designate when their orders are eligible for execution by selecting their desired Time-in-Force instruction.10 5 ‘‘Post-Market Session’’ means the time between 4:00 p.m. and 8:00 p.m. Eastern Time. See Exchange Rule 1.5(w). 6 All time references in this filing are to Eastern Time unless otherwise noted. 7 ‘‘Pre-Market Session’’ means the time between 7:00 a.m. and 9:30 a.m. See Exchange Rule 1.5(x). 8 ‘‘Regular Trading Hours’’ means the time between 9:30 a.m. and 4:00 p.m. See Exchange Rule 1.5(bb). 9 See supra note 5. 10 See Exchange Rule 11.6(o). VerDate Sep<11>2014 18:52 Oct 09, 2020 Jkt 253001 The purpose of the proposed rule change is to shorten the length of the Exchange’s after-hours trading session by amending Exchange Rule 1.5(w), which defines Post-Market Session, to end the Post-Market Session at 5:00 p.m. rather than 8:00 p.m. The Exchange submits that shortening the Post-Market Session would allow the Exchange to utilize its staff and resources in a more efficient manner while continuing to provide Members with an after-hours trading session for one hour after the close of the Regular Hours Session. The Exchange believes the proposal to reduce the operating time of its PostMarket Session to end at 5:00 p.m. rather than 8:00 p.m. is reasonable and appropriate given that only a very small percentage (approximately 0.65%) of daily trading volume in NMS stocks occurs during those hours,11 and as such the Exchange believes that the costs to the Exchange associated with operating during those hours outweigh the benefits to Members and other market participants. Moreover, since the Exchange commenced trading operations on September 21, 2020 (supporting trading in seven NMS stocks), the Exchange has received very few orders in the Post-Market Session, and all such orders were received between 4:00 p.m. and 5:00 p.m. The Exchange expects that it will continue to receive very few orders in the PostMarket Session even after the Exchange completes its rollout of supporting trading in all NMS stocks, and that the large majority of such orders would continue to be received between 4:00 p.m. and 5:00 p.m. rather than between 5:00 p.m. and 8:00 p.m. To the extent the Exchange in the future believes there is adequate demand to justify operating a longer after-hours trading session, it will consider again extending its hours to accommodate such demand. The Exchange notes that other exchanges offer a longer after-hours trading session after the close of Regular Trading Hours and that Members and other market participants can choose to direct their orders to those exchanges if they wish to participate in an afterhours trading session extending beyond 5:00 p.m.12 The Exchange also notes 11 Percentage calculated based on data from the week of September 21, 2020. The Exchange receives and processes data made available through consolidated data feeds (i.e., CTS and UTDF). 12 See, e.g., Cboe BZX Exchange, Inc. Rule 1.5(c), which provides for an ‘‘After Hours Trading Session’’ from 4:00 p.m. to 8:00 p.m.; Cboe EDGX Exchange, Inc. Rule 1.5(r), which provides for a ‘‘Post-Closing Session’’ from 4:00 p.m. to 8:00 p.m.; NYSE Arca Equities, Inc. Rule 7.34–E.(a)(3), which provides for a ‘‘Late Trading Session’’ that concludes at 8:00 p.m. Eastern Time; Nasdaq Rule PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 64537 that other exchanges currently end their after-hours trading sessions prior to 8 p.m., including three exchanges that close at 5:00 p.m. consistent with the Exchange’s proposal.13 Thus, the Exchange believes that its proposal will adequately address the needs of Members by providing for a one-hour Post-Market Session, which trade data show is the period in which most of the after-hours trading activity occurs, as described above, and would allow the Exchange to conserve resources and staff time that would otherwise be dedicated to supporting the Exchange’s after-hours trading session for a fourhour period on every trading day. The Exchange also proposes to make conforming changes to Exchange Rules 1.5(k) and 11.1(a) to reflect the PostMarket Session ending at 5:00 p.m. Specifically, the Exchange proposes to amend Exchange Rule 1.5(k), which defines ‘‘Exchange Operating Hours’’ or ‘‘Exchange Hours,’’ to reflect that the Exchange’s daily trading hours, comprised of all three trading sessions offered by the Exchange, would begin at 7:00 a.m. and continue until 5:00 p.m.14 The Exchange also proposes to amend Exchange Rule 11.1(a) to update the hours of operations referenced in that Rule consistent with the changes described above. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) 15 of the Act, in general, and furthers the objectives of Sections and 6(b)(5) 16 of the Act, in particular, in that it is designed to promote just and equitable principles of trade and, in general, to protect investors and the public interest; furthermore, the proposed rule change is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. Specifically, the Exchange believes its proposal to amend Rule 1.5(w) to shorten the length of its Post-Market 4701(g), which provides for ‘‘Post-Market Hours’’ that end at 8:00 p.m. Eastern Time. 13 See, e.g., New York Stock Exchange LLC Rule 51, which provides that the trading session concludes at 4:00 p.m.; MIAX PEARL, LLC Equities Rule 2600(a), which provides that orders may be entered on such exchange until 4:00 p.m.; Investors Exchange LLC Rule 1.160(aa), which provides for a ‘‘Post-Market Session’’ that concludes at 5:00 p.m.; Long-Term Stock Exchange, Inc. Rule 1.160(ee), which provides for a ‘‘Post-Market Session’’ that concludes at 5:00 p.m.; Nasdaq PHLX LLC Rule 3301(g), which provides for ‘‘Post-Market Hours’’ that end at 5:00 p.m. Eastern Time. 14 ‘‘Exchange Operating Hours’’ or ‘‘Exchange Hours’’ currently means the time between 7:00 a.m. and 8:00 p.m. See Exchange Rule 1.5(k). 15 15 U.S.C. 78f. 16 15 U.S.C. 78f(b)(5). E:\FR\FM\13OCN1.SGM 13OCN1 khammond on DSKJM1Z7X2PROD with NOTICES 64538 Federal Register / Vol. 85, No. 198 / Tuesday, October 13, 2020 / Notices Session to end at 5:00 p.m. rather than 8:00 p.m. would allow the Exchange to conserve its resources and staff time and focus these on the Exchange’s core business, which is providing an efficient and cost-effective marketplace for trading in equity securities during Regular Trading Hours, and other aspects of the Exchange’s operations, including its regulatory function, while maintaining a facility for Members to execute trades for one hour after Regular Trading Hours. Reducing the time during which the Post-Market Session operates would allow the Exchange to maximize efficiencies and eliminate costs that are associated with supporting trading operations during the longer after-hours trading session but are not expected to yield a sufficient economic return. The Exchange believes that the proposed rule change is therefore consistent with Section 6(b)(5) of the Act in that, by seeking to operate in a more efficient manner that focuses on trading during Regular Trading Hours and other aspects of the Exchange’s operations, including its regulatory function, it will operate to promote just and equitable principles of trade and, in general, protect investors and the public interest. The Exchange also believes that the proposed rule change would not permit unfair discrimination between customers, issuers, brokers, or dealers because it would affect all Members and market participants in the same way and to the same extent, and is therefore consistent with Section 6(b)(5) of the Act. Moreover, the Exchange notes that there is precedent for an exchange shortening the hours of its after-hours trading session (also changing from 8:00 p.m. to 5:00 p.m.) to allow it to utilize its staff time and resources in a more efficient manner and focus these on other aspects of its operations, so this aspect of the proposed rule change does not raise any new or novel issues that have not previously been considered by the Commission.17 In addition, the Exchange believes that the proposed amendment to Exchange Rule 1.5(w) furthers the objectives of Sections 6(b)(1) 18 of the Act in that it would conserve Exchange resources, which are expended to support trading operations during the Exchange’s trading hours, and would allow the Exchange to utilize these resources for other purposes, including the Exchange’s regulatory function, thereby enabling it to be so organized as 17 See Securities Exchange Act Release No. 72215 (May 21, 2014), 79 FR 30678 (May 28, 2014) (rule change of National Stock Exchange, Inc. shortening its after-hours trading session from 8:00 p.m. to 5:00 p.m.). 18 15 U.S.C. 78(f)(b)(1). VerDate Sep<11>2014 18:52 Oct 09, 2020 Jkt 253001 to have the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its members, with the provisions of the Act, the rules and regulations thereunder, and the rules of the Exchange. The Exchange also believes that the proposed amendments to Exchange Rules 1.5(k) and 11.1(a) are consistent with the Act because the amendments update those Rules to reference the proposed 5:00 p.m. time as the time until which the Exchange would accept orders in the Post-Market Session. No further substantive changes to those Rules are proposed. The Exchange believes that it is appropriate to update all of its rules that specifically reference the Exchange’s operating hours so that the Exchange’s rules properly reflect the change to the Post-Market Session being implemented in this proposed rule change. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the Act. By shortening the time period during which its Post-Market Session operates, the Exchange is reducing the number of equity exchanges offering an after-hours trading session extending from after the close of Regular Trading Hours until 8:00 p.m. However, the Exchange does not believe that this will inappropriately burden competition in that, as proposed, the Exchange will continue to offer a Post-Market Session until 5:00 p.m. and other exchanges offer an afterhours trading session extending until 8:00 p.m.19 The Exchange therefore believes that the availability of an afterhours trading facility at other exchanges will provide Members and other market participants with venues to which they can direct their after-hours activity after the Exchange’s proposed 5:00 p.m. PostMarket Session end time and the reduction in the time frame during which the Exchange’s after-hours facility operates will not impair competition. Furthermore, the Exchange does not believe that the proposed rule change would have any significant impact on inter-market competition as there are other exchanges that already end their after-hours trading sessions prior to 8:00 p.m., including at 5:00 p.m.,20 and other marketplaces are free to provide similar trading hours. The Exchange also does 19 See 20 See PO 00000 supra note 12. supra note 13. Frm 00098 Fmt 4703 Sfmt 4703 not believe that the proposed rule change would have any significant impact on intra-market competition as all Members would be subject to the modified hours of the Post-Market Session. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 21 and Rule 19b–4(f)(6) thereunder.22 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 23 and subparagraph (f)(6) of Rule 19b-4 thereunder.24 A proposed rule change filed under Rule 19b–4(f)(6) 25 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),26 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 proposal may take effect immediately. The Exchange states that waiver of the 30-day operative delay would allow the Exchange to immediately implement the proposed change to the Post-Market Session, which would better align the expenses of operating the Post-Market Session with the expected volume and revenue associated with that trading session, thereby allowing the Exchange to conserve resources and staff time and 21 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 23 15 U.S.C. 78s(b)(3)(A)(iii). 24 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled this requirement. 25 17 CFR 240.19b–4(f)(6). 26 17 CFR 240.19b–4(f)(6)(iii). 22 17 E:\FR\FM\13OCN1.SGM 13OCN1 Federal Register / Vol. 85, No. 198 / Tuesday, October 13, 2020 / Notices focus these on the Exchange’s core business and other aspects of the Exchange’s operations, including the Exchange’s regulatory function. The Commission believes that the proposed rule change raises no new or novel issues and that waiver of the operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal operative upon filing.27 At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) 28 of the Act 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: khammond on DSKJM1Z7X2PROD with NOTICES 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– MEMX–2020–11 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–MEMX–2020–11. 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 27 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 28 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 18:52 Oct 09, 2020 Jkt 253001 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–MEMX–2020–11 and should be submitted on or before November 3, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–22640 Filed 10–9–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–90101; File No. SR–FICC– 2020–010] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving a Proposed Rule Change To Describe Key Components of the Mortgage-Backed Securities Division Stress Testing Program October 6, 2020. I. Introduction On August 11, 2020, Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) proposed rule change SR–FICC–2020–010, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal 29 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 64539 Register on August 25, 2020.3 The Commission did not receive any comment letters on the proposed rule change. For the reasons discussed below, the Commission is approving the proposed rule change.4 II. Description of the Proposed Rule Change The proposed rule change consists of a proposal to amend the FICC MortgageBacked Securities Division (‘‘MBSD’’) Clearing Rules (‘‘MBSD Rules’’) 5 to include a new section that would describe the purpose and the key components of MBSD’s stress testing program. The proposed rule change would also provide that vendorsupplied data would be used in the stress testing program, and that a backup calculation would be used in the event the vendor fails to provide FICC with the vendor-sourced data. The proposed changes are further described below. A. Background MBSD provides trade comparison, netting, risk management, settlement, and central counterparty services for the U.S. mortgage-backed securities market. FICC manages its credit exposures to its Clearing Members by collecting an appropriate amount of margin (referred to in the MBSD Rules as Required Fund Deposit) from each Clearing Member.6 The aggregate of all Clearing Members’ margin amounts (together with certain other deposits required under the MBSD Rules) constitutes MBSD’s Clearing Fund, which FICC would access should a Clearing Member default with insufficient margin to satisfy any FICC losses caused by the liquidation of the defaulting Clearing Member’s portfolio.7 3 Securities Exchange Act Release No. 89616 (August 19, 2020), 85 FR 52387 (August 25, 2020) (SR–FICC–2020–010) (‘‘Notice’’). 4 On January 21, 2020, FICC filed a portion of this proposed rule change that is subject to Section 806(e)(1)(A) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the Payment, Clearing, and Settlement Supervision Act of 2010 (‘‘the Clearing Supervision Act’’) and Rule 19b–4(n)(1)(i) under the Act, as an advance notice with the Commission (the ‘‘Advance Notice Filing’’). 12 U.S.C. 5465(e)(1); 17 CFR 240.19b– 4(n)(1)(i); Release No. 88266 (February 24, 2020), 85 FR 11413 (February 27, 2020) (SR–FICC–2020–801). The Commission issued a notice of no objection to the Advance Notice Filing on March 13, 2020. See Release No. 88382 (March 13, 2020), 85 FR 15830 (March 19, 2020) (SR–FICC–2020–801). A copy of the Advance Notice Filing and the Commission’s notice of no objection are available at: https:// www.dtcc.com/legal/sec-rule-filings.aspx. 5 Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the MBSD Rules, available at: www.dtcc.com/legal/rules-and-procedures.aspx. 6 See MBSD Rule 4, supra note 5. 7 Id. E:\FR\FM\13OCN1.SGM 13OCN1

Agencies

[Federal Register Volume 85, Number 198 (Tuesday, October 13, 2020)]
[Notices]
[Pages 64536-64539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22640]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90119; File No. SR-MEMX-2020-11)


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Shorten the 
Exchange's Post-Market Session To End at 5:00 p.m. Eastern Time

October 7, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on October 2, 2020, MEMX LLC (``MEMX'' or the ``Exchange'') filed 
with the Securities and Exchange Commission (the ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange filed the proposal as 
a ``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The

[[Page 64537]]

Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 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 is filing with the Commission a proposed rule change 
to proposed rule change to amend Exchange Rule 1.5(w) to shorten the 
length of the Exchange's after-hours trading session (i.e., the Post-
Market Session \5\) to end at 5:00 p.m. Eastern Time \6\ rather 8:00 
p.m., and to make conforming changes to Exchange Rules 1.5(k) and 
11.1(a). The text of the proposed rule change is provided in Exhibit 5.
---------------------------------------------------------------------------

    \5\ ``Post-Market Session'' means the time between 4:00 p.m. and 
8:00 p.m. Eastern Time. See Exchange Rule 1.5(w).
    \6\ All time references in this filing are to Eastern Time 
unless otherwise noted.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange offers three distinct trading sessions in which the 
Exchange accepts orders from members of the Exchange (``Members'') for 
potential execution: (1) The ``Pre-Market Session,'' which begins at 
7:00 a.m. and continues until 9:30 a.m.,\7\ (2) ``Regular Trading 
Hours,'' which begin at 9:30 a.m. and continue until 4:00 p.m.,\8\ and 
(3) the ``Post-Market Session,'' which begins at 4:00 p.m. and 
continues until 8:00 p.m.\9\ Members may designate when their orders 
are eligible for execution by selecting their desired Time-in-Force 
instruction.\10\
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    \7\ ``Pre-Market Session'' means the time between 7:00 a.m. and 
9:30 a.m. See Exchange Rule 1.5(x).
    \8\ ``Regular Trading Hours'' means the time between 9:30 a.m. 
and 4:00 p.m. See Exchange Rule 1.5(bb).
    \9\ See supra note 5.
    \10\ See Exchange Rule 11.6(o).
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    The purpose of the proposed rule change is to shorten the length of 
the Exchange's after-hours trading session by amending Exchange Rule 
1.5(w), which defines Post-Market Session, to end the Post-Market 
Session at 5:00 p.m. rather than 8:00 p.m. The Exchange submits that 
shortening the Post-Market Session would allow the Exchange to utilize 
its staff and resources in a more efficient manner while continuing to 
provide Members with an after-hours trading session for one hour after 
the close of the Regular Hours Session.
    The Exchange believes the proposal to reduce the operating time of 
its Post-Market Session to end at 5:00 p.m. rather than 8:00 p.m. is 
reasonable and appropriate given that only a very small percentage 
(approximately 0.65%) of daily trading volume in NMS stocks occurs 
during those hours,\11\ and as such the Exchange believes that the 
costs to the Exchange associated with operating during those hours 
outweigh the benefits to Members and other market participants. 
Moreover, since the Exchange commenced trading operations on September 
21, 2020 (supporting trading in seven NMS stocks), the Exchange has 
received very few orders in the Post-Market Session, and all such 
orders were received between 4:00 p.m. and 5:00 p.m. The Exchange 
expects that it will continue to receive very few orders in the Post-
Market Session even after the Exchange completes its rollout of 
supporting trading in all NMS stocks, and that the large majority of 
such orders would continue to be received between 4:00 p.m. and 5:00 
p.m. rather than between 5:00 p.m. and 8:00 p.m. To the extent the 
Exchange in the future believes there is adequate demand to justify 
operating a longer after-hours trading session, it will consider again 
extending its hours to accommodate such demand.
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    \11\ Percentage calculated based on data from the week of 
September 21, 2020. The Exchange receives and processes data made 
available through consolidated data feeds (i.e., CTS and UTDF).
---------------------------------------------------------------------------

    The Exchange notes that other exchanges offer a longer after-hours 
trading session after the close of Regular Trading Hours and that 
Members and other market participants can choose to direct their orders 
to those exchanges if they wish to participate in an after-hours 
trading session extending beyond 5:00 p.m.\12\ The Exchange also notes 
that other exchanges currently end their after-hours trading sessions 
prior to 8 p.m., including three exchanges that close at 5:00 p.m. 
consistent with the Exchange's proposal.\13\ Thus, the Exchange 
believes that its proposal will adequately address the needs of Members 
by providing for a one-hour Post-Market Session, which trade data show 
is the period in which most of the after-hours trading activity occurs, 
as described above, and would allow the Exchange to conserve resources 
and staff time that would otherwise be dedicated to supporting the 
Exchange's after-hours trading session for a four-hour period on every 
trading day.
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    \12\ See, e.g., Cboe BZX Exchange, Inc. Rule 1.5(c), which 
provides for an ``After Hours Trading Session'' from 4:00 p.m. to 
8:00 p.m.; Cboe EDGX Exchange, Inc. Rule 1.5(r), which provides for 
a ``Post-Closing Session'' from 4:00 p.m. to 8:00 p.m.; NYSE Arca 
Equities, Inc. Rule 7.34-E.(a)(3), which provides for a ``Late 
Trading Session'' that concludes at 8:00 p.m. Eastern Time; Nasdaq 
Rule 4701(g), which provides for ``Post-Market Hours'' that end at 
8:00 p.m. Eastern Time.
    \13\ See, e.g., New York Stock Exchange LLC Rule 51, which 
provides that the trading session concludes at 4:00 p.m.; MIAX 
PEARL, LLC Equities Rule 2600(a), which provides that orders may be 
entered on such exchange until 4:00 p.m.; Investors Exchange LLC 
Rule 1.160(aa), which provides for a ``Post-Market Session'' that 
concludes at 5:00 p.m.; Long-Term Stock Exchange, Inc. Rule 
1.160(ee), which provides for a ``Post-Market Session'' that 
concludes at 5:00 p.m.; Nasdaq PHLX LLC Rule 3301(g), which provides 
for ``Post-Market Hours'' that end at 5:00 p.m. Eastern Time.
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    The Exchange also proposes to make conforming changes to Exchange 
Rules 1.5(k) and 11.1(a) to reflect the Post-Market Session ending at 
5:00 p.m. Specifically, the Exchange proposes to amend Exchange Rule 
1.5(k), which defines ``Exchange Operating Hours'' or ``Exchange 
Hours,'' to reflect that the Exchange's daily trading hours, comprised 
of all three trading sessions offered by the Exchange, would begin at 
7:00 a.m. and continue until 5:00 p.m.\14\ The Exchange also proposes 
to amend Exchange Rule 11.1(a) to update the hours of operations 
referenced in that Rule consistent with the changes described above.
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    \14\ ``Exchange Operating Hours'' or ``Exchange Hours'' 
currently means the time between 7:00 a.m. and 8:00 p.m. See 
Exchange Rule 1.5(k).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) \15\ of the Act, in general, and 
furthers the objectives of Sections and 6(b)(5) \16\ of the Act, in 
particular, in that it is designed to promote just and equitable 
principles of trade and, in general, to protect investors and the 
public interest; furthermore, the proposed rule change is not designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Specifically, the Exchange believes its proposal to amend Rule 
1.5(w) to shorten the length of its Post-Market

[[Page 64538]]

Session to end at 5:00 p.m. rather than 8:00 p.m. would allow the 
Exchange to conserve its resources and staff time and focus these on 
the Exchange's core business, which is providing an efficient and cost-
effective marketplace for trading in equity securities during Regular 
Trading Hours, and other aspects of the Exchange's operations, 
including its regulatory function, while maintaining a facility for 
Members to execute trades for one hour after Regular Trading Hours. 
Reducing the time during which the Post-Market Session operates would 
allow the Exchange to maximize efficiencies and eliminate costs that 
are associated with supporting trading operations during the longer 
after-hours trading session but are not expected to yield a sufficient 
economic return. The Exchange believes that the proposed rule change is 
therefore consistent with Section 6(b)(5) of the Act in that, by 
seeking to operate in a more efficient manner that focuses on trading 
during Regular Trading Hours and other aspects of the Exchange's 
operations, including its regulatory function, it will operate to 
promote just and equitable principles of trade and, in general, protect 
investors and the public interest. The Exchange also believes that the 
proposed rule change would not permit unfair discrimination between 
customers, issuers, brokers, or dealers because it would affect all 
Members and market participants in the same way and to the same extent, 
and is therefore consistent with Section 6(b)(5) of the Act. Moreover, 
the Exchange notes that there is precedent for an exchange shortening 
the hours of its after-hours trading session (also changing from 8:00 
p.m. to 5:00 p.m.) to allow it to utilize its staff time and resources 
in a more efficient manner and focus these on other aspects of its 
operations, so this aspect of the proposed rule change does not raise 
any new or novel issues that have not previously been considered by the 
Commission.\17\
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    \17\ See Securities Exchange Act Release No. 72215 (May 21, 
2014), 79 FR 30678 (May 28, 2014) (rule change of National Stock 
Exchange, Inc. shortening its after-hours trading session from 8:00 
p.m. to 5:00 p.m.).
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    In addition, the Exchange believes that the proposed amendment to 
Exchange Rule 1.5(w) furthers the objectives of Sections 6(b)(1) \18\ 
of the Act in that it would conserve Exchange resources, which are 
expended to support trading operations during the Exchange's trading 
hours, and would allow the Exchange to utilize these resources for 
other purposes, including the Exchange's regulatory function, thereby 
enabling it to be so organized as to have the capacity to be able to 
carry out the purposes of the Act and to comply, and to enforce 
compliance by its members, with the provisions of the Act, the rules 
and regulations thereunder, and the rules of the Exchange.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78(f)(b)(1).
---------------------------------------------------------------------------

    The Exchange also believes that the proposed amendments to Exchange 
Rules 1.5(k) and 11.1(a) are consistent with the Act because the 
amendments update those Rules to reference the proposed 5:00 p.m. time 
as the time until which the Exchange would accept orders in the Post-
Market Session. No further substantive changes to those Rules are 
proposed. The Exchange believes that it is appropriate to update all of 
its rules that specifically reference the Exchange's operating hours so 
that the Exchange's rules properly reflect the change to the Post-
Market Session being implemented in this proposed rule change.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the Act. By shortening the time period 
during which its Post-Market Session operates, the Exchange is reducing 
the number of equity exchanges offering an after-hours trading session 
extending from after the close of Regular Trading Hours until 8:00 p.m. 
However, the Exchange does not believe that this will inappropriately 
burden competition in that, as proposed, the Exchange will continue to 
offer a Post-Market Session until 5:00 p.m. and other exchanges offer 
an after-hours trading session extending until 8:00 p.m.\19\ The 
Exchange therefore believes that the availability of an after-hours 
trading facility at other exchanges will provide Members and other 
market participants with venues to which they can direct their after-
hours activity after the Exchange's proposed 5:00 p.m. Post-Market 
Session end time and the reduction in the time frame during which the 
Exchange's after-hours facility operates will not impair competition.
---------------------------------------------------------------------------

    \19\ See supra note 12.
---------------------------------------------------------------------------

    Furthermore, the Exchange does not believe that the proposed rule 
change would have any significant impact on inter-market competition as 
there are other exchanges that already end their after-hours trading 
sessions prior to 8:00 p.m., including at 5:00 p.m.,\20\ and other 
marketplaces are free to provide similar trading hours. The Exchange 
also does not believe that the proposed rule change would have any 
significant impact on intra-market competition as all Members would be 
subject to the modified hours of the Post-Market Session.
---------------------------------------------------------------------------

    \20\ See supra note 13.
---------------------------------------------------------------------------

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

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

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \21\ and Rule 19b-4(f)(6) thereunder.\22\ 
Because the foregoing proposed rule change does not: (i) Significantly 
affect the protection of investors or the public interest; (ii) impose 
any significant burden on competition; and (iii) become operative for 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, it has become effective pursuant to 
Section 19(b)(3)(A)(iii) of the Act \23\ and subparagraph (f)(6) of 
Rule 19b-4 thereunder.\24\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6).
    \23\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \24\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has fulfilled this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \25\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\26\ 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 proposal 
may take effect immediately. The Exchange states that waiver of the 30-
day operative delay would allow the Exchange to immediately implement 
the proposed change to the Post-Market Session, which would better 
align the expenses of operating the Post-Market Session with the 
expected volume and revenue associated with that trading session, 
thereby allowing the Exchange to conserve resources and staff time and

[[Page 64539]]

focus these on the Exchange's core business and other aspects of the 
Exchange's operations, including the Exchange's regulatory function. 
The Commission believes that the proposed rule change raises no new or 
novel issues and that waiver of the operative delay is consistent with 
the protection of investors and the public interest. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposal operative upon filing.\27\
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    \25\ 17 CFR 240.19b-4(f)(6).
    \26\ 17 CFR 240.19b-4(f)(6)(iii).
    \27\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \28\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-MEMX-2020-11 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-MEMX-2020-11. 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-MEMX-2020-11 and should be submitted on 
or before November 3, 2020.
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    \29\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-22640 Filed 10-9-20; 8:45 am]
BILLING CODE 8011-01-P
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