Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 952NY To Provide an Option for ATP Holders To Instruct the Exchange To Cancel Marketable Orders if a Series Is Not Opened Within a Specified Time Period, 46746-46749 [2021-17757]
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Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2021–061 on the subject line.
Paper Comments
lotter on DSK11XQN23PROD with NOTICES1
• 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–NASDAQ–2021–061. 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–NASDAQ–2021–061 and
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should be submitted on or before
September 9, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–17761 Filed 8–18–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92668; File No. SR–
NYSEAMER–2021–36]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 952NY To
Provide an Option for ATP Holders To
Instruct the Exchange To Cancel
Marketable Orders if a Series Is Not
Opened Within a Specified Time Period
August 13, 2021.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on August
10, 2021, NYSE American LLC (‘‘NYSE
American’’ 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 self-regulatory
organization. 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 amend
Rule 952NY (Opening Process) to
provide an option for ATP Holders to
instruct the Exchange to cancel
Marketable orders if a series is not
opened within a specified time period.
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,
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 952NY (Opening Process) to
provide an option for ATP Holders to
instruct the Exchange to cancel
Marketable 4 orders if a series is not
opened within a specified time period.
Rule 952NY sets forth the Exchange’s
process for opening and reopening a
series for trading. Rule 952NY(b)
provides that the Exchange will accept
market and limit orders for inclusion in
the opening auction process (‘‘Auction
Process’’) until such time as the Auction
Process is initiated in that option series.
As further provided for in Rule
952NY(b), once the primary market for
the underlying security disseminates a
quote and a trade that is at or within the
quote, the Exchange will open the
related option series automatically
based on the principles and procedures
set forth in paragraphs (A)–(F) of Rule
952NY(b). However, as described in
Rule 952NY(b)(D), the Exchange will
not conduct an Auction Process if the
bid-ask differential for that series is not
within an acceptable range, i.e., is not
within the bid-ask differential
guidelines established in Rule
925NY(b)(4). Because Rule 952NY(b)(D)
cross-references the bid-ask differential
requirement of Rule 925NY(b)(4), which
relates to the obligations of Market
Makers in appointed classes, the
Exchange will not open a series for
trading if Market Makers have not
entered quotations in a series that are
within such bid-ask differentials. If a
series does not open for trading, market
and limit orders entered in advance of
the Auction Process will remain in the
Consolidated Book and will not be
routed, even if another exchange opens
that series for trading and such orders
become Marketable against an away
market NBBO.
The Exchange proposes to amend
Rule 952NY to provide ATP Holders
4 The term ‘‘Marketable’’ is defined in Rule
900.2NY(39) to mean, for a Limit Order, the price
matches or crosses the NBBO on the other side of
the market and that market orders are always
considered marketable.
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Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices
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with an option to instruct the Exchange
to cancel their Marketable orders if an
option series has not been opened
within a specified time period. As
proposed, new subparagraph (d) to Rule
952NY 5 would provide that an ATP
Holder may instruct the Exchange to
cancel all Marketable orders in a series,
including GTC Orders, if that series has
not opened within a designated time
period after the Exchange receives
notification that the primary market for
the underlying security has
disseminated a quote and a trade that is
at or within the quote. This proposed
change is designed to provide ATP
Holders that electronically enter orders
before Core Trading Hours 6 begin in a
multitude of option series with an
optional risk protection mechanism for
the Exchange to automatically cancel
Marketable orders on their behalf. ATP
Holders could submit requests to cancel
such orders themselves, but would have
to monitor which series have been
opened on the Exchange. The proposed
optional functionality would reduce
operational risk for ATP Holders that
sent orders in multiple series by
providing them with a bulk cancel
feature that would instruct the Exchange
to cancel orders on their behalf if a
series has not been opened by a
specified time. Specifically, rather than
have Marketable orders remain
unexecuted on the Consolidated Book if
the option series has not opened on the
Exchange within a specified time
period, ATP Holders would have the
option to instruct the Exchange to
cancel such orders back to the ATP
Holder. Once cancelled back, the ATP
Holder could choose to re-enter such
orders on an exchange that has opened
that series for trading.
The Exchange further proposes to
provide that the Exchange would not
cancel any Marketable orders received
after the designated time period ends,
even if the series has not yet opened.
The Exchange believes that if an ATP
Holder sends an order in an option
series to the Exchange after Core
Trading Hours begin, and more than the
designated time period after the primary
market for the underlying security has
opened (i.e., the series open trigger),
such ATP Holder should be aware that
the Exchange has not opened that series
for trading when it sends the order to
the Exchange, and therefore intends for
5 The Exchange proposes a non-substantive
amendment to Rule 952NY to renumber current
subparagraph (d) to that Rule as subparagraph (e).
6 The term ‘‘Core Trading Hours’’ is defined in
Rule 900.2NY(15) to mean the regular trading hours
for business set forth in the rules of the primary
markets underlying those option classes listed on
the Exchange.
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such order to be sent to the Exchange
even though it has not yet opened that
series for trading.
Proposed Rule 952NY(d) would also
provide that the designated time period
would be two minutes, unless
determined otherwise by the Exchange
and announced to ATP Holders via
Trader Update, in which case the
designated time period would not be
greater than five minutes. The Exchange
believes that a two-minute period would
provide time for Market Makers to
update their quotes after the Exchange
receives the series open trigger so that
the bid-ask differential in an option
series can be within an acceptable range
and therefore the series can open for
trading on the Exchange. Specifically,
the Exchange has observed that on a
typical trading day, nearly 98% of all
series are opened by 9:32 a.m. Eastern
Time, and nearly 99% of all series are
opened by 9:35 a.m. Eastern Time. By
waiting two minutes before cancelling
orders, the Exchange believes that the
majority of series would be opened,
thereby minimizing the number of series
where there would be a bulk cancel of
Marketable orders. In addition, ATP
Holders that want to cancel orders less
than two minutes after the series open
trigger would still be able to submit
requests to cancel individual orders.
The Exchange further believes that it is
appropriate to provide the Exchange
with the ability to adjust the designated
time period via Trader Update to no
more than five minutes because it
would provide additional flexibility for
the Exchange to respond to the needs of
ATP Holders to implement the
instruction to cancel Marketable orders
on a different time basis. The Exchange
believes that a cap of five minutes
would be reasonable because very few
series remain unopened five minutes
after the series open trigger. The
Exchange notes that this is an optional
instruction, and therefore no ATP
Holder is required to use this proposed
new risk feature. The Exchange further
notes that Exchange flexibility in
connection with designating time
periods for risk limitation measures is
consistent with current Exchange rules.7
7 See, e.g., Commentary .03 to Rule 928NY (Risk
Limitation Mechanism) (providing that the
Exchange will ‘‘specify via Trader Update any
applicable time period(s) for the Risk Limitation
Mechanisms; provided, however, that the Exchange
will not specify a time period of less than 100
milliseconds, inclusive of the duration of any
trading halt occurring within that time’’). The
Exchange also provides for flexibility in its rules for
other risk mechanism parameters. See, e.g., Rule
967NY(b) (‘‘Unless determined otherwise by the
Exchange and announced to ATP Holders via
Trader Update, the specified percentage shall be as
follows: 100% for the contra-side NBB or NBO
PO 00000
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Fmt 4703
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46747
Finally, proposed Rule 952NY(d)
would provide that this instruction
would not be available for orders
entered by Floor Brokers via the
Electronic Order Capture System.8 The
current EOC provider could not
systemically apply the proposed
optional instruction on a firm-by firm
basis and therefore it would not be
available to individual Floor Brokers.
The Exchange believes that because of
the unique role of Floor Brokers on the
Exchange to provide manual, high-touch
services on behalf of customers, Floor
Brokers should not need this optional
feature. Specifically, unlike an off-Floor
ATP Holder that may be relying on an
algorithm to send orders in a multitude
of series, a Floor Broker that provides
high-touch services would be present on
the Trading floor and in a position to
monitor whether the Exchange has
opened a series, and if not, whether to
cancel an order that becomes
Marketable.
The Exchange will announce via
Trader Update when this proposed
optional feature will be available,
which, subject to effectiveness of this
proposed rule change, the Exchange
anticipates will be in early August 2021.
2. Statutory Basis
For the reasons set forth above, the
Exchange believes the proposed rule
change is consistent with Section 6(b) of
the Act 9 in general, and furthers the
objectives of Sections 6(b)(4) and (5) of
the Act,10 in that it is designed to
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanism of a free and
open market and a national market
system and, in general, to protect
investors and the public interest.
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
is designed to provide ATP Holders
with an optional risk protection
mechanism to instruct the Exchange to
cancel Marketable orders in an option
series on their behalf if that series has
not opened on the Exchange within a
priced at or below $1.00; and 50% for the contraside NBB or NBO priced above $1.00.’’)
8 As defined in Rule 900.2NY(20), the term
‘‘Electronic Order Capture System’’ or ‘‘EOC’’
means the Exchange’s electronic audit trail and
order tracking system that provides an accurate
time-sequenced record of all orders and
transactions on the Exchange. As further defined,
the EOC includes the electronic communications
interface between EOC booth terminals and the
Floor Broker Hand Held applications and also
contains an electronic order entry screen.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4) and (5).
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Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices
specified time period. The Exchange
does not open a series if Market Makers
have not quoted within the acceptable
range of bid-ask differentials as
specified in Rule 925NY(b)(4). However,
it is possible that another exchange,
with different opening process rules,
could have opened that series for
trading even if the Exchange does not.
If an order that an ATP Holder sent to
the Exchange before Core Trading Hours
begins becomes Marketable on another
exchange before the Exchange opens
that series for trading, such ATP Holder
could choose to cancel the order and
then send it to the other exchange. By
providing ATP Holders with an option
to instruct the Exchange to cancel their
Marketable orders in a series under the
specified circumstances, the Exchange
would perform this monitoring function
on behalf of ATP Holders, thereby
reducing their operational risk.
The Exchange believes that it would
remove impediments to and perfect the
mechanism of a free and open market
and a national market system to provide
that such instructions would not be
applicable to Marketable orders received
after the designated time period ends
because the Exchange believes that ATP
Holders that send orders to the
Exchange more than a specified period
after series open trigger should be aware
that the Exchange has not yet opened
that series for trading. Therefore, any
orders sent after that designated time
period ends were likely purposefully
directed to the Exchange even though
the Exchange has not yet opened that
series for trading.
The Exchange believes that the
proposed designated time period of two
minutes would remove impediments to
and perfect the mechanism of a free and
open market and a national market
system because it is designed to provide
time for Market Makers to update their
quotes so that the bid-ask differential in
an option series is within an acceptable
range and therefore the series can open
for trading on the Exchange. The
Exchange believes that the proposed
two-minute period is reasonable
because on a typical trading day,
approximately 98% of all series that
trade on the Exchange are open. ATP
Holders that want to cancel orders less
than two minutes after the series open
trigger would still be able to submit
requests to cancel individual orders.
The Exchange further believes that
providing the Exchange with flexibility
to change the designated time period via
Trader Update, provided that it would
never be longer than five minutes,
would enable the Exchange to respond
to the needs of ATP Holders to
implement the instruction to cancel
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17:28 Aug 18, 2021
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Marketable orders on a different time
basis. The Exchange believes that the
proposed cap of five minutes would
remove impediments to and perfect the
mechanism of a free and open market
and a national market system because
on a typical day, approximately 99% of
all series are opened by 9:35 a.m.
Eastern Time. The Exchange further
notes that this proposed risk mechanism
would be optional, and therefore ATP
Holders would not be required to
request that the Exchange cancel
unexecuted Marketable orders on their
behalf if a series has not opened within
the designated time period. In addition,
Exchange flexibility in connection with
designating time periods for risk
limitation measures is consistent with
current Exchange rules.11
Finally, the Exchange believes that
the proposal that the optional
instruction would not be available for
orders entered by Floor Brokers via the
EOC would remove impediments to and
perfect the mechanism of a free and
open market and a national market
system because the current EOC
provider could not systemically apply
the proposed optional instruction on a
firm-by firm basis. The instruction
could therefore not be segregated by
individual Floor Brokers that each use
the EOC. The Exchange believes that
because of the unique role of Floor
Brokers on the Exchange to provide
manual, high-touch services on behalf of
customers, Floor Brokers should not
need this optional bulk-cancel feature.
Specifically, unlike an off-Floor ATP
Holder that may be relying on an
algorithm to send orders in a multitude
of series, a Floor Broker that provides
high-touch services would be present on
the Trading floor and in a position to
monitor whether the Exchange has
opened a series, and if not, whether to
cancel an order that becomes
Marketable.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe the proposed
rule change would impose any burden
on intermarket competition, as the
proposed rule change is designed to
provide an option for ATP Holders to
instruct the Exchange to cancel
Marketable orders if an option series
does not open on the Exchange within
a designated time period. The Exchange
believes that the proposed rule change
11 See
PO 00000
supra note 7.
Frm 00076
Fmt 4703
Sfmt 4703
would promote intermarket competition
because if the Exchange cancels such
orders on the instruction of an ATP
Holder, such ATP Holder could then
choose to route such orders to another
exchange that has opened the option
series for trading.
The Exchange does not believe that
the proposed rule change would impose
any burden on intramarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed rule change
provides for optional functionality. ATP
Holders would not be required to use
this functionality. In addition, the
Exchange believes that because of the
unique role of Floor Brokers on the
Exchange to provide manual, high-touch
services on behalf of customers, Floor
Brokers should not need this optional
bulk-cancel feature and it would not
impose any undue burden on
intramarket competition not to provide
this optional feature to Floor Brokers.
Specifically, unlike an off-Floor ATP
Holder that may be relying on an
algorithm to send orders in a multitude
of series, a Floor Broker that provides
high-touch services would be present on
the Trading floor and in a position to
monitor whether the Exchange has
opened a series, and if not, whether to
cancel an order that becomes
Marketable.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 12 and Rule 19b–
4(f)(6) thereunder.13
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
13 17
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Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),15 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has requested
that the Commission waive the 30-day
operative delay so that the proposed
rule change may become operative prior
to 30 days after the date of the filing.
The Exchange states that waiver of the
operative delay would be consistent
with the protection of investors and the
public interest because the proposed
rule change, as described above, would
offer ATP Holders an additional, and
optional, risk limitation feature to
instruct the Exchange to cancel their
Marketable orders if the Exchange does
not open an option series within a
designated time frame. The Exchange
further states that the technology
supporting the proposed rule change
will be available prior to 30 days after
the date of the filing, and the Exchange
seeks to implement the proposed rule
change without delay. 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
operative delay and designates the
proposed rule change operative upon
filing.16
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
lotter on DSK11XQN23PROD with NOTICES1
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:
14 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
16 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
15 17
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17:28 Aug 18, 2021
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Electronic Comments
46749
DEPARTMENT OF STATE
• 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–
NYSEAMER–2021–36 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–NYSEAMER–2021–36. 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–NYSEAMER–2021–36, and
should be submitted on or before
September 9, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–17757 Filed 8–18–21; 8:45 am]
BILLING CODE 8011–01–P
[Public Notice 11503]
Certification Related to Foreign Military
Financing for Colombia Under
Regulations of the Department of
State, Foreign Operations, and Related
Programs Appropriations Act, 2021
Pursuant to the authority vested in the
Secretary of State, including under
section 7045(b)(2)(B) of the Department
of State, Foreign Operations, and
Related Programs Appropriations Act,
2021 (Div. K, Pub. L. 116–260), I hereby
certify that:
(i) The Special Jurisdiction for Peace
and other judicial authorities are taking
effective steps to hold accountable
perpetrators of gross violations of
human rights in a manner consistent
with international law, including for
command responsibility, and sentence
them to deprivation of liberty;
(ii) the Government of Colombia is
taking effective steps to prevent attacks
against human rights defenders and
other civil society activists, trade
unionists, and journalists, and judicial
authorities are prosecuting those
responsible for such attacks;
(iii) the Government of Colombia is
taking effective steps to protect AfroColombian and indigenous communities
and is respecting their rights and
territory;
(iv) senior military officers
responsible for ordering, committing,
and covering up cases of false positives
are being held accountable, including
removal from active duty if found guilty
through criminal or disciplinary
proceedings; and
(v) the Government of Colombia has
investigated and is taking steps to hold
accountable Government officials
credibly alleged to have directed,
authorized, or conducted illegal
surveillance of political opponents,
government officials, journalists, and
human rights defenders, including
through the use of assets provided by
the United States for combating
counterterrorism and counternarcotics
for such purposes.
This Certification shall be published
in the Federal Register and shall be
transmitted, along with the
accompanying Memorandum of
Justification, to Congress.
Dated: July 29, 2021.
Antony J. Blinken,
Secretary of State.
[FR Doc. 2021–17755 Filed 8–18–21; 8:45 am]
17 17
PO 00000
CFR 200.30–3(a)(12).
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[Federal Register Volume 86, Number 158 (Thursday, August 19, 2021)]
[Notices]
[Pages 46746-46749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17757]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92668; File No. SR-NYSEAMER-2021-36]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 952NY To Provide an Option for ATP Holders To Instruct the
Exchange To Cancel Marketable Orders if a Series Is Not Opened Within a
Specified Time Period
August 13, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on August 10, 2021, NYSE American LLC (``NYSE American'' 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 self-regulatory
organization. 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 amend Rule 952NY (Opening Process) to
provide an option for ATP Holders to instruct the Exchange to cancel
Marketable orders if a series is not opened within a specified time
period. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 952NY (Opening Process) to
provide an option for ATP Holders to instruct the Exchange to cancel
Marketable \4\ orders if a series is not opened within a specified time
period.
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\4\ The term ``Marketable'' is defined in Rule 900.2NY(39) to
mean, for a Limit Order, the price matches or crosses the NBBO on
the other side of the market and that market orders are always
considered marketable.
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Rule 952NY sets forth the Exchange's process for opening and
reopening a series for trading. Rule 952NY(b) provides that the
Exchange will accept market and limit orders for inclusion in the
opening auction process (``Auction Process'') until such time as the
Auction Process is initiated in that option series. As further provided
for in Rule 952NY(b), once the primary market for the underlying
security disseminates a quote and a trade that is at or within the
quote, the Exchange will open the related option series automatically
based on the principles and procedures set forth in paragraphs (A)-(F)
of Rule 952NY(b). However, as described in Rule 952NY(b)(D), the
Exchange will not conduct an Auction Process if the bid-ask
differential for that series is not within an acceptable range, i.e.,
is not within the bid-ask differential guidelines established in Rule
925NY(b)(4). Because Rule 952NY(b)(D) cross-references the bid-ask
differential requirement of Rule 925NY(b)(4), which relates to the
obligations of Market Makers in appointed classes, the Exchange will
not open a series for trading if Market Makers have not entered
quotations in a series that are within such bid-ask differentials. If a
series does not open for trading, market and limit orders entered in
advance of the Auction Process will remain in the Consolidated Book and
will not be routed, even if another exchange opens that series for
trading and such orders become Marketable against an away market NBBO.
The Exchange proposes to amend Rule 952NY to provide ATP Holders
[[Page 46747]]
with an option to instruct the Exchange to cancel their Marketable
orders if an option series has not been opened within a specified time
period. As proposed, new subparagraph (d) to Rule 952NY \5\ would
provide that an ATP Holder may instruct the Exchange to cancel all
Marketable orders in a series, including GTC Orders, if that series has
not opened within a designated time period after the Exchange receives
notification that the primary market for the underlying security has
disseminated a quote and a trade that is at or within the quote. This
proposed change is designed to provide ATP Holders that electronically
enter orders before Core Trading Hours \6\ begin in a multitude of
option series with an optional risk protection mechanism for the
Exchange to automatically cancel Marketable orders on their behalf. ATP
Holders could submit requests to cancel such orders themselves, but
would have to monitor which series have been opened on the Exchange.
The proposed optional functionality would reduce operational risk for
ATP Holders that sent orders in multiple series by providing them with
a bulk cancel feature that would instruct the Exchange to cancel orders
on their behalf if a series has not been opened by a specified time.
Specifically, rather than have Marketable orders remain unexecuted on
the Consolidated Book if the option series has not opened on the
Exchange within a specified time period, ATP Holders would have the
option to instruct the Exchange to cancel such orders back to the ATP
Holder. Once cancelled back, the ATP Holder could choose to re-enter
such orders on an exchange that has opened that series for trading.
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\5\ The Exchange proposes a non-substantive amendment to Rule
952NY to renumber current subparagraph (d) to that Rule as
subparagraph (e).
\6\ The term ``Core Trading Hours'' is defined in Rule
900.2NY(15) to mean the regular trading hours for business set forth
in the rules of the primary markets underlying those option classes
listed on the Exchange.
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The Exchange further proposes to provide that the Exchange would
not cancel any Marketable orders received after the designated time
period ends, even if the series has not yet opened. The Exchange
believes that if an ATP Holder sends an order in an option series to
the Exchange after Core Trading Hours begin, and more than the
designated time period after the primary market for the underlying
security has opened (i.e., the series open trigger), such ATP Holder
should be aware that the Exchange has not opened that series for
trading when it sends the order to the Exchange, and therefore intends
for such order to be sent to the Exchange even though it has not yet
opened that series for trading.
Proposed Rule 952NY(d) would also provide that the designated time
period would be two minutes, unless determined otherwise by the
Exchange and announced to ATP Holders via Trader Update, in which case
the designated time period would not be greater than five minutes. The
Exchange believes that a two-minute period would provide time for
Market Makers to update their quotes after the Exchange receives the
series open trigger so that the bid-ask differential in an option
series can be within an acceptable range and therefore the series can
open for trading on the Exchange. Specifically, the Exchange has
observed that on a typical trading day, nearly 98% of all series are
opened by 9:32 a.m. Eastern Time, and nearly 99% of all series are
opened by 9:35 a.m. Eastern Time. By waiting two minutes before
cancelling orders, the Exchange believes that the majority of series
would be opened, thereby minimizing the number of series where there
would be a bulk cancel of Marketable orders. In addition, ATP Holders
that want to cancel orders less than two minutes after the series open
trigger would still be able to submit requests to cancel individual
orders. The Exchange further believes that it is appropriate to provide
the Exchange with the ability to adjust the designated time period via
Trader Update to no more than five minutes because it would provide
additional flexibility for the Exchange to respond to the needs of ATP
Holders to implement the instruction to cancel Marketable orders on a
different time basis. The Exchange believes that a cap of five minutes
would be reasonable because very few series remain unopened five
minutes after the series open trigger. The Exchange notes that this is
an optional instruction, and therefore no ATP Holder is required to use
this proposed new risk feature. The Exchange further notes that
Exchange flexibility in connection with designating time periods for
risk limitation measures is consistent with current Exchange rules.\7\
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\7\ See, e.g., Commentary .03 to Rule 928NY (Risk Limitation
Mechanism) (providing that the Exchange will ``specify via Trader
Update any applicable time period(s) for the Risk Limitation
Mechanisms; provided, however, that the Exchange will not specify a
time period of less than 100 milliseconds, inclusive of the duration
of any trading halt occurring within that time''). The Exchange also
provides for flexibility in its rules for other risk mechanism
parameters. See, e.g., Rule 967NY(b) (``Unless determined otherwise
by the Exchange and announced to ATP Holders via Trader Update, the
specified percentage shall be as follows: 100% for the contra-side
NBB or NBO priced at or below $1.00; and 50% for the contra-side NBB
or NBO priced above $1.00.'')
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Finally, proposed Rule 952NY(d) would provide that this instruction
would not be available for orders entered by Floor Brokers via the
Electronic Order Capture System.\8\ The current EOC provider could not
systemically apply the proposed optional instruction on a firm-by firm
basis and therefore it would not be available to individual Floor
Brokers. The Exchange believes that because of the unique role of Floor
Brokers on the Exchange to provide manual, high-touch services on
behalf of customers, Floor Brokers should not need this optional
feature. Specifically, unlike an off-Floor ATP Holder that may be
relying on an algorithm to send orders in a multitude of series, a
Floor Broker that provides high-touch services would be present on the
Trading floor and in a position to monitor whether the Exchange has
opened a series, and if not, whether to cancel an order that becomes
Marketable.
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\8\ As defined in Rule 900.2NY(20), the term ``Electronic Order
Capture System'' or ``EOC'' means the Exchange's electronic audit
trail and order tracking system that provides an accurate time-
sequenced record of all orders and transactions on the Exchange. As
further defined, the EOC includes the electronic communications
interface between EOC booth terminals and the Floor Broker Hand Held
applications and also contains an electronic order entry screen.
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The Exchange will announce via Trader Update when this proposed
optional feature will be available, which, subject to effectiveness of
this proposed rule change, the Exchange anticipates will be in early
August 2021.
2. Statutory Basis
For the reasons set forth above, the Exchange believes the proposed
rule change is consistent with Section 6(b) of the Act \9\ in general,
and furthers the objectives of Sections 6(b)(4) and (5) of the Act,\10\
in that it is designed to promote just and equitable principles of
trade, remove impediments to and perfect the mechanism of a free and
open market and a national market system and, in general, to protect
investors and the public interest.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) and (5).
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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 is designed to provide ATP Holders
with an optional risk protection mechanism to instruct the Exchange to
cancel Marketable orders in an option series on their behalf if that
series has not opened on the Exchange within a
[[Page 46748]]
specified time period. The Exchange does not open a series if Market
Makers have not quoted within the acceptable range of bid-ask
differentials as specified in Rule 925NY(b)(4). However, it is possible
that another exchange, with different opening process rules, could have
opened that series for trading even if the Exchange does not. If an
order that an ATP Holder sent to the Exchange before Core Trading Hours
begins becomes Marketable on another exchange before the Exchange opens
that series for trading, such ATP Holder could choose to cancel the
order and then send it to the other exchange. By providing ATP Holders
with an option to instruct the Exchange to cancel their Marketable
orders in a series under the specified circumstances, the Exchange
would perform this monitoring function on behalf of ATP Holders,
thereby reducing their operational risk.
The Exchange believes that it would remove impediments to and
perfect the mechanism of a free and open market and a national market
system to provide that such instructions would not be applicable to
Marketable orders received after the designated time period ends
because the Exchange believes that ATP Holders that send orders to the
Exchange more than a specified period after series open trigger should
be aware that the Exchange has not yet opened that series for trading.
Therefore, any orders sent after that designated time period ends were
likely purposefully directed to the Exchange even though the Exchange
has not yet opened that series for trading.
The Exchange believes that the proposed designated time period of
two minutes would remove impediments to and perfect the mechanism of a
free and open market and a national market system because it is
designed to provide time for Market Makers to update their quotes so
that the bid-ask differential in an option series is within an
acceptable range and therefore the series can open for trading on the
Exchange. The Exchange believes that the proposed two-minute period is
reasonable because on a typical trading day, approximately 98% of all
series that trade on the Exchange are open. ATP Holders that want to
cancel orders less than two minutes after the series open trigger would
still be able to submit requests to cancel individual orders. The
Exchange further believes that providing the Exchange with flexibility
to change the designated time period via Trader Update, provided that
it would never be longer than five minutes, would enable the Exchange
to respond to the needs of ATP Holders to implement the instruction to
cancel Marketable orders on a different time basis. The Exchange
believes that the proposed cap of five minutes would remove impediments
to and perfect the mechanism of a free and open market and a national
market system because on a typical day, approximately 99% of all series
are opened by 9:35 a.m. Eastern Time. The Exchange further notes that
this proposed risk mechanism would be optional, and therefore ATP
Holders would not be required to request that the Exchange cancel
unexecuted Marketable orders on their behalf if a series has not opened
within the designated time period. In addition, Exchange flexibility in
connection with designating time periods for risk limitation measures
is consistent with current Exchange rules.\11\
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\11\ See supra note 7.
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Finally, the Exchange believes that the proposal that the optional
instruction would not be available for orders entered by Floor Brokers
via the EOC would remove impediments to and perfect the mechanism of a
free and open market and a national market system because the current
EOC provider could not systemically apply the proposed optional
instruction on a firm-by firm basis. The instruction could therefore
not be segregated by individual Floor Brokers that each use the EOC.
The Exchange believes that because of the unique role of Floor Brokers
on the Exchange to provide manual, high-touch services on behalf of
customers, Floor Brokers should not need this optional bulk-cancel
feature. Specifically, unlike an off-Floor ATP Holder that may be
relying on an algorithm to send orders in a multitude of series, a
Floor Broker that provides high-touch services would be present on the
Trading floor and in a position to monitor whether the Exchange has
opened a series, and if not, whether to cancel an order that becomes
Marketable.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe the proposed rule change would impose any burden on intermarket
competition, as the proposed rule change is designed to provide an
option for ATP Holders to instruct the Exchange to cancel Marketable
orders if an option series does not open on the Exchange within a
designated time period. The Exchange believes that the proposed rule
change would promote intermarket competition because if the Exchange
cancels such orders on the instruction of an ATP Holder, such ATP
Holder could then choose to route such orders to another exchange that
has opened the option series for trading.
The Exchange does not believe that the proposed rule change would
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed rule change provides for optional functionality. ATP Holders
would not be required to use this functionality. In addition, the
Exchange believes that because of the unique role of Floor Brokers on
the Exchange to provide manual, high-touch services on behalf of
customers, Floor Brokers should not need this optional bulk-cancel
feature and it would not impose any undue burden on intramarket
competition not to provide this optional feature to Floor Brokers.
Specifically, unlike an off-Floor ATP Holder that may be relying on an
algorithm to send orders in a multitude of series, a Floor Broker that
provides high-touch services would be present on the Trading floor and
in a position to monitor whether the Exchange has opened a series, and
if not, whether to cancel an order that becomes Marketable.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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[[Page 46749]]
A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposed rule change may become operative prior to 30 days after
the date of the filing. The Exchange states that waiver of the
operative delay would be consistent with the protection of investors
and the public interest because the proposed rule change, as described
above, would offer ATP Holders an additional, and optional, risk
limitation feature to instruct the Exchange to cancel their Marketable
orders if the Exchange does not open an option series within a
designated time frame. The Exchange further states that the technology
supporting the proposed rule change will be available prior to 30 days
after the date of the filing, and the Exchange seeks to implement the
proposed rule change without delay. 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 operative delay and designates the
proposed rule change operative upon filing.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For purposes only of waiving the 30-day operative delay,
the Commission also 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-NYSEAMER-2021-36 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-NYSEAMER-2021-36. 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-NYSEAMER-2021-36, and should be
submitted on or before September 9, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-17757 Filed 8-18-21; 8:45 am]
BILLING CODE 8011-01-P
