Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Related to Clearly Erroneous Transactions Until April 20, 2022, 58116-58118 [2021-22795]
Download as PDF
<![CDATA[
58116
Federal Register / Vol. 86, No. 200 / Wednesday, October 20, 2021 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–22810 Filed 10–19–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93333; File Nos. SR–NYSE–
2021–25, SR–NYSEAMER–2021–21, SR–
NYSEArca–2021–24, SR–NYSECHX–2021–
07, SR–NYSENAT–2021–09]
Self-Regulatory Organizations; New
York Stock Exchange LLC, NYSE
American LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc.;
Notice of Withdrawal of Proposed Rule
Changes To Amend the Fee Schedule
To Add Meet-Me-Room Connectivity
Services Available at the Mahwah Data
Center
instituted proceedings under Section
19(b)(2)(B) of the Act 6 to determine
whether to approve or disapprove the
proposed rule changes.7 On September
28, 2021, pursuant to Section 19(b)(2) of
the Act,8 the Commission designated a
longer period for Commission action on
the proceedings to determine whether to
approve or disapprove the proposed
rule changes.9 The Commission has
received one comment letter on the
proposed rule changes.10 On October
12, 2021, the Exchanges withdrew the
proposed rule changes (SR–NYSE–
2021–25, SR–NYSEAMER–2021–21,
SR–NYSEArca–2021–24, SR–
NYSECHX–2021–07, SR–NYSENAT–
2021–09).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–22800 Filed 10–19–21; 8:45 am]
BILLING CODE 8011–01–P
October 14, 2021.
On April 9, 2021, New York Stock
Exchange LLC, NYSE American LLC,
NYSE Arca, Inc., NYSE Chicago, Inc.,
and NYSE National, Inc. (collectively,
the ‘‘Exchanges’’) each filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend the schedule of connectivity
services available at the Mahwah data
center to add services available to
customers in the meet me rooms in the
Mahwah data center and procedures for
the allocation of cabinets and power to
such customers.
The proposed rule changes were
published for comment in the Federal
Register on April 22, 2021.3 On June 2,
2021, pursuant to Section 19(b)(2) of the
Act,4 the Commission designated a
longer period within which to approve
the proposed rule changes, disapprove
the proposed rule changes, or institute
proceedings to determine whether to
disapprove the proposed rule changes.5
On July 9, 2021, the Commission
17 17
CFR 200.30–3(a)(34).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release Nos. 91598
(April 16, 2021), 86 FR 21373 (April 22, 2021) (SR–
NYSE–2021–25); 91599 (April 16, 2021), 86 FR
21365 (April 22, 2021) (SR–NYSEAMER–2021–21);
91600 (April 16, 2021), 86 FR 21384 (April 22,
2021) (SR–NYSEArca–2021–24); 91601 (April 16,
2021), 86 FR 21410 (April 22, 2021) (SR–
NYSECHX–2021–07); and 91602 (April 16, 2021),
86 FR 21393 (April 22, 2021) (SR–NYSENAT–2021–
09).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 92089
(June 2, 2021), 86 FR 30510 (June 8, 2021).
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93328; File No. SR–BX–
2021–046]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Pilot
Related to Clearly Erroneous
Transactions Until April 20, 2022
October 14, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
8, 2021, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II,
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
lotter on DSK11XQN23PROD with NOTICES1
1 15
VerDate Sep<11>2014
17:55 Oct 19, 2021
Jkt 256001
6 15
U.S.C. 78s(b)(2)(B).
Securities Exchange Act Release No. 92368
(July 9, 2021), 86 FR 37356 (July 15, 2021).
8 15 U.S.C. 78s(b)(2).
9 See Securities Exchange Act Release No. 93160
(September 28, 2021), 86 FR 54770 (October 4,
2021).
10 The comment letter received on the proposed
rule changes is available at: https://www.sec.gov/
comments/sr-nyse-2021-25/srnyse202125.htm.
11 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
7 See
PO 00000
Frm 00063
Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
current pilot program related to BX
Equity 11, Rule 11890 (Clearly
Erroneous Transactions) to the close of
business on April 20, 2022.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/bx/rules, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to extend the current pilot
program related to Equity 11, Rule
11890, Clearly Erroneous Transactions,
to the close of business on April 20,
2022. The pilot program is currently due
to expire on October 20, 2021.
On September 10, 2010, the
Commission approved, on a pilot basis,
changes to Equity 11, Rule 11890 that,
among other things: (i) Provided for
uniform treatment of clearly
erroneous execution reviews in multistock events involving twenty or more
securities; and (ii) reduced the ability of
the Exchange to deviate from the
objective standards set forth in the rule.3
In 2013, the Exchange adopted a
provision designed to address the
operation of the Plan.4 Finally, in 2014,
the Exchange adopted two additional
provisions providing that: (i) A series of
transactions in a particular security on
one or more trading days may be viewed
as one event if all such transactions
3 See Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010) (SR–BX–2010–040).
4 See Securities Exchange Act Release No. 68818
(February 1, 2013), 78 FR 9100 (February 7, 2013)
(SR–BX–2013–010).
E:\FR\FM\20OCN1.SGM
20OCN1
Federal Register / Vol. 86, No. 200 / Wednesday, October 20, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1
were effected based on the same
fundamentally incorrect or grossly
misinterpreted issuance information
resulting in a severe valuation error for
all such transactions; and (ii) in the
event of any disruption or malfunction
in the operation of the electronic
communications and trading facilities of
an Exchange, another SRO, or
responsible single plan processor in
connection with the transmittal or
receipt of a trading halt, an Officer,
acting on his or her own motion, shall
nullify any transaction that occurs after
a trading halt has been declared by the
primary listing market for a security and
before such trading halt has officially
ended according to the primary listing
market.5
These changes were originally
scheduled to operate for a pilot period
to coincide with the pilot period for the
Plan to Address Extraordinary Market
Volatility (the ‘‘Limit Up-Limit Down
Plan’’ or ‘‘LULD Plan’’).6 In April 2019,
the Commission approved an
amendment to the LULD Plan for it to
operate on a permanent, rather than
pilot, basis.7 In light of that change, the
Exchange amended Equity 11, Rule
11890 to untie the pilot program’s
effectiveness from that of the LULD Plan
and to extend the pilot’s effectiveness to
the close of business on October 18,
2019.8 Subsequently, the Exchange
amended Rule 11890 to extend the
pilot’s effectiveness to the close of
business on October 20, 2021.9
The Exchange now proposes to amend
Equity 11, Rule 11890 to extend the
pilot’s effectiveness for a further six
months until the close of business on
April 20, 2022. If the pilot period is not
either extended, replaced or approved
as permanent, the prior versions of
paragraphs (a)(2)(C), (c)(1), (b)(i), and
(b)(ii) shall be in effect, and the
provisions of paragraphs (g) through (i)
shall be null and void.10 In such an
event, the remaining sections of Rule
11890 would continue to apply to all
transactions executed on the Exchange.
5 See Securities Exchange Act Release No. 72434
(June 19, 2014), 79 FR 36110 (June 25, 2014) (SR–
BX–2014–021).
6 See Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012) (the
‘‘Limit Up-Limit Down Release’’).
7 See Securities Exchange Act Release No. 85623
(April 11, 2019), 84 FR 16086 (April 17, 2019)
(approving Eighteenth Amendment to LULD Plan).
8 See Securities Exchange Act Release No. 85613
(April 11, 2019), 84 FR 16077 (April 17, 2019) (SR–
BX–2019–009).
9 See Securities Exchange Act Release No. 91575
(April 15, 2021), 86 FR 20779 (April 21, 2021) (SR–
BX–2021–016).
10 See notes 3–5, supra. The prior versions of
paragraphs (a)(2)(C), (c)(1), (b)(i), and (b)(ii)
generally provided greater discretion to the
Exchange with respect to breaking erroneous trades.
VerDate Sep<11>2014
17:55 Oct 19, 2021
Jkt 256001
The Exchange understands that the
other national securities exchanges and
Financial Industry Regulatory Authority
(‘‘FINRA’’) will also file similar
proposals to extend their respective
clearly erroneous execution pilot
programs, the substance of which are
identical to Rule 11890.
The Exchange does not propose any
additional changes to Equity 11, Rule
11890. Extending the effectiveness of
Rule 11890 for an additional six months
will provide the Exchange and other
self-regulatory organizations additional
time to consider whether further
amendments to the clearly erroneous
execution rules are appropriate.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
requirements of Section 6(b) of the
Act,11 in general, and Section 6(b)(5) of
the Act,12 in particular, in that it is
designed to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, to promote just and equitable
principles of trade, and, in general, to
protect investors and the public interest
and not to permit unfair discrimination
between customers, issuers, brokers, or
dealers.
The Exchange believes that the
proposed rule change promotes just and
equitable principles of trade in that it
promotes transparency and uniformity
across markets concerning review of
transactions as clearly erroneous. The
Exchange believes that extending the
clearly erroneous execution pilot under
Equity 11, Rule 11890 for an additional
six months would help assure that the
determination of whether a clearly
erroneous trade has occurred will be
based on clear and objective criteria,
and that the resolution of the incident
will occur promptly through a
transparent process. The proposed rule
change would also help assure
consistent results in handling erroneous
trades across the U.S. equities markets,
thus furthering fair and orderly markets,
the protection of investors and the
public interest. Based on the foregoing,
the Exchange believes the amended
clearly erroneous executions rule
should continue to be in effect on a pilot
basis while the Exchange and other selfregulatory organizations consider
whether further amendments to these
rules are appropriate.
11 15
12 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00064
Fmt 4703
Sfmt 4703
58117
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The proposal
would ensure the continued,
uninterrupted operation of harmonized
clearly erroneous execution rules across
the U.S. equities markets while the
Exchange and other self-regulatory
organizations consider whether further
amendments to these rules are
appropriate. The Exchange understands
that the other national securities
exchanges and FINRA will also file
similar proposals to extend their
respective clearly erroneous execution
pilot programs. Thus, the proposed rule
change will help to ensure consistency
across market centers without
implicating any competitive issues.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 13 and
subparagraph (f)(6) of Rule 19b–4
thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative prior to 30 days after
the date of the filing. However, Rule
19b–4(f)(6)(iii) 16 permits the
Commission to designate a shorter time
if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposed
rule change may become operative
13 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
14 17
E:\FR\FM\20OCN1.SGM
20OCN1
lotter on DSK11XQN23PROD with NOTICES1
58118
Federal Register / Vol. 86, No. 200 / Wednesday, October 20, 2021 / Notices
immediately upon filing. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest, as it will allow the
current clearly erroneous execution
pilot program to continue
uninterrupted, without any changes,
while the Exchange and the other
national securities exchanges consider a
permanent proposal for clearly
erroneous execution reviews. For this
reason, the Commission hereby waives
the 30-day operative delay and
designates the proposed rule change as
operative upon filing.17
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
should be approved or disapproved.
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–BX–2021–046 and should
be submitted on or before November 10,
2021.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Assistant Secretary.
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–
BX–2021–046 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BX–2021–046. 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
17 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).
VerDate Sep<11>2014
17:55 Oct 19, 2021
Jkt 256001
[FR Doc. 2021–22795 Filed 10–19–21; 8:45 am]
Register on February 10, 2021.3 On
March 24, 2021, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 On May 11, 2021, the
Commission instituted proceedings
under Section 19(b)(2)(B) of the Act 6 to
determine whether to approve or
disapprove the proposed rule change.7
On August 6, 2021, the Commission
designated a longer period within which
to issue an order approving or
disapproving the proposed rule change.8
The Commission received no comment
letters on the proposed rule change. On
August 12, 2021, the Exchange
withdrew the proposed rule change
(SR–CboeBZX–2021–014).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–22808 Filed 10–19–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93326; File No. SR–CBOE–
2021–059]
BILLING CODE 8011–01–P
[Release No. 34–93316; File No. SR–
CboeBZX–2021–014]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of
Withdrawal of a Proposed Rule Change
To Allow Invesco Focused Discovery
Growth ETF and Invesco Select
Growth ETF To Strike and Publish
Multiple Intraday Net Asset Values
October 14, 2021.
On January 22, 2021, Cboe BZX
Exchange, Inc. (the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to allow Invesco Focused
Discovery Growth ETF and Invesco
Select Growth ETF to strike and publish
multiple intraday net asset values.
The proposed rule change was
published for comment in the Federal
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00065
Fmt 4703
Sfmt 4703
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Rule
5.54 and Rule 5.55 in Connection With
a Designated Primary Market-Maker’s
and a Lead Market-Maker’s Obligation
To Submit Opening Quotes for the
Regular Trading Hours Session in
Index Options
October 14, 2021.
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
8, 2021, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
3 See Securities Exchange Act Release No. 91064
(February 4, 2021), 86 FR 8935.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 91398,
86 FR 16650 (March 30, 2021).
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 91845,
86 FR 26767 (May 17, 2021).
8 See Securities Exchange Act Release No. 92564,
86 FR 44459 (August 12, 2021).
9 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
E:\FR\FM\20OCN1.SGM
20OCN1
]]>Agencies
[Federal Register Volume 86, Number 200 (Wednesday, October 20, 2021)]
[Notices]
[Pages 58116-58118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22795]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93328; File No. SR-BX-2021-046]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot
Related to Clearly Erroneous Transactions Until April 20, 2022
October 14, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 8, 2021, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I and II, below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the current pilot program related
to BX Equity 11, Rule 11890 (Clearly Erroneous Transactions) to the
close of business on April 20, 2022.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to extend the current
pilot program related to Equity 11, Rule 11890, Clearly Erroneous
Transactions, to the close of business on April 20, 2022. The pilot
program is currently due to expire on October 20, 2021.
On September 10, 2010, the Commission approved, on a pilot basis,
changes to Equity 11, Rule 11890 that, among other things: (i) Provided
for uniform treatment of clearly erroneous execution reviews in multi-
stock events involving twenty or more securities; and (ii) reduced the
ability of the Exchange to deviate from the objective standards set
forth in the rule.\3\ In 2013, the Exchange adopted a provision
designed to address the operation of the Plan.\4\ Finally, in 2014, the
Exchange adopted two additional provisions providing that: (i) A series
of transactions in a particular security on one or more trading days
may be viewed as one event if all such transactions
[[Page 58117]]
were effected based on the same fundamentally incorrect or grossly
misinterpreted issuance information resulting in a severe valuation
error for all such transactions; and (ii) in the event of any
disruption or malfunction in the operation of the electronic
communications and trading facilities of an Exchange, another SRO, or
responsible single plan processor in connection with the transmittal or
receipt of a trading halt, an Officer, acting on his or her own motion,
shall nullify any transaction that occurs after a trading halt has been
declared by the primary listing market for a security and before such
trading halt has officially ended according to the primary listing
market.\5\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010) (SR-BX-2010-040).
\4\ See Securities Exchange Act Release No. 68818 (February 1,
2013), 78 FR 9100 (February 7, 2013) (SR-BX-2013-010).
\5\ See Securities Exchange Act Release No. 72434 (June 19,
2014), 79 FR 36110 (June 25, 2014) (SR-BX-2014-021).
---------------------------------------------------------------------------
These changes were originally scheduled to operate for a pilot
period to coincide with the pilot period for the Plan to Address
Extraordinary Market Volatility (the ``Limit Up-Limit Down Plan'' or
``LULD Plan'').\6\ In April 2019, the Commission approved an amendment
to the LULD Plan for it to operate on a permanent, rather than pilot,
basis.\7\ In light of that change, the Exchange amended Equity 11, Rule
11890 to untie the pilot program's effectiveness from that of the LULD
Plan and to extend the pilot's effectiveness to the close of business
on October 18, 2019.\8\ Subsequently, the Exchange amended Rule 11890
to extend the pilot's effectiveness to the close of business on October
20, 2021.\9\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down
Release'').
\7\ See Securities Exchange Act Release No. 85623 (April 11,
2019), 84 FR 16086 (April 17, 2019) (approving Eighteenth Amendment
to LULD Plan).
\8\ See Securities Exchange Act Release No. 85613 (April 11,
2019), 84 FR 16077 (April 17, 2019) (SR-BX-2019-009).
\9\ See Securities Exchange Act Release No. 91575 (April 15,
2021), 86 FR 20779 (April 21, 2021) (SR-BX-2021-016).
---------------------------------------------------------------------------
The Exchange now proposes to amend Equity 11, Rule 11890 to extend
the pilot's effectiveness for a further six months until the close of
business on April 20, 2022. If the pilot period is not either extended,
replaced or approved as permanent, the prior versions of paragraphs
(a)(2)(C), (c)(1), (b)(i), and (b)(ii) shall be in effect, and the
provisions of paragraphs (g) through (i) shall be null and void.\10\ In
such an event, the remaining sections of Rule 11890 would continue to
apply to all transactions executed on the Exchange. The Exchange
understands that the other national securities exchanges and Financial
Industry Regulatory Authority (``FINRA'') will also file similar
proposals to extend their respective clearly erroneous execution pilot
programs, the substance of which are identical to Rule 11890.
---------------------------------------------------------------------------
\10\ See notes 3-5, supra. The prior versions of paragraphs
(a)(2)(C), (c)(1), (b)(i), and (b)(ii) generally provided greater
discretion to the Exchange with respect to breaking erroneous
trades.
---------------------------------------------------------------------------
The Exchange does not propose any additional changes to Equity 11,
Rule 11890. Extending the effectiveness of Rule 11890 for an additional
six months will provide the Exchange and other self-regulatory
organizations additional time to consider whether further amendments to
the clearly erroneous execution rules are appropriate.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\11\ in general, and
Section 6(b)(5) of the Act,\12\ in particular, in that it is designed
to remove impediments to and perfect the mechanism of a free and open
market and a national market system, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest and not to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change promotes just
and equitable principles of trade in that it promotes transparency and
uniformity across markets concerning review of transactions as clearly
erroneous. The Exchange believes that extending the clearly erroneous
execution pilot under Equity 11, Rule 11890 for an additional six
months would help assure that the determination of whether a clearly
erroneous trade has occurred will be based on clear and objective
criteria, and that the resolution of the incident will occur promptly
through a transparent process. The proposed rule change would also help
assure consistent results in handling erroneous trades across the U.S.
equities markets, thus furthering fair and orderly markets, the
protection of investors and the public interest. Based on the
foregoing, the Exchange believes the amended clearly erroneous
executions rule should continue to be in effect on a pilot basis while
the Exchange and other self-regulatory organizations consider whether
further amendments to these rules are appropriate.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposal would ensure
the continued, uninterrupted operation of harmonized clearly erroneous
execution rules across the U.S. equities markets while the Exchange and
other self-regulatory organizations consider whether further amendments
to these rules are appropriate. The Exchange understands that the other
national securities exchanges and FINRA will also file similar
proposals to extend their respective clearly erroneous execution pilot
programs. Thus, the proposed rule change will help to ensure
consistency across market centers without implicating any competitive
issues.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative
[[Page 58118]]
immediately upon filing. The Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and
the public interest, as it will allow the current clearly erroneous
execution pilot program to continue uninterrupted, without any changes,
while the Exchange and the other national securities exchanges consider
a permanent proposal for clearly erroneous execution reviews. For this
reason, the Commission hereby waives the 30-day operative delay and
designates the proposed rule change as operative upon filing.\17\
---------------------------------------------------------------------------
\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ 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 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 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-BX-2021-046 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2021-046. 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-BX-2021-046 and should be submitted on
or before November 10, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22795 Filed 10-19-21; 8:45 am]
BILLING CODE 8011-01-P
