Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Current Pilot Program Related to Rule 7.10, 58313-58315 [2021-22935]
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[FR Doc. 2021–22888 Filed 10–20–21; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission Asset
Management Advisory Committee
(‘‘AMAC’’) will hold a public meeting
on Thursday, October 28, 2021 at 10:00
a.m.
PLACE: The meeting will be conducted
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may watch the webcast of the meeting
on the Commission’s website at
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STATUS: The meeting will begin at 10:00
a.m. and will be open to the public by
webcast on the Commission’s website at
www.sec.gov.
MATTERS TO BE CONSIDERED: On October
19, 2021, the Commission issued notice
of the meeting (Release No. 34–93380),
indicating that the meeting is open to
the public and inviting the public to
submit written comments to AMAC.
This Sunshine Act notice is being
issued because a majority of the
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TIME AND DATE:
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Dated: October 19, 2021.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2021–23108 Filed 10–19–21; 4:15 pm]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93360; File No. SR–
NYSECHX–2021–15]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Current
Pilot Program Related to Rule 7.10
October 15, 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 October
5, 2021, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the 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 extend the
current pilot program related to Rule
7.10 (Clearly Erroneous Executions) to
the close of business on April 20, 2022.
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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
Frm 00067
Fmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
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58313
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The purpose of the proposed rule
change is to extend the current pilot
program related to Rule 7.10 (Clearly
Erroneous Executions) 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 Article 20, Rule 10 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.4
In 2013, the Exchange adopted a
provision designed to address the
operation of the Plan.5 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
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.6
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’’),7 including any
extensions to the pilot period for the
4 See Securities Exchange Act Release No. 62886
(Sept. 10, 2010), 75 FR 56613 (Sept. 16, 2010) (SR–
CHX–2010–13).
5 See Securities Exchange Act Release No. 68802
(Feb. 1, 2013), 78 FR 9092 (Feb. 7, 2013) (SR–CHX–
2013–04).
6 See Securities Exchange Act Release No. 72434
(June 19, 2014), 79 FR 36110 (June 25, 2014) (SR–
CHX–2014–06).
7 See Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012) (the
‘‘Limit Up-Limit Down Release’’).
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21OCN1
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Federal Register / Vol. 86, No. 201 / Thursday, October 21, 2021 / Notices
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LULD Plan.8 In April 2019, the
Commission approved an amendment to
the LULD Plan for it to operate on a
permanent, rather than pilot, basis.9 In
light of that change, the Exchange
amended Article 20, Rule 10 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, 2019.10 After
the Commission approved the
Exchange’s proposal to transition to
trading on Pillar,11 the Exchange
amended the corresponding Pillar
rule—Rule 7.10—to extend the pilot’s
effectiveness to the close of business on
April 20, 2020,12 October 20, 2020,13
April 20, 2021,14 and subsequently,
October 20, 2021.15
The Exchange now proposes to amend
Rule 7.10 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 (c), (e)(2), (f), and (g) of
Article 20, Rule 10 prior to being
amended by SR–CHX–2010–13 shall be
in effect, and the provisions of
paragraphs (i) through (k) shall be null
and void.16 In such an event, the
remaining sections of Article 20, Rule
10 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
8 See Securities Exchange Act Release No. 71782
(March 24, 2014), 79 FR 17630 (March 28, 2014)
(SR–CHX–2014–04).
9 See Securities Exchange Act Release No. 85623
(April 11, 2019), 84 FR 16086 (April 17, 2019)
(approving Eighteenth Amendment to LULD Plan).
10 See Securities Exchange Act Release No. 85533
(April 5, 2019), 84 FR 14701 (April 11, 2019) (SR–
NYSECHX–2019–04).
11 See Securities Exchange Act Release No. 87264
(October 9, 2019), 84 FR 55345 (October 16, 2019)
(SR–NYSECHX–2019–08). Article 20, Rule 10 is no
longer applicable to any securities that trade on the
Exchange.
12 See Securities Exchange Act Release No. 87351
(October 18, 2019), 84 FR 57068 (October 24, 2019)
(SR–NYSECHX–2019–13).
13 See Securities Exchange Act Release No. 88591
(April 8, 2020), 85 FR 20771 (April 14, 2020) (SR–
NYSECHX–2020–09).
14 See Securities Exchange Act Release No. 90156
(October 13, 2020), 85 FR 66384 (October 19, 2020)
(SR–NYSECHX–2020–29).
15 See Securities Exchange Act Release No. 91550
(April 14, 2021), 86 FR 20560 (April 20, 2021) (SR–
NYSECHX–2021–06).
16 See supra notes 4–6. The prior versions of
paragraphs (c), (e)(2), (f), and (g) generally provided
greater discretion to the Exchange with respect to
breaking erroneous trades.
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17:35 Oct 20, 2021
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programs, the substance of which are
identical to Rule 7.10.
The Exchange does not propose any
additional changes to Rule 7.10.
Extending the effectiveness of these
rules for an additional six months will
provide the Exchange and other selfregulatory 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,17 in general, and Section 6(b)(5) of
the Act,18 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
Rule 7.10 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.
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
17 15
18 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00068
Fmt 4703
Sfmt 4703
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 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 19 and Rule 19b–
4(f)(6) thereunder.20
A proposed rule change filed under
Rule 19b–4(f)(6) 21 normally does not
become operative prior to 30 days after
the date of the filing. However, Rule
19b–4(f)(6)(iii) 22 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
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
19 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.
21 17 CFR 240.19b–4(f)(6).
22 17 CFR 240.19b–4(f)(6)(iii).
20 17
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Federal Register / Vol. 86, No. 201 / Thursday, October 21, 2021 / Notices
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.23
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.
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–NYSECHX–2021–15 and
should be submitted on or before
November 12, 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.24
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–
NYSECHX–2021–15 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–NYSECHX–2021–15. 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
23 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).
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[FR Doc. 2021–22935 Filed 10–20–21; 8:45 am]
BILLING CODE 8011–01–P
58315
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal
office, 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
[Release No. 34–93367; File No. SR–
EMERALD–2021–33]
Self-Regulatory Organizations: MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule To Adjust the Options
Regulatory Fee
October 15, 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
7, 2021, MIAX Emerald, LLC (‘‘MIAX
Emerald’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the Exchange’s Fee Schedule
(‘‘Fee Schedule’’) to adjust the Options
Regulatory Fee (‘‘ORF’’).
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
Currently, the Exchange assesses ORF
in the amount of $0.00060 per contract
side. The Exchange proposes to increase
the amount of ORF from $0.00060 per
contract side to $0.0016 per contract
side. The Exchange initially filed this
proposal on July 30, 2021 (SR–
EMERALD–2021–24) and withdrew
such filing on August 12, 2021. The
Exchange refiled this proposal on
August 12, 2021 (SR–EMERALD–2021–
27) and withdrew such filing on October
7, 2021. The Exchange proposes to
implement this fee change effective
October 7, 2021.
In light of historical and projected
volume changes and shifts in the
industry and on the Exchange, as well
as changes to the Exchange’s regulatory
cost structure, the Exchange proposes to
change the amount of ORF that will be
collected by the Exchange. The
Exchange’s proposed change to the ORF
should balance the Exchange’s
regulatory revenue against the
anticipated regulatory costs. The
Exchange will continue to monitor ORF
to ensure that revenue collected from
the ORF, in combination with other
regulatory fees and fines, does not
exceed the Exchange’s total regulatory
costs.
The Exchange notes it originally
adopted the current ORF amount at a
significantly lower rate as the Exchange
had just begun operations and that the
amount of ORF it collects has remain
unchanged since it was first adopted in
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Agencies
[Federal Register Volume 86, Number 201 (Thursday, October 21, 2021)]
[Notices]
[Pages 58313-58315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22935]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93360; File No. SR-NYSECHX-2021-15]
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Extend
the Current Pilot Program Related to Rule 7.10
October 15, 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 October 5, 2021, the NYSE Chicago, Inc. (``NYSE Chicago''
or the ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 Rule 7.10 (Clearly Erroneous Executions) to the close of business on
April 20, 2022. The proposed rule change is available on the Exchange's
website at www.nyse.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to extend the current
pilot program related to Rule 7.10 (Clearly Erroneous Executions) 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 Article 20, Rule 10 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.\4\ In 2013, the Exchange adopted a provision
designed to address the operation of the Plan.\5\ 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 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.\6\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 62886 (Sept. 10,
2010), 75 FR 56613 (Sept. 16, 2010) (SR-CHX-2010-13).
\5\ See Securities Exchange Act Release No. 68802 (Feb. 1,
2013), 78 FR 9092 (Feb. 7, 2013) (SR-CHX-2013-04).
\6\ See Securities Exchange Act Release No. 72434 (June 19,
2014), 79 FR 36110 (June 25, 2014) (SR-CHX-2014-06).
---------------------------------------------------------------------------
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''),\7\ including any extensions to the pilot period for the
[[Page 58314]]
LULD Plan.\8\ In April 2019, the Commission approved an amendment to
the LULD Plan for it to operate on a permanent, rather than pilot,
basis.\9\ In light of that change, the Exchange amended Article 20,
Rule 10 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.\10\ After the Commission approved the
Exchange's proposal to transition to trading on Pillar,\11\ the
Exchange amended the corresponding Pillar rule--Rule 7.10--to extend
the pilot's effectiveness to the close of business on April 20,
2020,\12\ October 20, 2020,\13\ April 20, 2021,\14\ and subsequently,
October 20, 2021.\15\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down
Release'').
\8\ See Securities Exchange Act Release No. 71782 (March 24,
2014), 79 FR 17630 (March 28, 2014) (SR-CHX-2014-04).
\9\ See Securities Exchange Act Release No. 85623 (April 11,
2019), 84 FR 16086 (April 17, 2019) (approving Eighteenth Amendment
to LULD Plan).
\10\ See Securities Exchange Act Release No. 85533 (April 5,
2019), 84 FR 14701 (April 11, 2019) (SR-NYSECHX-2019-04).
\11\ See Securities Exchange Act Release No. 87264 (October 9,
2019), 84 FR 55345 (October 16, 2019) (SR-NYSECHX-2019-08). Article
20, Rule 10 is no longer applicable to any securities that trade on
the Exchange.
\12\ See Securities Exchange Act Release No. 87351 (October 18,
2019), 84 FR 57068 (October 24, 2019) (SR-NYSECHX-2019-13).
\13\ See Securities Exchange Act Release No. 88591 (April 8,
2020), 85 FR 20771 (April 14, 2020) (SR-NYSECHX-2020-09).
\14\ See Securities Exchange Act Release No. 90156 (October 13,
2020), 85 FR 66384 (October 19, 2020) (SR-NYSECHX-2020-29).
\15\ See Securities Exchange Act Release No. 91550 (April 14,
2021), 86 FR 20560 (April 20, 2021) (SR-NYSECHX-2021-06).
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The Exchange now proposes to amend Rule 7.10 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 (c), (e)(2),
(f), and (g) of Article 20, Rule 10 prior to being amended by SR-CHX-
2010-13 shall be in effect, and the provisions of paragraphs (i)
through (k) shall be null and void.\16\ In such an event, the remaining
sections of Article 20, Rule 10 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 7.10.
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\16\ See supra notes 4-6. The prior versions of paragraphs (c),
(e)(2), (f), and (g) generally provided greater discretion to the
Exchange with respect to breaking erroneous trades.
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The Exchange does not propose any additional changes to Rule 7.10.
Extending the effectiveness of these rules 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,\17\ in general, and
Section 6(b)(5) of the Act,\18\ 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 Rule 7.10 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.
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\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
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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 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 \19\ and Rule 19b-
4(f)(6) thereunder.\20\
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\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 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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A proposed rule change filed under Rule 19b-4(f)(6) \21\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \22\ 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 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
[[Page 58315]]
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.\23\
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\21\ 17 CFR 240.19b-4(f)(6).
\22\ 17 CFR 240.19b-4(f)(6)(iii).
\23\ 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).
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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-NYSECHX-2021-15 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-NYSECHX-2021-15. 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-NYSECHX-2021-15 and should be submitted
on or before November 12, 2021.
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\24\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-22935 Filed 10-20-21; 8:45 am]
BILLING CODE 8011-01-P