Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NYSE Rule 7.31, 59774-59776 [2021-23532]
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59774
Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Notices
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:
jspears on DSK121TN23PROD with NOTICES1
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–2021–081 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–NASDAQ–2021–081. 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–2021–081 and
should be submitted on or before
November 18, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–23434 Filed 10–27–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93416; File No. SR–NYSE–
2021–61]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
NYSE Rule 7.31
October 25, 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
13, 2021, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
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
NYSE Rule 7.31 to establish a minimum
dollar threshold into its rule for Limit
Order Price Protection. 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
11 17
CFR 200.30–3(a)(12).
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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
NYSE Rule 7.31 (Orders and Modifiers)
to establish a minimum dollar threshold
in its rule for Limit Order Price
Protection.
Rule 7.31(a)(2)(B) (‘‘Limit Order Price
Protection’’) describes the price
protection mechanism for Limit Orders.
Currently, the rule provides that a Limit
Order to buy (sell) will be rejected if it
is priced at or above (below) a specified
percentage away from the National Best
Offer (National Best Bid) (‘‘NBO’’ and
‘‘NBB,’’ respectively).4
The Exchange proposes to amend
Rule 7.31(a)(2)(B) to introduce a
minimum dollar threshold of $0.15 into
the Limit Order Price Protection
calculation for lower-priced securities.
Accordingly, the proposed rule would
provide that a Limit Order to buy (sell)
would be rejected if it was priced at or
above (below) the greater of $0.15 or a
specified percentage away from the
NBO (NBB).
The Exchange believes that the
introduction of this minimum dollar
threshold would enhance the Limit
Order Price Protection mechanism for
securities with a reference price below
$1.50 because using the current 10%
multiplier for such securities would
result in too narrow of a price protection
mechanism. Thus, the proposed rule
change would encourage price
continuity, specifically in lower-priced
illiquid securities.
This proposed minimum dollar
threshold of $0.15 is the same minimum
dollar threshold that currently exists in
the Limit Order Price Protection rules of
the Exchange’s affiliate exchanges NYSE
American LLC (‘‘NYSE American’’),
NYSE Arca, Inc. (‘‘NYSE Arca’’), NYSE
Chicago, Inc. (‘‘NYSE Chicago’’), and
NYSE National, Inc (‘‘NYSE National’’).5
4 For securities with a reference price between
$0.00 and $25.00, the specified percentage is 10%;
for securities with a reference price between $25.01
and $50.00, the specified percentage is 5%; and for
securities with a reference price greater than $50.00,
the specified percentage is 3%.
5 See NYSE American Rule 7.31E(a)(2)(B); NYSE
Arca Rule 7.31–E(a)(2)(B); NYSE Chicago Rule
7.31(a)(2)(B); and NYSE National Rule 7.31(a)(2)(B).
See also Securities Exchange Act Release Nos.
81943 (October 25, 2017), 82 FR 50475 (October 31,
2017) (SR–NYSAMER–2017–25) (adding $0.15
minimum dollar threshold to Limit Order Price
Protection in NYSE American Rule 7.31E(a)(2)(B));
82004 (November 2, 2017), 82 FR 51890 (November
8, 2017) (SR–NYSEArca–2017–126) (adding same to
NYSE Arca Rule 7.31–E(a)(2)(B)); 87264 (October 9,
2019), 84 FR 55345 (October 16, 2019) (SR–
NYSECHX–2019–08) (regarding NYSE Chicago Rule
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Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Notices
Implementation
The Exchange anticipates
implementing the proposed change in
November 2021 and will announce the
timing of such changes by Trader
Update.
jspears on DSK121TN23PROD with NOTICES1
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,6 in general, and
with Section 6(b)(5),7 in particular,
because it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
to 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 change adding a $0.15
minimum price threshold to Rule
7.31(a)(2)(B) would remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and in
general, protect investors and the public
interest, because the proposed change is
based on the Limit Order Price
Protection rules currently in effect on
NYSE American, NYSE Arca, NYSE
Chicago, and NYSE National, and
therefore is not novel.8 The Exchange
further believes that the proposed
change would enhance the Exchange’s
Limit Order Price Protection
mechanism, which protects from
aberrant prices, thus improving
continuous trading and price discovery.
In addition, the proposal to enhance
Limit Order Price Protection by adding
a minimum dollar threshold would
assist with the maintenance of fair and
orderly markets because such
mechanisms protect investors from
potentially receiving executions away
from the prevailing market prices at any
given time.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change will not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not intended to
address competitive issues but rather
7.31(a)(2)(B)); 83289 (May 17, 2018), 83 FR 23968
(May 23, 2018) (SR–NYSENAT–2018–02) (regarding
NYSE National Rule 7.31(a)(2)(B)).
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
8 See supra note 4.
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would provide for a more effective Limit
Order Price Protection mechanism,
specifically for lower-priced securities.
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 9 and Rule 19b–
4(f)(6) thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),12 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay to allow the Exchange to
make the proposed enhancement to its
Limit Order Price Protection mechanism
when the technology associated with
this proposed change is available, which
is anticipated to be less than 30 days
from the date of this filing.
The Exchange represents that the
proposed change would assist with the
maintenance of fair and orderly markets
by protecting investors from potentially
receiving executions away from the
prevailing market prices at any given
time. And the Commission notes that
the proposed minimum dollar threshold
is the same minimum dollar threshold
that currently exists in the Limit Order
Price Protection rules of the Exchange’s
affiliate exchanges.13 The Commission
therefore believes that waiver of the 30day operative delay is consistent with
9 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.
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii).
13 See supra note 5 and accompanying text.
10 17
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59775
the protection of investors and the
public interest. Accordingly, the
Commission waives the 30-day
operative delay and designates the
proposal operative upon filing.14
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
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–
NYSE–2021–61 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2021–61. 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
14 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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59776
Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Notices
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR- NYSE–2021–61, and
should be submitted on or before
November 18, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–23532 Filed 10–27–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93412; File No. S7–09–21]
Order Granting Conditional
Substituted Compliance in Connection
With Certain Requirements Applicable
to Non-U.S. Security-Based Swap
Dealers and Major Security-Based
Swap Participants Subject to
Regulation in the Kingdom of Spain
October 22, 2021.
jspears on DSK121TN23PROD with NOTICES1
I. Overview
The Spanish Comisio´n Nacional del
Mercado de Valores (‘‘CNMV’’) has
submitted a ‘‘substituted compliance’’
application requesting that the
Securities and Exchange Commission
(‘‘Commission’’) determine, pursuant to
the Securities Exchange Act of 1934
(‘‘Exchange Act’’) rule 3a71–6,1 that
security-based swap dealers and major
security-based swap participants (‘‘SBS
Entities’’) subject to regulation in the
Kingdom of Spain (‘‘Spain’’)
conditionally may satisfy requirements
under the Exchange Act by complying
with comparable Spanish and European
Union (‘‘EU’’) requirements.2 The
CNMV sought substituted compliance in
connection with certain Exchange Act
15 17
CFR 200.30–3(a)(12).
CFR 240.3a71–6.
2 See Letter from Rodrigo Buenaventura, Chair,
CNMV, dated August 20, 2021 (‘‘CNMV
Application’’). The CNMV Application is available
on the Commission’s website at: https://
www.sec.gov/page/exchange-act-substitutedcompliance-and-listed-jurisidction-applicationssecurity-based-swap.
1 17
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requirements related to risk control,
internal supervision, chief compliance
officer, antitrust, counterparty
protection, recordkeeping, reporting,
and notification.3 The CNMV
Application incorporated comparability
analyses between the relevant
requirements in Exchange Act section
15F 4 and the rules and regulations
thereunder and applicable Spanish and
EU law, as well as information regarding
Spanish and EU supervisory and
enforcement frameworks.
On August 20, 2021, the Commission
issued a notice of the CNMV
Application, accompanied by a
proposed order to grant substituted
compliance with conditions in
connection with the CNMV Application
(‘‘proposed Order’’).5 The proposed
Order incorporated a number of
conditions to tailor the scope of
substituted compliance consistent with
the prerequisite that relevant Spanish
and EU requirements produce
regulatory outcomes that are comparable
to relevant requirements under the
Exchange Act.
As discussed below, the Commission
is adopting a final order (‘‘Order’’) that
has been modified from the proposal in
certain respects to address commenter
concerns and to make clarifying
changes.
II. Substituted Compliance Framework
and Prerequisites
A. Substituted Compliance Framework
and Purpose
As the Commission has discussed
previously,6 Exchange Act rule 3a71–6
3 Risk control requirements include requirements
related to internal risk management, trade
acknowledgement and verification, portfolio
reconciliation and dispute resolution, portfolio
compression, and trading relationship
documentation; internal supervision, chief
compliance officer, and antittrust requirements
include requirements related to diligent
supervision, conflicts of interest, information
gathering, chief compliance officers, and antitrust
considerations; counterparty protection
requirements include requirements related to
disclosure of material risks and characteristics,
disclosure of material incentives or conflicts of
interest, ‘‘know your counterparty,’’ suitability of
recommendations, fair and balanced
communications, disclosure of daily marks, and
disclosure of clearing rights; and recordkeeping,
reporting, and notification requirements include
requirements related to making and keeping current
certain prescribed records, preservation of records,
reporting, and notificiation.
4 15 U.S.C. 78o–10.
5 See Exchange Act Release No. 92716 (Aug. 20,
2021), 86 FR 47668 (Aug. 26, 2021) (‘‘Spanish
Substituted Compliance Notice and Proposed
Order’’).
6 See, e.g., Exchange Act Release No. 90378 (Nov.
9, 2020), 85 FR 72726 (Nov. 13, 2020) (‘‘German
Substituted Compliance Notice and Proposed
Order’’); Exchange Act Release No. 90765 (Dec. 22,
2020), 85 FR 85686 (Dec. 29, 2020) (‘‘German
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provides a framework whereby non-U.S.
SBS Entities may satisfy certain
requirements under Exchange Act
section 15F by complying with
comparable regulatory requirements of a
foreign jurisdiction.7 Because
substituted compliance does not
constitute exemptive relief, but instead
provides an alternative method by
which non-U.S. SBS Entities may
comply with applicable Exchange Act
requirements, the non-U.S. SBS Entities
would remain subject to the relevant
requirements under section 15F. The
Commission accordingly will retain the
authority to inspect, examine, and
supervise those SBS Entities’
compliance and take enforcement action
as appropriate. Under the substituted
compliance framework, failure to
comply with the applicable foreign
requirements and other conditions to a
substituted compliance order would
lead to a violation of the applicable
requirements under the Exchange Act
and potential enforcement action by the
Commission (as opposed to automatic
revocation of the substituted
compliance order).
Under rule 3a71–6, substituted
compliance potentially is available in
connection with certain section 15F
requirements,8 but is not available in
connection with antifraud prohibitions
and certain other requirements under
the Federal securities laws.9 SBS
Substituted Compliance Order’’) Exchange Act
Release No. 92647 (Aug. 12, 2021), 86 FR 46500
(Aug. 18, 2021) (‘‘German Substituted Compliance
Notice and Proposed Amended Order’’); Exchange
Act Release No. 93411 (Oct. 22, 2021) (‘‘German
Amended Substituted Compliance Order’’);
Exchange Act Release No. 90766 (Dec. 22, 2020), 85
FR 85720 (Dec. 29, 2020) (‘‘French Substituted
Compliance Notice and Proposed Order’’);
Exchange Act Release No. 91477 (Apr. 5, 2021), 86
FR 18341 (Apr. 8, 2021) (‘‘French Substituted
Compliance Re-Opening Release’’); Exchange Act
Release No. 92484 (July 23, 2021), 86 FR 41612
(Aug. 2, 2021) (‘‘French Substituted Compliance
Order’’); Exchange Act Release No. 91476 (Apr. 5,
2021), 86 FR 18378 (Apr. 8, 2021) (‘‘UK Substituted
Compliance Notice and Proposed Order’’);
Exchange Act Release No. 92529 (July 30, 2021), 86
FR 43318 (August 6, 2021), ‘‘UK Substituted
Compliance Order’’); Exchange Act Release No.
92632 (Aug. 10, 2021), 86 FR 45770 (Aug. 16, 2021)
(‘‘Swiss Substituted Compliance Notice and
Proposed Order’’); Exchange Act Release No. 93284
(Oct. 8, 2021), 86 FR 57455 (Oct. 15, 2021) (‘‘Swiss
Substituted Compliance Order’’); Spanish
Substituted Compliance Notice and Proposed
Order, 86 FR 47668.
7 See Exchange Act Release No. 77617 (Apr. 14,
2016), 81 FR 29960, 30079 (May 13, 2016)
(‘‘Business Conduct Adopting Release’’).
8 17 CFR 240.3a71–6(d).
9 See Spanish Substituted Compliance Notice and
Proposed Order, 86 FR 47669 n.10 (addressing
unavailability under Rule 3a71–6 of substituted
compliance for information-related requirements
under Exchange Act section 15F, as well as for
provisions related to anti-fraud, transactions with
counterparties that are not eligible contract
participants, segregation of customer assets,
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]]>Agencies
[Federal Register Volume 86, Number 206 (Thursday, October 28, 2021)]
[Notices]
[Pages 59774-59776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23532]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93416; File No. SR-NYSE-2021-61]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend NYSE Rule 7.31
October 25, 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 13, 2021, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the Exchange. The
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 amend NYSE Rule 7.31 to establish a
minimum dollar threshold into its rule for Limit Order Price
Protection. 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 NYSE Rule 7.31 (Orders and
Modifiers) to establish a minimum dollar threshold in its rule for
Limit Order Price Protection.
Rule 7.31(a)(2)(B) (``Limit Order Price Protection'') describes the
price protection mechanism for Limit Orders. Currently, the rule
provides that a Limit Order to buy (sell) will be rejected if it is
priced at or above (below) a specified percentage away from the
National Best Offer (National Best Bid) (``NBO'' and ``NBB,''
respectively).\4\
---------------------------------------------------------------------------
\4\ For securities with a reference price between $0.00 and
$25.00, the specified percentage is 10%; for securities with a
reference price between $25.01 and $50.00, the specified percentage
is 5%; and for securities with a reference price greater than
$50.00, the specified percentage is 3%.
---------------------------------------------------------------------------
The Exchange proposes to amend Rule 7.31(a)(2)(B) to introduce a
minimum dollar threshold of $0.15 into the Limit Order Price Protection
calculation for lower-priced securities. Accordingly, the proposed rule
would provide that a Limit Order to buy (sell) would be rejected if it
was priced at or above (below) the greater of $0.15 or a specified
percentage away from the NBO (NBB).
The Exchange believes that the introduction of this minimum dollar
threshold would enhance the Limit Order Price Protection mechanism for
securities with a reference price below $1.50 because using the current
10% multiplier for such securities would result in too narrow of a
price protection mechanism. Thus, the proposed rule change would
encourage price continuity, specifically in lower-priced illiquid
securities.
This proposed minimum dollar threshold of $0.15 is the same minimum
dollar threshold that currently exists in the Limit Order Price
Protection rules of the Exchange's affiliate exchanges NYSE American
LLC (``NYSE American''), NYSE Arca, Inc. (``NYSE Arca''), NYSE Chicago,
Inc. (``NYSE Chicago''), and NYSE National, Inc (``NYSE National'').\5\
---------------------------------------------------------------------------
\5\ See NYSE American Rule 7.31E(a)(2)(B); NYSE Arca Rule 7.31-
E(a)(2)(B); NYSE Chicago Rule 7.31(a)(2)(B); and NYSE National Rule
7.31(a)(2)(B). See also Securities Exchange Act Release Nos. 81943
(October 25, 2017), 82 FR 50475 (October 31, 2017) (SR-NYSAMER-2017-
25) (adding $0.15 minimum dollar threshold to Limit Order Price
Protection in NYSE American Rule 7.31E(a)(2)(B)); 82004 (November 2,
2017), 82 FR 51890 (November 8, 2017) (SR-NYSEArca-2017-126) (adding
same to NYSE Arca Rule 7.31-E(a)(2)(B)); 87264 (October 9, 2019), 84
FR 55345 (October 16, 2019) (SR-NYSECHX-2019-08) (regarding NYSE
Chicago Rule 7.31(a)(2)(B)); 83289 (May 17, 2018), 83 FR 23968 (May
23, 2018) (SR-NYSENAT-2018-02) (regarding NYSE National Rule
7.31(a)(2)(B)).
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[[Page 59775]]
Implementation
The Exchange anticipates implementing the proposed change in
November 2021 and will announce the timing of such changes by Trader
Update.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and with Section
6(b)(5),\7\ in particular, because it is designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to 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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed change adding a $0.15
minimum price threshold to Rule 7.31(a)(2)(B) would remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and in general, protect investors and the public
interest, because the proposed change is based on the Limit Order Price
Protection rules currently in effect on NYSE American, NYSE Arca, NYSE
Chicago, and NYSE National, and therefore is not novel.\8\ The Exchange
further believes that the proposed change would enhance the Exchange's
Limit Order Price Protection mechanism, which protects from aberrant
prices, thus improving continuous trading and price discovery. In
addition, the proposal to enhance Limit Order Price Protection by
adding a minimum dollar threshold would assist with the maintenance of
fair and orderly markets because such mechanisms protect investors from
potentially receiving executions away from the prevailing market prices
at any given time.
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\8\ See supra note 4.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change will not impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is not
intended to address competitive issues but rather would provide for a
more effective Limit Order Price Protection mechanism, specifically for
lower-priced securities.
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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay to allow the
Exchange to make the proposed enhancement to its Limit Order Price
Protection mechanism when the technology associated with this proposed
change is available, which is anticipated to be less than 30 days from
the date of this filing.
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange represents that the proposed change would assist with
the maintenance of fair and orderly markets by protecting investors
from potentially receiving executions away from the prevailing market
prices at any given time. And the Commission notes that the proposed
minimum dollar threshold is the same minimum dollar threshold that
currently exists in the Limit Order Price Protection rules of the
Exchange's affiliate exchanges.\13\ The Commission therefore believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission waives the 30-day operative delay and designates the
proposal operative upon filing.\14\
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\13\ See supra note 5 and accompanying text.
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings 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-NYSE-2021-61 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2021-61. 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
[[Page 59776]]
Reference Room, 100 F Street NE, Washington, DC 20549 on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSE-2021-61, and should be submitted on or before November 18, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-23532 Filed 10-27-21; 8:45 am]
BILLING CODE 8011-01-P
