Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.62P-O(a)(4), 56097-56099 [2022-19680]
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Federal Register / Vol. 87, No. 176 / Tuesday, September 13, 2022 / Notices
of information to the Office of
Management and Budget for extension
and approval.
The title for the collection of
information is: ‘‘Rule 204–5 under the
Investment Advisers Act of 1940.’’ Rule
204–5 requires an investment adviser to
deliver an electronic or paper version of
the relationship summary to each retail
investor before or at the time the adviser
enters into an investment advisory
contract with the retail investor. The
purpose of the relationship summary is
to assist retail investors in making an
informed choice when choosing an
investment firm and professional, and
type of account. Retail investors can use
the information required in the
relationship summary to determine
whether to hire or retain an investment
adviser, as well as what types of
accounts and services are appropriate
for their needs.
We estimate the total collection of
information burden for rule 204–5 to be
1,137,413 annual aggregate hours per
year, or 124 hours per respondent, for a
total annual aggregate monetized cost of
$77,344,061, or $8,402 per adviser.
The likely respondents to this
information collection are
approximately 9,205 investment
advisers registered with the Commission
that are required to deliver a
relationship summary to retail investors
pursuant to rule 204–5. We also note
that these figures include the 325
registered broker-dealers that are dually
registered as investment advisers.
The requirements of this collection of
information are mandatory. Responses
will not be kept confidential. An agency
may not conduct or sponsor, and a
person is not required to respond to a
collection of information unless it
displays a currently valid control
number. Written comments are invited
on: (a) whether the proposed collection
of information is necessary for the
proper performance of the functions of
the Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
by November 14, 2022.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
VerDate Sep<11>2014
17:30 Sep 12, 2022
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Please direct your written comments
to: David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: September 7, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–19671 Filed 9–12–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95687; File No. SR–
NYSEARCA–2022–57]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 6.62P–
O(a)(4)
September 7, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
29, 2022, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 6.62P–O(a)(4) to modify the values
used to determine Trading Collars. 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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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56097
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 6.62P–O(a)(4) to modify the values
used to determine Trading Collars as set
forth below.
The Exchange has in place various
price check features that are designed to
help maintain a fair and orderly market,
including Trade Collar Protection.4
Trading Collars mitigate the risks
associated with orders sweeping
through multiple price points (including
during extreme market volatility) and
resulting in executions at prices that are
potentially erroneous. Specifically, a
Market Order or Limit Order to buy
(sell) will not trade or route to an Away
Market at a price above (below) the
Trading Collar assigned to that order.5
As such, Trading Collars function as a
ceiling (for buy orders) or floor (for sell
orders) of the price at which such order
could be traded, displayed, or routed.
Trading Collars are determined based
on the Reference Price, which for an
order to buy (sell) is the NBO (NBB).6
Under the current rule, the Trading
Collar for an order to buy (sell) is a
specified amount above (below) the
Reference Price, as follows: (1) for
orders with a Reference Price of $1.00
or lower, $0.25; or (2) for orders with a
Reference Price above $1.00, the lower
of $2.50 or 25%.7
The current Trading Collar
functionality (and the method of
calculation) was recently implemented
in connection with the Exchange’s
migration to the Pillar trading platform.8
Consistent with the pre-Pillar
functionality (under Rule 6.60–O(a)),
4 See Rule 6.62P–O(a)(4)(A). Trading Collars
assigned to an order are calculated once per trading
day and would be updated only if the series is
halted. See id.
5 Rule 6.62P–O(a)(1) provides that a Market Order
is ‘‘[a]n unpriced order message to buy or sell a
stated number of option contracts at the best price
obtainable, subject to the Trading Collar assigned to
the order. A Market Order may be designated Day
or GTC.’’ Rule 6.62P–O(a)(2) provides that a Limit
Order is ‘‘[a]n order message to buy or sell a stated
number of option contracts at a specified price or
better, subject to Limit Order Price Protection and
the Trading Collar assigned to the order.’’
6 See Rule 6.62P–O(a)(4)(B).
7 See Rule 6.62P–O(a)(4)(C).
8 The Exchange announced the migration of the
fifth and final tranche of symbols to the Pillar
trading platform, via Trader Update, available here:
https://www.nyse.com/trader-update/
history#110000440092.
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56098
Federal Register / Vol. 87, No. 176 / Tuesday, September 13, 2022 / Notices
participants against bad executions, the
Exchange has determined that
additional modifications would enhance
the Trading Collar functionality. The
Exchange therefore proposes to modify
the Trading Collar thresholds to better
align with the thresholds in the Obvious
Error Rule. As such, the proposed
change is designed to (further) prevent
the Trading Collar thresholds were
designed to be within the current
parameters for determining whether a
trade is an Obvious Error or
Catastrophic Error to protect per Rule
6.87–O (the ‘‘Obvious Error Rule’’).9
While the Exchange believes that these
recent changes have been generally
successful in protecting market
Reference price
Trading collar
$0.00 to $1.00 .................................
$1.01 to $2.00 .................................
$2.01 to $3.00 .................................
$3.01 to $5.00 .................................
$5.01 to $7.50 .................................
$7.51 to $10.00 ...............................
$10.01 to $20.00 .............................
$20.01 to $50.00 .............................
$50.01 to $100.00 ...........................
$100.01 and above .........................
$0.20.
Lesser
Lesser
Lesser
Lesser
Lesser
Lesser
Lesser
Lesser
Lesser
of
of
of
of
of
of
of
of
of
Consistent with current Rule 6.62P–
O(a)(4)(C)(i), if the calculation of a
Trading Collar would not be in the
Minimum Price Variation or MPV for
the series, such calculation would be
rounded down to the nearest price
within the applicable MPV.
In addition, the Exchange proposes
that the amounts in the proposed table
above would apply, ‘‘[u]nless
announced otherwise by Trader
Update,’’ which discretion is consistent
with the implementation of Trading
Collars on other option exchanges.10
The Exchange believes that the
proposed modifications would enhance
the efficacy of the price protection
afforded by Trading Collars and the
proposed values for determining such
collars would better align with the
current parameters for determining
whether a trade is an Obvious Error or
Catastrophic Error.
Implementation
The Exchange will announce the
implementation of this proposal via
Trader Update to be published no later
than 60 days following the effectiveness
of this this rule.
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2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),11 in general, and furthers the
objectives of Section 6(b)(5),12 in
particular, because it is designed to
9 See Rules 6.87–O(c)(1) (thresholds for Obvious
Errors) and 6.87–O(d)(1) (thresholds for
Catastrophic Errors).
10 See, e.g., NYSE American Rule 967NY(a)(2)
(providing that the values set forth in paragraphs
(A)(i)–(v) of Rule 967NY(a)(2) apply ‘‘unless
announced otherwise via Trader Update. . .’’). The
Exchange notes that, when migrating to Pillar, it
VerDate Sep<11>2014
17:30 Sep 12, 2022
the trading of aggressively-priced
interest that, if executed, would qualify
to be handled under the procedures set
forth in the Obvious Error Rule.
Specifically, the Exchange proposes to
amend Rule 6.62P–O(a)(4)(C) to modify
the values used to calculate the Trading
Collars as follows:
*
*
*
*
*
Jkt 256001
$0.20
$0.30
$0.30
$0.40
$0.40
$0.70
$0.90
$1.40
$1.90
or
or
or
or
or
or
or
or
or
25%
25%
25%
25%
25%
25%
25%
25%
25%
of
of
of
of
of
of
of
of
of
the
the
the
the
the
the
the
the
the
Reference
Reference
Reference
Reference
Reference
Reference
Reference
Reference
Reference
Price.
Price.
Price.
Price.
Price.
Price.
Price.
Price.
Price.
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.
Overall, the Exchange believes the
proposed change is consistent with the
protection of investors and the investing
public and would promote a fair and
orderly market because it would
enhance the (recently revised) operation
of the Trading Collar functionality and
would continue to protect investors
from receiving bad executions away
from prevailing market prices. Further,
the Exchange believes that the proposed
modification would promote just and
equitable principles of trade as the
proposed values for determining
Trading Collars would better align with
the current parameters for determining
whether a trade is an Obvious Error or
Catastrophic Error.13
In addition, the Exchange believes
that its proposal to retain discretion to
modify the values used to determine the
Trading Collar would promote just and
equitable principles of trade because it
would allow the Exchange to respond to
certain market conditions as necessary,
which discretion is consistent with the
inadvertently failed to include this language
affording the Exchange discretion to modify the
Trading Collars. See, e.g., Rule 6.60–O(a)(2)
(providing that the values set forth in paragraphs
(A)(i)–(v) of Rule 6.60–O(a)(2) apply ‘‘unless
announced otherwise via Trader Update. . .’’).
11 15 U.S.C. 78f(b).
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Frm 00111
Fmt 4703
Sfmt 4703
implementation of Trading Collars on
other option exchanges.14
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Instead, the
Exchange believes the proposal would
enhance the operation of the Trading
Collars that provide market participants
with protection from anomalous
executions. Thus, the Exchange does not
believe the proposal creates any
significant impact on competition.
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 15 and Rule
19b–4(f)(6) thereunder.16 Because the
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
12 15
U.S.C. 78f(b)(5).
e.g., Rules 6.87–O(c)(1) (thresholds for
Obvious Errors) and 6.87–O(d)(1) (thresholds for
Catastrophic Errors).
14 See, e.g., NYSE American Rule 967NY(a)(2).
15 15 U.S.C. 78s(b)(3)(A)(iii).
16 17 CFR 240.19b–4(f)(6).
13 See,
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Federal Register / Vol. 87, No. 176 / Tuesday, September 13, 2022 / Notices
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.17
A proposed rule change filed under
Rule 19b-4(f)(6) 18 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),19 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The
Commission believes that waiver of the
operative delay is consistent with the
protection of investors and the public
interest because it will allow the
Exchange to provide, without delay,
further protections against potentially
erroneous executions. Accordingly, the
Commission hereby waives the 30-day
operative delay and designates the
proposal operative upon filing.20
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 21 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
jspears on DSK121TN23PROD with NOTICES
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.
17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has fulfilled this requirement.
18 17 CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6)(iii).
20 For purposes only of accelerating the operative
date of this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
21 15 U.S.C. 78s(b)(2)(B).
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17:30 Sep 12, 2022
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56099
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–95691; File No. SR–NYSE–
2022–32]
• 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–
NYSEARCA–2022–57 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–NYSEARCA–2022–57. 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–NYSEARCA–2022–57 and
should be submitted on or before
October 4, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–19680 Filed 9–12–22; 8:45 am]
BILLING CODE 8011–01–P
22 17
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CFR 200.30–3(a)(12).
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Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving a Proposed Rule Change To
Amend NYSE Rule 7.35B Relating to
the Closing Auction and Make Certain
Conforming and Non-Substantive
Changes to NYSE Rules 7.31, 7.35,
7.35B and 104
September 7, 2022.
I. Introduction
On July 13, 2022, New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘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 amend NYSE Rule 7.35B
(DMM-Facilitated Closing Auctions)
relating to the Closing Auction, and
make certain conforming and nonsubstantive changes to NYSE Rules 7.31
(Orders and Modifiers), 7.35 (General),
7.35B, and NYSE Rule 104 (Dealings
and Responsibilities of DMMs). The
proposed rule change was published for
comment in the Federal Register on July
28, 2022.3 The Commission has received
no comment letters on the proposed rule
change. This order approves the
proposal.
II. Description of the Proposal
The Exchange proposes to amend
NYSE Rule 7.35B to add price
parameters within which Designated
Market Makers (‘‘DMMs’’) must select a
Closing Auction Price when facilitation
the Closing Auctions in their assigned
securities. As described below, the
Closing Auction Price determined by
the DMM must be at a price that is at
or between the last-published Imbalance
Reference Price and the last-published
Continuous Book Clearing Price.
Further, the Exchange proposes to
modify how the DMM would participate
in the Closing Auction by canceling any
resting DMM Orders at the end of Core
Trading Hours. The Exchange also
proposes to make conforming changes to
other affected rules.
The Exchange states that the proposed
changes would make the Closing
Auction more transparent and
deterministic while retaining the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 95354
(July 22, 2022), 87 FR 45382 (July 28, 2022)
(‘‘Notice’’).
2 17
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]]>Agencies
[Federal Register Volume 87, Number 176 (Tuesday, September 13, 2022)]
[Notices]
[Pages 56097-56099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19680]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95687; File No. SR-NYSEARCA-2022-57]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule
6.62P-O(a)(4)
September 7, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on August 29, 2022, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\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 Rule 6.62P-O(a)(4) to modify the
values used to determine Trading Collars. The proposed rule change is
available on the Exchange's website at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 6.62P-O(a)(4) to modify the
values used to determine Trading Collars as set forth below.
The Exchange has in place various price check features that are
designed to help maintain a fair and orderly market, including Trade
Collar Protection.\4\ Trading Collars mitigate the risks associated
with orders sweeping through multiple price points (including during
extreme market volatility) and resulting in executions at prices that
are potentially erroneous. Specifically, a Market Order or Limit Order
to buy (sell) will not trade or route to an Away Market at a price
above (below) the Trading Collar assigned to that order.\5\ As such,
Trading Collars function as a ceiling (for buy orders) or floor (for
sell orders) of the price at which such order could be traded,
displayed, or routed.
---------------------------------------------------------------------------
\4\ See Rule 6.62P-O(a)(4)(A). Trading Collars assigned to an
order are calculated once per trading day and would be updated only
if the series is halted. See id.
\5\ Rule 6.62P-O(a)(1) provides that a Market Order is ``[a]n
unpriced order message to buy or sell a stated number of option
contracts at the best price obtainable, subject to the Trading
Collar assigned to the order. A Market Order may be designated Day
or GTC.'' Rule 6.62P-O(a)(2) provides that a Limit Order is ``[a]n
order message to buy or sell a stated number of option contracts at
a specified price or better, subject to Limit Order Price Protection
and the Trading Collar assigned to the order.''
---------------------------------------------------------------------------
Trading Collars are determined based on the Reference Price, which
for an order to buy (sell) is the NBO (NBB).\6\ Under the current rule,
the Trading Collar for an order to buy (sell) is a specified amount
above (below) the Reference Price, as follows: (1) for orders with a
Reference Price of $1.00 or lower, $0.25; or (2) for orders with a
Reference Price above $1.00, the lower of $2.50 or 25%.\7\
---------------------------------------------------------------------------
\6\ See Rule 6.62P-O(a)(4)(B).
\7\ See Rule 6.62P-O(a)(4)(C).
---------------------------------------------------------------------------
The current Trading Collar functionality (and the method of
calculation) was recently implemented in connection with the Exchange's
migration to the Pillar trading platform.\8\ Consistent with the pre-
Pillar functionality (under Rule 6.60-O(a)),
[[Page 56098]]
the Trading Collar thresholds were designed to be within the current
parameters for determining whether a trade is an Obvious Error or
Catastrophic Error to protect per Rule 6.87-O (the ``Obvious Error
Rule'').\9\ While the Exchange believes that these recent changes have
been generally successful in protecting market participants against bad
executions, the Exchange has determined that additional modifications
would enhance the Trading Collar functionality. The Exchange therefore
proposes to modify the Trading Collar thresholds to better align with
the thresholds in the Obvious Error Rule. As such, the proposed change
is designed to (further) prevent the trading of aggressively-priced
interest that, if executed, would qualify to be handled under the
procedures set forth in the Obvious Error Rule.
---------------------------------------------------------------------------
\8\ The Exchange announced the migration of the fifth and final
tranche of symbols to the Pillar trading platform, via Trader
Update, available here: https://www.nyse.com/trader-update/history#110000440092.
\9\ See Rules 6.87-O(c)(1) (thresholds for Obvious Errors) and
6.87-O(d)(1) (thresholds for Catastrophic Errors).
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Specifically, the Exchange proposes to amend Rule 6.62P-O(a)(4)(C)
to modify the values used to calculate the Trading Collars as follows:
* * * * *
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Reference price Trading collar
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$0.00 to $1.00.................... $0.20.
$1.01 to $2.00.................... Lesser of $0.20 or 25% of the
Reference Price.
$2.01 to $3.00.................... Lesser of $0.30 or 25% of the
Reference Price.
$3.01 to $5.00.................... Lesser of $0.30 or 25% of the
Reference Price.
$5.01 to $7.50.................... Lesser of $0.40 or 25% of the
Reference Price.
$7.51 to $10.00................... Lesser of $0.40 or 25% of the
Reference Price.
$10.01 to $20.00.................. Lesser of $0.70 or 25% of the
Reference Price.
$20.01 to $50.00.................. Lesser of $0.90 or 25% of the
Reference Price.
$50.01 to $100.00................. Lesser of $1.40 or 25% of the
Reference Price.
$100.01 and above................. Lesser of $1.90 or 25% of the
Reference Price.
------------------------------------------------------------------------
Consistent with current Rule 6.62P-O(a)(4)(C)(i), if the
calculation of a Trading Collar would not be in the Minimum Price
Variation or MPV for the series, such calculation would be rounded down
to the nearest price within the applicable MPV.
In addition, the Exchange proposes that the amounts in the proposed
table above would apply, ``[u]nless announced otherwise by Trader
Update,'' which discretion is consistent with the implementation of
Trading Collars on other option exchanges.\10\
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\10\ See, e.g., NYSE American Rule 967NY(a)(2) (providing that
the values set forth in paragraphs (A)(i)-(v) of Rule 967NY(a)(2)
apply ``unless announced otherwise via Trader Update. . .''). The
Exchange notes that, when migrating to Pillar, it inadvertently
failed to include this language affording the Exchange discretion to
modify the Trading Collars. See, e.g., Rule 6.60-O(a)(2) (providing
that the values set forth in paragraphs (A)(i)-(v) of Rule 6.60-
O(a)(2) apply ``unless announced otherwise via Trader Update. .
.'').
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The Exchange believes that the proposed modifications would enhance
the efficacy of the price protection afforded by Trading Collars and
the proposed values for determining such collars would better align
with the current parameters for determining whether a trade is an
Obvious Error or Catastrophic Error.
Implementation
The Exchange will announce the implementation of this proposal via
Trader Update to be published no later than 60 days following the
effectiveness of this this rule.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\11\ in general, and
furthers the objectives of Section 6(b)(5),\12\ 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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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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Overall, the Exchange believes the proposed change is consistent
with the protection of investors and the investing public and would
promote a fair and orderly market because it would enhance the
(recently revised) operation of the Trading Collar functionality and
would continue to protect investors from receiving bad executions away
from prevailing market prices. Further, the Exchange believes that the
proposed modification would promote just and equitable principles of
trade as the proposed values for determining Trading Collars would
better align with the current parameters for determining whether a
trade is an Obvious Error or Catastrophic Error.\13\
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\13\ See, e.g., Rules 6.87-O(c)(1) (thresholds for Obvious
Errors) and 6.87-O(d)(1) (thresholds for Catastrophic Errors).
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In addition, the Exchange believes that its proposal to retain
discretion to modify the values used to determine the Trading Collar
would promote just and equitable principles of trade because it would
allow the Exchange to respond to certain market conditions as
necessary, which discretion is consistent with the implementation of
Trading Collars on other option exchanges.\14\
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\14\ See, e.g., NYSE American Rule 967NY(a)(2).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Instead, the Exchange
believes the proposal would enhance the operation of the Trading
Collars that provide market participants with protection from anomalous
executions. Thus, the Exchange does not believe the proposal creates
any significant impact on competition.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\
Because the 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
[[Page 56099]]
prior to 30 days from the date on which it was filed, or such shorter
time as the Commission may designate, if consistent with the protection
of investors and the public interest, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule
19b-4(f)(6)(iii) thereunder.\17\
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\15\ 15 U.S.C. 78s(b)(3)(A)(iii).
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has fulfilled this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \18\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\19\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission believes
that waiver of the operative delay is consistent with the protection of
investors and the public interest because it will allow the Exchange to
provide, without delay, further protections against potentially
erroneous executions. Accordingly, the Commission hereby waives the 30-
day operative delay and designates the proposal operative upon
filing.\20\
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 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 under
Section 19(b)(2)(B) \21\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\21\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSEARCA-2022-57 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-NYSEARCA-2022-57. 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-NYSEARCA-2022-57 and should be submitted
on or before October 4, 2022.
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\22\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-19680 Filed 9-12-22; 8:45 am]
BILLING CODE 8011-01-P
