Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 7.31, 4231-4233 [2023-01273]
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Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / Notices
information collected must be filed with
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available. We estimate that it takes
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PRA_Mailbox@sec.gov.
Dated: January 18, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–01248 Filed 1–23–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96697; File No. SR–
NYSECHX–2023–02]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify Rule 7.31
tkelley on DSK125TN23PROD with NOTICES
January 18, 2023.
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 January 4,
2023, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ 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
1
2
15 U.S.C. 78s(b)(1).
17 CFR 240.19b–4.
VerDate Sep<11>2014
19:17 Jan 23, 2023
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 modify
Rule 7.31 regarding MPL–IOC Orders.
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 7.31 regarding MPL–IOC Orders.
Rule 7.31(d)(3) defines a Mid-Point
Liquidity Order (‘‘MPL Order’’) as a
Limit Order to buy (sell) that is not
displayed and does not route, with a
working price at the lower (higher) of
the midpoint of the PBBO or its limit
price. An MPL Order may be entered
during any Exchange trading session
and is ranked Priority 3—Non-Display
Orders. An MPL Order to buy (sell)
must be designated with a limit price in
the minimum price variation for the
security and will be eligible to trade at
its working price.3 If there is no PBB or
PBO, or if the PBBO is locked or
crossed, an arriving or resting MPL
Order will not be eligible to trade until
the PBBO is not locked or crossed. If a
resting MPL Order to buy (sell) trades
with another MPL Order to sell (buy)
after the PBBO is unlocked or
uncrossed, the MPL Order with the later
working time will be the liquidityremoving order.4
An Aggressing MPL Order to buy
(sell) will trade at the working price of
resting orders to sell (buy) when such
resting orders have a working price at or
3
4
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PO 00000
See Rule 7.31(d)(3)(A).
See Rule 7.31(d)(3)(B).
Frm 00081
Fmt 4703
Sfmt 4703
4231
below (above) the working price of the
MPL Order. Resting MPL Orders to buy
(sell) will trade against all Aggressing
Orders to sell (buy) priced at or below
(above) the working price of the MPL
Order.5
Currently, Rule 7.31(d)(3)(D) provides
that an MPL Order may be designated
with an Immediate-or-Cancel (‘‘IOC’’)
Modifier (an ‘‘MPL–IOC Order’’). An
MPL Order designated IOC will be
traded in whole or in part on the
Exchange as soon as such order is
received, and any untraded quantity
will be cancelled.6 Rule 7.31(d)(3)(D)
further provides that, subject to the IOC
Modifier, an MPL–IOC Order follows
the same trading and priority rules as an
MPL Order (as described above), except
that an MPL–IOC Order will be rejected
if (i) the order entry size is less than one
round lot or (ii) there is no PBBO or the
PBBO is locked or crossed.
The Exchange proposes to modify
Rule 7.31(d)(3)(D) to permit MPL–IOC
Orders to be entered in any size and
thus proposes to eliminate rule text
currently providing that an MPL–IOC
Order would be rejected if entered in a
quantity less than one round lot. The
Exchange believes that requiring MPL–
IOC Orders to be entered in round lots
is unnecessary and that providing
Participants with the option to enter
MPL–IOC Orders in odd lots could
increase liquidity and enhance
opportunities for order execution on the
Exchange. The Exchange notes that
permitting odd-lot order quantities is
not novel on the Exchange or other cash
equity exchanges and believes that this
proposed change would align the
Exchange’s handling of MPL–IOC
Orders with the treatment of equivalent
order types on other cash equity
exchanges.7
Because of the technology changes
associated with this proposed rule
change, the Exchange will announce the
implementation date by Trader Update,
See Rule 7.31(d)(3)(C).
See Rule 7.31(b)(2) (defining IOC Modifier).
7 See, e.g., Members Exchange Rules 11.8(c)(1)
and (2) (providing that a Midpoint Peg Order may
be designated IOC and may be entered as an odd
lot, round lot, or mixed lot); Cboe EDGX Exchange,
Inc. Rules 11.8(d)(1) and (2) (providing that a
MidPoint Peg Order may have an IOC instruction
and may be entered as an odd lot, round lot, or
mixed lot); Cboe EDGA Exchange, Inc. Rules
11.8(d)(1) and (2) (same). The Exchange also notes
that the rules of the Nasdaq Stock Market LLC
(‘‘Nasdaq’’), Cboe BZX Exchange, Inc. (‘‘BZX’’), and
Cboe BYX Exchange, Inc. (‘‘BYX’’) appear to permit
orders, including orders analogous to MPL–IOC
Orders, to be entered in any size. See Nasdaq Rule
4703(b) (providing that an order may be entered in
any whole share size, except as otherwise
provided); BZX Rule 11.2 (providing that orders are
eligible for odd-lot, round-lot, and mixed-lot
executions unless otherwise indicated); BYX Rule
11.2 (same).
5
6
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Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / Notices
which, subject to effectiveness of this
proposed rule change, will be in the first
quarter of 2023.
tkelley on DSK125TN23PROD with NOTICES
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,8
in general, and furthers the objectives of
Section 6(b)(5),9 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 would promote just
and equitable principles of trade,
remove impediments to, and perfect the
mechanism of, a free and open market
and a national market system, and
protect investors and the public interest
because it would provide Participants
with the option to enter MPL–IOC
Orders in odd-lot sized orders, which
could encourage order flow to the
Exchange and promote opportunities for
order execution on the Exchange, to the
benefit of all market participants. The
Exchange notes that the proposed
change would not otherwise impact the
operation of MPL–IOC Orders as
provided under current Exchange rules.
The Exchange also believes that the
proposed change would align Exchange
rules with the treatment of orders
analogous to MPL–IOC Orders on other
cash equity exchanges, thereby
removing impediments to, and
perfecting the mechanism of, a free and
open market and a national market
system.10
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. As noted
above, the Exchange believes the
proposed rule change would allow the
Exchange to accept MPL–IOC Orders of
any size and align the Exchange’s
handling of such orders with other cash
equity exchanges’ handling of similar
order types,11 thereby promoting
competition among exchanges by
offering Participants options available
15 U.S.C. 78f(b).
15 U.S.C. 78f(b)(5).
10 See note 7, supra.
11 Id.
8
9
VerDate Sep<11>2014
19:17 Jan 23, 2023
Jkt 259001
on other cash equity exchanges. The
Exchange also believes that, to the
extent the proposed change would
increase opportunities for order
execution, the proposed change would
promote competition by making the
Exchange a more attractive venue for
order flow and enhancing market
quality for all market participants.
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)(iii) of the Act 12 and
subparagraph (f)(6) of Rule 19b–4
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),15 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay to allow the Exchange to
implement the proposal as soon as
possible. The Exchange states that the
proposed change would align the
Exchange’s treatment of MPL–IOC
Orders with treatment of similar order
types on other cash equity exchanges
and allow the Exchange to accept MPL–
IOC Orders of any size as soon as the
technology associated with the
proposed change is available, which is
anticipated to be less than 30 days from
the date of this filing. The Commission
believes that waiver of the 30-day
operative delay is consistent with the
15 U.S.C. 78s(b)(3)(A)(iii).
17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange 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.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
12
13
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
protection of investors and the public
interest because the proposal does not
raise any new or novel issues.
Accordingly, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.16
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–
NYSECHX–2023–02 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–2023–02. 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
16 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).
E:\FR\FM\24JAN1.SGM
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Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / Notices
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–2023–02 and
should be submitted on or before
February 14, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–01273 Filed 1–23–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rules 10.9132,
10.9133, 10.9135, 10.9146, 10.9522,
10.9524, 10.9559 and 10.9630
January 18, 2023.
tkelley on DSK125TN23PROD with NOTICES
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 January
4, 2023, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ 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
Rules 10.9132, 10.9133, 10.9135,
17 CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
19:17 Jan 23, 2023
Jkt 259001
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
[Release No. 34–96691; File No. SR–
NYSECHX–2023–03]
17
10.9146, 10.9522, 10.9524, 10.9559 and
10.9630 to permit, and in some
instances require, electronic service and
filing of documents in disciplinary and
other proceedings and appeals, in
conformity with recent changes by the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’). 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.
1. Purpose
The Exchange proposes to amend
Rules 10.9132, 10.9133, 10.9135,
10.9146, 10.9522, 10.9524, 10.9559 and
10.9630 to permit, and in some
instances require, electronic service and
filing of documents in disciplinary and
other proceedings, in conformity with
recent changes by FINRA.
In 2020, following the outbreak of the
Coronavirus Disease (‘‘COVID–19’’),
FINRA temporarily amended certain of
its rules, including related to the
method of service and filing in
disciplinary proceedings before the
Office of Hearing Officers (OHO) and
appeals before the National
Adjudicatory Council (NAC), among
other types of administrative
proceedings (the ‘‘temporary
amendments’’).4 The temporary
4 See, e.g., Securities Exchange Act Release No.
88917 (May 20, 2020), 85 FR 31832 (May 27, 2020)
(SR–FINRA–2020–015) (Notice and immediate
effectiveness of filing to temporarily amend certain
timing, method of service and other procedural
requirements in FINRA Rules during the outbreak
of COVID–19). FINRA extended the temporary
amendments several times before filing to make
certain of the aforementioned amendments
permanent. The temporary amendments included
rule changes to permit the conduct of virtual
hearings (i.e., Rules 9261 and 9830), which rule
changes are not being included in this proposal.
Rather, the Exchange is solely copying a subset of
PO 00000
Frm 00083
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4233
amendments allowed, and in some
instances required, FINRA (in its
capacity as an Adjudicator per FINRA
Rule 9120) to serve certain documents
on parties by electronic mail (‘‘email’’)
and required parties to file or serve
documents by email, unless the parties
agreed to an alternative method of
service.5 Earlier this year, FINRA made
permanent the temporary amendments
to its rules regarding electronic service
and filing permanent, with some
modifications.6
In support of its filing, FINRA noted
that advances in technology and its
availability made filing and service
permitted by the temporary
amendments more efficient than under
FINRA’s ‘‘original’’ (non-amended)
rules.7 Moreover, FINRA determined
that electronic service and filing is
beneficial for parties, panelists and
FINRA staff.8 FINRA also noted that the
Commission likewise amended its rules
in November 2020 to require electronic
filing and service of documents in its
administrative proceedings.9 For these
reasons, FINRA determined that making
permanent the temporary amendments
would similarly improve and modernize
FINRA’s operations.10
To likewise improve and modernize
Exchange rules, the Exchange proposes
to modify certain of its disciplinary
rules to allow for electronic service and
filing of documents in disciplinary and
other proceedings in conformity with
the approved FINRA Rules.11
Background
In 2022, NYSE Chicago adopted
disciplinary rules that are, with certain
rules covered by the temporary amendments as
discussed herein.
5 See id.
6 See Securities Exchange Act Release Nos. 95147
(June 23, 2022), 87 FR 38803 (June 29, 2022) (order
approving change to certain FINRA rules to permit,
and in some instances require, electronic service
and filing of documents in disciplinary and other
proceedings and appeals) (‘‘Approval Order of
FINRA Rules’’); 94654 (April 8, 2022), 87 FR 22264
(April 14, 2022) (SR–FINRA–2022–009) (‘‘FINRA
Notice’’). The Approval Order of FINRA Rules
related to FINRA Rules 1012, 1015, 6490, 9132,
9133, 9135, 9146, 9321, 9341, 9349, 9351, 9522,
9524, 9559 and 9630 (collectively, ‘‘the approved
FINRA Rules’’).
7 See FINRA Notice, 87 FR at 22267.
8 See FINRA Notice, 87 FR at 22267.
9 See Amendments to the Commission’s Rules of
Practice, Securities Exchange Act Release No. 90442
(November 17, 2020), 85 FR 86464 (File No. S7–18–
15) (December 30, 2020) (codified at 17 CFR 201
(2020)).
10 See FINRA Notice, 87 FR at 22266–67.
11 Consistent with the Approval Order of FINRA
Rules, the Exchange is not proposing to permit
electronic service of an initial complaint on a
respondent due to heightened fair process concerns.
As is the case today, the only permissible methods
of serving the initial complaint are by hand, mail
or courier. See Rule 10.9131(b) (requiring that
service be pursuant to Rule 10.9134(a)).
E:\FR\FM\24JAN1.SGM
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]]>Agencies
[Federal Register Volume 88, Number 15 (Tuesday, January 24, 2023)]
[Notices]
[Pages 4231-4233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01273]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96697; File No. SR-NYSECHX-2023-02]
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
Rule 7.31
January 18, 2023.
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 January 4, 2023, the NYSE Chicago, Inc. (``NYSE Chicago'' 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\ 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 modify Rule 7.31 regarding MPL-IOC Orders.
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 7.31 regarding MPL-IOC Orders.
Rule 7.31(d)(3) defines a Mid-Point Liquidity Order (``MPL Order'')
as a Limit Order to buy (sell) that is not displayed and does not
route, with a working price at the lower (higher) of the midpoint of
the PBBO or its limit price. An MPL Order may be entered during any
Exchange trading session and is ranked Priority 3--Non-Display Orders.
An MPL Order to buy (sell) must be designated with a limit price in the
minimum price variation for the security and will be eligible to trade
at its working price.\3\ If there is no PBB or PBO, or if the PBBO is
locked or crossed, an arriving or resting MPL Order will not be
eligible to trade until the PBBO is not locked or crossed. If a resting
MPL Order to buy (sell) trades with another MPL Order to sell (buy)
after the PBBO is unlocked or uncrossed, the MPL Order with the later
working time will be the liquidity-removing order.\4\
---------------------------------------------------------------------------
\3\ See Rule 7.31(d)(3)(A).
\4\ See Rule 7.31(d)(3)(B).
---------------------------------------------------------------------------
An Aggressing MPL Order to buy (sell) will trade at the working
price of resting orders to sell (buy) when such resting orders have a
working price at or below (above) the working price of the MPL Order.
Resting MPL Orders to buy (sell) will trade against all Aggressing
Orders to sell (buy) priced at or below (above) the working price of
the MPL Order.\5\
---------------------------------------------------------------------------
\5\ See Rule 7.31(d)(3)(C).
---------------------------------------------------------------------------
Currently, Rule 7.31(d)(3)(D) provides that an MPL Order may be
designated with an Immediate-or-Cancel (``IOC'') Modifier (an ``MPL-IOC
Order''). An MPL Order designated IOC will be traded in whole or in
part on the Exchange as soon as such order is received, and any
untraded quantity will be cancelled.\6\ Rule 7.31(d)(3)(D) further
provides that, subject to the IOC Modifier, an MPL-IOC Order follows
the same trading and priority rules as an MPL Order (as described
above), except that an MPL-IOC Order will be rejected if (i) the order
entry size is less than one round lot or (ii) there is no PBBO or the
PBBO is locked or crossed.
---------------------------------------------------------------------------
\6\ See Rule 7.31(b)(2) (defining IOC Modifier).
---------------------------------------------------------------------------
The Exchange proposes to modify Rule 7.31(d)(3)(D) to permit MPL-
IOC Orders to be entered in any size and thus proposes to eliminate
rule text currently providing that an MPL-IOC Order would be rejected
if entered in a quantity less than one round lot. The Exchange believes
that requiring MPL-IOC Orders to be entered in round lots is
unnecessary and that providing Participants with the option to enter
MPL-IOC Orders in odd lots could increase liquidity and enhance
opportunities for order execution on the Exchange. The Exchange notes
that permitting odd-lot order quantities is not novel on the Exchange
or other cash equity exchanges and believes that this proposed change
would align the Exchange's handling of MPL-IOC Orders with the
treatment of equivalent order types on other cash equity exchanges.\7\
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\7\ See, e.g., Members Exchange Rules 11.8(c)(1) and (2)
(providing that a Midpoint Peg Order may be designated IOC and may
be entered as an odd lot, round lot, or mixed lot); Cboe EDGX
Exchange, Inc. Rules 11.8(d)(1) and (2) (providing that a MidPoint
Peg Order may have an IOC instruction and may be entered as an odd
lot, round lot, or mixed lot); Cboe EDGA Exchange, Inc. Rules
11.8(d)(1) and (2) (same). The Exchange also notes that the rules of
the Nasdaq Stock Market LLC (``Nasdaq''), Cboe BZX Exchange, Inc.
(``BZX''), and Cboe BYX Exchange, Inc. (``BYX'') appear to permit
orders, including orders analogous to MPL-IOC Orders, to be entered
in any size. See Nasdaq Rule 4703(b) (providing that an order may be
entered in any whole share size, except as otherwise provided); BZX
Rule 11.2 (providing that orders are eligible for odd-lot, round-
lot, and mixed-lot executions unless otherwise indicated); BYX Rule
11.2 (same).
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Because of the technology changes associated with this proposed
rule change, the Exchange will announce the implementation date by
Trader Update,
[[Page 4232]]
which, subject to effectiveness of this proposed rule change, will be
in the first quarter of 2023.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\8\ in general, and furthers the objectives of Section 6(b)(5),\9\
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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed change would promote just
and equitable principles of trade, remove impediments to, and perfect
the mechanism of, a free and open market and a national market system,
and protect investors and the public interest because it would provide
Participants with the option to enter MPL-IOC Orders in odd-lot sized
orders, which could encourage order flow to the Exchange and promote
opportunities for order execution on the Exchange, to the benefit of
all market participants. The Exchange notes that the proposed change
would not otherwise impact the operation of MPL-IOC Orders as provided
under current Exchange rules. The Exchange also believes that the
proposed change would align Exchange rules with the treatment of orders
analogous to MPL-IOC Orders on other cash equity exchanges, thereby
removing impediments to, and perfecting the mechanism of, a free and
open market and a national market system.\10\
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\10\ See note 7, supra.
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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. As noted above, the Exchange
believes the proposed rule change would allow the Exchange to accept
MPL-IOC Orders of any size and align the Exchange's handling of such
orders with other cash equity exchanges' handling of similar order
types,\11\ thereby promoting competition among exchanges by offering
Participants options available on other cash equity exchanges. The
Exchange also believes that, to the extent the proposed change would
increase opportunities for order execution, the proposed change would
promote competition by making the Exchange a more attractive venue for
order flow and enhancing market quality for all market participants.
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\11\ Id.
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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)(iii) of the Act \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange 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) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay to allow the
Exchange to implement the proposal as soon as possible. The Exchange
states that the proposed change would align the Exchange's treatment of
MPL-IOC Orders with treatment of similar order types on other cash
equity exchanges and allow the Exchange to accept MPL-IOC Orders of any
size as soon as the technology associated with the proposed change is
available, which is anticipated to be less than 30 days from the date
of this filing. The Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest because the proposal does not raise any new or novel
issues. Accordingly, the Commission hereby waives the 30-day operative
delay and designates the proposal operative upon filing.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For purposes only of waiving the 30-day operative delay,
the Commission 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-NYSECHX-2023-02 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-2023-02. 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
[[Page 4233]]
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-2023-02 and
should be submitted on or before February 14, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-01273 Filed 1-23-23; 8:45 am]
BILLING CODE 8011-01-P
