Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 7.44 Relating to the Retail Liquidity Program, 11499-11501 [2023-03699]
Download as PDF
<![CDATA[
Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Notices
analysis, and conditions, please refer to
Applicants’ third amended and restated
application, dated November 29, 2022,
which may be obtained via the
Commission’s website by searching for
the file number at the top of this
document, or for an Applicant using the
Company name search field, on the
SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at
https://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Public Reference
Room at (202) 551–8090.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–03777 Filed 2–22–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96940; File No. SR–MRX–
2022–30]
Self-Regulatory Organizations; Nasdaq
MRX, LLC; Notice of Withdrawal of
Proposed Rule Change To Amend
Options 7, Section 7 To Add Market
Data Fees
February 16, 2023.
On December 19, 2022, Nasdaq MRX,
LLC (‘‘MRX’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 1 and Rule 19b–4 thereunder,2 a
proposed rule change to assess market
data fees. The proposed rule change was
published for comment in the Federal
Register on December 28, 2022.3
On February 6, 2023, MRX withdrew
the proposed rule change (SR–MRX–
2022–30).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.4
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–03696 Filed 2–22–23; 8:45 am]
lotter on DSK11XQN23PROD with NOTICES1
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 96561
(December 21, 2022), 87 FR 79915.
4 17 CFR 200.30–3(a)(12).
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96944; File No. SR–NYSE–
2023–11]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify Rule
7.44 Relating to the Retail Liquidity
Program
February 16, 2023.
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 February
14, 2023, 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, II, and III below, which Items
have been prepared by the selfregulatory 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 modify
Rule 7.44 relating to the Retail Liquidity
Program. 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 modify
Rule 7.44, which sets forth the
Exchange’s Retail Liquidity Program
2 17
VerDate Sep<11>2014
17:12 Feb 22, 2023
Jkt 259001
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
11499
(the ‘‘Program’’).4 The purpose of the
Program is to attract retail order flow to
the Exchange and allow such order flow
to receive potential price improvement.
Under Rule 7.44, a class of market
participants called Retail Liquidity
Providers (‘‘RLPs’’) and non-RLP
member organizations are able to
provide potential price improvement to
retail investor orders in the form of a
non-displayed order that is priced better
than the best protected bid or offer,
called a Retail Price Improvement Order
(‘‘RPI Order’’).5 When there is an RPI
Order in a particular security, the
Exchange disseminates an indicator,
known as the Retail Liquidity Identifier,
that such interest exists.6 Retail Member
Organizations (‘‘RMOs’’) can submit a
Retail Order to the Exchange, which
interacts, to the extent possible, with
available contra-side RPI Orders and
then may interact with other liquidity
on the Exchange or elsewhere,
depending on the Retail Order’s
instructions.7 The segmentation in the
Program allows retail order flow to
receive potential price improvement as
a result of their order flow being
deemed more desirable by liquidity
providers. The Exchange recently
modified the Program to be available for
all securities traded on the Exchange.8
Rule 7.44(k) currently describes the
operation of a Retail Order pursuant to
the Program, which is defined in Rule
7.44(a)(3) as an agency order or a
riskless principal order that meets the
criteria of FINRA Rule 5320.03 that
originates from a natural person and is
submitted to the Exchange by an RMO,
provided that no change is made to the
4 The Program was established on a pilot basis in
2012 and was approved by the Commission to
operate on a permanent basis in 2019. See
Securities Exchange Act Release No. 85160
(February 15, 2019), 84 FR 5754 (February 22, 2019)
(SR–NYSE–2018–28). In connection with the
Commission’s approval of the Program on a pilot
basis, the Commission granted the Exchange’s
request for exemptive relief from Rule 612 of
Regulation NMS, 17 CFR 242.612 (the ‘‘Sub-Penny
Rule’’), which, among other things, prohibits a
national securities exchange from accepting or
ranking orders priced greater than $1.00 per share
in an increment smaller than $0.01. See Securities
Exchange Act Release No. 67347 (July 3, 2012), 77
FR 40673 (July 10, 2012) (SR–NYSE–2011–55). The
Exchange notes that the change proposed in this
filing has no substantive impact under the SubPenny Rule and thus does not require an update or
revision to the exemptive relief previously granted
by the Commission.
5 See Rules 7.44(a)(1) (defining an RLP) and
7.44(a)(4) (defining RPI Order).
6 See Rule 7.44(j).
7 See Rule 7.44(a)(2) (defining RMO); Rules
7.44(a)(3) and 7.44(k) (describing Retail Orders).
8 See Securities Exchange Act Release No. 96112
(October 20, 2022), 87 FR 64831 (October 26, 2022)
(SR–NYSE–2022–47) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
to Modify Rule 7.44).
E:\FR\FM\23FEN1.SGM
23FEN1
11500
Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Notices
lotter on DSK11XQN23PROD with NOTICES1
terms of the order with respect to price
or side of market and the order does not
originate from a trading algorithm or
any other computerized methodology.
Rule 7.44(k) provides that a Retail Order
is a non-routable Limit IOC Order to buy
(sell) that will trade only with available
RPIs to sell (buy) and all other orders to
sell (buy) with a working price below
(above) the PBO (PBB) on the Exchange
Book. Any quantity of a Retail Order to
buy (sell) that does not trade with
eligible orders to sell (buy) will be
immediately and automatically
cancelled. Rule 7.44(k) further provides
that a Retail Order will be rejected on
arrival if the PBBO is locked or crossed
and may not be designated with a
minimum trade size modifier (‘‘MTS
Modifier’’).9
The Exchange now proposes to permit
Retail Orders to be designated with an
MTS Modifier and, accordingly,
proposes to modify the last sentence of
Rule 7.44(k) to reflect this change. The
proposed change is intended to provide
RMOs with the option to designate
Retail Orders with a minimum trade
size if they so choose. The Exchange
believes that the proposed change
would provide additional flexibility to
RMOs entering Retail Orders, which
could encourage retail order flow to the
Exchange and promote additional
opportunities for price improvement for
such orders. The Exchange notes that
the proposed change would not
otherwise impact the operation of Retail
Orders as set forth in current Exchange
rules and would simply make an
existing modifier available for use with
Retail Orders. The Exchange also
believes that the proposed change
would allow it to compete with other
exchanges’ retail price improvement
programs that permit retail orders to be
designated with a minimum trade
size.10
9 See Rule 7.31(i)(3) (providing that the MTS
Modifier designates an order with a minimum trade
size and an order with an MTS Modifier will be
rejected if the MTS is less than a round lot or if
the MTS is larger than the size of the order). The
Exchange notes that the rule text currently
providing that a Retail Order may not be designated
with an MTS Modifier was introduced in
connection with the Exchange’s transition to the
Pillar trading platform and was intended to ensure
that Exchange rules continued to accurately reflect
the operation of Retail Orders (as established prior
to such transition). See Securities Exchange Act
Release No. 85930 (May 23, 2019), 84 FR 25100
(May 30, 2019) (SR–NYSE–2019–26) (Notice of
Filing and Immediate Effectiveness of Proposed
Rule Change of New Rule 7.44 To Operate Its Retail
Liquidity Program on Pillar, the Exchange’s New
Technology Trading Platform).
10 See, e.g., Investors Exchange LLC (‘‘IEX’’) Rules
11.190(b)(9)(G), 11.190(b)(10)(G), and 11.232(a)(2)
(providing that a Retail order may be a
Discretionary Peg order or Midpoint Peg order,
either of which may be designated with a minimum
VerDate Sep<11>2014
17:12 Feb 22, 2023
Jkt 259001
The Exchange also proposes nonsubstantive clarifying changes to Rules
7.44(a)(3) and 7.44(a)(4) 11 relating to the
size of Retail Orders and RPI Orders.
Rules 7.44(a)(3) and 7.44(a)(4)(E)
currently include text providing that
Retail Orders and RPI Orders,
respectively, may be an odd lot, round
lot, or mixed lot. The Exchange now
proposes to delete such rule text as
extraneous because Exchange rules
already provide that orders may be
entered in any size unless otherwise
specified.12
Subject to the effectiveness of this
proposed rule change, the Exchange will
implement this change no later than in
the second quarter of 2023 and
announce the implementation date by
Trader Update.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Act,13 in general, and furthers the
objectives of Section 6(b)(5),14 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 the proposed
change 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 by allowing
RMOs the option to designate Retail
Orders with a minimum trade size,
which could attract additional retail
order flow to the Exchange, thereby
promoting additional opportunities for
price improvement and order execution
on the Exchange and promoting
competition with other exchanges
operating retail price improvement
programs that allow retail orders to be
designated with a minimum trade
trade size). The Exchange notes that IEX’s retail
improvement program differs from the NYSE RLP
in that the IEX program is designed to provide price
improvement at the midpoint but does not believe
that difference to be meaningful with respect to the
ability to designate a retail order with a minimum
trade size.
11 The Exchange also proposes a non-substantive
change to Rule 7.44(a)(4)(A) to improve the clarity
of the rule text, with no change to the operation of
the rule.
12 See Rule 7.38(a).
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
size.15 The Exchange also believes that
the proposed change would remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system and
promote just and equitable principles of
trade because it would permit the use of
the existing MTS Modifier with Retail
Orders and would not otherwise impact
the operation of Retail Orders as
provided under current Exchange rules.
The Exchange further believes that the
proposed clarifying changes to Rule 7.44
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 they are
intended only to streamline Exchange
rules and would not impact the
operation of existing Exchange rules.
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. The
Exchange believes that, to the extent the
proposed change encourages RMOs to
direct additional Retail Orders to the
Exchange and increases opportunities
for price improvement and 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. The
Exchange also believes that the
proposed change would promote
competition with retail price
improvement programs on other
equities exchanges that permit retail
orders to be designated with a minimum
trade size.16
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 17 and Rule
19b–4(f)(6) thereunder.18 Because the
foregoing proposed rule change does
not: (i) significantly affect the protection
15 See
note 10, supra.
16 Id.
17 15
18 17
E:\FR\FM\23FEN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
23FEN1
11501
Federal Register / Vol. 88, No. 36 / Thursday, February 23, 2023 / Notices
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 19 and
subparagraph (f)(6) of Rule 19b–4
thereunder.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
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–2023–11 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–2023–11. 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
19 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
21 15 U.S.C. 78s(b)(2)(B).
lotter on DSK11XQN23PROD with NOTICES1
20 17
VerDate Sep<11>2014
17:12 Feb 22, 2023
Jkt 259001
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–NYSE–2023–11 and should
be submitted on or before March 16,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–03699 Filed 2–22–23; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #17787 and #17788;
Illinois Disaster Number IL–00077]
Administrative Declaration of a
Disaster for the State of Illinois
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a notice of an
Administrative declaration of a disaster
for the State of Illinois dated 02/16/
2023.
Incident: Harper Square Cooperative
Apartment Building Fire.
Incident Period: 01/25/2023.
DATES: Issued on 02/16/2023.
Physical Loan Application Deadline
Date: 04/17/2023.
Economic Injury (EIDL) Loan
Application Deadline Date: 11/16/2023.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
SUMMARY:
22 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00099
Fmt 4703
Sfmt 4703
A.
Escobar, Office of Disaster Recovery &
Resilience, U.S. Small Business
Administration, 409 3rd Street SW,
Suite 6050, Washington, DC 20416,
(202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
applications for disaster loans may be
filed at the address listed above or other
locally announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Cook.
Contiguous Counties:
Illinois: DuPage, Kane, Lake,
McHenry, Will.
Indiana: Lake.
The Interest Rates are:
FOR FURTHER INFORMATION CONTACT:
Percent
For Physical Damage:
Homeowners with Credit Available Elsewhere ....................
Homeowners without Credit
Available Elsewhere ............
Businesses with Credit Available Elsewhere ....................
Businesses without Credit
Available Elsewhere ............
Non-Profit Organizations with
Credit Available Elsewhere
Non-Profit Organizations without Credit Available Elsewhere ...................................
For Economic Injury:
Businesses & Small Agricultural Cooperatives without
Credit Available Elsewhere
Non-Profit Organizations without Credit Available Elsewhere ...................................
4.625
2.313
6.610
3.305
2.375
2.375
3.305
2.375
The number assigned to this disaster
for physical damage is 17787 5 and for
economic injury is 17788 0.
The States which received an EIDL
Declaration # are Illinois, Indiana.
(Catalog of Federal Domestic Assistance
Number 59008)
Isabella Guzman,
Administrator.
[FR Doc. 2023–03674 Filed 2–22–23; 8:45 am]
BILLING CODE 8026–09–P
SURFACE TRANSPORTATION BOARD
30-Day Notice of Intent To Seek
Extension of Approval: Class I
Railroad Annual Report
Surface Transportation Board.
Notice and request for
comments.
AGENCY:
ACTION:
As required by the Paperwork
Reduction Act of 1995 (PRA), the
SUMMARY:
E:\FR\FM\23FEN1.SGM
23FEN1
]]>Agencies
[Federal Register Volume 88, Number 36 (Thursday, February 23, 2023)]
[Notices]
[Pages 11499-11501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03699]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96944; File No. SR-NYSE-2023-11]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Rule 7.44 Relating to the Retail Liquidity Program
February 16, 2023.
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 February 14, 2023, 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, II,
and III 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 modify Rule 7.44 relating to the Retail
Liquidity Program. 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 modify Rule 7.44, which sets forth the
Exchange's Retail Liquidity Program (the ``Program'').\4\ The purpose
of the Program is to attract retail order flow to the Exchange and
allow such order flow to receive potential price improvement. Under
Rule 7.44, a class of market participants called Retail Liquidity
Providers (``RLPs'') and non-RLP member organizations are able to
provide potential price improvement to retail investor orders in the
form of a non-displayed order that is priced better than the best
protected bid or offer, called a Retail Price Improvement Order (``RPI
Order'').\5\ When there is an RPI Order in a particular security, the
Exchange disseminates an indicator, known as the Retail Liquidity
Identifier, that such interest exists.\6\ Retail Member Organizations
(``RMOs'') can submit a Retail Order to the Exchange, which interacts,
to the extent possible, with available contra-side RPI Orders and then
may interact with other liquidity on the Exchange or elsewhere,
depending on the Retail Order's instructions.\7\ The segmentation in
the Program allows retail order flow to receive potential price
improvement as a result of their order flow being deemed more desirable
by liquidity providers. The Exchange recently modified the Program to
be available for all securities traded on the Exchange.\8\
---------------------------------------------------------------------------
\4\ The Program was established on a pilot basis in 2012 and was
approved by the Commission to operate on a permanent basis in 2019.
See Securities Exchange Act Release No. 85160 (February 15, 2019),
84 FR 5754 (February 22, 2019) (SR-NYSE-2018-28). In connection with
the Commission's approval of the Program on a pilot basis, the
Commission granted the Exchange's request for exemptive relief from
Rule 612 of Regulation NMS, 17 CFR 242.612 (the ``Sub-Penny Rule''),
which, among other things, prohibits a national securities exchange
from accepting or ranking orders priced greater than $1.00 per share
in an increment smaller than $0.01. See Securities Exchange Act
Release No. 67347 (July 3, 2012), 77 FR 40673 (July 10, 2012) (SR-
NYSE-2011-55). The Exchange notes that the change proposed in this
filing has no substantive impact under the Sub-Penny Rule and thus
does not require an update or revision to the exemptive relief
previously granted by the Commission.
\5\ See Rules 7.44(a)(1) (defining an RLP) and 7.44(a)(4)
(defining RPI Order).
\6\ See Rule 7.44(j).
\7\ See Rule 7.44(a)(2) (defining RMO); Rules 7.44(a)(3) and
7.44(k) (describing Retail Orders).
\8\ See Securities Exchange Act Release No. 96112 (October 20,
2022), 87 FR 64831 (October 26, 2022) (SR-NYSE-2022-47) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Modify
Rule 7.44).
---------------------------------------------------------------------------
Rule 7.44(k) currently describes the operation of a Retail Order
pursuant to the Program, which is defined in Rule 7.44(a)(3) as an
agency order or a riskless principal order that meets the criteria of
FINRA Rule 5320.03 that originates from a natural person and is
submitted to the Exchange by an RMO, provided that no change is made to
the
[[Page 11500]]
terms of the order with respect to price or side of market and the
order does not originate from a trading algorithm or any other
computerized methodology. Rule 7.44(k) provides that a Retail Order is
a non-routable Limit IOC Order to buy (sell) that will trade only with
available RPIs to sell (buy) and all other orders to sell (buy) with a
working price below (above) the PBO (PBB) on the Exchange Book. Any
quantity of a Retail Order to buy (sell) that does not trade with
eligible orders to sell (buy) will be immediately and automatically
cancelled. Rule 7.44(k) further provides that a Retail Order will be
rejected on arrival if the PBBO is locked or crossed and may not be
designated with a minimum trade size modifier (``MTS Modifier'').\9\
---------------------------------------------------------------------------
\9\ See Rule 7.31(i)(3) (providing that the MTS Modifier
designates an order with a minimum trade size and an order with an
MTS Modifier will be rejected if the MTS is less than a round lot or
if the MTS is larger than the size of the order). The Exchange notes
that the rule text currently providing that a Retail Order may not
be designated with an MTS Modifier was introduced in connection with
the Exchange's transition to the Pillar trading platform and was
intended to ensure that Exchange rules continued to accurately
reflect the operation of Retail Orders (as established prior to such
transition). See Securities Exchange Act Release No. 85930 (May 23,
2019), 84 FR 25100 (May 30, 2019) (SR-NYSE-2019-26) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change of New
Rule 7.44 To Operate Its Retail Liquidity Program on Pillar, the
Exchange's New Technology Trading Platform).
---------------------------------------------------------------------------
The Exchange now proposes to permit Retail Orders to be designated
with an MTS Modifier and, accordingly, proposes to modify the last
sentence of Rule 7.44(k) to reflect this change. The proposed change is
intended to provide RMOs with the option to designate Retail Orders
with a minimum trade size if they so choose. The Exchange believes that
the proposed change would provide additional flexibility to RMOs
entering Retail Orders, which could encourage retail order flow to the
Exchange and promote additional opportunities for price improvement for
such orders. The Exchange notes that the proposed change would not
otherwise impact the operation of Retail Orders as set forth in current
Exchange rules and would simply make an existing modifier available for
use with Retail Orders. The Exchange also believes that the proposed
change would allow it to compete with other exchanges' retail price
improvement programs that permit retail orders to be designated with a
minimum trade size.\10\
---------------------------------------------------------------------------
\10\ See, e.g., Investors Exchange LLC (``IEX'') Rules
11.190(b)(9)(G), 11.190(b)(10)(G), and 11.232(a)(2) (providing that
a Retail order may be a Discretionary Peg order or Midpoint Peg
order, either of which may be designated with a minimum trade size).
The Exchange notes that IEX's retail improvement program differs
from the NYSE RLP in that the IEX program is designed to provide
price improvement at the midpoint but does not believe that
difference to be meaningful with respect to the ability to designate
a retail order with a minimum trade size.
---------------------------------------------------------------------------
The Exchange also proposes non-substantive clarifying changes to
Rules 7.44(a)(3) and 7.44(a)(4) \11\ relating to the size of Retail
Orders and RPI Orders. Rules 7.44(a)(3) and 7.44(a)(4)(E) currently
include text providing that Retail Orders and RPI Orders, respectively,
may be an odd lot, round lot, or mixed lot. The Exchange now proposes
to delete such rule text as extraneous because Exchange rules already
provide that orders may be entered in any size unless otherwise
specified.\12\
---------------------------------------------------------------------------
\11\ The Exchange also proposes a non-substantive change to Rule
7.44(a)(4)(A) to improve the clarity of the rule text, with no
change to the operation of the rule.
\12\ See Rule 7.38(a).
---------------------------------------------------------------------------
Subject to the effectiveness of this proposed rule change, the
Exchange will implement this change no later than in the second quarter
of 2023 and announce the implementation date by Trader Update.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\13\ in general, and furthers the objectives of Section
6(b)(5),\14\ 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.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes the proposed change 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 by allowing RMOs the option to designate Retail Orders with a
minimum trade size, which could attract additional retail order flow to
the Exchange, thereby promoting additional opportunities for price
improvement and order execution on the Exchange and promoting
competition with other exchanges operating retail price improvement
programs that allow retail orders to be designated with a minimum trade
size.\15\ The Exchange also believes that the proposed change would
remove impediments to, and perfect the mechanism of, a free and open
market and a national market system and promote just and equitable
principles of trade because it would permit the use of the existing MTS
Modifier with Retail Orders and would not otherwise impact the
operation of Retail Orders as provided under current Exchange rules.
The Exchange further believes that the proposed clarifying changes to
Rule 7.44 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 they are intended
only to streamline Exchange rules and would not impact the operation of
existing Exchange rules.
---------------------------------------------------------------------------
\15\ See note 10, supra.
---------------------------------------------------------------------------
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. The Exchange believes that,
to the extent the proposed change encourages RMOs to direct additional
Retail Orders to the Exchange and increases opportunities for price
improvement and 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. The
Exchange also believes that the proposed change would promote
competition with retail price improvement programs on other equities
exchanges that permit retail orders to be designated with a minimum
trade size.\16\
---------------------------------------------------------------------------
\16\ Id.
---------------------------------------------------------------------------
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 \17\ and Rule 19b-4(f)(6) thereunder.\18\
Because the foregoing proposed rule change does not: (i) significantly
affect the protection
[[Page 11501]]
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 \19\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\20\
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(3)(A)(iii).
\18\ 17 CFR 240.19b-4(f)(6).
\19\ 15 U.S.C. 78s(b)(3)(A)(iii).
\20\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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-2023-11 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-2023-11. 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-NYSE-2023-11 and should be submitted on
or before March 16, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
---------------------------------------------------------------------------
\22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03699 Filed 2-22-23; 8:45 am]
BILLING CODE 8011-01-P
