Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Amending Rule 7.31E(a)(2)(B) Regarding Limit Order Price Protection, 14123-14125 [2024-03774]

Download as PDF Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Notices Section 19(b)(2) of the Exchange Act 12 provides that proceedings to determine whether to approve or disapprove a proposed rule change must be concluded within 180 days of the date of publication of notice of filing of the proposed rule change. The time for conclusion of the proceedings may be extended for up to 60 days if the Commission determines that a longer period is appropriate and publishes the reasons for such determination.13 The 180th day after publication of the Notice in the Federal Register is February 26, 2024. The Commission is extending the period for Commission action on the Proposed Rule Change, as modified by Partial Amendment No. 1 and Amendment No. 2 (hereinafter, the ‘‘Proposed Rule Change’’). The Commission finds that it is appropriate to designate a longer period within which to take action on the Proposed Rule Change so that the Commission has sufficient time to consider the issues raised by the Proposed Rule Change and to take action on the Proposed Rule Change. Accordingly, pursuant to section 19(b)(2)(B)(ii)(II) of the Exchange Act,14 the Commission designates April 26, 2024, as the date by which the Commission should either approve or disapprove the Proposed Rule Change SR–NSCC–2023–007. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–03775 Filed 2–23–24; 8:45 am] BILLING CODE 8011–01–P Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change Amending Rule 7.31E(a)(2)(B) Regarding Limit Order Price Protection khammond on DSKJM1Z7X2PROD with NOTICES corruption in the markets) and Anthony LaBree (Oct. 12, 2024) (concerns about OCC’s business practices). Comments are available at https:// www.sec.gov/comments/sr-nscc-2023-007/ srnscc2023007.htm. 12 15 U.S.C. 78s(b)(2). 13 15 U.S.C 78s(b)(2)(B)(ii)(II). 14 Id. 15 17 CFR 200.30–3(a)(57). 1 15 U.S.C. 78s(b)(1). VerDate Sep<11>2014 16:23 Feb 23, 2024 Jkt 262001 The Exchange proposes to amend Rule 7.31E(a)(2)(B) regarding Limit Order Price Protection. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1. Purpose [Release No. 34–99566; File No. SR– NYSEAMER–2024–11] Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION February 20, 2024. (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on February 9,2024, NYSE American LLC (‘‘NYSE American’’ 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. The Exchange proposes to amend Rule 7.31E(a)(2)(B) (‘‘Limit Order Price Protection’’) to provide for the application of Limit Order Price Protection during the Core Trading Session even where a contra-side NBB (NBO) has not been established. Currently, Rule 7.31E(a)(2)(B) provides that a Limit Order to buy (sell) will be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage away from the National Best Offer (National Best Bid) (‘‘NBO’’ and ‘‘NBB,’’ respectively),4 and 2 15 U.S.C. 78a. CFR 240.19b–4. 4 For securities with a reference price between $0.00 and $25.00, the specified percentage is 10%; for securities with a reference price between $25.01 and $50.00, the specified percentage is 5%; and for 3 17 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 14123 that Limit Order Price Protection will not be applied to an incoming Limit Order to buy (sell) if there is no NBO (NBB). The Exchange has recently received requests from market participants to modify this rule so that during the Core Trading Session, Limit Order Price Protection would apply even when no contra-side NBB or NBO has been established. In such cases, market participants have suggested that the Limit Order Price Protection calculation should use an alternate reference price, such as the last consolidated round-lot price of the trading day or the prior trading day’s official closing price. That way, even if no contra-side NBB or NBO has been established, the Exchange would still apply Limit Order Price Protection using the best-available alternate reference price, thereby offering market participants greater protections against the execution of Limit Orders with aberrant prices during the Core Trading Session. The Exchange is aware that the Limit Order Price Protection rule on the MIAX Pearl equities exchange (‘‘MIAX Pearl’’) currently features such a hierarchy of reference prices, so that Limit Order Price Protection is applied to all Limit Orders, even where no contra-side NBB or NBO has been established.5 In light of these requests from market participants, the Exchange now proposes to amend Rule 7.31E(a)(2)(B) to provide a hierarchy of reference prices against which Limit Order Price Protection would apply during the Core Trading Session. As in the current rule, during the Core Trading Session, a Limit Order to buy (sell) would be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage (as set forth in the accompanying table) away from the NBO (NBB). But if such NBO (NBB) has not yet been established, the Exchange would use as the reference price the last consolidated round-lot price of that trading day, or, if none, the prior trading day’s Official Closing Price.6 securities with a reference price greater than $50.00, the specified percentage is 3%. 5 Under current MIAX Pearl rules, a Limit Order to buy (sell) will be rejected if it is priced at or above (below) the greater of a specified dollar and percentage away from (1) the PBO (PBB), or, if unavailable, (2) the consolidated last sale price disseminated during the Regular Trading Hours on trade date, or, if unavailable, (3) the prior day’s Official Closing Price. See MIAX Pearl Rule 2614(a)(1)(ix)(A). 6 The Exchange’s proposed hierarchy of reference prices is substantially similar to the hierarchy in the MIAX Pearl rules. The only differences are that the Exchange’s proposal (a) would continue to reference the NBO (NBB) instead of the PBO (PBB), as the Exchange’s Limit Order Price Protection E:\FR\FM\26FEN1.SGM Continued 26FEN1 14124 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Notices khammond on DSKJM1Z7X2PROD with NOTICES The Exchange does not propose for this change to apply during the Early and Late Trading Sessions. This is because with respect to both the Early and Late Trading Sessions, there is a higher likelihood that overnight news developments may move the market more than the percentages specified in the Limit Order Price Protection rule. If, in the absence of an NBO (NBB), such percentages were applied to the prior trading day’s Official Closing Price, this might lead the Exchange to reject orders that are appropriately trying to establish a quote at the new market level. For this reason, the Exchange believes the current rule should continue to govern during the Early and Late Trading Sessions, such that if there is no contraside NBO (NBB), Limit Order Price Protection will not be applied. Accordingly, the Exchange proposes to amend and reorganize Rule 7.31E(a)(2)(B) into three sub-sections, with sub-section (i) describing the relevant reference prices during the Core Trading Session, sub-section (ii) describing the relevant reference price during the Early and Late Trading Sessions, and sub-section (iii) describing the balance of the current rule. Specifically, the Exchange proposes that new sub-section (i) of Rule 7.31E(a)(2)(B) would provide that during the Core Trading Session, a Limit Order to buy (sell) will be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage (as set forth in the accompanying table) away from ‘‘(a) the NBO (NBB), or, if none, (b) the last consolidated round-lot price of that trading day, or, if none, (c) the prior trading day’s Official Closing Price.’’ The Exchange proposes that new subsection (ii) of the rule would provide that during the Early and Late Trading Sessions, a Limit Order to buy (sell) will be rejected if it is priced at or above (below) the greater of $0.15 or a specified percentage (as set forth in the accompanying table) away from the NBO (NBB), and that Limit Order Price Protection will not be applied to an incoming Limit Order to buy (sell) if there is no NBO (NBB). Finally, the Exchange proposes that the balance of the current rule be moved mechanism has always done; and (b) unlike the MIAX Pearl rule, which permits an odd lot to serve as ‘‘the consolidated last sale price disseminated during the Regular Trading Hours on trade date,’’ the Exchange’s proposal would instead use the last consolidated round-lot price of that trading day, which the Exchange believes is a better indication of actual market conditions. Both the MIAX Pearl rule and the Exchange’s proposed rule would use the prior trading day’s Official Closing Price as the reference price of last resort. VerDate Sep<11>2014 16:23 Feb 23, 2024 Jkt 262001 to new sub-section (iii) after the new subtitle ‘‘Applicability.’’ The Exchange does not propose to make any other changes to the rule, nor does it propose any changes to the $0.15 or specified percentages used in the calculation of Limit Order Price Protection. Implementation The Exchange anticipates implementing the proposed change in the first quarter of 2024 and, in any event, will implement the proposed rule change no later than the end of June 2024. The Exchange will announce the timing of such changes by Trader Update. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,7 in general, and with Section 6(b)(5),8 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 remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, protect investors and the public interest, because the use a substantially similar hierarchy of reference prices for the application of Limit Order Price Protection when no contra-side NBO or NBB has been established is currently in effect on MIAX Pearl and therefore is not novel.9 The Exchange further believes that the proposed change would enhance the Exchange’s Limit Order Price Protection mechanism during the Core Trading Session, because it would apply using the bestavailable alternate reference price when a contra-side NBO or NBB has not been established, thereby offering market participants greater protection from aberrant prices and improving continuous trading and price discovery. In addition, the proposal to enhance Limit Order Price Protection by adding alternative reference prices to apply to the Core Trading Session would assist with the maintenance of fair and orderly markets because such mechanisms U.S.C. 78f(b). U.S.C. 78f(b)(5). 9 See supra notes 5 and 6. protect investors from potentially receiving executions away from the prevailing market prices. The Exchange also believes that it would protect investors and the public interest for the Exchange to maintain the current Limit Order Price Protection rule for the Early and Late Trading Sessions. With respect to both the Early and Late Trading Sessions, there is a higher likelihood that overnight news developments may move the market more than the percentages specified in the Limit Order Price Protection rule. If, in the absence of an NBO (NBB), such percentages were applied to the prior trading day’s Official Closing Price, this might lead the Exchange to reject orders that are appropriately trying to establish a quote at the new market level. For this reason, the Exchange believes that, for the protection of investors and the public interest, the current rule should continue to govern during the Early and Late Trading Sessions, such that if there is no contra-side NBO (NBB), Limit Order Price Protection will not be applied. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change would not address competitive issues but rather would enhance the Exchange’s Limit Order Price Protection mechanism, to further protect market participants from aberrant prices and improve continuous trading and price discovery. B. 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 10 and Rule 19b–4(f)(6) thereunder.11 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 prior to 30 days from the date on which it was filed, or such shorter time as the 7 15 8 15 PO 00000 Frm 00085 Fmt 4703 10 15 11 17 Sfmt 4703 E:\FR\FM\26FEN1.SGM U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 26FEN1 Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Notices 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.12 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) 13 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– NYSEAMER–2024–11 on the subject line. khammond on DSKJM1Z7X2PROD with NOTICES 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–NYSEAMER–2024–11. 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 12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b–4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. 13 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 16:23 Feb 23, 2024 Jkt 262001 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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–NYSEAMER–2024–11 and should be submitted on or before March 18, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Sherry R. Haywood, Assistant Secretary. 14125 SW, Suite 6050, Washington, DC 20416, (202) 205–6734. Notice is hereby given that as a result of the President’s major disaster declaration on 02/15/2024, applications for disaster loans may be submitted online using the MySBA Loan Portal https:// lending.sba.gov or other locally announced locations. Please contact the SBA disaster assistance customer service center by email at disastercustomerservice@sba.gov or by phone at 1–800–659–2955 for further assistance. The following areas have been determined to be adversely affected by the disaster: SUPPLEMENTARY INFORMATION: Primary Counties (Physical Damage and Economic Injury Loans): Spokane. Contiguous Counties (Economic Injury Loans Only): Washington: Lincoln, Pend Oreille, Stevens, Whitman Idaho: Kootenai, Benewah, Bonner The Interest Rates are: Percent [FR Doc. 2024–03774 Filed 2–23–24; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 20205 and # 20206; WASHINGTON Disaster Number WA–20005] Presidential Declaration of a Major Disaster for the State of Washington U.S. Small Business Administration. ACTION: Notice. AGENCY: This is a Notice of the Presidential declaration of a major disaster for the State of Washington (FEMA–4759–DR), dated 02/15/2024. Incident: Wildfires. Incident Period: 08/18/2023 through 08/25/2023. DATES: Issued on 02/15/2024. Physical Loan Application Deadline Date: 04/15/2024. Economic Injury (EIDL) Loan Application Deadline Date: 11/15/2024. ADDRESSES: Visit the MySBA Loan Portal at https://lending.sba.gov to apply for a disaster assistance loan. FOR FURTHER INFORMATION CONTACT: Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SUMMARY: 14 17 PO 00000 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: Business and Small Agricultural Cooperatives without Credit Available Elsewhere .............. Non-Profit Organizations without Credit Available Elsewhere ..................................... Fmt 4703 Sfmt 9990 2.500 8.000 4.000 2.375 2.375 4.000 2.375 The number assigned to this disaster for physical damage is 202055 and for economic injury is 202060. (Catalog of Federal Domestic Assistance Number 59008) Francisco Sa´nchez, Jr., Associate Administrator, Office of Disaster Recovery & Resilience. [FR Doc. 2024–03877 Filed 2–23–24; 8:45 am] BILLING CODE 8026–09–P CFR 200.30–3(a)(12). Frm 00086 5.000 E:\FR\FM\26FEN1.SGM 26FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 89, Number 38 (Monday, February 26, 2024)]
[Notices]
[Pages 14123-14125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03774]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99566; File No. SR-NYSEAMER-2024-11]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change Amending Rule 
7.31E(a)(2)(B) Regarding Limit Order Price Protection

February 20, 2024.
    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 9,2024, NYSE American LLC (``NYSE American'' 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 7.31E(a)(2)(B) regarding Limit 
Order Price Protection. The proposed rule change is available on the 
Exchange's website at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 7.31E(a)(2)(B) (``Limit Order 
Price Protection'') to provide for the application of Limit Order Price 
Protection during the Core Trading Session even where a contra-side NBB 
(NBO) has not been established.
    Currently, Rule 7.31E(a)(2)(B) provides that a Limit Order to buy 
(sell) will be rejected if it is priced at or above (below) the greater 
of $0.15 or a specified percentage away from the National Best Offer 
(National Best Bid) (``NBO'' and ``NBB,'' respectively),\4\ and that 
Limit Order Price Protection will not be applied to an incoming Limit 
Order to buy (sell) if there is no NBO (NBB).
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    \4\ For securities with a reference price between $0.00 and 
$25.00, the specified percentage is 10%; for securities with a 
reference price between $25.01 and $50.00, the specified percentage 
is 5%; and for securities with a reference price greater than 
$50.00, the specified percentage is 3%.
---------------------------------------------------------------------------

    The Exchange has recently received requests from market 
participants to modify this rule so that during the Core Trading 
Session, Limit Order Price Protection would apply even when no contra-
side NBB or NBO has been established. In such cases, market 
participants have suggested that the Limit Order Price Protection 
calculation should use an alternate reference price, such as the last 
consolidated round-lot price of the trading day or the prior trading 
day's official closing price. That way, even if no contra-side NBB or 
NBO has been established, the Exchange would still apply Limit Order 
Price Protection using the best-available alternate reference price, 
thereby offering market participants greater protections against the 
execution of Limit Orders with aberrant prices during the Core Trading 
Session. The Exchange is aware that the Limit Order Price Protection 
rule on the MIAX Pearl equities exchange (``MIAX Pearl'') currently 
features such a hierarchy of reference prices, so that Limit Order 
Price Protection is applied to all Limit Orders, even where no contra-
side NBB or NBO has been established.\5\
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    \5\ Under current MIAX Pearl rules, a Limit Order to buy (sell) 
will be rejected if it is priced at or above (below) the greater of 
a specified dollar and percentage away from (1) the PBO (PBB), or, 
if unavailable, (2) the consolidated last sale price disseminated 
during the Regular Trading Hours on trade date, or, if unavailable, 
(3) the prior day's Official Closing Price. See MIAX Pearl Rule 
2614(a)(1)(ix)(A).
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    In light of these requests from market participants, the Exchange 
now proposes to amend Rule 7.31E(a)(2)(B) to provide a hierarchy of 
reference prices against which Limit Order Price Protection would apply 
during the Core Trading Session. As in the current rule, during the 
Core Trading Session, a Limit Order to buy (sell) would be rejected if 
it is priced at or above (below) the greater of $0.15 or a specified 
percentage (as set forth in the accompanying table) away from the NBO 
(NBB). But if such NBO (NBB) has not yet been established, the Exchange 
would use as the reference price the last consolidated round-lot price 
of that trading day, or, if none, the prior trading day's Official 
Closing Price.\6\
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    \6\ The Exchange's proposed hierarchy of reference prices is 
substantially similar to the hierarchy in the MIAX Pearl rules. The 
only differences are that the Exchange's proposal (a) would continue 
to reference the NBO (NBB) instead of the PBO (PBB), as the 
Exchange's Limit Order Price Protection mechanism has always done; 
and (b) unlike the MIAX Pearl rule, which permits an odd lot to 
serve as ``the consolidated last sale price disseminated during the 
Regular Trading Hours on trade date,'' the Exchange's proposal would 
instead use the last consolidated round-lot price of that trading 
day, which the Exchange believes is a better indication of actual 
market conditions. Both the MIAX Pearl rule and the Exchange's 
proposed rule would use the prior trading day's Official Closing 
Price as the reference price of last resort.

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[[Page 14124]]

    The Exchange does not propose for this change to apply during the 
Early and Late Trading Sessions. This is because with respect to both 
the Early and Late Trading Sessions, there is a higher likelihood that 
overnight news developments may move the market more than the 
percentages specified in the Limit Order Price Protection rule. If, in 
the absence of an NBO (NBB), such percentages were applied to the prior 
trading day's Official Closing Price, this might lead the Exchange to 
reject orders that are appropriately trying to establish a quote at the 
new market level. For this reason, the Exchange believes the current 
rule should continue to govern during the Early and Late Trading 
Sessions, such that if there is no contra-side NBO (NBB), Limit Order 
Price Protection will not be applied.
    Accordingly, the Exchange proposes to amend and reorganize Rule 
7.31E(a)(2)(B) into three sub-sections, with sub-section (i) describing 
the relevant reference prices during the Core Trading Session, sub-
section (ii) describing the relevant reference price during the Early 
and Late Trading Sessions, and sub-section (iii) describing the balance 
of the current rule.
    Specifically, the Exchange proposes that new sub-section (i) of 
Rule 7.31E(a)(2)(B) would provide that during the Core Trading Session, 
a Limit Order to buy (sell) will be rejected if it is priced at or 
above (below) the greater of $0.15 or a specified percentage (as set 
forth in the accompanying table) away from ``(a) the NBO (NBB), or, if 
none, (b) the last consolidated round-lot price of that trading day, 
or, if none, (c) the prior trading day's Official Closing Price.''
    The Exchange proposes that new sub-section (ii) of the rule would 
provide that during the Early and Late Trading Sessions, a Limit Order 
to buy (sell) will be rejected if it is priced at or above (below) the 
greater of $0.15 or a specified percentage (as set forth in the 
accompanying table) away from the NBO (NBB), and that Limit Order Price 
Protection will not be applied to an incoming Limit Order to buy (sell) 
if there is no NBO (NBB).
    Finally, the Exchange proposes that the balance of the current rule 
be moved to new sub-section (iii) after the new subtitle 
``Applicability.''
    The Exchange does not propose to make any other changes to the 
rule, nor does it propose any changes to the $0.15 or specified 
percentages used in the calculation of Limit Order Price Protection.
Implementation
    The Exchange anticipates implementing the proposed change in the 
first quarter of 2024 and, in any event, will implement the proposed 
rule change no later than the end of June 2024. The Exchange will 
announce the timing of such changes by Trader Update.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and with Section 
6(b)(5),\8\ 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange 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 in general, protect investors and the 
public interest, because the use a substantially similar hierarchy of 
reference prices for the application of Limit Order Price Protection 
when no contra-side NBO or NBB has been established is currently in 
effect on MIAX Pearl and therefore is not novel.\9\ The Exchange 
further believes that the proposed change would enhance the Exchange's 
Limit Order Price Protection mechanism during the Core Trading Session, 
because it would apply using the best-available alternate reference 
price when a contra-side NBO or NBB has not been established, thereby 
offering market participants greater protection from aberrant prices 
and improving continuous trading and price discovery. In addition, the 
proposal to enhance Limit Order Price Protection by adding alternative 
reference prices to apply to the Core Trading Session would assist with 
the maintenance of fair and orderly markets because such mechanisms 
protect investors from potentially receiving executions away from the 
prevailing market prices.
---------------------------------------------------------------------------

    \9\ See supra notes 5 and 6.
---------------------------------------------------------------------------

    The Exchange also believes that it would protect investors and the 
public interest for the Exchange to maintain the current Limit Order 
Price Protection rule for the Early and Late Trading Sessions. With 
respect to both the Early and Late Trading Sessions, there is a higher 
likelihood that overnight news developments may move the market more 
than the percentages specified in the Limit Order Price Protection 
rule. If, in the absence of an NBO (NBB), such percentages were applied 
to the prior trading day's Official Closing Price, this might lead the 
Exchange to reject orders that are appropriately trying to establish a 
quote at the new market level. For this reason, the Exchange believes 
that, for the protection of investors and the public interest, the 
current rule should continue to govern during the Early and Late 
Trading Sessions, such that if there is no contra-side NBO (NBB), Limit 
Order Price Protection will not be applied.
Self-Regulatory Organization's Statement on Burden on Competition
    The Exchange believes that the proposed rule change will not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change would 
not address competitive issues but rather would enhance the Exchange's 
Limit Order Price Protection mechanism, to further protect market 
participants from aberrant prices and improve continuous trading and 
price discovery.

B. 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 \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
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 prior to 
30 days from the date on which it was filed, or such shorter time as 
the

[[Page 14125]]

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.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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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    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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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-NYSEAMER-2024-11 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-NYSEAMER-2024-11. 
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 a.m. and 3 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. Do 
not include personal identifiable information in submissions; you 
should submit only information that you wish to make available 
publicly. We may redact in part or withhold entirely from publication 
submitted material that is obscene or subject to copyright protection. 
All submissions should refer to file number SR-NYSEAMER-2024-11 and 
should be submitted on or before March 18, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-03774 Filed 2-23-24; 8:45 am]
BILLING CODE 8011-01-P

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