Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.19-E, 16601-16603 [2024-04795]
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Federal Register / Vol. 89, No. 46 / Thursday, March 7, 2024 / Notices
based index options, including EAFE
and EM options.44
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,45 that the
proposed rule change (SR–CBOE–2024–
006), as modified by Amendment No. 1,
be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.46
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–04798 Filed 3–6–24; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99654; File No. SR–
NYSEARCA–2024–19]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 7.19–E
March 1, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
16, 2024, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
khammond on DSKJM1Z7X2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7.19–E to make additional pretrade risk controls available to Entering
Firms and Clearing Firms. 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
Notice, supra note 3, at 5595.
U.S.C. 78s(b)(2).
46 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
45 15
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 7.19–E to make additional pretrade risk controls available to Entering
Firms and Clearing Firms.
BILLING CODE 8011–01–P
44 See
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.
Background and Proposal
In 2020, in order to assist ETP
Holders’ efforts to manage their risk, the
Exchange amended its rules to add Rule
7.19–E (Pre-Trade Risk Controls),3
which established a set of optional pretrade risk controls by which Entering
Firms and their designated Clearing
Firms 4 could set credit limits and other
pre-trade risk controls for an Entering
Firm’s trading on the Exchange and
authorize the Exchange to take action if
those credit limits or other pre-trade risk
controls are exceeded. These pre-trade
risk controls include a Gross Credit Risk
Limit, which is defined in Rule 7.19–
E(b)(1) as ‘‘a pre-established maximum
daily dollar amount for purchases and
sales across all symbols, where both buy
and sell orders are counted as positive
values.’’ The current version of Rule
7.19–E(b)(1) specifies that both open
and executed orders are considered:
‘‘[f]or purposes of calculating the Gross
Credit Risk Limit, unexecuted orders in
the NYSE Arca Book, orders routed on
arrival pursuant to Rule 7.37–E(a)(1),
and executed orders are included.’’
The Exchange has recently received
several requests from market
participants to create two additional
Gross Credit Risk Limit risk controls:
one that that includes only open orders
and another that includes only executed
orders. Market participants have
explained that Entering Firms and
Clearing Firms would benefit from
having more granular gross credit risk
3 See Securities Exchange Act Release No. 88904
(May 19, 2020), 85 FR 31560 (May 26, 2020) (SR–
NYSEArca–2020–43). Later, in 2023, the Exchange
amended its rules to make additional pre-trade risk
controls available to Entering Firms. See Securities
Exchange Act Release No. 96921 (February 14,
2023), 88 FR 10597 (February 21, 2023) (SR–
NYSEARCA–2023–13).
4 The terms ‘‘Entering Firm’’ and ‘‘Clearing Firm’’
are defined in Rule 7.19–E.
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
16601
controls available, which would allow
them to set limits and breach actions
based solely on open orders or executed
orders, in addition to the Exchange’s
existing Gross Credit Risk Limit that
includes both open and executed orders.
The Exchange notes that the MIAX
Pearl equities exchange (‘‘MIAX Pearl’’)
currently offers risk controls
substantially similar to those proposed
here. Specifically, MIAX Pearl offers its
‘‘Equity Members’’ and their ‘‘Clearing
Members’’ the option to use a ‘‘Gross
Notional Trade Value’’ risk check,
which includes only executed orders,
and a ‘‘Gross Notional Open Value’’ risk
check, which includes only unexecuted
orders, in addition to a ‘‘Gross Notional
Open and Trade Value’’ risk check, for
which both executed and unexecuted
orders are included.5 As such, market
participants are already familiar with
these various gross credit risk checks,
such that the ones proposed by the
Exchange in this filing are not novel.
In light of these requests, the
Exchange proposes to amend Rule 7.19–
E(b)(1) to rename the existing Gross
Credit Risk Limit as ‘‘Gross Credit Risk
Limit—Open + Executed,’’ and to add
two additional risk limits: ‘‘Gross Credit
Risk Limit—Open Only’’ and ‘‘Gross
Credit Risk Limit—Executed Only.’’
Specifically, the Exchange proposes to
amend and reorganize Rule 7.19–E(b)(1)
as follows. First, the Exchange would
amend the language in the first sentence
of the rule to refer to plural Gross Credit
Risk Limits, instead of just one. At the
end of the first sentence, the Exchange
would add that ‘‘[a]vailable Gross Credit
Risk Limits include’’ the three types
described in new sub-sections (A), (B),
and (C).
Proposed sub-section (A) would
define the ‘‘Gross Credit Risk Limit—
Open + Executed’’ risk check to include
unexecuted orders in the NYSE Arca
Book, orders routed on arrival pursuant
to Rule 7.37–E(a)(1), and executed
orders (just as the current Gross Credit
Risk Limit does).
Proposed sub-section (B) would
define the ‘‘Gross Credit Risk Limit—
Open Only’’ risk check to include only
unexecuted orders in the NYSE Arca
Book and orders routed on arrival
pursuant to Rule 7.37–E(a)(1).
Proposed sub-section (C) would
define the ‘‘Gross Credit Risk Limit—
Executed Only’’ risk check to include
executed orders only.
In addition, the Exchange proposes to
make a conforming change to section
(c)(1)(B) of the rule, to make plural the
current singular reference to ‘‘Gross
Credit Risk Limit.’’
5 See
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MIAX Pearl Rule 2618(a)(2)(A), (C), and (E).
07MRN1
16602
Federal Register / Vol. 89, No. 46 / Thursday, March 7, 2024 / Notices
As with the Exchange’s existing risk
controls, use of the pre-trade risk
controls proposed herein would be
optional. The Exchange proposes no
other changes to Rule 7.19–E or its
Commentary.
Continuing Obligations of ETP Holders
Under Rule 15c3–5
The proposed Pre-Trade Risk Controls
described here are meant to supplement,
and not replace, the ETP Holders’ own
internal systems, monitoring, and
procedures related to risk management.
The Exchange does not guarantee that
these controls will be sufficiently
comprehensive to meet all of an ETP
Holder’s needs, the controls are not
designed to be the sole means of risk
management, and using these controls
will not necessarily meet an ETP
Holder’s obligations required by
Exchange or federal rules (including,
without limitation, the Rule 15c3–5
under the Act 6 (‘‘Rule 15c3–5’’)). Use of
the Exchange’s Pre-Trade Risk Controls
will not automatically constitute
compliance with Exchange or federal
rules and responsibility for compliance
with all Exchange and SEC rules
remains with the ETP Holder.7
Timing and 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,8 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,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
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
6 See
17 CFR 240.15c3–5.
also Commentary .01 to Rule 7.19–E, which
provides that ‘‘[t]he pre-trade risk controls
described in this Rule are meant to supplement, and
not replace, the ETP Holder’s own internal systems,
monitoring and procedures related to risk
management and are not designed for compliance
with Rule 15c3–5 under the Exchange Act.
Responsibility for compliance with all Exchange
and SEC rules remains with the ETP Holder.’’
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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7 See
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and a national market system, and, in
general, to protect investors and the
public interest, and because it is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
Specifically, the Exchange believes
that the proposed rule change will
remove impediments to and perfect the
mechanism of a free and open market
and a national market system because
the proposed additional Pre-Trade Risk
Controls would provide Entering Firms
and Clearing Firms with enhanced
abilities to manage their risk with
respect to orders on the Exchange. The
proposed additional Pre-Trade Risk
Controls are not novel; they are based
on existing risk settings already in place
on MIAX Pearl and market participants
are already familiar with the types of
protections that the proposed risk
controls afford.10 As such, the Exchange
believes that the proposed additional
Pre-Trade Risk Controls would provide
a means to address potentially marketimpacting events, helping to ensure the
proper functioning of the market.
In addition, the Exchange believes
that the proposed rule change will
protect investors and the public interest
because the proposed additional PreTrade Risk Controls are a form of impact
mitigation that will aid Entering Firms
and Clearing Firms in minimizing their
risk exposure and reduce the potential
for disruptive, market-wide events. The
Exchange understands that ETP Holders
implement a number of different riskbased controls, including those required
by Rule 15c3–5. The controls proposed
here will serve as an additional tool for
Entering Firms and Clearing Firms to
assist them in identifying any risk
exposure. The Exchange believes the
proposed additional Pre-Trade Risk
Controls will assist Entering Firms and
Clearing Firms in managing their
financial exposure which, in turn, could
enhance the integrity of trading on the
securities markets and help to assure the
stability of the financial system.
Finally, the Exchange believes that
the proposed rule change does not
unfairly discriminate among the
Exchange’s ETP Holders because use of
the proposed additional Pre-Trade Risk
Controls is optional and is not a
prerequisite for participation on the
Exchange.
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. In fact, the
Exchange believes that the proposal will
have a positive effect on competition
because, by providing Entering Firms
and Clearing Firms additional means to
monitor and control risk, the proposed
rule will increase confidence in the
proper functioning of the markets. The
Exchange believes the proposed
additional Pre-Trade Risk Controls will
assist Entering Firms and Clearing Firms
in managing their financial exposure
which, in turn, could enhance the
integrity of trading on the securities
markets and help to assure the stability
of the financial system. As a result, the
level of competition should increase as
public confidence in the markets is
solidified.
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 11 and Rule
19b–4(f)(6) thereunder.12 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
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.
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.
11 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
13 15 U.S.C. 78s(b)(2)(B).
12 17
10 See
PO 00000
supra note 6.
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Federal Register / Vol. 89, No. 46 / Thursday, March 7, 2024 / Notices
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:
[FR Doc. 2024–04795 Filed 3–6–24; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
SMALL BUSINESS ADMINISTRATION
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSEARCA–2024–19 on the subject
line.
[Disaster Declaration #20210 and #20211;
TENNESSEE Disaster Number TN–20011]
Paper Comments
All submissions should refer to file
number SR–NYSEARCA–2024–19. 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. 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–NYSEARCA–2024–
19, and should be submitted on or
before March 28, 2024.
VerDate Sep<11>2014
16:13 Mar 06, 2024
Administrative Declaration of a
Disaster for the State of Tennessee
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a notice of an
Administrative declaration of a disaster
for the State of Tennessee dated 03/01/
2024.
Incident: Severe Storms and
Tornadoes.
Incident Period: 12/09/2023.
DATES: Issued on 03/01/2024.
Physical Loan Application Deadline
Date: 04/30/2024.
Economic Injury (EIDL) Loan
Application Deadline Date: 12/02/2024.
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
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
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:
Primary Counties: Robertson
Contiguous Counties:
Tennessee: Cheatham, Davidson,
Montgomery, Sumner
Kentucky: Simpson, Todd, Logan
The Interest Rates are:
Percent
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 .....................................
5.375
2.688
8.000
4.000
3.250
3.250
4.000
3.250
SUMMARY:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
khammond on DSKJM1Z7X2PROD with NOTICES
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Deputy Secretary.
16603
Jkt 262001
Percent
For Physical Damage:
14 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00083
Fmt 4703
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The number assigned to this disaster
for physical damage is 20210C and for
economic injury is 202110.
The States which received an EIDL
Declaration are Kentucky, Tennessee.
(Catalog of Federal Domestic Assistance
Number 59008)
Isabella Guzman,
Administrator.
[FR Doc. 2024–04843 Filed 3–6–24; 8:45 am]
BILLING CODE 8026–09–P
SMALL BUSINESS ADMINISTRATION
Administrator’s Line of Succession
Designation, No.1–A, Revision 38
This document replaces and
supersedes ‘‘Line of Succession
Designation No. 1–A, Revision 37’’.
Line of Succession Designation No. 1–
A, Revision 38
Effective immediately, the
Administrator’s Line of Succession
Designation is as follows:
(a) In the event the Administrator
determines she is unable to perform the
functions and duties of her position or
if she is medically incapacitated or have
died or resigned, the Administrator
designates the officials in listed order
below, if they are eligible to act as
Administrator under the provisions of
the Federal Vacancies Reform Act of
1998 (5 U.S.C. 3345–3349d), to serve as
Acting Administrator with full authority
to perform all acts which the
Administrator is authorized to perform:
(1) Deputy Administrator;
(2) Chief of Staff;
(3) General Counsel;
(4) Chief Operating Officer;
(5) Associate Administrator for
Performance and Chief Financial
Officer;
(6) Chief Human Capital Officer; and
E:\FR\FM\07MRN1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 46 (Thursday, March 7, 2024)]
[Notices]
[Pages 16601-16603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04795]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99654; File No. SR-NYSEARCA-2024-19]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.19-
E
March 1, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 16, 2024, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7.19-E to make additional pre-
trade risk controls available to Entering Firms and Clearing Firms. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 7.19-E to make additional pre-
trade risk controls available to Entering Firms and Clearing Firms.
Background and Proposal
In 2020, in order to assist ETP Holders' efforts to manage their
risk, the Exchange amended its rules to add Rule 7.19-E (Pre-Trade Risk
Controls),\3\ which established a set of optional pre-trade risk
controls by which Entering Firms and their designated Clearing Firms
\4\ could set credit limits and other pre-trade risk controls for an
Entering Firm's trading on the Exchange and authorize the Exchange to
take action if those credit limits or other pre-trade risk controls are
exceeded. These pre-trade risk controls include a Gross Credit Risk
Limit, which is defined in Rule 7.19-E(b)(1) as ``a pre-established
maximum daily dollar amount for purchases and sales across all symbols,
where both buy and sell orders are counted as positive values.'' The
current version of Rule 7.19-E(b)(1) specifies that both open and
executed orders are considered: ``[f]or purposes of calculating the
Gross Credit Risk Limit, unexecuted orders in the NYSE Arca Book,
orders routed on arrival pursuant to Rule 7.37-E(a)(1), and executed
orders are included.''
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 88904 (May 19,
2020), 85 FR 31560 (May 26, 2020) (SR-NYSEArca-2020-43). Later, in
2023, the Exchange amended its rules to make additional pre-trade
risk controls available to Entering Firms. See Securities Exchange
Act Release No. 96921 (February 14, 2023), 88 FR 10597 (February 21,
2023) (SR-NYSEARCA-2023-13).
\4\ The terms ``Entering Firm'' and ``Clearing Firm'' are
defined in Rule 7.19-E.
---------------------------------------------------------------------------
The Exchange has recently received several requests from market
participants to create two additional Gross Credit Risk Limit risk
controls: one that that includes only open orders and another that
includes only executed orders. Market participants have explained that
Entering Firms and Clearing Firms would benefit from having more
granular gross credit risk controls available, which would allow them
to set limits and breach actions based solely on open orders or
executed orders, in addition to the Exchange's existing Gross Credit
Risk Limit that includes both open and executed orders.
The Exchange notes that the MIAX Pearl equities exchange (``MIAX
Pearl'') currently offers risk controls substantially similar to those
proposed here. Specifically, MIAX Pearl offers its ``Equity Members''
and their ``Clearing Members'' the option to use a ``Gross Notional
Trade Value'' risk check, which includes only executed orders, and a
``Gross Notional Open Value'' risk check, which includes only
unexecuted orders, in addition to a ``Gross Notional Open and Trade
Value'' risk check, for which both executed and unexecuted orders are
included.\5\ As such, market participants are already familiar with
these various gross credit risk checks, such that the ones proposed by
the Exchange in this filing are not novel.
---------------------------------------------------------------------------
\5\ See MIAX Pearl Rule 2618(a)(2)(A), (C), and (E).
---------------------------------------------------------------------------
In light of these requests, the Exchange proposes to amend Rule
7.19-E(b)(1) to rename the existing Gross Credit Risk Limit as ``Gross
Credit Risk Limit--Open + Executed,'' and to add two additional risk
limits: ``Gross Credit Risk Limit--Open Only'' and ``Gross Credit Risk
Limit--Executed Only.''
Specifically, the Exchange proposes to amend and reorganize Rule
7.19-E(b)(1) as follows. First, the Exchange would amend the language
in the first sentence of the rule to refer to plural Gross Credit Risk
Limits, instead of just one. At the end of the first sentence, the
Exchange would add that ``[a]vailable Gross Credit Risk Limits
include'' the three types described in new sub-sections (A), (B), and
(C).
Proposed sub-section (A) would define the ``Gross Credit Risk
Limit--Open + Executed'' risk check to include unexecuted orders in the
NYSE Arca Book, orders routed on arrival pursuant to Rule 7.37-E(a)(1),
and executed orders (just as the current Gross Credit Risk Limit does).
Proposed sub-section (B) would define the ``Gross Credit Risk
Limit--Open Only'' risk check to include only unexecuted orders in the
NYSE Arca Book and orders routed on arrival pursuant to Rule 7.37-
E(a)(1).
Proposed sub-section (C) would define the ``Gross Credit Risk
Limit--Executed Only'' risk check to include executed orders only.
In addition, the Exchange proposes to make a conforming change to
section (c)(1)(B) of the rule, to make plural the current singular
reference to ``Gross Credit Risk Limit.''
[[Page 16602]]
As with the Exchange's existing risk controls, use of the pre-trade
risk controls proposed herein would be optional. The Exchange proposes
no other changes to Rule 7.19-E or its Commentary.
Continuing Obligations of ETP Holders Under Rule 15c3-5
The proposed Pre-Trade Risk Controls described here are meant to
supplement, and not replace, the ETP Holders' own internal systems,
monitoring, and procedures related to risk management. The Exchange
does not guarantee that these controls will be sufficiently
comprehensive to meet all of an ETP Holder's needs, the controls are
not designed to be the sole means of risk management, and using these
controls will not necessarily meet an ETP Holder's obligations required
by Exchange or federal rules (including, without limitation, the Rule
15c3-5 under the Act \6\ (``Rule 15c3-5'')). Use of the Exchange's Pre-
Trade Risk Controls will not automatically constitute compliance with
Exchange or federal rules and responsibility for compliance with all
Exchange and SEC rules remains with the ETP Holder.\7\
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\6\ See 17 CFR 240.15c3-5.
\7\ See also Commentary .01 to Rule 7.19-E, which provides that
``[t]he pre-trade risk controls described in this Rule are meant to
supplement, and not replace, the ETP Holder's own internal systems,
monitoring and procedures related to risk management and are not
designed for compliance with Rule 15c3-5 under the Exchange Act.
Responsibility for compliance with all Exchange and SEC rules
remains with the ETP Holder.''
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Timing and 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,\8\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\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 regulating,
clearing, settling, processing information with respect to, and
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,
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that the proposed rule change
will remove impediments to and perfect the mechanism of a free and open
market and a national market system because the proposed additional
Pre-Trade Risk Controls would provide Entering Firms and Clearing Firms
with enhanced abilities to manage their risk with respect to orders on
the Exchange. The proposed additional Pre-Trade Risk Controls are not
novel; they are based on existing risk settings already in place on
MIAX Pearl and market participants are already familiar with the types
of protections that the proposed risk controls afford.\10\ As such, the
Exchange believes that the proposed additional Pre-Trade Risk Controls
would provide a means to address potentially market-impacting events,
helping to ensure the proper functioning of the market.
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\10\ See supra note 6.
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In addition, the Exchange believes that the proposed rule change
will protect investors and the public interest because the proposed
additional Pre-Trade Risk Controls are a form of impact mitigation that
will aid Entering Firms and Clearing Firms in minimizing their risk
exposure and reduce the potential for disruptive, market-wide events.
The Exchange understands that ETP Holders implement a number of
different risk-based controls, including those required by Rule 15c3-5.
The controls proposed here will serve as an additional tool for
Entering Firms and Clearing Firms to assist them in identifying any
risk exposure. The Exchange believes the proposed additional Pre-Trade
Risk Controls will assist Entering Firms and Clearing Firms in managing
their financial exposure which, in turn, could enhance the integrity of
trading on the securities markets and help to assure the stability of
the financial system.
Finally, the Exchange believes that the proposed rule change does
not unfairly discriminate among the Exchange's ETP Holders because use
of the proposed additional Pre-Trade Risk Controls is optional and is
not a prerequisite for participation on the Exchange.
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. In fact, the Exchange
believes that the proposal will have a positive effect on competition
because, by providing Entering Firms and Clearing Firms additional
means to monitor and control risk, the proposed rule will increase
confidence in the proper functioning of the markets. The Exchange
believes the proposed additional Pre-Trade Risk Controls will assist
Entering Firms and Clearing Firms in managing their financial exposure
which, in turn, could enhance the integrity of trading on the
securities markets and help to assure the stability of the financial
system. As a result, the level of competition should increase as public
confidence in the markets is solidified.
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
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 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.
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
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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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[[Page 16603]]
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSEARCA-2024-19 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEARCA-2024-19. 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. 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-NYSEARCA-2024-19, and
should be submitted on or before March 28, 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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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-04795 Filed 3-6-24; 8:45 am]
BILLING CODE 8011-01-P
