Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.31, 21059-21063 [2024-06326]
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
Electronic Comments
fee change in a filing before the
Commission.
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 33 and Rule
19b–4(f)(6) thereunder.34 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.35
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) 36 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:
ddrumheller on DSK120RN23PROD with NOTICES1
33 15
U.S.C. 78s(b)(3)(A)(iii).
34 17 CFR 240.19b–4(f)(6).
35 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange to give the
Commission written notice of its intent to file the
proposed rule change, along with a brief description
and text of the proposed rule change, at least five
business days prior to the date of filing of the
proposed rule change, or such shorter time as
designated by the Commission. The Exchange has
satisfied this requirement.
36 15 U.S.C. 78s(b)(2)(B).
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• 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–2024–15 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–2024–15. 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–NYSE–2024–15 and should be
submitted on or before April 16, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.37
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–06341 Filed 3–25–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99789; File No. SR–NYSE–
2024–14]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
7.31
March 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 March 6,
2024, 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 and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7.31 to provide for the use of Day
ISO Reserve Orders and make other
conforming changes. The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 7.31 to provide for the use of Day
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
37 17
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CFR 200.30–3(a)(12).
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
ISO Reserve Orders and make
conforming changes in Rule 7.11 (Limit
Up-Limit Down Plan and Trading
Pauses in Individual Securities Due to
Extraordinary Market Volatility) and
Rule 7.37 (Order Execution and
Routing).
ddrumheller on DSK120RN23PROD with NOTICES1
Day ISO Orders
Rule 7.31(e)(3) defines an Intermarket
Sweep Order (‘‘ISO’’) as a Limit Order
that does not route and meets the
requirements of Rule 600(b)(38) of
Regulation NMS. As described in Rules
7.31(e)(3)(A) and subparagraphs (i) and
(ii) thereunder, an ISO may trade
through a protected bid or offer and will
not be rejected or cancelled if it would
lock, cross, or be marketable against an
Away Market, provided that (1) it is
identified as an ISO and (2)
simultaneously with its routing to the
Exchange, the member organization that
submits the ISO also routes one or more
additional Limit Orders, as necessary, to
trade against the full displayed size of
any protected bids (for sell orders) or
protected offers (for buy orders) on
Away Markets.
Rule 7.31(e)(3)(C) provides that an
ISO designated Day (‘‘Day ISO’’), if
marketable on arrival, will immediately
trade with contra-side interest on the
Exchange Book up to its full size and
limit price. Any untraded quantity of a
Day ISO will be displayed at its limit
price and may lock or cross a protected
quotation that was displayed at the time
the order arrived.
Reserve Orders
Rule 7.31(d)(1) provides for Reserve
Orders, which are Limit or Inside Limit
Orders with a quantity of the size
displayed and with a reserve quantity
(‘‘reserve interest’’) of the size that is not
displayed. The displayed quantity of a
Reserve Order is ranked Priority 2—
Display Orders, and the reserve interest
is ranked Priority 3—Non-Display
Orders. Both the display quantity and
the reserve interest of an arriving
marketable Reserve Order are eligible to
trade with resting interest in the
Exchange Book or to route to Away
Markets. The working price of the
reserve interest of a resting Reserve
Order will be adjusted in the same
manner as a Non-Displayed Limit Order,
as provided for in Rule 7.31(d)(2)(A).
As described in Rule 7.31(d)(1)(A),
the display quantity of a Reserve Order
must be entered in round lots, and the
displayed portion of a Reserve Order
will be replenished when the display
quantity is decremented to below a
round lot. The replenish quantity will
be the minimum display size of the
order or the remaining quantity of the
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reserve interest if it is less than the
minimum display quantity.
Rule 7.31(d)(1)(B) provides that each
time the display quantity of a Reserve
Order is replenished from reserve
interest, a new working time is assigned
to the replenished quantity (each
display quantity with a different
working time is referred to as a ‘‘child’’
order), while the reserve interest retains
the working time of the original order
entry. In addition, when a Reserve
Order is replenished from reserve
interest and already has two child
orders that equal less than a round lot,
the child order with the later working
time will rejoin the reserve interest and
be assigned the new working time
assigned to the next replenished
quantity. If a Reserve Order is not
routable, the replenish quantity will be
assigned a display and working price
consistent with the instructions for the
order.
Rule 7.31(d)(1)(C) provides that a
Reserve Order must be designated Day
and may only be combined with the
following order types: D Order, NonRoutable Limit Order, or Primary
Pegged Order.
Rule 7.31(d)(1)(D) provides that
routable Reserve Orders will be
evaluated for routing both on arrival and
each time their display quantity is
replenished.
Rule 7.31(d)(1)(E) provides that a
request to reduce the size of a Reserve
Order will cancel the reserve interest
before cancelling the display quantity,
and, if the Reserve Order has more than
one child order, the child order with the
latest working time will be cancelled
first.
Rule 7.31(d)(1)(F) provides that, if the
PBBO is crossed and the display
quantity of a Reserve Order to buy (sell)
that is a Non-Routable Limit Order is
decremented to less than a round lot,
the display price and working price of
such Reserve Order will not change and
the reserve interest that replenishes the
display quantity will be assigned a
display price one MPV below (above)
the PBO (PBB) and a working price
equal to the PBO (PBB). Rule
7.31(d)(1)(F) further provides that, when
the PBBO uncrosses, the display price
and working price will be adjusted as
provided for under Rule 7.31(e)(1)
relating to Non-Routable Limit Orders
or, for an ALO Order designated as
Reserve, as provided for under Rule
7.31(e)(2)(E).
Day ISO Reserve Orders
The Exchange proposes to amend
Rule 7.31 to provide for the use of Day
ISO Reserve Orders. The proposed
change is not intended to modify any
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current functionality, but would instead
facilitate the combination of two order
types currently offered by the Exchange
to offer increased efficiency to member
organizations. As proposed, Day ISO
Reserve Orders would, except as
otherwise noted, operate consistent with
current Rule 7.31(d)(1) regarding
Reserve Orders and current Rule
7.31(e)(3)(C) regarding Day ISO Orders.
To allow for the use of Day ISO Reserve
Orders, the Exchange first proposes to
amend Rule 7.31(d)(1)(C) to include Day
ISO Orders among the order types that
may be designated as Reserve Orders.
The proposed change is intended to
allow Day ISO Orders, as described in
Rule 7.31(e)(3)(C),4 to have a displayed
quantity, along with non-displayed
reserve interest, as described in Rule
7.31(d)(1). The display quantity of a Day
ISO Reserve Order would be
replenished as provided in Rules
7.31(d)(1)(A) and (B), except that the
Exchange proposes to add new rule text
to Rule 7.31(d)(1)(B)(ii), which currently
provides that the replenish quantity of
a non-routable Reserve Order will be
assigned a display and working price
consistent with the instructions for the
order. Because Day ISO Reserve Orders
would be non-routable but could not be
replenished at their limit price given the
specific requirements for ISOs (as
described above),5 the Exchange
proposes to amend Rule 7.31(d)(1)(B)(ii)
to specify that the replenish quantity of
a Day ISO Reserve Order would be
assigned a display price and working
price in the same manner as a NonRoutable Limit Order, as provided for
under paragraph (e)(1) of this Rule.
As currently described in Rule
7.31(e)(3)(C), a Day ISO Reserve Order,
if marketable on arrival, would
immediately trade with contra-side
interest on the Exchange Book up to its
full size and limit price. Currently, Rule
7.31(e)(3)(C) further provides that any
untraded quantity of a Day ISO will be
displayed at its limit price and may lock
or cross a protected quotation that was
displayed at the time of arrival of the
Day ISO. The Exchange proposes two
changes to Rule 7.31(e)(3)(C) to reflect
the operation of Day ISO Reserve
Orders:
4 The Exchange does not currently propose to
allow Day ISO ALO Orders (as defined in Rule
7.31(e)(3)(D)) to be designated as Reserve Orders.
Accordingly, the Exchange proposes to amend Rule
7.31(e)(3)(D) to specify that Day ISO ALOs may not
be so designated.
5 Consistent with the requirements for ISOs and
the Exchange’s existing rules governing Day ISOs,
a Day ISO Reserve Order, as proposed, would only
behave as an ISO upon arrival and would not
otherwise be permitted to trade through a protected
bid or offer or lock or cross an Away Market.
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ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
• The Exchange proposes to amend
the second sentence of Rule
7.31(e)(3)(C) to specify that reserve
interest of a Day ISO Reserve Order
would not be displayed at its limit price
because reserve interest is, by
definition, non-displayed and would
instead rest non-displayed on the
Exchange Book at the order’s limit price.
• The Exchange proposes to add new
subparagraph (i) under Rule
7.31(e)(3)(C) to offer member
organizations the ability to designate a
Day ISO Reserve Order to be cancelled
if, upon replenishment, it would be
displayed at a price other than its limit
price for any reason. The Exchange
notes that it does not offer this option
for Day ISOs not designated as Reserve
Orders because such orders would never
be displayed at a price other than their
limit price. By contrast, a Day ISO
Reserve Order could be repriced upon
replenishment as described in Rule
7.31(d)(1)(B)(ii) (as modified by this
filing to include Day ISOs designated as
Reserve Orders, discussed below).
This proposed change would provide
member organizations with increased
flexibility with respect to order
handling and the ability to have greater
determinism regarding order processing
when Day ISO Reserve Orders would be
repriced to display at a price other than
their limit price upon replenishment.
This designation would be optional, and
if not designated to cancel, Day ISO
Reserve Orders would function as
otherwise described in this filing. The
Exchange notes that it already makes
this option available for other order
types and believes that offering it to Day
ISO Reserve Orders would promote
consistency in Exchange rules.6
The working price of the reserve
interest of a resting Day ISO Reserve
Order would be adjusted as provided for
in Rule 7.31(d)(1). Rule 7.31(d)(1)(E)
would also apply to requests to reduce
the size of Day ISO Reserve Orders.
Rule 7.31(d)(1)(F) provides that, if the
PBBO is crossed and the display
quantity of a Reserve Order to buy (sell)
that is a Non-Routable Limit Order is
decremented to less than a round lot,
the display price and working price of
the order would not change, but the
reserve interest that replenishes the
display quantity would be assigned a
display price one MPV below (above)
the PBO (PBB) and a working price
equal to the PBO (PBB). When the PBBO
uncrosses, the display price and
working price of a Reserve Order will be
adjusted as provided for under
paragraph (e)(1) of this Rule relating to
Non-Routable Limit Orders. The
Exchange proposes to amend Rule
7.31(d)(1)(F) to provide that the rule
would likewise apply to a Reserve Order
that is a Day ISO. The Exchange further
notes that this proposed change is
consistent with the proposed change to
Rule 7.31(d)(1)(B)(ii), which similarly
provides that the replenish quantity of
a Day ISO Reserve Order would be
assigned a display price and working
price in the same manner as a NonRoutable Limit Order.
Finally, the Exchange proposes
conforming changes to Rule 7.11(a)(5)
and Rule 7.37(g)(2) to reflect the
operation of Day ISO Reserve Orders.
Rule 7.11(a)(5) sets forth rules
governing how Exchange systems will
reprice or cancel buy (sell) orders that
are priced or could be traded above
(below) the Upper (Lower) Price Bands
consistent with the Limit Up-Limit
Down Plan. Rule 7.11(a)(5)(ii) currently
provides that if the Price Bands move
and the working price of a resting
Market Order or Day ISO to buy (sell)
is above (below) the updated Upper
(Lower) Price Band, such orders will be
cancelled. The Exchange proposes to
amend Rule 7.11(a)(5)(ii) to clarify its
applicability to any portion of a resting
Day ISO that is designated Reserve.
Thus, if the Price Bands move and the
working price of any portion of a resting
Day ISO Reserve Order to buy (sell) is
above (below) the updated Upper
(Lower) Price Band, the entirety of the
Day ISO Reserve Order would be
cancelled.
Rule 7.37(g)(2) describes the ISO
exception to the Order Protection Rule.
Rule 7.37(g)(2)(A) provides that the
Exchange will accept ISOs to be
executed in the Exchange Book against
orders at the Exchange’s best bid or best
offer without regard to whether the
execution would trade through another
market’s Protected Quotation. Rule
7.37(g)(2)(B) provides that, if an ISO is
marked as ‘‘Immediate-or-Cancel,’’ any
portion of the order not executed upon
arrival will be automatically cancelled;
if an ISO is not marked as ‘‘Immediateor-Cancel,’’ any balance of the order will
be displayed without regard to whether
that display would lock or cross another
market center, so long as the order
complies with Rule 7.37(f)(3)(C).7 The
6 See, e.g., Rules 7.31(e)(1), 7.31(e)(2), and
7.31(e)(3)(D) (permitting Non-Routable Limit
Orders, displayed ALO Orders, and Day ISO ALO
Orders, respectively, to be designated to cancel if
they would be displayed at a price other than their
limit price for any reason).
7 Rule 7.37(e)(3)(C) provides that the prohibition
against Locking and Crossing Quotations described
in Rule 7.37(e)(2) does not apply when the Locking
or Crossing Quotation was an Automated
Quotation, and the member organization displaying
such Automated Quotation simultaneously routed
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21061
Exchange proposes to amend Rule
7.37(g)(2)(B) to specify that, for an ISO
not marked as ‘‘Immediate-or-Cancel,’’
any displayed portion of such order
would be displayed, and any nondisplayed portion would remain on the
Exchange Book. This proposed change
is intended to clarify that the reserve
interest of a Day ISO Reserve Order
would not be displayed, but could, on
arrival only, rest non-displayed at a
price that would lock or cross another
market center if the member
organization has complied with Rule
7.37(f)(3)(C).
The proposed change is intended to
facilitate the combined use of two
existing order types available on the
Exchange, thereby providing member
organizations with enhanced flexibility,
optionality, and efficiency when trading
on the Exchange. The proposed change
could also promote increased liquidity
and trading opportunities on the
Exchange, to the benefit of all market
participants. The Exchange also believes
the proposed change would permit the
Exchange to offer functionality similar
to that available on at least one other
equities exchange, thereby promoting
competition among equities exchanges.8
Because of the technology changes
associated with this proposed rule
change, the Exchange will announce the
implementation date by Trader Update,
which, subject to effectiveness of this
proposed rule change, will be no later
than in the second quarter of 2024.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,9
in general, and furthers the objectives of
Section 6(b)(5),10 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 rule change is designed to
remove impediments to and perfect the
mechanism of a free and open market
because it would allow for the
combined use of two existing order
an ISO to execute against the full displayed size of
any locked or crossed Protected Quotation.
8 See, e.g., Nasdaq Stock Market LLC Rule
4702(b)(1)(C) (describing Price to Comply Order,
which may be designated with both reserve size and
as an ISO).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
types available on the Exchange and
permit the Exchange to offer
functionality similar to that already
available on at least one other equities
exchange.11 Member organizations
would be free to choose to use the
proposed Day ISO Reserve Order type or
not, and the proposed change would not
otherwise impact the operation of the
Reserve Order or Day ISO Order as
described in current Exchange rules.
The Exchange also believes that the
proposed rule change would remove
impediments to and perfect the
mechanism of a free and open market,
as well as protect investors and the
public interest, by expanding the
options available to member
organizations when trading on the
Exchange and promoting increased
liquidity and additional trading
opportunities for all market
participants.
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 addition,
as noted above, Exchange believes the
proposed rule change would allow the
Exchange to offer functionality already
available on at least one other equities
exchange 12 and thus would promote
competition among equities exchanges.
The Exchange also believes that, to the
extent the proposed change increases
opportunities for order execution, the
proposed change would promote
competition by making the Exchange a
more attractive venue for order flow and
enhancing market quality for all market
participants.
ddrumheller on DSK120RN23PROD with NOTICES1
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the 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
11 See
12 See
note 8, supra.
id.
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investors and the public interest, the
proposed rule change has become
effective pursuant to Section
19(b)(3)(A)(iii) of the Act 13 and Rule
19b–4(f)(6) thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),16 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing.
The Commission finds that it is
consistent with the protection of
investors and the public interest to
waive the 30-day operative delay. The
proposal would allow the Exchange to
offer functionality similar to that
already available on at least one other
equities exchange.17 Member
organizations would have the option to
use the proposed Day ISO Reserve Order
type, and the proposed change would
not otherwise alter the operation of the
Reserve Order or Day ISO Order as
described in current Exchange rules.
Therefore, the Commission waives the
30-day operative delay and designates
the proposal operative upon filing.18
At any time within 60 days of the
filing of the 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) 19 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
13 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). 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, 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.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
17 See note 8, supra.
18 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
19 15 U.S.C. 78s(b)(2)(B).
14 17
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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 rule-comments@
sec.gov. Please include file number
SR–NYSE–2024–14 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–2024–14. 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–NYSE–2024–14 and should be
submitted on or before April 16, 2024.
E:\FR\FM\26MRN1.SGM
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Federal Register / Vol. 89, No. 59 / Tuesday, March 26, 2024 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–06326 Filed 3–25–24; 8:45 am]
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99784; File No. SR–MRX–
2024–08]
Self-Regulatory Organizations; Nasdaq
MRX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the Regular
Taker Fees in the Exchange’s Pricing
Schedule at Options 7, Section 3
March 20, 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 March 12,
2024, Nasdaq MRX, LLC (‘‘MRX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
regular taker fees in the Exchange’s
Pricing Schedule at Options 7, Section
3.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/mrx/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
ddrumheller on DSK120RN23PROD with NOTICES1
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
Exchange 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 these
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
20 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
18:10 Mar 25, 2024
Jkt 262001
1. Purpose
The purpose of the proposed rule
change is to amend the regular taker fees
in the Exchange’s Pricing Schedule at
Options 7, Section 3.
The Exchange initially filed the
proposed pricing changes on March 1,
2024 (SR–MRX–2024–06). On March 12,
2024, the Exchange withdrew that filing
and replaced it with this filing.
Today, as set forth in Table 1 of
Options 7, Section 3, the Exchange
charges tiered taker fees to Priority
Customer 3 orders in Penny Symbols
that range from: $0.15 (Tier 1 through
Tier 3) to $0.10 (Tier 4). For Non-Penny
Symbols, Priority Customer orders are
assessed tiered taker fees that range
from: $0.35 (Tier 1), $0.25 (Tier 2), $0.15
(Tier 3), and $0.10 (Tier 4).
The Exchange now proposes a
number of changes to the Priority
Customer taker fees. First, the Exchange
proposes to increase the Priority
Customer taker fees in Penny Symbols
to $0.20 per contract across Tiers 1–4.
Second, the Exchange proposes to
increase the Priority Customer taker fees
in Non-Penny Symbols to $0.40 per
contract across Tiers 1–4. Third, the
Exchange proposes to reduce the
proposed Priority Customer taker fees
from $0.20 to $0.10 per contract (Penny
Symbols) and from $0.40 to $0.20 per
contract (Non-Penny Symbols) for
Members that execute Total Affiliated
Member 4 or Affiliated Entity 5 Priority
3 A ‘‘Priority Customer’’ is a person or entity that
is not a broker/dealer in securities, and does not
place more than 390 orders in listed options per day
on average during a calendar month for its own
beneficial account(s), as defined in Nasdaq MRX
Options 1, Section 1(a)(36).
4 An ‘‘Affiliated Member’’ is a Member that shares
at least 75% common ownership with a particular
Member as reflected on the Member’s Form BD,
Schedule A.
5 An ‘‘Affiliated Entity’’ is a relationship between
an Appointed Market Maker and an Appointed OFP
for purposes of qualifying for certain pricing
specified in the Pricing Schedule. Market Makers
and OFPs are required to send an email to the
Exchange to appoint their counterpart, at least 3
business days prior to the last day of the month to
qualify for the next month. The Exchange will
acknowledge receipt of the emails and specify the
date the Affiliated Entity is eligible for applicable
pricing, as specified in the Pricing Schedule. Each
Affiliated Entity relationship will commence on the
1st of a month and may not be terminated prior to
the end of any month. An Affiliated Entity
relationship will automatically renew each month
until or unless either party terminates earlier in
writing by sending an email to the Exchange at least
3 business days prior to the last day of the month
to terminate for the next month. Affiliated Members
PO 00000
Frm 00124
Fmt 4703
Sfmt 4703
21063
Customer ADV 6 of 0.30% Customer
Total Consolidated Volume 7 in regular
orders for Penny and Non-Penny
Symbols which remove liquidity in a
given month.8
Lastly, the Exchange proposes nonsubstantive, technical edits in Options
7, Section 3, Table 1 to add parentheses
around the note 6 references appended
to the Priority Customer taker fees in
Penny Symbols to correct a formatting
error in the Pricing Schedule.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,9 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,10 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange’s proposed changes to
its Pricing Schedule are reasonable in
several respects. As a threshold matter,
the Exchange is subject to significant
competitive forces in the market for
options securities transaction services
that constrain its pricing determinations
in that market. The fact that this market
is competitive has long been recognized
by the courts. In NetCoalition v.
Securities and Exchange Commission,
the D.C. Circuit stated as follows: ‘‘[n]o
one disputes that competition for order
flow is ‘fierce.’ . . . As the SEC
explained, ‘[i]n the U.S. national market
system, buyers and sellers of securities,
and the broker-dealers that act as their
order-routing agents, have a wide range
of choices of where to route orders for
execution’; [and] ‘no exchange can
afford to take its market share
percentages for granted’ because ‘no
exchange possesses a monopoly,
regulatory or otherwise, in the execution
may not qualify as a counterparty comprising an
Affiliated Entity. Each Member may qualify for only
one (1) Affiliated Entity relationship at any given
time.
6 Total Affiliated Member or Affiliated Entity
Priority Customer ADV means all Priority Customer
ADV executed on the Exchange in all symbols and
order types, including volume executed by
Affiliated Members or Affiliated Entities. All
eligible volume from Affiliated Members or an
Affiliated Entity will be aggregated in determining
applicable tiers. See note 4 of Options 7, Section 3,
Table 1.
7 ‘‘Customer Total Consolidated Volume’’ means
the total volume cleared at The Options Clearing
Corporation in the Customer range in equity and
ETF options in that month.
8 See proposed note 7 of Options 7, Section 3,
Table 1.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4) and (5).
E:\FR\FM\26MRN1.SGM
26MRN1
]]>Agencies
[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Notices]
[Pages 21059-21063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06326]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99789; File No. SR-NYSE-2024-14]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 7.31
March 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 March 6, 2024, 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 and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7.31 to provide for the use of
Day ISO Reserve Orders and make other conforming changes. The proposed
rule change is available on the Exchange's website at www.nyse.com, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 7.31 to provide for the use of
Day
[[Page 21060]]
ISO Reserve Orders and make conforming changes in Rule 7.11 (Limit Up-
Limit Down Plan and Trading Pauses in Individual Securities Due to
Extraordinary Market Volatility) and Rule 7.37 (Order Execution and
Routing).
Day ISO Orders
Rule 7.31(e)(3) defines an Intermarket Sweep Order (``ISO'') as a
Limit Order that does not route and meets the requirements of Rule
600(b)(38) of Regulation NMS. As described in Rules 7.31(e)(3)(A) and
subparagraphs (i) and (ii) thereunder, an ISO may trade through a
protected bid or offer and will not be rejected or cancelled if it
would lock, cross, or be marketable against an Away Market, provided
that (1) it is identified as an ISO and (2) simultaneously with its
routing to the Exchange, the member organization that submits the ISO
also routes one or more additional Limit Orders, as necessary, to trade
against the full displayed size of any protected bids (for sell orders)
or protected offers (for buy orders) on Away Markets.
Rule 7.31(e)(3)(C) provides that an ISO designated Day (``Day
ISO''), if marketable on arrival, will immediately trade with contra-
side interest on the Exchange Book up to its full size and limit price.
Any untraded quantity of a Day ISO will be displayed at its limit price
and may lock or cross a protected quotation that was displayed at the
time the order arrived.
Reserve Orders
Rule 7.31(d)(1) provides for Reserve Orders, which are Limit or
Inside Limit Orders with a quantity of the size displayed and with a
reserve quantity (``reserve interest'') of the size that is not
displayed. The displayed quantity of a Reserve Order is ranked Priority
2--Display Orders, and the reserve interest is ranked Priority 3--Non-
Display Orders. Both the display quantity and the reserve interest of
an arriving marketable Reserve Order are eligible to trade with resting
interest in the Exchange Book or to route to Away Markets. The working
price of the reserve interest of a resting Reserve Order will be
adjusted in the same manner as a Non-Displayed Limit Order, as provided
for in Rule 7.31(d)(2)(A).
As described in Rule 7.31(d)(1)(A), the display quantity of a
Reserve Order must be entered in round lots, and the displayed portion
of a Reserve Order will be replenished when the display quantity is
decremented to below a round lot. The replenish quantity will be the
minimum display size of the order or the remaining quantity of the
reserve interest if it is less than the minimum display quantity.
Rule 7.31(d)(1)(B) provides that each time the display quantity of
a Reserve Order is replenished from reserve interest, a new working
time is assigned to the replenished quantity (each display quantity
with a different working time is referred to as a ``child'' order),
while the reserve interest retains the working time of the original
order entry. In addition, when a Reserve Order is replenished from
reserve interest and already has two child orders that equal less than
a round lot, the child order with the later working time will rejoin
the reserve interest and be assigned the new working time assigned to
the next replenished quantity. If a Reserve Order is not routable, the
replenish quantity will be assigned a display and working price
consistent with the instructions for the order.
Rule 7.31(d)(1)(C) provides that a Reserve Order must be designated
Day and may only be combined with the following order types: D Order,
Non-Routable Limit Order, or Primary Pegged Order.
Rule 7.31(d)(1)(D) provides that routable Reserve Orders will be
evaluated for routing both on arrival and each time their display
quantity is replenished.
Rule 7.31(d)(1)(E) provides that a request to reduce the size of a
Reserve Order will cancel the reserve interest before cancelling the
display quantity, and, if the Reserve Order has more than one child
order, the child order with the latest working time will be cancelled
first.
Rule 7.31(d)(1)(F) provides that, if the PBBO is crossed and the
display quantity of a Reserve Order to buy (sell) that is a Non-
Routable Limit Order is decremented to less than a round lot, the
display price and working price of such Reserve Order will not change
and the reserve interest that replenishes the display quantity will be
assigned a display price one MPV below (above) the PBO (PBB) and a
working price equal to the PBO (PBB). Rule 7.31(d)(1)(F) further
provides that, when the PBBO uncrosses, the display price and working
price will be adjusted as provided for under Rule 7.31(e)(1) relating
to Non-Routable Limit Orders or, for an ALO Order designated as
Reserve, as provided for under Rule 7.31(e)(2)(E).
Day ISO Reserve Orders
The Exchange proposes to amend Rule 7.31 to provide for the use of
Day ISO Reserve Orders. The proposed change is not intended to modify
any current functionality, but would instead facilitate the combination
of two order types currently offered by the Exchange to offer increased
efficiency to member organizations. As proposed, Day ISO Reserve Orders
would, except as otherwise noted, operate consistent with current Rule
7.31(d)(1) regarding Reserve Orders and current Rule 7.31(e)(3)(C)
regarding Day ISO Orders. To allow for the use of Day ISO Reserve
Orders, the Exchange first proposes to amend Rule 7.31(d)(1)(C) to
include Day ISO Orders among the order types that may be designated as
Reserve Orders.
The proposed change is intended to allow Day ISO Orders, as
described in Rule 7.31(e)(3)(C),\4\ to have a displayed quantity, along
with non-displayed reserve interest, as described in Rule 7.31(d)(1).
The display quantity of a Day ISO Reserve Order would be replenished as
provided in Rules 7.31(d)(1)(A) and (B), except that the Exchange
proposes to add new rule text to Rule 7.31(d)(1)(B)(ii), which
currently provides that the replenish quantity of a non-routable
Reserve Order will be assigned a display and working price consistent
with the instructions for the order. Because Day ISO Reserve Orders
would be non-routable but could not be replenished at their limit price
given the specific requirements for ISOs (as described above),\5\ the
Exchange proposes to amend Rule 7.31(d)(1)(B)(ii) to specify that the
replenish quantity of a Day ISO Reserve Order would be assigned a
display price and working price in the same manner as a Non-Routable
Limit Order, as provided for under paragraph (e)(1) of this Rule.
---------------------------------------------------------------------------
\4\ The Exchange does not currently propose to allow Day ISO ALO
Orders (as defined in Rule 7.31(e)(3)(D)) to be designated as
Reserve Orders. Accordingly, the Exchange proposes to amend Rule
7.31(e)(3)(D) to specify that Day ISO ALOs may not be so designated.
\5\ Consistent with the requirements for ISOs and the Exchange's
existing rules governing Day ISOs, a Day ISO Reserve Order, as
proposed, would only behave as an ISO upon arrival and would not
otherwise be permitted to trade through a protected bid or offer or
lock or cross an Away Market.
---------------------------------------------------------------------------
As currently described in Rule 7.31(e)(3)(C), a Day ISO Reserve
Order, if marketable on arrival, would immediately trade with contra-
side interest on the Exchange Book up to its full size and limit price.
Currently, Rule 7.31(e)(3)(C) further provides that any untraded
quantity of a Day ISO will be displayed at its limit price and may lock
or cross a protected quotation that was displayed at the time of
arrival of the Day ISO. The Exchange proposes two changes to Rule
7.31(e)(3)(C) to reflect the operation of Day ISO Reserve Orders:
[[Page 21061]]
The Exchange proposes to amend the second sentence of Rule
7.31(e)(3)(C) to specify that reserve interest of a Day ISO Reserve
Order would not be displayed at its limit price because reserve
interest is, by definition, non-displayed and would instead rest non-
displayed on the Exchange Book at the order's limit price.
The Exchange proposes to add new subparagraph (i) under
Rule 7.31(e)(3)(C) to offer member organizations the ability to
designate a Day ISO Reserve Order to be cancelled if, upon
replenishment, it would be displayed at a price other than its limit
price for any reason. The Exchange notes that it does not offer this
option for Day ISOs not designated as Reserve Orders because such
orders would never be displayed at a price other than their limit
price. By contrast, a Day ISO Reserve Order could be repriced upon
replenishment as described in Rule 7.31(d)(1)(B)(ii) (as modified by
this filing to include Day ISOs designated as Reserve Orders, discussed
below).
This proposed change would provide member organizations with
increased flexibility with respect to order handling and the ability to
have greater determinism regarding order processing when Day ISO
Reserve Orders would be repriced to display at a price other than their
limit price upon replenishment. This designation would be optional, and
if not designated to cancel, Day ISO Reserve Orders would function as
otherwise described in this filing. The Exchange notes that it already
makes this option available for other order types and believes that
offering it to Day ISO Reserve Orders would promote consistency in
Exchange rules.\6\
---------------------------------------------------------------------------
\6\ See, e.g., Rules 7.31(e)(1), 7.31(e)(2), and 7.31(e)(3)(D)
(permitting Non-Routable Limit Orders, displayed ALO Orders, and Day
ISO ALO Orders, respectively, to be designated to cancel if they
would be displayed at a price other than their limit price for any
reason).
---------------------------------------------------------------------------
The working price of the reserve interest of a resting Day ISO
Reserve Order would be adjusted as provided for in Rule 7.31(d)(1).
Rule 7.31(d)(1)(E) would also apply to requests to reduce the size of
Day ISO Reserve Orders.
Rule 7.31(d)(1)(F) provides that, if the PBBO is crossed and the
display quantity of a Reserve Order to buy (sell) that is a Non-
Routable Limit Order is decremented to less than a round lot, the
display price and working price of the order would not change, but the
reserve interest that replenishes the display quantity would be
assigned a display price one MPV below (above) the PBO (PBB) and a
working price equal to the PBO (PBB). When the PBBO uncrosses, the
display price and working price of a Reserve Order will be adjusted as
provided for under paragraph (e)(1) of this Rule relating to Non-
Routable Limit Orders. The Exchange proposes to amend Rule
7.31(d)(1)(F) to provide that the rule would likewise apply to a
Reserve Order that is a Day ISO. The Exchange further notes that this
proposed change is consistent with the proposed change to Rule
7.31(d)(1)(B)(ii), which similarly provides that the replenish quantity
of a Day ISO Reserve Order would be assigned a display price and
working price in the same manner as a Non-Routable Limit Order.
Finally, the Exchange proposes conforming changes to Rule
7.11(a)(5) and Rule 7.37(g)(2) to reflect the operation of Day ISO
Reserve Orders.
Rule 7.11(a)(5) sets forth rules governing how Exchange systems
will reprice or cancel buy (sell) orders that are priced or could be
traded above (below) the Upper (Lower) Price Bands consistent with the
Limit Up-Limit Down Plan. Rule 7.11(a)(5)(ii) currently provides that
if the Price Bands move and the working price of a resting Market Order
or Day ISO to buy (sell) is above (below) the updated Upper (Lower)
Price Band, such orders will be cancelled. The Exchange proposes to
amend Rule 7.11(a)(5)(ii) to clarify its applicability to any portion
of a resting Day ISO that is designated Reserve. Thus, if the Price
Bands move and the working price of any portion of a resting Day ISO
Reserve Order to buy (sell) is above (below) the updated Upper (Lower)
Price Band, the entirety of the Day ISO Reserve Order would be
cancelled.
Rule 7.37(g)(2) describes the ISO exception to the Order Protection
Rule. Rule 7.37(g)(2)(A) provides that the Exchange will accept ISOs to
be executed in the Exchange Book against orders at the Exchange's best
bid or best offer without regard to whether the execution would trade
through another market's Protected Quotation. Rule 7.37(g)(2)(B)
provides that, if an ISO is marked as ``Immediate-or-Cancel,'' any
portion of the order not executed upon arrival will be automatically
cancelled; if an ISO is not marked as ``Immediate-or-Cancel,'' any
balance of the order will be displayed without regard to whether that
display would lock or cross another market center, so long as the order
complies with Rule 7.37(f)(3)(C).\7\ The Exchange proposes to amend
Rule 7.37(g)(2)(B) to specify that, for an ISO not marked as
``Immediate-or-Cancel,'' any displayed portion of such order would be
displayed, and any non-displayed portion would remain on the Exchange
Book. This proposed change is intended to clarify that the reserve
interest of a Day ISO Reserve Order would not be displayed, but could,
on arrival only, rest non-displayed at a price that would lock or cross
another market center if the member organization has complied with Rule
7.37(f)(3)(C).
---------------------------------------------------------------------------
\7\ Rule 7.37(e)(3)(C) provides that the prohibition against
Locking and Crossing Quotations described in Rule 7.37(e)(2) does
not apply when the Locking or Crossing Quotation was an Automated
Quotation, and the member organization displaying such Automated
Quotation simultaneously routed an ISO to execute against the full
displayed size of any locked or crossed Protected Quotation.
---------------------------------------------------------------------------
The proposed change is intended to facilitate the combined use of
two existing order types available on the Exchange, thereby providing
member organizations with enhanced flexibility, optionality, and
efficiency when trading on the Exchange. The proposed change could also
promote increased liquidity and trading opportunities on the Exchange,
to the benefit of all market participants. The Exchange also believes
the proposed change would permit the Exchange to offer functionality
similar to that available on at least one other equities exchange,
thereby promoting competition among equities exchanges.\8\
---------------------------------------------------------------------------
\8\ See, e.g., Nasdaq Stock Market LLC Rule 4702(b)(1)(C)
(describing Price to Comply Order, which may be designated with both
reserve size and as an ISO).
---------------------------------------------------------------------------
Because of the technology changes associated with this proposed
rule change, the Exchange will announce the implementation date by
Trader Update, which, subject to effectiveness of this proposed rule
change, will be no later than in the second quarter of 2024.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\9\ in general, and furthers the objectives of Section 6(b)(5),\10\
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.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change is designed to
remove impediments to and perfect the mechanism of a free and open
market because it would allow for the combined use of two existing
order
[[Page 21062]]
types available on the Exchange and permit the Exchange to offer
functionality similar to that already available on at least one other
equities exchange.\11\ Member organizations would be free to choose to
use the proposed Day ISO Reserve Order type or not, and the proposed
change would not otherwise impact the operation of the Reserve Order or
Day ISO Order as described in current Exchange rules. The Exchange also
believes that the proposed rule change would remove impediments to and
perfect the mechanism of a free and open market, as well as protect
investors and the public interest, by expanding the options available
to member organizations when trading on the Exchange and promoting
increased liquidity and additional trading opportunities for all market
participants.
---------------------------------------------------------------------------
\11\ See note 8, 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. In addition, as noted above,
Exchange believes the proposed rule change would allow the Exchange to
offer functionality already available on at least one other equities
exchange \12\ and thus would promote competition among equities
exchanges. The Exchange also believes that, to the extent the proposed
change increases opportunities for order execution, the proposed change
would promote competition by making the Exchange a more attractive
venue for order flow and enhancing market quality for all market
participants.
---------------------------------------------------------------------------
\12\ See 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
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)(iii) of the Act \13\ and Rule
19b-4(f)(6) thereunder.\14\
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6). 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, 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission finds that it is consistent with the protection of
investors and the public interest to waive the 30-day operative delay.
The proposal would allow the Exchange to offer functionality similar to
that already available on at least one other equities exchange.\17\
Member organizations would have the option to use the proposed Day ISO
Reserve Order type, and the proposed change would not otherwise alter
the operation of the Reserve Order or Day ISO Order as described in
current Exchange rules. Therefore, the Commission waives the 30-day
operative delay and designates the proposal operative upon filing.\18\
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\17\ See note 8, supra.
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the 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) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\19\ 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-NYSE-2024-14 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-2024-14. 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-NYSE-2024-14 and should be
submitted on or before April 16, 2024.
[[Page 21063]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-06326 Filed 3-25-24; 8:45 am]
BILLING CODE 8011-01-P
