Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.8A and Article 9, Rule 7, 24057-24059 [2024-07222]
Download as PDF
<![CDATA[
Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
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–CboeEDGA–2024–010 and should
be submitted on or before April 26,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–07224 Filed 4–4–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 7.8A and
Article 9, Rule 7
khammond on DSKJM1Z7X2PROD with NOTICES
April 1, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 25,
2024, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
16:44 Apr 04, 2024
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1. Purpose
On March 6, 2023, the Commission
adopted amendments to Rule 15c6–1(a)
of the Act to shorten the standard
settlement cycle for most broker-dealer
transactions from T+2 to T+1.3
Accordingly, the Exchange proposes to
amend Rule 7.8A and Article 9, Rule 7
to conform with the amendments to
Rule 15c6–1(a) and reflect a standard
settlement cycle of T+1.
Rule 7.8A currently provides that
Cross Orders settle ‘‘regular way’’ unless
designated with one of two ‘‘non-regular
way’’ settlement terms: Cash or Next
Day. A Cross Order designated for ‘‘nonregular way’’ settlement may execute at
any price without regard to the PBBO or
any orders on the Exchange Book. Rule
7.8A defines ‘‘Cash’’ settlement as a
transaction for delivery on the day of
3 See Securities Exchange Act Release No. 96930,
88 FR 13872 (March 6, 2023) (‘‘T+1 Adopting
Release’’).
1 15
VerDate Sep<11>2014
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7.8A (Cross Order Settlement
Terms) and Article 9, Rule 7
(Transactions ‘‘Ex-Dividend’’ and ‘‘ExWarrants’’) to conform to amendments
to Rule 15c6–1(a) of the Act to shorten
the standard settlement cycle for most
broker-dealer transactions from two
business days after the trade date
(‘‘T+2’’) to one business day after the
trade date (‘‘T+1’’). 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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
[Release No. 34–99874; File No. SR–
NYSECHX–2024–14]
18 17
comments on the proposed rule change
from interested persons.
Jkt 262001
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
24057
the contract and ‘‘Next Day’’ settlement
as a transaction for delivery on the next
business day following the day of the
contract.
Article 9, Rule 7(a) currently provides
that transactions in stocks are exdividend or ex-rights on the business
day immediately preceding the date of
record fixed by the corporation for the
determination of stockholders entitled
to receive such dividends or rights, with
certain exceptions. First, as provided in
Rule 7(a)(1), when the record date
occurs on a holiday or half-holiday,
transactions in the stock will be exdividend or ex-rights two full business
days immediately preceding the record
date. Rule 7(a)(2) further provides that
‘‘cash’’ transactions are ex-dividend or
ex-rights on the day following the
record date. Finally, Rule 7(a)(3)
provides that the Committee on
Exchange Procedure may direct that
transactions be ex-dividend or ex-rights
on a day other than that fixed by this
Rule.
Rule 7(b) currently provides that
transactions in securities which have
subscription warrants attached, except
those made for ‘‘cash,’’ will be exwarrants on the business day preceding
the date of expiration of the warrants,
with certain exceptions. First, as
provided in Rule 7(b)(1), when the day
of expiration occurs on a holiday or
Sunday, such transactions will be exwarrants on the second full business
day preceding the day of expiration.
Rule 7(b)(2) further provides that ‘‘cash’’
transactions are ex-warrants on the day
following the record date. Finally, Rule
7(b)(c) provides that, notwithstanding
the provisions of Rule 7(b) and
subparagraphs (1) and (2) thereunder,
the Committee on Exchange Procedure
may direct otherwise in any specific
case.
Proposed Rule Change
To conform Rule 7.8A and Article 9,
Rule 7 with the amendments to Rule
15c6–1(a) of the Act adopted by the
Commission, the Exchange proposes the
following changes:
• The Exchange proposes to amend
Rule 7.8A to eliminate Next Day as a
‘‘non-regular way’’ settlement option in
light of the amendments to Rule 15c6–
1(a), because under a T+1 settlement
cycle, next day settlement would be
considered standard or ‘‘regular way’’
settlement.
• The Exchange proposes to amend
Rule 7(a) to provide that transactions in
stocks, except as provided in the
subparagraphs thereunder, will be exdividend or ex-rights on the record date,
rather than on the business day
preceding the record date.
E:\FR\FM\05APN1.SGM
05APN1
24058
Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
• In Rule 7(a)(1), the Exchange
proposes to eliminate the reference to a
‘‘half-holiday’’ and to amend the Rule to
refer to one full business day preceding
the record date, rather than two
business days.
• The Exchange proposes to amend
Rule 7(b) to provide that transactions
with subscription warrants attached,
except as provided in the subparagraphs
thereunder, will be ex-warrants on the
date of expiration of the warrants, rather
than on the business day preceding such
date.
• The Exchange proposes to amend
Rule 7(b)(1) to refer to the first full
business day preceding the expiration
date, rather than the second business
day.
Implementation
The Exchange proposes that the
operative date of this proposed rule
change will be Tuesday, May 28, 2024,
which is the compliance date specified
in the T+1 Adopting Release, or such
later date as may be announced by the
Commission for compliance with the
amendments to Rule 15c6–1(a) set forth
in the T+1 Adopting Release.4 The
Exchange further proposes that, with the
implementation of the T+1 settlement
cycle and as described in the proposed
changes outlined above, the ex-dividend
date for ‘‘normal’’ distributions will be
the same business day as the record
date. Accordingly, the Exchange
proposes that Wednesday, May 29, 2024
would be the first date to which the
proposed rules described herein would
apply (i.e., the first record date to which
the new ex-dividend date rationale will
be applied). During the implementation
of the T+1 settlement cycle, the
Exchange proposes that the ex-dividend
dates will be as follows:
Record date
khammond on DSKJM1Z7X2PROD with NOTICES
May 24, 2024 ....................
May 28, 2024 ....................
May 29, 2024 ....................
Ex-dividend date
May 23, 2024.
May 24, 2024.
May 29, 2024.
A record date of Friday, May 24, 2024
would be a date prior to the effective
date of the amendments to Rule 15c6–
1(a) of the Act to shorten the standard
settlement cycle for most broker-dealer
transactions from T+2 to T+1.5 The
rules described above would apply to
this record date in their current form
and, thus, the ‘‘ex-dividend date’’ would
be the first business day preceding the
record date or Thursday, May 23, 2024.
Monday, May 27, 2024 is Memorial Day,
which is an Exchange holiday;
accordingly, there would be no record
4 See
5 See
16:44 Apr 04, 2024
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,6 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,7 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices,
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 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.
In particular, the proposed rule
change would amend the Exchange’s
rules to reflect a standard settlement
cycle of T+1, in support of the industryled initiative to shorten the settlement
cycle to one business day. Moreover, the
proposed rule change is consistent with
the Commission’s amendments to Rule
15c6–1(a) of the Act to require standard
settlement no later than T+1. The
Exchange believes that the proposed
rule change would provide the
regulatory certainty to facilitate the
industry-led move to a T+1 settlement
cycle. Further, the Exchange believes
that, by shortening the time period for
settlement of most securities
transactions, the proposed rule change
would protect investors and the public
interest by reducing the number of
unsettled trades in the clearance and
settlement system at any given time,
thereby reducing the risk inherent in
settling securities transactions to
clearing corporations, their members,
and public investors.
6 15
note 3, supra.
note 3, supra.
VerDate Sep<11>2014
date on a holiday. A record date of
Tuesday, May 28, 2024 would also fall
under the Exchange’s current rules, and
the first business day preceding such
record date would be Friday, May 24,
2024. On Wednesday, May 29, 2024, the
proposed rules described above would
apply, such that, for the record date of
May 29, 2024, the ‘‘ex-dividend date’’
would be the same business day.
The Exchange will issue a Trader
Notice regarding the implementation of
the proposed rule change and T+1
settlement cycle, which date would
correspond with the industry-led
transition to a T+1 standard settlement,
and the compliance date of the
Commission’s amendment of Rule
15c6–1(a) of the Act to require standard
settlement no later than T+1.
7 15
Jkt 262001
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00098
Fmt 4703
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed change is not designed to
address any competitive issue, but
rather to support the industry’s
transition to a T+1 regular-way
settlement cycle in conformity with the
Commission’s amendment of Rule
15c6–1(a). The proposed change amends
the Exchange’s rules pertaining to
securities settlement, which rules would
apply uniformly to all contracts for the
purchase or sale of a security (other than
exempted securities) that provide for
payment of funds and delivery of
securities that occur on the Exchange or
other self-regulatory organizations, and
is intended to facilitate the industrywide transition to a T+1 settlement
cycle. The Exchange also believes that
the proposed rule change will serve to
promote clarity and consistency in its
rules, thereby reducing burdens on the
marketplace and facilitating investor
protection. Accordingly, the Exchange
believes that the proposed changes do
not impose any burden on competition
other than that necessary to implement
the amendments to Rule 15c6–1(a) of
the Act as set forth in the T+1 Adopting
Release.8
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
(i) significantly affect the protection of
investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act and Rule 19b–4(f)(6) thereunder.
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
8 See
Sfmt 4703
E:\FR\FM\05APN1.SGM
note 3, supra.
05APN1
Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSECHX–2024–14 on the subject line.
Paper Comments
khammond on DSKJM1Z7X2PROD with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–NYSECHX–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–NYSECHX–2024–14 and should be
submitted on or before April 26, 2024.
VerDate Sep<11>2014
16:44 Apr 04, 2024
Jkt 262001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–07222 Filed 4–4–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99880; File No. SR–
CboeBZX–2024–023]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule
2.8 Regarding Voluntary Termination
of Rights as an Exchange Member
April 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 March 19,
2024, Cboe BZX Exchange, Inc.
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder.4 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
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) proposes to
amend Rule 2.8, related to the voluntary
termination of rights as an Exchange
Member (‘‘Member’’).5 The text of the
proposed rule change is provided
below.
(Additions are Italicized; Deletions are
[Bracketed])
*
*
*
*
*
Rules of Cboe BZX Exchange, Inc.
*
*
*
*
*
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 See Exchange Rule 1.5(n). The term ‘‘Member’’
is defined as ‘‘any registered broker or dealer that
has been admitted to membership in the Exchange.’’
1 15
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
24059
Rule 2.8. Voluntary Termination of
Rights as a Member
A Member may voluntarily terminate
its rights as a Member only by a written
resignation addressed to the Exchange’s
Secretary or another officer designated
by the Exchange. [Such resignation shall
not take effect until 30 days after all of
the following conditions have been
satisfied: (i) receipt of such written
resignation; (ii) all indebtedness due the
Exchange shall have been paid in full;
(iii) any Exchange investigation or
disciplinary action brought against the
Member has reached a final disposition;
and (iv) any examination of such
Member in process is completed and all
exceptions noted have been reasonably
resolved; provided, however, that the
Board may declare a resignation
effective at any time]Each terminating
Member must promptly (a) make any
outstanding filings required under the
Rules, and (b) pay any outstanding fees,
assessments, charges, fines, or other
amounts due to the Exchange, the
Commission, or the Securities Investor
Protection Corporation.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
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
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
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
1. Purpose
The Exchange proposes amendments
to Rule 2.8 (Voluntary Termination of
Rights as a Member). Rule 2.8 sets forth
the requirements for a Member’s
voluntary termination of its rights as a
Member. Currently, Rule 2.8 provides
that a Member’s voluntary termination
of its rights as a Member shall not take
effect until 30 days after all of the
E:\FR\FM\05APN1.SGM
05APN1
]]>Agencies
[Federal Register Volume 89, Number 67 (Friday, April 5, 2024)]
[Notices]
[Pages 24057-24059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07222]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99874; File No. SR-NYSECHX-2024-14]
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 7.8A and Article 9, Rule 7
April 1, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 25, 2024, the NYSE Chicago, Inc. (``NYSE Chicago'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7.8A (Cross Order Settlement
Terms) and Article 9, Rule 7 (Transactions ``Ex-Dividend'' and ``Ex-
Warrants'') to conform to amendments to Rule 15c6-1(a) of the Act to
shorten the standard settlement cycle for most broker-dealer
transactions from two business days after the trade date (``T+2'') to
one business day after the trade date (``T+1''). 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
On March 6, 2023, the Commission adopted amendments to Rule 15c6-
1(a) of the Act to shorten the standard settlement cycle for most
broker-dealer transactions from T+2 to T+1.\3\ Accordingly, the
Exchange proposes to amend Rule 7.8A and Article 9, Rule 7 to conform
with the amendments to Rule 15c6-1(a) and reflect a standard settlement
cycle of T+1.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 96930, 88 FR 13872
(March 6, 2023) (``T+1 Adopting Release'').
---------------------------------------------------------------------------
Rule 7.8A currently provides that Cross Orders settle ``regular
way'' unless designated with one of two ``non-regular way'' settlement
terms: Cash or Next Day. A Cross Order designated for ``non-regular
way'' settlement may execute at any price without regard to the PBBO or
any orders on the Exchange Book. Rule 7.8A defines ``Cash'' settlement
as a transaction for delivery on the day of the contract and ``Next
Day'' settlement as a transaction for delivery on the next business day
following the day of the contract.
Article 9, Rule 7(a) currently provides that transactions in stocks
are ex-dividend or ex-rights on the business day immediately preceding
the date of record fixed by the corporation for the determination of
stockholders entitled to receive such dividends or rights, with certain
exceptions. First, as provided in Rule 7(a)(1), when the record date
occurs on a holiday or half-holiday, transactions in the stock will be
ex-dividend or ex-rights two full business days immediately preceding
the record date. Rule 7(a)(2) further provides that ``cash''
transactions are ex-dividend or ex-rights on the day following the
record date. Finally, Rule 7(a)(3) provides that the Committee on
Exchange Procedure may direct that transactions be ex-dividend or ex-
rights on a day other than that fixed by this Rule.
Rule 7(b) currently provides that transactions in securities which
have subscription warrants attached, except those made for ``cash,''
will be ex-warrants on the business day preceding the date of
expiration of the warrants, with certain exceptions. First, as provided
in Rule 7(b)(1), when the day of expiration occurs on a holiday or
Sunday, such transactions will be ex-warrants on the second full
business day preceding the day of expiration. Rule 7(b)(2) further
provides that ``cash'' transactions are ex-warrants on the day
following the record date. Finally, Rule 7(b)(c) provides that,
notwithstanding the provisions of Rule 7(b) and subparagraphs (1) and
(2) thereunder, the Committee on Exchange Procedure may direct
otherwise in any specific case.
Proposed Rule Change
To conform Rule 7.8A and Article 9, Rule 7 with the amendments to
Rule 15c6-1(a) of the Act adopted by the Commission, the Exchange
proposes the following changes:
The Exchange proposes to amend Rule 7.8A to eliminate Next
Day as a ``non-regular way'' settlement option in light of the
amendments to Rule 15c6-1(a), because under a T+1 settlement cycle,
next day settlement would be considered standard or ``regular way''
settlement.
The Exchange proposes to amend Rule 7(a) to provide that
transactions in stocks, except as provided in the subparagraphs
thereunder, will be ex-dividend or ex-rights on the record date, rather
than on the business day preceding the record date.
[[Page 24058]]
In Rule 7(a)(1), the Exchange proposes to eliminate the
reference to a ``half-holiday'' and to amend the Rule to refer to one
full business day preceding the record date, rather than two business
days.
The Exchange proposes to amend Rule 7(b) to provide that
transactions with subscription warrants attached, except as provided in
the subparagraphs thereunder, will be ex-warrants on the date of
expiration of the warrants, rather than on the business day preceding
such date.
The Exchange proposes to amend Rule 7(b)(1) to refer to
the first full business day preceding the expiration date, rather than
the second business day.
Implementation
The Exchange proposes that the operative date of this proposed rule
change will be Tuesday, May 28, 2024, which is the compliance date
specified in the T+1 Adopting Release, or such later date as may be
announced by the Commission for compliance with the amendments to Rule
15c6-1(a) set forth in the T+1 Adopting Release.\4\ The Exchange
further proposes that, with the implementation of the T+1 settlement
cycle and as described in the proposed changes outlined above, the ex-
dividend date for ``normal'' distributions will be the same business
day as the record date. Accordingly, the Exchange proposes that
Wednesday, May 29, 2024 would be the first date to which the proposed
rules described herein would apply (i.e., the first record date to
which the new ex-dividend date rationale will be applied). During the
implementation of the T+1 settlement cycle, the Exchange proposes that
the ex-dividend dates will be as follows:
---------------------------------------------------------------------------
\4\ See note 3, supra.
------------------------------------------------------------------------
Record date Ex-dividend date
------------------------------------------------------------------------
May 24, 2024.............................. May 23, 2024.
May 28, 2024.............................. May 24, 2024.
May 29, 2024.............................. May 29, 2024.
------------------------------------------------------------------------
A record date of Friday, May 24, 2024 would be a date prior to the
effective date of the amendments to Rule 15c6-1(a) of the Act to
shorten the standard settlement cycle for most broker-dealer
transactions from T+2 to T+1.\5\ The rules described above would apply
to this record date in their current form and, thus, the ``ex-dividend
date'' would be the first business day preceding the record date or
Thursday, May 23, 2024. Monday, May 27, 2024 is Memorial Day, which is
an Exchange holiday; accordingly, there would be no record date on a
holiday. A record date of Tuesday, May 28, 2024 would also fall under
the Exchange's current rules, and the first business day preceding such
record date would be Friday, May 24, 2024. On Wednesday, May 29, 2024,
the proposed rules described above would apply, such that, for the
record date of May 29, 2024, the ``ex-dividend date'' would be the same
business day.
---------------------------------------------------------------------------
\5\ See note 3, supra.
---------------------------------------------------------------------------
The Exchange will issue a Trader Notice regarding the
implementation of the proposed rule change and T+1 settlement cycle,
which date would correspond with the industry-led transition to a T+1
standard settlement, and the compliance date of the Commission's
amendment of Rule 15c6-1(a) of the Act to require standard settlement
no later than T+1.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\7\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
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 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the proposed rule change would amend the Exchange's
rules to reflect a standard settlement cycle of T+1, in support of the
industry-led initiative to shorten the settlement cycle to one business
day. Moreover, the proposed rule change is consistent with the
Commission's amendments to Rule 15c6-1(a) of the Act to require
standard settlement no later than T+1. The Exchange believes that the
proposed rule change would provide the regulatory certainty to
facilitate the industry-led move to a T+1 settlement cycle. Further,
the Exchange believes that, by shortening the time period for
settlement of most securities transactions, the proposed rule change
would protect investors and the public interest by reducing the number
of unsettled trades in the clearance and settlement system at any given
time, thereby reducing the risk inherent in settling securities
transactions to clearing corporations, their members, and public
investors.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change is not
designed to address any competitive issue, but rather to support the
industry's transition to a T+1 regular-way settlement cycle in
conformity with the Commission's amendment of Rule 15c6-1(a). The
proposed change amends the Exchange's rules pertaining to securities
settlement, which rules would apply uniformly to all contracts for the
purchase or sale of a security (other than exempted securities) that
provide for payment of funds and delivery of securities that occur on
the Exchange or other self-regulatory organizations, and is intended to
facilitate the industry-wide transition to a T+1 settlement cycle. The
Exchange also believes that the proposed rule change will serve to
promote clarity and consistency in its rules, thereby reducing burdens
on the marketplace and facilitating investor protection. Accordingly,
the Exchange believes that the proposed changes do not impose any
burden on competition other than that necessary to implement the
amendments to Rule 15c6-1(a) of the Act as set forth in the T+1
Adopting Release.\8\
---------------------------------------------------------------------------
\8\ See note 3, supra.
---------------------------------------------------------------------------
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule
19b-4(f)(6) thereunder.
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
[[Page 24059]]
investors, or otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSECHX-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-NYSECHX-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-NYSECHX-2024-14 and should
be submitted on or before April 26, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-07222 Filed 4-4-24; 8:45 am]
BILLING CODE 8011-01-P
