Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.19, 49927-49929 [2024-12787]
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Federal Register / Vol. 89, No. 114 / Wednesday, June 12, 2024 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–12792 Filed 6–11–24; 8:45 am]
BILLING CODE 8011–01–P
[Investment Company Act Release No.
35210A]
Deregistration Under the Investment
Company Act of 1940
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
May 31, 2024.
Correction
In notice document 2024–12360,
beginning on pages 48453–48458, in the
issue of Thursday, June 6, 2024, make
the following corrections:
1. On page 48457, in the first column,
in the 20th and 21st lines, under the
heading ‘‘Stone Ridge Longevity Risk
Premium Fixed Income Trust 78F’’
‘‘811–23549’’ is corrected to read: ‘‘811–
23551’’.
2. On the same page, in the same
column, in the 38th and 39th lines
under the heading ‘‘Stone Ridge
Longevity Risk Premium Fixed Income
Trust 78M’’ ‘‘811–23551’’ is corrected to
read: ‘‘811–23549’’.
[FR Doc. C1–2024–12360 Filed 6–11–24; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
The Exchange proposes to amend
Rule 7.19 to make additional pre-trade
risk controls available to Entering Firms.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100281; File No. SR–NYSE–
2024–32]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
7.19
June 6, 2024.
ddrumheller on DSK120RN23PROD with NOTICES1
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
BILLING CODE 0099–10–P
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 May 31,
2024, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘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 self-regulatory
organization. The Commission is
11 17
CFR 200.30–3(a)(57).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
17:43 Jun 11, 2024
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7.19 to make additional pre-trade
risk controls available to Entering Firms.
The proposed rule change is available
on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
SECURITIES AND EXCHANGE
COMMISSION
VerDate Sep<11>2014
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
Jkt 262001
Background and Proposal
In 2020, in order to assist Member
organizations’ efforts to manage their
risk, the Exchange amended its rules to
add Rule 7.19 (Pre-Trade Risk
Controls),4 which established a set of
optional pre-trade risk controls by
which Entering Firms and their
designated Clearing Firms 5 could set
credit limits and other pre-trade risk
controls for an Entering Firm’s trading
on the Exchange and authorize the
Exchange to take action if those credit
limits or other pre-trade risk controls are
exceeded.
The Exchange has recently received
several requests from market
4 See Securities Exchange Act Release No. 88776
(April 29, 2020), 85 FR 26768 (May 5, 2020) (SR–
NYSE–2020–17). Later, in 2023, the Exchange
amended its rules to make additional pre-trade risk
controls available to Entering Firms (the ‘‘2023 Risk
Controls’’). See Securities Exchange Act Release No.
97101 (March 1, 2023), 88 FR 14213 (March 7,
2023) (SR–NYSE–2023–14).
5 The terms ‘‘Entering Firm’’ and ‘‘Clearing Firm’’
are defined in Rule 7.19.
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
49927
participants to create an additional risk
control to restrict the overall rate of
orders. The Exchange notes that several
other exchanges—including the Cboe
equities exchanges, MEMX, and the
MIAX Pearl equities exchange (‘‘MIAX
Pearl’’) 6—currently offer risk controls
substantially similar to the one
proposed here. As such, market
participants are already familiar with
these risk checks, such that the ones
proposed by the Exchange in this filing
are not novel.
In light of these requests, the
Exchange proposes to amend Rule
7.19(b)(2) to add a new subparagraph
(G), which would provide that the
Single Order Risk Controls available to
Entering Firms would include ‘‘controls
to restrict the overall rate of orders.’’
As with the Exchange’s existing risk
controls, use of the pre-trade risk
controls proposed herein would be
optional. The Exchange proposes no
other changes to Rule 7.19 or its
Commentary.
Continuing Obligations of Member
Organizations Under Rule 15c3–5
The proposed Pre-Trade Risk Controls
described here are meant to supplement,
and not replace, the member
organizations’ own internal systems,
monitoring, and procedures related to
risk management. The Exchange does
not guarantee that these controls will be
sufficiently comprehensive to meet all
of a member organization’s needs, the
controls are not designed to be the sole
means of risk management, and using
these controls will not necessarily meet
a member organization’s obligations
required by Exchange or federal rules
(including, without limitation, the Rule
15c3–5 under the Act 7 (‘‘Rule 15c3–
5’’)). Use of the Exchange’s Pre-Trade
Risk Controls will not automatically
constitute compliance with Exchange or
federal rules and responsibility for
compliance with all Exchange and SEC
rules remains with the member
organization.8
6 See, e.g., Cboe BZX Equities Rule 11.13
Interpretations and Policies .01 paragraph (f); Cboe
BYX Equities Rule 11.13 Interpretations and
Policies .01 paragraph (f); Cboe EDGA Equities Rule
11.10 Interpretations and Policies .01 paragraph (f);
Cboe EDGX Equities Rule 11.10 Interpretations and
Policies .01 paragraph (f); MEMX Rule 11.10
Interpretations and Policies .01 paragraph (f); and
MIAX Pearl Equities Rule 2618(a)(1)(H).
7 See 17 CFR 240.15c3–5.
8 See also Commentary .01 to Rule 7.19, which
provides that ‘‘[t]he pre-trade risk controls
described in this Rule are meant to supplement, and
not replace, the member organization’s own internal
systems, monitoring and procedures related to risk
management and are not designed for compliance
with Rule 15c3–5 under the Exchange Act.
Responsibility for compliance with all Exchange
E:\FR\FM\12JNN1.SGM
Continued
12JNN1
49928
Federal Register / Vol. 89, No. 114 / Wednesday, June 12, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
Timing and Implementation
The Exchange anticipates
implementing the proposed change in
the second quarter of 2024 and, in any
event, will implement the proposed rule
change no later than the end of
September 2024. The Exchange will
announce the timing of such changes by
Trader Update.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,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
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest, and because it is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
Specifically, the Exchange believes
that the proposed rule change will
remove impediments to and perfect the
mechanism of a free and open market
and a national market system because
the proposed additional Pre-Trade Risk
Control would provide Entering Firms
with enhanced abilities to manage their
risk with respect to orders on the
Exchange. The proposed additional PreTrade Risk Control is not novel; it is
based on existing risk settings already in
place on the Cboe, MEMX, and MIAX
Pearl exchanges and market participants
are already familiar with the types of
protections that the proposed risk
control affords.11 As such, the Exchange
believes that the proposed additional
Pre-Trade Risk Control would provide a
means to address potentially marketimpacting events, helping to ensure the
proper functioning of the market.
In addition, the Exchange believes
that the proposed rule change will
protect investors and the public interest
because the proposed additional PreTrade Risk Control is a form of impact
mitigation that will aid Entering Firms
in minimizing their risk exposure and
reduce the potential for disruptive,
market-wide events. The Exchange
and SEC rules remains with the member
organization.’’
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
11 See supra note 6.
VerDate Sep<11>2014
17:43 Jun 11, 2024
Jkt 262001
understands that member organizations
implement a number of different riskbased controls, including those required
by Rule 15c3–5. The controls proposed
here will serve as an additional tool for
Entering Firms to assist them in
identifying any risk exposure. The
Exchange believes the proposed
additional Pre-Trade Risk Control will
assist Entering Firms in managing their
financial exposure which, in turn, could
enhance the integrity of trading on the
securities markets and help to assure the
stability of the financial system.
Finally, the Exchange believes that
the proposed rule change does not
unfairly discriminate among the
Exchange’s member organizations
because use of the proposed additional
Pre-Trade Risk Control is optional and
is not a prerequisite for participation on
the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. In fact, the
Exchange believes that the proposal will
have a positive effect on competition
because, by providing Entering Firms
additional means to monitor and control
risk, the proposed rule will increase
confidence in the proper functioning of
the markets. The Exchange believes the
proposed additional Pre-Trade Risk
Control will assist Entering Firms in
managing their financial exposure
which, in turn, could enhance the
integrity of trading on the securities
markets and help to assure the stability
of the financial system. As a result, the
level of competition should increase as
public confidence in the markets is
solidified.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 12 and Rule
19b–4(f)(6) thereunder.13 Because the
foregoing proposed rule change does
not: (i) significantly affect the protection
of investors or the public interest; (ii)
12 15
13 17
PO 00000
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
Frm 00105
Fmt 4703
Sfmt 4703
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 14 and Rule 19b–
4(f)(6) thereunder.15
A proposed rule change filed under
Rule 19b–4(f)(6) 16 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),17 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has requested
that the Commission waive the 30-day
operative delay so that the proposed
rule change may become effective and
operative upon filing with the
Commission. The Exchange states that
the proposed rule change is tied to a
technological release that the Exchange
plans to implement by the end of June
2024, that such release may be ready
before the 30-day operative delay has
elapsed, and the Exchange seeks to
implement the proposed rule change
without delay. The Exchange explains
that the proposed rule change will assist
Entering Firms in minimizing their risk
exposure, which could enhance the
integrity of trading on the securities
markets and help to assure the stability
of the financial system, and that the
proposed rule change is not novel as it
is based on existing risk settings already
in place on other exchanges. For these
reasons, and because the proposed rule
change does not raise any new or novel
regulatory issues, the Commission
believes that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest. Accordingly, the Commission
hereby waives the operative delay and
designates the proposed rule change
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
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
18 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
15 17
E:\FR\FM\12JNN1.SGM
12JNN1
Federal Register / Vol. 89, No. 114 / Wednesday, June 12, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
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
to determine whether the proposed rule
change should be approved or
disapproved.
subject to copyright protection. All
submissions should refer to file number
SR–NYSE–2024–32 and should be
submitted on or before July 3, 2024.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Sherry R. Haywood,
Assistant Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
[FR Doc. 2024–12787 Filed 6–11–24; 8:45 am]
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–2024–32 on the subject
line.
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 7.19
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–2024–32. 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
VerDate Sep<11>2014
17:43 Jun 11, 2024
Jkt 262001
49929
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100286; File No. SR–
NYSECHX–2024–20]
June 6, 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 May 28,
2024, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ or the ‘‘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 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 7.19 to make additional pre-trade
risk controls available to Entering Firms.
The proposed rule change is available
on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
1. Purpose
The Exchange proposes to amend
Rule 7.19 to make additional pre-trade
risk controls available to Entering Firms.
Background and Proposal
In 2020, in order to assist Participants’
efforts to manage their risk, the
Exchange amended its rules to add Rule
7.19 (Pre-Trade Risk Controls),4 which
established a set of optional pre-trade
risk controls by which Entering Firms
and their designated Clearing Firms 5
could set credit limits and other pretrade risk controls for an Entering Firm’s
trading on the Exchange and authorize
the Exchange to take action if those
credit limits or other pre-trade risk
controls are exceeded.
The Exchange has recently received
several requests from market
participants to create an additional risk
control to restrict the overall rate of
orders. The Exchange notes that several
other exchanges—including the Cboe
equities exchanges, MEMX, and the
MIAX Pearl equities exchange (‘‘MIAX
Pearl’’) 6—currently offer risk controls
substantially similar to the one
proposed here. As such, market
participants are already familiar with
these risk checks, such that the ones
proposed by the Exchange in this filing
are not novel.
In light of these requests, the
Exchange proposes to amend Rule
7.19(b)(2) to add a new subparagraph
(G), which would provide that the
Single Order Risk Controls available to
Entering Firms would include ‘‘controls
to restrict the overall rate of orders.’’
As with the Exchange’s existing risk
controls, use of the pre-trade risk
4 See Securities Exchange Act Release No. 88903
(May 19, 2020), 85 FR 31578 (May 26, 2020) (SR–
NYSECHX–2020–14). Later, in 2023, the Exchange
amended its rules to make additional pre-trade risk
controls available to Entering Firms. See Securities
Exchange Act Release No. 96920 (February 14,
2023), 88 FR 10592 (February 21, 2023) (SR–
NYSECHX–2023–08).
5 The terms ‘‘Entering Firm’’ and ‘‘Clearing Firm’’
are defined in Rule 7.19.
6 See, e.g., Cboe BZX Equities Rule 11.13
interpretation [sic] .01 paragraph (f); Cboe BYX
Equities Rule 11.13 interpretation [sic] .01
paragraph (f); Cboe EDGA Equities Rule 11.10
interpretation [sic] .01 paragraph (f); Cboe EDGX
Equities Rule 11.10 interpretation [sic] .01
paragraph (f); MEMX Rule 11.10 interpretation [sic]
.01 paragraph (f); and MIAX Pearl Equities Rule
2618(a)(1)(H).
E:\FR\FM\12JNN1.SGM
12JNN1
]]>Agencies
[Federal Register Volume 89, Number 114 (Wednesday, June 12, 2024)]
[Notices]
[Pages 49927-49929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12787]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100281; File No. SR-NYSE-2024-32]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 7.19
June 6, 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 May 31, 2024, New York Stock Exchange LLC (``NYSE'' or the
``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 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 7.19 to make additional pre-
trade risk controls available to Entering Firms. The proposed rule
change is available on the Exchange's website at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 7.19 to make additional pre-
trade risk controls available to Entering Firms.
Background and Proposal
In 2020, in order to assist Member organizations' efforts to manage
their risk, the Exchange amended its rules to add Rule 7.19 (Pre-Trade
Risk Controls),\4\ which established a set of optional pre-trade risk
controls by which Entering Firms and their designated Clearing Firms
\5\ could set credit limits and other pre-trade risk controls for an
Entering Firm's trading on the Exchange and authorize the Exchange to
take action if those credit limits or other pre-trade risk controls are
exceeded.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 88776 (April 29,
2020), 85 FR 26768 (May 5, 2020) (SR-NYSE-2020-17). Later, in 2023,
the Exchange amended its rules to make additional pre-trade risk
controls available to Entering Firms (the ``2023 Risk Controls'').
See Securities Exchange Act Release No. 97101 (March 1, 2023), 88 FR
14213 (March 7, 2023) (SR-NYSE-2023-14).
\5\ The terms ``Entering Firm'' and ``Clearing Firm'' are
defined in Rule 7.19.
---------------------------------------------------------------------------
The Exchange has recently received several requests from market
participants to create an additional risk control to restrict the
overall rate of orders. The Exchange notes that several other
exchanges--including the Cboe equities exchanges, MEMX, and the MIAX
Pearl equities exchange (``MIAX Pearl'') \6\--currently offer risk
controls substantially similar to the one proposed here. As such,
market participants are already familiar with these risk checks, such
that the ones proposed by the Exchange in this filing are not novel.
---------------------------------------------------------------------------
\6\ See, e.g., Cboe BZX Equities Rule 11.13 Interpretations and
Policies .01 paragraph (f); Cboe BYX Equities Rule 11.13
Interpretations and Policies .01 paragraph (f); Cboe EDGA Equities
Rule 11.10 Interpretations and Policies .01 paragraph (f); Cboe EDGX
Equities Rule 11.10 Interpretations and Policies .01 paragraph (f);
MEMX Rule 11.10 Interpretations and Policies .01 paragraph (f); and
MIAX Pearl Equities Rule 2618(a)(1)(H).
---------------------------------------------------------------------------
In light of these requests, the Exchange proposes to amend Rule
7.19(b)(2) to add a new subparagraph (G), which would provide that the
Single Order Risk Controls available to Entering Firms would include
``controls to restrict the overall rate of orders.''
As with the Exchange's existing risk controls, use of the pre-trade
risk controls proposed herein would be optional. The Exchange proposes
no other changes to Rule 7.19 or its Commentary.
Continuing Obligations of Member Organizations Under Rule 15c3-5
The proposed Pre-Trade Risk Controls described here are meant to
supplement, and not replace, the member organizations' own internal
systems, monitoring, and procedures related to risk management. The
Exchange does not guarantee that these controls will be sufficiently
comprehensive to meet all of a member organization's needs, the
controls are not designed to be the sole means of risk management, and
using these controls will not necessarily meet a member organization's
obligations required by Exchange or federal rules (including, without
limitation, the Rule 15c3-5 under the Act \7\ (``Rule 15c3-5'')). Use
of the Exchange's Pre-Trade Risk Controls will not automatically
constitute compliance with Exchange or federal rules and responsibility
for compliance with all Exchange and SEC rules remains with the member
organization.\8\
---------------------------------------------------------------------------
\7\ See 17 CFR 240.15c3-5.
\8\ See also Commentary .01 to Rule 7.19, which provides that
``[t]he pre-trade risk controls described in this Rule are meant to
supplement, and not replace, the member organization's own internal
systems, monitoring and procedures related to risk management and
are not designed for compliance with Rule 15c3-5 under the Exchange
Act. Responsibility for compliance with all Exchange and SEC rules
remains with the member organization.''
---------------------------------------------------------------------------
[[Page 49928]]
Timing and Implementation
The Exchange anticipates implementing the proposed change in the
second quarter of 2024 and, in any event, will implement the proposed
rule change no later than the end of September 2024. The Exchange will
announce the timing of such changes by Trader Update.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\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 regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest,
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that the proposed rule change
will remove impediments to and perfect the mechanism of a free and open
market and a national market system because the proposed additional
Pre-Trade Risk Control would provide Entering Firms with enhanced
abilities to manage their risk with respect to orders on the Exchange.
The proposed additional Pre-Trade Risk Control is not novel; it is
based on existing risk settings already in place on the Cboe, MEMX, and
MIAX Pearl exchanges and market participants are already familiar with
the types of protections that the proposed risk control affords.\11\ As
such, the Exchange believes that the proposed additional Pre-Trade Risk
Control would provide a means to address potentially market-impacting
events, helping to ensure the proper functioning of the market.
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\11\ See supra note 6.
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In addition, the Exchange believes that the proposed rule change
will protect investors and the public interest because the proposed
additional Pre-Trade Risk Control is a form of impact mitigation that
will aid Entering Firms in minimizing their risk exposure and reduce
the potential for disruptive, market-wide events. The Exchange
understands that member organizations implement a number of different
risk-based controls, including those required by Rule 15c3-5. The
controls proposed here will serve as an additional tool for Entering
Firms to assist them in identifying any risk exposure. The Exchange
believes the proposed additional Pre-Trade Risk Control will assist
Entering Firms in managing their financial exposure which, in turn,
could enhance the integrity of trading on the securities markets and
help to assure the stability of the financial system.
Finally, the Exchange believes that the proposed rule change does
not unfairly discriminate among the Exchange's member organizations
because use of the proposed additional Pre-Trade Risk Control is
optional and is not a prerequisite for participation on the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. In fact, the Exchange
believes that the proposal will have a positive effect on competition
because, by providing Entering Firms additional means to monitor and
control risk, the proposed rule will increase confidence in the proper
functioning of the markets. The Exchange believes the proposed
additional Pre-Trade Risk Control will assist Entering Firms in
managing their financial exposure which, in turn, could enhance the
integrity of trading on the securities markets and help to assure the
stability of the financial system. As a result, the level of
competition should increase as public confidence in the markets is
solidified.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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 \14\ and Rule 19b-4(f)(6)
thereunder.\15\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposed rule change may become effective and operative upon filing
with the Commission. The Exchange states that the proposed rule change
is tied to a technological release that the Exchange plans to implement
by the end of June 2024, that such release may be ready before the 30-
day operative delay has elapsed, and the Exchange seeks to implement
the proposed rule change without delay. The Exchange explains that the
proposed rule change will assist Entering Firms in minimizing their
risk exposure, which could enhance the integrity of trading on the
securities markets and help to assure the stability of the financial
system, and that the proposed rule change is not novel as it is based
on existing risk settings already in place on other exchanges. For
these reasons, and because the proposed rule change does not raise any
new or novel regulatory issues, the Commission believes that waiver of
the 30-day operative delay is consistent with the protection of
investors and the public interest. Accordingly, the Commission hereby
waives the operative delay and designates the proposed rule change
operative upon filing.\18\
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ For purposes only of waiving the 30-day operative delay,
the Commission also has 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
[[Page 49929]]
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 to determine whether the proposed rule change
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number
SR-NYSE-2024-32 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-2024-32. 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-2024-32 and should be
submitted on or before July 3, 2024.
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\19\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-12787 Filed 6-11-24; 8:45 am]
BILLING CODE 8011-01-P
