Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.19, 49929-49931 [2024-12791]

Download as PDF 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 49930 Federal Register / Vol. 89, No. 114 / Wednesday, June 12, 2024 / Notices controls proposed herein would be optional. The Exchange proposes no other changes to Rule 7.19 or its Commentary. Continuing Obligations of Participants Under Rule 15c3–5 The proposed Pre-Trade Risk Controls described here are meant to supplement, and not replace, the Participants’ 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 Participant’s needs, the controls are not designed to be the sole means of risk management, and using these controls will not necessarily meet a Participant’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 Participant.8 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 ddrumheller on DSK120RN23PROD with NOTICES1 7 See 17 CFR 240.15c3–5. 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 Participant’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 Participant.’’ 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 8 See VerDate Sep<11>2014 17:43 Jun 11, 2024 Jkt 262001 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 understands that Participants 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 Participants 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 11 See PO 00000 supra note 6. Frm 00107 Fmt 4703 Sfmt 4703 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; (i) 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 12 15 U.S.C. 78s(b)(3)(A)(iii). 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. 16 17 CFR 240.19b–4(f)(6). 17 17 CFR 240.19b–4(f)(6)(iii). 13 17 E:\FR\FM\12JNN1.SGM 12JNN1 Federal Register / Vol. 89, No. 114 / Wednesday, June 12, 2024 / Notices 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 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: ddrumheller on DSK120RN23PROD with NOTICES1 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–2024–20 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. 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). VerDate Sep<11>2014 17:43 Jun 11, 2024 Jkt 262001 All submissions should refer to file number SR–NYSECHX–2024–20. 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–2024–20 and should be submitted on or before July 3, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–12791 Filed 6–11–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100290; File No. SR– NYSEARCA–2024–45] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the Grayscale Bitcoin Mini Trust Under NYSE Arca Rule 8.201–E, Commodity-Based Trust Shares June 6, 2024. On May 28, 2024, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares (‘‘Shares’’) of the Grayscale Bitcoin Mini Trust under NYSE Arca Rule 8.201–E, Commodity-Based Trust Shares. On June 5, 2024, the Exchange filed Amendment No. 1, as described in Items I, II, and III below, which Items have been prepared by the Exchange. Amendment No. 1 replaced and superseded the proposed rule change in its entirety. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade shares of the following under NYSE Arca Rule 8.201–E: Grayscale Bitcoin Mini Trust (BTC) (the ‘‘Trust’’). This Amendment No. 1 to SR– NYSEARCA–2024–45 replaces SR– NYSEARCA2024–45 as originally filed and supersedes such filing in its entirety. 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 Under NYSE Arca Rule 8.201–E, the Exchange may propose to list and/or trade pursuant to unlisted trading privileges ‘‘Commodity-Based Trust 1 15 19 17 PO 00000 CFR 200.30–3(a)(12). Frm 00108 Fmt 4703 Sfmt 4703 49931 2 17 E:\FR\FM\12JNN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 12JNN1

Agencies

[Federal Register Volume 89, Number 114 (Wednesday, June 12, 2024)]
[Notices]
[Pages 49929-49931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12791]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100286; File No. SR-NYSECHX-2024-20]


Self-Regulatory Organizations; NYSE Chicago, Inc.; 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 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.
---------------------------------------------------------------------------

    \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 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 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. 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.
---------------------------------------------------------------------------

    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 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).
---------------------------------------------------------------------------

    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

[[Page 49930]]

controls proposed herein would be optional. The Exchange proposes no 
other changes to Rule 7.19 or its Commentary.
Continuing Obligations of Participants Under Rule 15c3-5
    The proposed Pre-Trade Risk Controls described here are meant to 
supplement, and not replace, the Participants' 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 Participant's needs, the controls are 
not designed to be the sole means of risk management, and using these 
controls will not necessarily meet a Participant'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 Participant.\8\
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    \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 Participant'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 Participant.''
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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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \11\ See supra note 6.
---------------------------------------------------------------------------

    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 Participants 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 Participants 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; (i) 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.
---------------------------------------------------------------------------

    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

[[Page 49931]]

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 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-NYSECHX-2024-20 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-2024-20. 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-2024-20 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. 2024-12791 Filed 6-11-24; 8:45 am]
BILLING CODE 8011-01-P
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