Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1 and Rule 5.2-E(j)(6), 61557-61560 [2024-16804]

Download as PDF lotter on DSK11XQN23PROD with NOTICES1 Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / Notices delay and designates the proposal operative upon filing.27 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 28 of the Act to determine whether the proposed rule change should be approved or disapproved. 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–SAPPHIRE–2024–01 and should be submitted on or before August 21, 2024. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 Sherry R. Haywood, Assistant Secretary. 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– SAPPHIRE–2024–01 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–SAPPHIRE–2024–01. 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 27 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 28 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 17:29 Jul 30, 2024 Jkt 262001 [FR Doc. 2024–16795 Filed 7–30–24; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–100597; File No. SR– NYSEARCA–2024–61] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1 and Rule 5.2–E(j)(6) July 25, 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 July 15, 2024, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to (1) amend Rule 1.1 to include Exchange-Traded Fund Shares in the definition of ‘‘UTP Derivative Securities Product,’’ and (2) amend Rule 5.2–E(j)(6) to exclude Exchange-Traded Fund Shares when applying the quantitative generic listing criteria applicable to Equity Index- PO 00000 29 17 CFR 200.30–3(a)(12), (59). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 Frm 00161 Fmt 4703 Sfmt 4703 61557 Linked Securities. 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 Rule 1.1 The Exchange proposes to amend Rule 1.1, which sets forth definitions of terms used in Exchange rules, including the meanings of ‘‘Derivative Securities Product’’ and ‘‘UTP Derivative Securities Product.’’ Specifically, the Exchange proposes to amend the definition of ‘‘UTP Derivative Securities Product’’ to include Exchange-Traded Fund Shares listed pursuant to NYSE Arca, Inc. (‘‘NYSE Arca’’) Rule 5.2–E(j)(8), Exchange-Traded Fund Shares listed pursuant to New York Stock Exchange LLC (‘‘NYSE’’) Rule 5.2(j)(8), ExchangeTraded Fund Shares listed pursuant to Cboe BZX Exchange, Inc. (‘‘BZX’’) Rule 14.11(l), and Exchange Traded Fund Shares listed pursuant to Nasdaq Stock Market LLC (‘‘Nasdaq’’) Rule 5704 as additional types of Exchange Traded Product (‘‘ETPs’’) that may trade on the Exchange pursuant to unlisted trading privileges (‘‘UTP’’).4 4 Exchange-Traded Fund Shares and Exchange Traded Fund Shares are substantially similar products that generally refer to shares of exchangetraded funds eligible to operate in reliance on Rule 6c–11 under the Investment Company Act of 1940. See Securities Exchange Act Release Nos. 88625 (April 13, 2020), 85 FR 21479 (April 17, 2020) (SR– NYSEArca–2019–81) (order approving NYSE Arca Rule 5.2–E(j)(8) governing the listing and trading of Exchange-Traded Fund Shares); 91029 (February 1, 2021), 86 FR 8420 (February 5, 2021) (SR–NYSE– 2020–86) (order approving NYSE Rule 5.2(j)(8) governing the listing and trading of ExchangeTraded Fund Shares); 88566 (April 6, 2020), 85 FR 20312 (April 10, 2020) (SR–CboeBZX–2019–097) Continued E:\FR\FM\31JYN1.SGM 31JYN1 61558 Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / Notices lotter on DSK11XQN23PROD with NOTICES1 To effect this change, the Exchange proposes to add a bullet point listing ‘‘Exchange-Traded Fund Shares listed pursuant to NYSE Arca, Inc. Rule 5.2– E(j)(8), New York Stock Exchange LLC Rule 5.2(j)(8), or Cboe BZX Exchange, Inc. Rule 14.11(l) and Exchange Traded Fund Shares listed pursuant to Nasdaq Stock Market LLC Rule 5704’’ in Rule 1.1 to include them in the enumerated list of Derivative Securities Products that may trade on the Exchange on a UTP basis. The Exchange also proposes non-substantive changes to accommodate the addition of this bullet point as the final item in the bulleted list in Rule 1.1. The Exchange believes that the proposed change would ensure that the definition of ‘‘UTP Derivative Securities Product’’ in Rule 1.1 reflects a complete list of Derivative Securities Products that may trade on the Exchange pursuant to UTP, thereby improving the clarity and transparency of Exchange Rules. Rule 5.2–E(j)(6) Rule 5.2–E(j)(6) sets forth criteria applicable to Exchange listing of equity index-linked securities (‘‘Equity IndexLinked Securities’’), commodity-linked securities, currency-linked securities, fixed income index-linked securities, futures-linked securities, and multifactor index-linked securities. As defined in Rule 5.2–E(j)(6)(B)(I)(1), Equity Index-Linked Securities are securities that provide for the payment at maturity (or earlier redemption) based on the performance of an underlying index or indexes of equity securities, securities of closed-end management investment companies registered under the Investment Company Act of 1940,5 and/or Investment Company Units. In addition to certain other generic listing criteria, Equity Index-Linked Securities must satisfy the generic quantitative initial and continued listing criteria under Rule 5.2–E(j)(6)(B)(I) in order to become, and continue to be, listed and traded on the Exchange. Certain of the applicable quantitative criteria specify minimum or maximum thresholds that must be satisfied with respect to, for example, market value, trading volume, and dollar weight of an index represented by a single component or groups of components. Currently, Rule 5.2–E(j)(6)(B)(I)(1)(a) provides that each underlying index of (order approving BZX Rule 14.11(l) governing the listing and trading of Exchange-Traded Fund Shares); 88561 (April 3, 2020), 85 FR 19984 (April 9, 2020) (SR–NASDAQ–2019–090) (order approving Nasdaq Rule 5704 governing the listing and trading of Exchange Traded Fund Shares). 5 15 U.S.C. 80–1. VerDate Sep<11>2014 17:29 Jul 30, 2024 Jkt 262001 an Equity Index-Linked Security is required to have at least ten component securities, provided, however, that there shall be no minimum number of component securities if one or more issues of Derivative Securities Products (i.e., Investment Company Units (as described in Rule 5.2–E(j)(3)) and securities described in Section 2 of Rule 8) or Index-Linked Securities (as described in Rule 5.2–E(j)(6)), constitute, at least in part, component securities underlying an issue of Equity Index-Linked Securities. The Exchange proposes to amend Rule 5.2– E(j)(6)(B)(I)(1)(a) to include ExchangeTraded Fund Shares, as described in Rule 5.2–E(j)(8), in the group of Derivative Securities Products to which the ten component security minimum would not apply. The Exchange also proposes to exclude Derivative Securities Products, consistent with this proposed change to the description of Derivative Securities Products in Rule 5.2–E(j)(6)(B)(I)(1)(a), from consideration when determining whether the applicable quantitative generic thresholds have been satisfied under the initial listing standards specified in Rules 5.2– E(j)(6)(B)(I)(1)(b)(i) through (iv) and the continued listing standards specified in Rules 5.2–E(j)(6)(B)(I)(2)(a)(i) and (ii). Thus, for example, when determining compliance with Rule 5.2– E(j)(6)(B)(I)(1)(b)(ii), component stocks, excluding Derivative Securities Products (which would, as proposed, include Exchange-Traded Fund Shares) or Index-Linked Securities, that in the aggregate account for at least 90% of the remaining index weight, excluding any Derivative Securities Products (including, as proposed, ExchangeTraded Fund Shares) or Index-Linked Securities, would be required to have a minimum global monthly trading volume of 1,000,000 shares, or minimum global notional volume traded per month of $25,000,000, averaged over the last six months. In addition, Rule 5.2–E(j)(6)(B)(I)(1)(a) currently provides that the securities described in Rule 5.2–E(j)(3), Section 2 of Rule 8, and Rule 5.2–E(j)(6), as referenced in Rule 5.2– E(j)(6)(B)(I)(1)(b)(2) and Rule 5.2– E(j)(6)(B)(I)(2)(a), shall include securities listed on another national securities exchange pursuant to substantially equivalent listing rules. The Exchange proposes to update this list to include a reference to Rule 5.2– E(j)(8), consistent with the proposed change described above. The Exchange also proposes non-substantive changes in two places in Rule 5.2– PO 00000 Frm 00162 Fmt 4703 Sfmt 4703 E(j)(6)(B)(I)(1)(a) to refer to ‘‘Section 2 of Rule 8–E’’ (instead of ‘‘Section 2 of Rule 8’’) to reflect the current NYSE Arca rule numbering convention. Finally, the Exchange proposes non-substantive changes to delete the extra spaces that appear in the term ‘‘Index-Linked Securities’’ in Rules 5.2– E(j)(6)(B)(I)(1)(b)(ii), 5.2– E(j)(6)(B)(I)(2)(a)(i), and 5.2– E(j)(6)(B)(I)(2)(a)(ii). The Exchange notes that the inclusion of Exchange-Traded Fund Shares in the group of Derivative Securities Products that are excepted from the generic listing and continued listing criteria specified above for Equity Index-Linked Securities would align the Exchange’s rules with the listing criteria for Equity Index-Linked Securities on at least one other equity exchange.6 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Section 6(b)(5) of the Act,8 in particular, because it is designed to remove impediments to and perfect the mechanism of a free and open market, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The proposed rule change with respect to the definition of ‘‘UTP Derivative Securities Products’’ in Rule 1.1 is designed to remove impediments to and perfect the mechanism of a free and open market, promote just and equitable principles of trade, and, in general, to protect investors and the public interest because it modifies Rule 6 See, e.g., BZX Rule 14.11(d)(2)(K)(i)(a) (describing listing criteria for Equity Index-Linked Securities, including that ‘‘each underlying index is required to have at least ten (10) component securities; provided, however, that there shall be no minimum number of component securities if one or more issues of Derivative Securities Products (which are defined in Rule 14.11(c)(3)(A)(i)(a)). . .constitute, at least in part, component securities underlying an issue of Equity Index-Linked Securities’’); BZX Rule 14.11(c)(3)(A)(i)(a) (defining ‘‘Derivative Securities Products’’ to include Index Fund Shares, Portfolio Depositary Receipts, Trust Issued Receipts, ETF Shares, and Managed Fund Shares); and BZX 14.11(l) (defining Exchange-Traded Fund Shares or ETF Shares). Cf. Nasdaq Rule 5705(b)(3)(A)(i)(a) (describing listing criteria for Index Fund Shares, including that ‘‘Component stocks (excluding ‘‘Derivative Securities Products’’ as defined in this subsection a.) that in the aggregate account for at least 90% of the weight of the U.S. Component Stocks portion of the index or portfolio (excluding Derivative Securities Products) each shall have a minimum market value of at least $75 million’’ and defining ‘‘Derivative Securities Products’’ as including Exchange Traded Fund Shares listed under Nasdaq Rule 5704). 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4) & (5). E:\FR\FM\31JYN1.SGM 31JYN1 Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / Notices 1.1 to state the complete list of Derivative Securities Products that may trade on a UTP basis on the Exchange, providing specificity, clarity, and transparency in the Exchange’s rules. Moreover, the proposed rule change would facilitate the trading of additional types of Derivative Securities Products on the Exchange pursuant to UTP, thereby enhancing competition among market participants for the benefit of investors and the marketplace. The Exchange believes that the proposed change with respect to Rule 5.2–E(j)(6) is designed to remove impediments to and perfect the mechanism of a free and open market, promote just and equitable principles of trade, and, in general, to protect investors and the public interest because including Exchange-Traded Fund Shares as Derivative Securities Products excepted from certain generic listing and continued listing criteria for Equity Index-Linked Securities would facilitate the listing and trading of additional types of Equity Index-Linked Securities. The Exchange further believes the proposed change would remove impediments to and perfect the mechanism of a free and open market and promote competition, to the benefit of investors and the marketplace, because the proposed change would amend the Exchange’s rules to be consistent with the listing criteria for Equity Index-Linked Securities on at least one other equity exchange.9 lotter on DSK11XQN23PROD with NOTICES1 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 would provide the public and investors with up-to-date information about the types of Derivative Securities Products that can trade on the Exchange on a UTP basis and would promote competition by providing for additional types of Derivative Securities Products that may trade on the Exchange pursuant to UTP. The Exchange also believes that the proposed change would encourage competition by enabling additional types of Equity Index-Linked Securities to be listed on the Exchange. 9 See note 6, supra. VerDate Sep<11>2014 17:29 Jul 30, 2024 Jkt 262001 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 Pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6) 11 thereunder, the Exchange has designated this proposal as one that effects a change that: (i) does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest.12 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 13 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requested that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The proposed rule change, which adds Exchange-Traded Fund Shares (or Exchange Traded Fund Shares, as the case may be) to the definition of ‘‘UTP Derivative Securities Product’’ in NYSE Arca Rule 1.1 and modifies certain listing standards applicable to Equity Index-Linked Securities, conforms to substantially similar rules of other exchanges 14 and raises no unique or novel legal or regulatory issues. Therefore, 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 30-day operative delay and U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 12 In addition, Rule 19b–4(f)(6) requires a selfregulatory organization to give the Commission written notice of its intent to file 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. 13 17 CFR 240.19b–4(f)(6)(iii). 14 See, e.g., BZX Rule 1.5(ee) (incorporating ‘‘Exchange-Traded Fund Shares’’ in the definition of UTP Derivative Securities); and BZX Rule 14.11(d)(2)(K)(i)(a) and (b) (setting forth the initial and continued listing standards for Equity IndexLinked Securities). PO 00000 10 15 11 17 Frm 00163 Fmt 4703 Sfmt 4703 61559 designates the proposed rule change operative upon filing.15 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. 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– NYSEARCA–2024–61 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–NYSEARCA–2024–61. 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 15 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\31JYN1.SGM 31JYN1 61560 Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / Notices Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–NYSEARCA–2024–61 and should be submitted on or before August 21, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–16804 Filed 7–30–24; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100590; File No. SR– NASDAQ–2024–039] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for Its Expanded Co-Location Services July 25, 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 July 15, 2024, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. lotter on DSK11XQN23PROD with NOTICES1 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to establish fees for its expanded co-location services, as described further below. While these amendments are effective upon filing, the Exchange has designated the proposed amendments to be operative on August 15, 2024. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/nasdaq/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 16 17 CFR 200.30–3(a)(12), (59). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 17:29 Jul 30, 2024 Jkt 262001 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. 1. Purpose The Exchange filed a proposal to expand its co-location services by offering new cabinet, power, and power distribution unit options in the Exchange’s expanded data center.3 As described in that filing, the Exchange’s current data center (‘‘NY11’’) in Carteret, NJ is undergoing an expansion (‘‘NY11–4’’) in response to demand for power and cabinets. The purpose of this proposed rule change is to establish fees for the expanded co-location services. Specifically, the Exchange proposes to establish (i) a monthly fee for Ultra High Density Cabinets, (ii) an installation fee for cabinets in NY11–4, (iii) fees for power installation in NY11–4, and (iv) fees for power distribution unit options in NY11–4. Ultra High Density Cabinet Currently, co-location customers have the option of obtaining cabinets of various sizes and power densities. Colocation customers may obtain a Half Cabinet,4 a Low Density Cabinet with power density less than or equal to 2.88 kilowatts (‘‘kW’’), a Medium Density Cabinet with power density greater than 2.88 kW and less than or equal to 5 kW, a Medium-High Density Cabinet with power density greater than 5 kW and less than or equal to 7 kW, a High Density Cabinet with power density greater than 7 kW and less than 10 kW, and a Super High Density Cabinet with power density greater than 10 kW and less than or equal to 17.3 kW. The Exchange filed a proposal to introduce a new cabinet choice in NY11–4, an ‘‘Ultra High Density Cabinet,’’ with power density greater than 10 kW and less than or equal to 15 kW.5 The Ultra High Density Cabinet option will only be offered in NY11–4 because of the power configuration necessary for such cabinets, which is not possible or available in other portions of the data center due to different power distribution.6 In addition to the Ultra High Density Cabinet, the Exchange will offer the other, existing cabinet options in NY11– 4, with the exception of the Low Density Cabinet and Half Cabinet due to a lack of demand for such cabinets. The ongoing monthly fees for the Super High Density Cabinet, High Density Cabinet, Medium-High Density Cabinet, and Medium Density Cabinet are the same in NY11 and NY11–4 and the Exchange is not proposing to modify such fees. The Exchange proposes to establish an ongoing monthly fee of $7,230 for the Ultra High Density Cabinets. To effectuate this change, the Exchange proposes to add the $7,230 ongoing monthly fee for Ultra High Density Cabinets to its fee schedule in General 8, Section 1(a). The Exchange notes that the proposed fee amount falls between the $4,748 ongoing monthly fee charged for High Density Cabinets and the $8,440 ongoing monthly fee charged for Super High Density Cabinets. Furthermore, the proposed fee is consistent with the existing ongoing monthly cabinet fees on a per kW basis. The existing monthly cabinet fees range from approximately $475 per kW to $916 per kW, while the proposed ongoing monthly cabinet fee for the Ultra High Density Cabinet ranges from approximately $482 per kW (at the high end of the power density range for Ultra High Density Cabinets) to $723 per kW (at the low end of the power density range for Ultra High Density Cabinets). Installation Fee for Cabinets in NY11–4 The Exchange proposes to establish a cabinet installation fee of $5,940 for all cabinets in NY11–4. To effectuate this change, the Exchange proposes to add the proposed $5,940 installation fee to its fee schedule in General 8, Section 1(a) for Super High Density Cabinets, Ultra High Density Cabinets, High Density Cabinets, Medium-High Density Cabinets, and Medium Density Cabinets in NY11–4. In the existing data halls, customers may bring their own cabinets or use Exchange-provided cabinets. In NY11–4, because of the cooling system 5 Supra Securities Exchange Act Release No. 34– 100440 (June 27, 2024), 89 FR 55294 (July 3, 2024) (SR–NASDAQ–2024–026). 4 Half cabinets are not available to new subscribers. See General 8, Section 1(a). PO 00000 3 See Frm 00164 Fmt 4703 Sfmt 4703 note 3. of the addition of the Ultra High Density Cabinet option in NY11–4, the Super High Density Cabinet in NY11–4 will have power density greater than 15 kW and less than or equal to 17.3 kW. 6 Because E:\FR\FM\31JYN1.SGM 31JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Notices]
[Pages 61557-61560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16804]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100597; File No. SR-NYSEARCA-2024-61]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1 
and Rule 5.2-E(j)(6)

July 25, 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 July 15, 2024, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to (1) amend Rule 1.1 to include Exchange-
Traded Fund Shares in the definition of ``UTP Derivative Securities 
Product,'' and (2) amend Rule 5.2-E(j)(6) to exclude Exchange-Traded 
Fund Shares when applying the quantitative generic listing criteria 
applicable to Equity Index-Linked Securities. 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
Rule 1.1
    The Exchange proposes to amend Rule 1.1, which sets forth 
definitions of terms used in Exchange rules, including the meanings of 
``Derivative Securities Product'' and ``UTP Derivative Securities 
Product.''
    Specifically, the Exchange proposes to amend the definition of 
``UTP Derivative Securities Product'' to include Exchange-Traded Fund 
Shares listed pursuant to NYSE Arca, Inc. (``NYSE Arca'') Rule 5.2-
E(j)(8), Exchange-Traded Fund Shares listed pursuant to New York Stock 
Exchange LLC (``NYSE'') Rule 5.2(j)(8), Exchange-Traded Fund Shares 
listed pursuant to Cboe BZX Exchange, Inc. (``BZX'') Rule 14.11(l), and 
Exchange Traded Fund Shares listed pursuant to Nasdaq Stock Market LLC 
(``Nasdaq'') Rule 5704 as additional types of Exchange Traded Product 
(``ETPs'') that may trade on the Exchange pursuant to unlisted trading 
privileges (``UTP'').\4\
---------------------------------------------------------------------------

    \4\ Exchange-Traded Fund Shares and Exchange Traded Fund Shares 
are substantially similar products that generally refer to shares of 
exchange-traded funds eligible to operate in reliance on Rule 6c-11 
under the Investment Company Act of 1940. See Securities Exchange 
Act Release Nos. 88625 (April 13, 2020), 85 FR 21479 (April 17, 
2020) (SR-NYSEArca-2019-81) (order approving NYSE Arca Rule 5.2-
E(j)(8) governing the listing and trading of Exchange-Traded Fund 
Shares); 91029 (February 1, 2021), 86 FR 8420 (February 5, 2021) 
(SR-NYSE-2020-86) (order approving NYSE Rule 5.2(j)(8) governing the 
listing and trading of Exchange-Traded Fund Shares); 88566 (April 6, 
2020), 85 FR 20312 (April 10, 2020) (SR-CboeBZX-2019-097) (order 
approving BZX Rule 14.11(l) governing the listing and trading of 
Exchange-Traded Fund Shares); 88561 (April 3, 2020), 85 FR 19984 
(April 9, 2020) (SR-NASDAQ-2019-090) (order approving Nasdaq Rule 
5704 governing the listing and trading of Exchange Traded Fund 
Shares).

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[[Page 61558]]

    To effect this change, the Exchange proposes to add a bullet point 
listing ``Exchange-Traded Fund Shares listed pursuant to NYSE Arca, 
Inc. Rule 5.2-E(j)(8), New York Stock Exchange LLC Rule 5.2(j)(8), or 
Cboe BZX Exchange, Inc. Rule 14.11(l) and Exchange Traded Fund Shares 
listed pursuant to Nasdaq Stock Market LLC Rule 5704'' in Rule 1.1 to 
include them in the enumerated list of Derivative Securities Products 
that may trade on the Exchange on a UTP basis. The Exchange also 
proposes non-substantive changes to accommodate the addition of this 
bullet point as the final item in the bulleted list in Rule 1.1.
    The Exchange believes that the proposed change would ensure that 
the definition of ``UTP Derivative Securities Product'' in Rule 1.1 
reflects a complete list of Derivative Securities Products that may 
trade on the Exchange pursuant to UTP, thereby improving the clarity 
and transparency of Exchange Rules.
Rule 5.2-E(j)(6)
    Rule 5.2-E(j)(6) sets forth criteria applicable to Exchange listing 
of equity index-linked securities (``Equity Index-Linked Securities''), 
commodity-linked securities, currency-linked securities, fixed income 
index-linked securities, futures-linked securities, and multifactor 
index-linked securities.
    As defined in Rule 5.2-E(j)(6)(B)(I)(1), Equity Index-Linked 
Securities are securities that provide for the payment at maturity (or 
earlier redemption) based on the performance of an underlying index or 
indexes of equity securities, securities of closed-end management 
investment companies registered under the Investment Company Act of 
1940,\5\ and/or Investment Company Units. In addition to certain other 
generic listing criteria, Equity Index-Linked Securities must satisfy 
the generic quantitative initial and continued listing criteria under 
Rule 5.2-E(j)(6)(B)(I) in order to become, and continue to be, listed 
and traded on the Exchange. Certain of the applicable quantitative 
criteria specify minimum or maximum thresholds that must be satisfied 
with respect to, for example, market value, trading volume, and dollar 
weight of an index represented by a single component or groups of 
components.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 80-1.
---------------------------------------------------------------------------

    Currently, Rule 5.2-E(j)(6)(B)(I)(1)(a) provides that each 
underlying index of an Equity Index-Linked Security is required to have 
at least ten component securities, provided, however, that there shall 
be no minimum number of component securities if one or more issues of 
Derivative Securities Products (i.e., Investment Company Units (as 
described in Rule 5.2-E(j)(3)) and securities described in Section 2 of 
Rule 8) or Index-Linked Securities (as described in Rule 5.2-E(j)(6)), 
constitute, at least in part, component securities underlying an issue 
of Equity Index-Linked Securities. The Exchange proposes to amend Rule 
5.2-E(j)(6)(B)(I)(1)(a) to include Exchange-Traded Fund Shares, as 
described in Rule 5.2-E(j)(8), in the group of Derivative Securities 
Products to which the ten component security minimum would not apply. 
The Exchange also proposes to exclude Derivative Securities Products, 
consistent with this proposed change to the description of Derivative 
Securities Products in Rule 5.2-E(j)(6)(B)(I)(1)(a), from consideration 
when determining whether the applicable quantitative generic thresholds 
have been satisfied under the initial listing standards specified in 
Rules 5.2-E(j)(6)(B)(I)(1)(b)(i) through (iv) and the continued listing 
standards specified in Rules 5.2-E(j)(6)(B)(I)(2)(a)(i) and (ii). Thus, 
for example, when determining compliance with Rule 5.2-
E(j)(6)(B)(I)(1)(b)(ii), component stocks, excluding Derivative 
Securities Products (which would, as proposed, include Exchange-Traded 
Fund Shares) or Index-Linked Securities, that in the aggregate account 
for at least 90% of the remaining index weight, excluding any 
Derivative Securities Products (including, as proposed, Exchange-Traded 
Fund Shares) or Index-Linked Securities, would be required to have a 
minimum global monthly trading volume of 1,000,000 shares, or minimum 
global notional volume traded per month of $25,000,000, averaged over 
the last six months.
    In addition, Rule 5.2-E(j)(6)(B)(I)(1)(a) currently provides that 
the securities described in Rule 5.2-E(j)(3), Section 2 of Rule 8, and 
Rule 5.2-E(j)(6), as referenced in Rule 5.2-E(j)(6)(B)(I)(1)(b)(2) and 
Rule 5.2-E(j)(6)(B)(I)(2)(a), shall include securities listed on 
another national securities exchange pursuant to substantially 
equivalent listing rules. The Exchange proposes to update this list to 
include a reference to Rule 5.2-E(j)(8), consistent with the proposed 
change described above. The Exchange also proposes non-substantive 
changes in two places in Rule 5.2-E(j)(6)(B)(I)(1)(a) to refer to 
``Section 2 of Rule 8-E'' (instead of ``Section 2 of Rule 8'') to 
reflect the current NYSE Arca rule numbering convention. Finally, the 
Exchange proposes non-substantive changes to delete the extra spaces 
that appear in the term ``Index-Linked Securities'' in Rules 5.2-
E(j)(6)(B)(I)(1)(b)(ii), 5.2-E(j)(6)(B)(I)(2)(a)(i), and 5.2-
E(j)(6)(B)(I)(2)(a)(ii).
    The Exchange notes that the inclusion of Exchange-Traded Fund 
Shares in the group of Derivative Securities Products that are excepted 
from the generic listing and continued listing criteria specified above 
for Equity Index-Linked Securities would align the Exchange's rules 
with the listing criteria for Equity Index-Linked Securities on at 
least one other equity exchange.\6\
---------------------------------------------------------------------------

    \6\ See, e.g., BZX Rule 14.11(d)(2)(K)(i)(a) (describing listing 
criteria for Equity Index-Linked Securities, including that ``each 
underlying index is required to have at least ten (10) component 
securities; provided, however, that there shall be no minimum number 
of component securities if one or more issues of Derivative 
Securities Products (which are defined in Rule 
14.11(c)(3)(A)(i)(a)). . .constitute, at least in part, component 
securities underlying an issue of Equity Index-Linked Securities''); 
BZX Rule 14.11(c)(3)(A)(i)(a) (defining ``Derivative Securities 
Products'' to include Index Fund Shares, Portfolio Depositary 
Receipts, Trust Issued Receipts, ETF Shares, and Managed Fund 
Shares); and BZX 14.11(l) (defining Exchange-Traded Fund Shares or 
ETF Shares). Cf. Nasdaq Rule 5705(b)(3)(A)(i)(a) (describing listing 
criteria for Index Fund Shares, including that ``Component stocks 
(excluding ``Derivative Securities Products'' as defined in this 
subsection a.) that in the aggregate account for at least 90% of the 
weight of the U.S. Component Stocks portion of the index or 
portfolio (excluding Derivative Securities Products) each shall have 
a minimum market value of at least $75 million'' and defining 
``Derivative Securities Products'' as including Exchange Traded Fund 
Shares listed under Nasdaq Rule 5704).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\8\ in particular, because it 
is designed to remove impediments to and perfect the mechanism of a 
free and open market, to promote just and equitable principles of 
trade, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) & (5).
---------------------------------------------------------------------------

    The proposed rule change with respect to the definition of ``UTP 
Derivative Securities Products'' in Rule 1.1 is designed to remove 
impediments to and perfect the mechanism of a free and open market, 
promote just and equitable principles of trade, and, in general, to 
protect investors and the public interest because it modifies Rule

[[Page 61559]]

1.1 to state the complete list of Derivative Securities Products that 
may trade on a UTP basis on the Exchange, providing specificity, 
clarity, and transparency in the Exchange's rules. Moreover, the 
proposed rule change would facilitate the trading of additional types 
of Derivative Securities Products on the Exchange pursuant to UTP, 
thereby enhancing competition among market participants for the benefit 
of investors and the marketplace.
    The Exchange believes that the proposed change with respect to Rule 
5.2-E(j)(6) is designed to remove impediments to and perfect the 
mechanism of a free and open market, promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest because including Exchange-Traded Fund Shares as 
Derivative Securities Products excepted from certain generic listing 
and continued listing criteria for Equity Index-Linked Securities would 
facilitate the listing and trading of additional types of Equity Index-
Linked Securities. The Exchange further believes the proposed change 
would remove impediments to and perfect the mechanism of a free and 
open market and promote competition, to the benefit of investors and 
the marketplace, because the proposed change would amend the Exchange's 
rules to be consistent with the listing criteria for Equity Index-
Linked Securities on at least one other equity exchange.\9\
---------------------------------------------------------------------------

    \9\ See note 6, supra.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change would 
provide the public and investors with up-to-date information about the 
types of Derivative Securities Products that can trade on the Exchange 
on a UTP basis and would promote competition by providing for 
additional types of Derivative Securities Products that may trade on 
the Exchange pursuant to UTP. The Exchange also believes that the 
proposed change would encourage competition by enabling additional 
types of Equity Index-Linked Securities to be listed on the Exchange.

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

    Pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) \11\ thereunder, the Exchange has designated this proposal as 
one that effects a change that: (i) does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
organization to give the Commission written notice of its intent to 
file the proposed rule change 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 pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
its filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requested 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. The proposed 
rule change, which adds Exchange-Traded Fund Shares (or Exchange Traded 
Fund Shares, as the case may be) to the definition of ``UTP Derivative 
Securities Product'' in NYSE Arca Rule 1.1 and modifies certain listing 
standards applicable to Equity Index-Linked Securities, conforms to 
substantially similar rules of other exchanges \14\ and raises no 
unique or novel legal or regulatory issues. Therefore, 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 30-day operative delay and designates the 
proposed rule change operative upon filing.\15\
---------------------------------------------------------------------------

    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ See, e.g., BZX Rule 1.5(ee) (incorporating ``Exchange-
Traded Fund Shares'' in the definition of UTP Derivative 
Securities); and BZX Rule 14.11(d)(2)(K)(i)(a) and (b) (setting 
forth the initial and continued listing standards for Equity Index-
Linked Securities).
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSEARCA-2024-61 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-NYSEARCA-2024-61. 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

[[Page 61560]]

Exchange. Do not include personal identifiable information in 
submissions; you should submit only information that you wish to make 
available publicly. We may redact in part or withhold entirely from 
publication submitted material that is obscene or subject to copyright 
protection. All submissions should refer to file number SR-NYSEARCA-
2024-61 and should be submitted on or before August 21, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-16804 Filed 7-30-24; 8:45 am]
BILLING CODE 8011-01-P

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