Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 to a Proposed Rule Change To Adopt Temporary Rule 7.34-E(T) and Revise Rules 1.1 and 7.34-E to Lengthen the Current Extended Trading Sessions, 106709-106715 [2024-30903]

Download as PDF Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices manipulative acts and practices in the specific context of the Proposals. ddrumheller on DSK120RN23PROD with NOTICES1 B. Exchange Act Section 11A(a)(1)(C)(iii) Each Proposal sets forth aspects of its proposed ETP, including the availability of pricing information, transparency of portfolio holdings, and types of surveillance procedures, that are consistent with other ETPs that the Commission has approved.26 This includes commitments regarding: the availability of quotation and last-sale information for the shares of each Trust; the availability on the websites of each Trust of certain information related to the Trusts, including net asset values; the dissemination of intra-day indicative values by one or more major market data vendors, updated every 15 seconds throughout the Exchanges’ regular trading hours; the Exchanges’ surveillance procedures and ability to obtain information regarding trading in the shares of the Trusts; the conditions under which the Exchanges would implement trading halts and suspensions; and the requirements of registered market makers in the shares of each Trust.27 In addition, in each Proposal, the applicable Exchange deems the shares of the applicable Trust to be equity securities, thus rendering trading in such shares subject to that Exchange’s existing rules governing the trading of equity securities.28 Further, the applicable listing rules of each Exchange require that all statements and representations made in its filing regarding, among others, the description of the applicable Trust’s holdings, limitations on such holdings, and the applicability of that Exchange’s listing rules specified in the filing, will constitute continued listing requirements.29 Moreover, each Proposal states that: the applicable Trust will represent to the applicable Exchange that it will advise that Exchange of any failure to comply with the applicable continued listing requirements; pursuant to obligations under Section 19(g)(1) of the Exchange Act, that Exchange will monitor for compliance with the continued listing requirements; and if the applicable Trust is not in compliance with the applicable listing requirements, that 26 See, e.g., Spot Bitcoin ETP Approval Order at 3011; Spot Ether ETP Approval Order at 46941; Second Spot Bitcoin ETP Approval Order at 62822; Second Spot Ether ETP Approval Order at 59787. 27 See Hashdex Filing at 80976–78; Franklin Filing at 15–17, 19–26. 28 See Hashdex Filing at 80977; Franklin Filing at 23. 29 See Nasdaq Rule 5711(d)(iii); BZX Rule 14.11(a). VerDate Sep<11>2014 23:58 Dec 27, 2024 Jkt 265001 Exchange will commence delisting procedures.30 The Commission therefore finds that the Proposals, as with other ETPs that the Commission has approved,31 are reasonably designed to promote fair disclosure of information that may be necessary to price the shares of the Trusts appropriately, to prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material non-public information relating to the Trusts’ portfolios, and to ensure fair and orderly markets for the shares of the Trusts. III. Accelerated Approval of the Franklin Filing The Commission finds good cause to approve the Franklin Filing prior to the 30th day after the date of publication of notice of its Amendment No. 1 32 in the Federal Register. The amendment clarified the description of its Trust; further described the terms of the Trust; and conformed various representations in the amended filing to BZX’s listing standards and to representations that exchanges have made for other ETPs that the Commission has approved.33 The amended filing is now substantially similar to filings for other spot bitcoin ETPs and spot ether ETPs that the Commission has approved,34 and as discussed above in Section II.A, both (i) the spot bitcoin market and the CME bitcoin futures market and (ii) the spot ether market and the CME ether futures market remain consistently highly correlated. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Exchange Act,35 to approve the Franklin Filing on an accelerated basis. IV. Conclusion This approval order is based on all of the Exchanges’ representations and descriptions in their respective amended filings, which the Commission has carefully evaluated as discussed above.36 For the reasons set forth above, 30 See Hashdex Filing at 80977; Franklin Filing at 25. 31 See supra note 26. supra note 4. 33 See also supra Section II.B. 34 See Spot Bitcoin ETP Approval Order; Spot Ether ETP Approval Order; Second Spot Bitcoin ETP Approval Order; Second Spot Ether ETP Approval Order. 35 15 U.S.C. 78s(b)(2). 36 In addition, the shares of the Trust in the Hashdex Filing must comply with the requirements of Nasdaq Rule 5711(d) (Commodity-Based Trust Shares) to be listed and traded on Nasdaq on an initial and continuing basis; and the shares of the Trust in the Franklin Filing must comply with the requirements of BZX Rule 14.11(e)(4) (CommodityBased Trust Shares) to be listed and traded on BZX on an initial and continuing basis. 32 See PO 00000 Frm 00304 Fmt 4703 Sfmt 4703 106709 including the Commission’s correlation analyses, the Commission finds, pursuant to Section 19(b)(2) of the Exchange Act,37 that the Proposals are consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with Section 6(b)(5) and Section 11A(a)(1)(C)(iii) of the Exchange Act.38 It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act,39 that the Hashdex Filing (SR–NASDAQ– 2024–028) be, and hereby is, approved; and that the Franklin Filing (SR– CboeBZX–2024–091) be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.40 Vanessa A. Countryman, Secretary. [FR Doc. 2024–30911 Filed 12–27–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–101985; File No. SR– NYSEARCA–2024–89] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 to a Proposed Rule Change To Adopt Temporary Rule 7.34–E(T) and Revise Rules 1.1 and 7.34–E to Lengthen the Current Extended Trading Sessions December 19, 2024. On October 25, 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 adopt temporary rule 7.34– E(T) and revise rules 1.1 and 7.34–E to lengthen the current extended trading sessions. The proposed rule change was published for comment in the Federal Register on November 14, 2024.3 On December 13, 2024, the Exchange filed Amendment No. 1 to the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. Amendment No. 1 37 15 U.S.C. 78s(b)(2). U.S.C. 78f(b)(5); 15 U.S.C. 78k– 1(a)(1)(C)(iii). 39 15 U.S.C. 78s(b)(2). 40 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 101559 (November 7, 2024), 89 FR 90143 (‘‘Initial Proposal’’). 38 15 E:\FR\FM\30DEN1.SGM 30DEN1 106710 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices amended and replaced 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 adopt temporary Rule 7.34–E(T) and revise Rules 1.1 and 7.34–E to permit the Exchange to lengthen the current extended trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday. This Amendment No. 1 supersedes the Initial Proposal in its entirety. The text of 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 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. ddrumheller on DSK120RN23PROD with NOTICES1 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to adopt temporary Rule 7.34–E(T) and revise Rules 1.1 (Definitions) and 7.34–E (Trading Sessions) to permit the Exchange to lengthen current extended trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday. The Exchange also proposes certain technical, conforming changes to Rule 5.1–E(a) (General Provisions and Unlisted Trading Privileges) and Commentary .08 to Rule 9.5320–E (Prohibition Against Trading Ahead of Customer Orders). Background The Exchange currently offers three trading sessions each day the Exchange VerDate Sep<11>2014 01:30 Dec 28, 2024 Jkt 265001 is open for business unless the Exchange determines otherwise, as follows. The Exchange’s first trading session, the Early Trading Session, begins at 4:00 a.m. Eastern Time (‘‘E.T.’’) and concludes at the commencement of the Core Trading Session.4 The Exchange begins accepting orders 90 minutes before the Early Trading Session begins.5 The second or Core Trading Session begins for each security at 9:30 a.m. E.T. and ends at the conclusion of Core Trading Hours or the Core Closing Auction, whichever comes later.6 The final session is the Late Trading Session, which begins following the conclusion of the Core Trading Session and concludes at 8:00 p.m. E.T. Current Rule 7.34–E(b) requires that orders entered into the Exchange marketplace include a designation for which trading session(s) the order will remain in effect. The Exchange will reject orders entered without a trading session designation. An order is only eligible to participate in the designated trading session(s) and may remain in effect for one or more consecutive trading sessions on a particular day. Unless otherwise specified, an order designated for a later trading session will be accepted but not eligible to trade until the designated trading session begins. The Exchange will reject orders designated solely for a trading session that has already ended. Current Rule 7.34–E(c) describes the order types that are permitted in each session, as follows. Early Trading Session Orders and modifiers defined in Rule 7.31–E designated for the Early Trading Session are eligible to participate in the Early Trading Session unless otherwise specified in Rule 7.34–E(c)(1)(A)–(F). Pursuant to Rule 7.34–E(c)(1)(A), Market Orders and Pegged Orders are not eligible to participate in the Early Trading Session, and such orders that include a designation for the Early Trading Session will be rejected. Market Pegged Orders and Discretionary Pegged Orders, regardless of the session designated for the order, may not be entered before or during the Early Trading Session and will also be rejected. Under Rule 7.34–E(c)(1)(B), Limit Orders designated Immediate or Cancel (‘‘IOC’’) are ineligible to participate in the Early Open Auction 4 See Rule 7.34–E(a)(1). 5 See id. 6 See Rule 7.34–E(a)(2). ‘‘Core Trading Hours’’ means the hours of 9:30 a.m. E.T. through 4:00 p.m. E.T. or such other hours as may be determined by the Exchange from time to time. See Rule 1.1. PO 00000 Frm 00305 Fmt 4703 Sfmt 4703 and will be rejected if entered before the Early Open Auction concludes. Pursuant to Rule 7.34–E(c)(1)(C), Limit Orders designated IOC entered before or during the Early Trading Session and designated for the Core Trading Session will be rejected if entered before the Auction Processing Period for the Core Open Auction. Rule 7.34–E(c)(1)(D) provides that for securities that are not eligible for an auction on the Exchange, Market Orders designated for the Core Trading Session and Auction-Only Orders will be routed to the primary listing market on arrival. Any order routed directly to the primary listing market on arrival will be cancelled if that market is not accepting orders. Pursuant to Rule 7.34–E(c)(1)(E), Market-on-Open Orders (‘‘MOO Orders’’), Market-on-Close Orders (‘‘MOC Orders’’), Limit-on-Close Orders (‘‘LOC Orders’’), Primary Only Orders, and Directed Orders designated for the Early Trading Session will be rejected. Finally, pursuant to Rule 7.34– E(c)(1)(F), Non-Displayed Limit Orders, Mid-Point Liquidity Orders (‘‘MPL Orders’’), Tracking Orders, and RPI Orders entered before the Auction Processing Period for the Early Open Auction concludes will also be rejected. Core Trading Session All orders and modifiers defined in Rule 7.31–E that are designated for the Core Trading Session are eligible to participate in the Core Trading Session unless otherwise specified in Rules 7.34–E(c)(2)(A)–(C). Pursuant to Rule 7.34–E(c)(2)(A), Market Orders in securities that are not eligible for the Core Open Auction will be routed to the primary listing market until the first opening print of any size on the primary listing market or 10:00 a.m. E.T., whichever is earlier. Pursuant to Rule 7.34–E(c)(2)(B), Auction-Only Orders in securities that are not eligible for an auction on the Exchange will be accepted and routed directly to the primary listing market. Finally, Rule 7.34–E(c)(2)(C) provides that Limit Orders designated IOC entered before or during the Core Trading Session and designated for the Late Trading Session will be rejected if entered before the Auction Processing Period for the Closing Auction. Late Trading Session The orders and modifiers defined in Rule 7.31–E that are designated for the Late Trading Session are eligible to participate in the Late Trading Session unless otherwise specified in Rules 7.34–E(c)(3)(A)–(C). E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices Pursuant to Rule 7.34–E(c)(3)(A), Market Orders and Pegged Orders are not eligible to participate in the Late Trading Session. The Exchange will reject Market Orders and Pegged Orders that include a designation for the Late Trading Session. Further, under Rule 7.34–E(c)(3)(B), orders that are routed directly to the primary listing market on arrival will be cancelled if that market is not accepting orders. Finally, pursuant to Rule 7.34–E(c)(3)(C), MOO Orders, MOC Orders, LOC Orders, Primary Only Orders, and Directed Orders designated for the Late Trading Session will be rejected. ddrumheller on DSK120RN23PROD with NOTICES1 Customer Disclosures Rule 7.34–E(d) provides that no ETP Holder may accept an order from a nonETP Holder for execution in the Early or Late Trading Session without disclosing to such non-ETP Holder that Limit Orders are the only orders that are eligible for execution during the Early and Late Trading Sessions 7 and that an order must be designated specifically for trading in the Early and/or Late Trading Session to be eligible for trading in the Early and/or Late Trading Session.8 In addition, Rule 7.34–E(d)(3) provides that an ETP Holder must disclose to non-ETP Holders that extended hours trading involves material trading risks, including the possibility of lower liquidity, high volatility, changing prices, unlinked markets, an exaggerated effect from news announcements, wider spreads and any other relevant risk. The absence of an updated underlying index value or intraday indicative value is an additional trading risk in extended hours for Derivative Securities Products. The disclosures required pursuant to Rule 7.34–E(d)(3) may take the form described in subparagraphs (1) through (7) thereunder or such other form as provides substantially similar information, including risks of lower liquidity; higher volatility; changing prices; unlinked markets; news announcements; wider spreads; and lack of calculation or dissemination of underlying index value or intraday indicative value. Finally, Rule 7.34–E(e) provides that trades on the Exchange executed and reported outside of the Core Trading Session are designated as .T trades. Proposed Rule Change As recently announced,9 the Exchange proposes to facilitate the 7 See Rule 7.34–E(d)(1). id. at (d)(2). 9 See ‘‘The New York Stock Exchange Plans to Extend Weekday Trading on its NYSE Arca Equities 8 See VerDate Sep<11>2014 23:58 Dec 27, 2024 Jkt 265001 trading of NMS securities on the Exchange beginning at 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday. The Exchange would retain the current structure of the Early and Late Trading Sessions, including eligible order types and required disclosures as described above, while extending the beginning of the Early Trading Session and end time of the Late Trading Session and accepting orders earlier than currently. To effectuate these changes, the Exchange proposes to adopt a temporary Rule 7.34–E titled ‘‘7.34–E(T).’’ The proposed temporary rule would be identical to current Rule 7.34–E with three exceptions. First, the beginning and ending times of the Early and Late Trading Sessions, respectively, as set forth in Rule 7.34– E(a)(1) and (3) would be changed to reflect the proposed longer extended trading hours. The Exchange proposes to end the Late Trading Session at 8:00 p.m. E.T. on Friday in order to maximize the available time to make changes at the end of the week before weekend testing. Second, the Exchange would shorten the time it will begin accepting orders before commencement of the Early Trading Session as set forth in proposed Rule 7.34–E(a)(1) from 90 minutes to 30 minutes such that orders would be accepted beginning at 1:00 a.m. E.T. The Exchange does not propose to change the time when the Core Trading Session would begin or end or make any other rule changes impacting the Core Trading Session. Third, the Exchange proposes to supplement its current customer disclosures set forth in proposed Rule 7.34–E(d)(3) to add six additional potential risks associated with Extended Hours Trading based on the recently approved rules of 24X National Exchange LLC,10 as follows: • Proposed Rule 7.34–E(d)(viii) would address the potential risks of trading during when financial market infrastructure companies such as other markets, banks, Fedwire Funds Service, and certain other providers of settlement services, would be closed. Exchange to 22 Hours a Day,’’ October 25, 2024, available at https://ir.theice.com/press/newsdetails/2024/The-New-York-Stock-Exchange-Plansto-Extend-Weekday-Trading-on-its-NYSE-ArcaEquities-Exchange-to-22-Hours-a-Day/default.aspx. 10 See Securities Exchange Act Release No. 101777 (November 27, 2024), 89 FR 97092, 97110– 111 (December 06, 2024) (In the Matter of the Application of 24X National Exchange LLC for Registration as a National Securities Exchange; Findings, Opinion, and Order of the Commission) (‘‘Release No. 101777’’); see 24X Rule 3.21(g) & (i)(1)–(5). PO 00000 Frm 00306 Fmt 4703 Sfmt 4703 106711 The proposed rule would advise that during hours in which these financial market infrastructure companies are closed may lead to an increased passage of time between execution and final settlement of the resulting transaction. Proposed Rule 7.34–E(d)(viii) is based on and substantially the same as 24X Rule 3.21(g). • Proposed Rule 7.34–E(d)(ix) would address the potential risks of trading during hours in which primary listing markets may not be open. As proposed, proposed [sic] Rule 7.34–E(d)(ix) would provide that during Extended Hours Trading, the primary listing exchanges for securities traded on the Exchange may not be open and, thus, trading in listed securities may not be occurring on the primary listing exchanges. The proposed rule would also advise customers that the primary listing exchanges may not be available to perform their regulatory surveillance and other regulatory obligations with regard to their listed securities during Extended Hours Trading. Proposed Rule 7.34–E(d)(ix) is based on and substantially the same as 24X Rule 3.21(i)(1). • Proposed Rule 7.34–E(d)(x) would address the potential risks of trading during hours in which there may be limited or different regulatory protections. As proposed, the rule would advise that the regulatory protections available during Extended Hours Trading may be more limited or different than those available during the Core Trading Session. For example, the proposed rule would note that certain mechanisms that address volatility in individual symbols and the equities market may not be available during Extended Hours Trading. Proposed Rule 7.34–E(d)(x) is based on and substantially the same as 24X Rule 3.21(i)(2). • Proposed Rule 7.34–E(d)(xi) would address the potential risk of trading because of limited trading alternatives. As proposed, the rule would advise that Exchange may be the only exchange trading certain securities during Extended Hours Trading and that, with more limited trading alternatives during Extended Hours Trading, customers may experience losses if their orders cannot be executed normally due to systems failures or other issues on the Exchange. Proposed Rule 7.34–E(d)(xi) is based on and substantially the same as 24X Rule 3.21(i)(3). • Proposed Rule 7.34–E(d)(xii) would address the potential risk related to continuous trading during Extended Hours Trading. As proposed, the rule would advise that, with more limited breaks in trading, there may be a greater E:\FR\FM\30DEN1.SGM 30DEN1 ddrumheller on DSK120RN23PROD with NOTICES1 106712 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices risk related to system maintenance and testing, as well as the pausing and resumption of trading. Proposed Rule 7.34–E(d)(xii) is based on and substantially the same as 24X Rule 3.21(i)(4). • Finally, proposed Rule 7.34– E(d)(xiii) would advise that Extended Hours Trading may present additional unforeseen risks in addition to those discussed above. Proposed Rule 7.34– E(d)(xiii) is based on and substantially the same as 24X Rule 3.21(i)(5). The current version of Rule 7.34–E would remain operative until transition to the proposed new Extended Trading Hours set forth in Rule 7.34–E(T)(a) becomes operative. As proposed, the Exchange would not commence operation of Extended Hours Trading as set forth in Rule 7.34–E(T)(a) unless the Equity Data Plans (as proposed to be defined in Rule 1.1, discussed below) have established a mechanism to collect, consolidate, process and disseminate quotation and transaction information at all times during Extended Trading Hours that is equivalent to the mechanism established for the Core Trading Session, and (2) have provided the Exchange with notification that they are prepared to collect, consolidate, process and disseminate quotation and transaction information to accommodate Extended Trading Hours. Specifically, prior to commencing operation during Extended Hours Trading as set forth in Rule 7.34–E(T)(a), the Exchange will file a proposed rule change pursuant to Section 19(b) of the Act and the rules thereunder to amend its rules to delete the current version of Rule 7.34–E and preamble and delete the ‘‘T’’ designation in Rule 7.34–E(T), and confirm that the Exchange is able to comply with its obligations under the Act and the rules thereunder during Extended Trading Hours and that such Equity Data Plans are prepared to collect, consolidate, process and disseminate quotation and transaction information at all times during Extended Trading Hours. The Exchange believes that these limitations are designed to reasonably ensure that consolidated quotation and transaction data are provided in a manner that is consistent with the existing extended hours sessions on exchanges.11 The Exchange would accordingly add the following legend to current Rule 7.34–E (new text italicized): This version of Rule 7.34–E will remain operative until Extended Hours Trading as set forth in Rule 7.34–E(T) is operative. For the avoidance of doubt, notwithstanding 11 See Release No. 101777, 89 FR at 97105. VerDate Sep<11>2014 23:58 Dec 27, 2024 Jkt 265001 anything to the contrary in these Rules, the Exchange shall not commence operation of Extended Hours Trading as set forth in Rule 7.34–E(T) unless the Equity Data Plans (1) have established a mechanism to collect, consolidate, process and disseminate quotation and transaction information at all times during Extended Trading Hours that is equivalent to the mechanism established for the Core Trading Session, and (2) have provided the Exchange with notification that they are prepared to collect, consolidate, process and disseminate quotation and transaction information to accommodate Extended Trading Hours. Prior to commencing operation during Extended Hours Trading as set forth in Rule 7.34–E(T), the Exchange will file a proposed rule change pursuant to Section 19(b) of the Exchange Act and the rules thereunder to amend its rules to delete the current version of Rule 7.34–E and preamble and delete the ‘‘T’’ designation in Rule 7.34–E(T), and confirm that the Exchange is able to comply with its obligations under the Exchange Act and the rules thereunder during Extended Trading Hours and that such Equity Data Plans are prepared to collect, consolidate, process and disseminate quotation and transaction information at all times during Extended Trading Hours. The rule change must be filed with the SEC within 18 months of the SEC’s approval of the Exchange’s rule filing adopting Rule 7.34–E(T). If the Exchange fails to file such a rule change within 18 months of approval of Rule 7.34–E(T), the Exchange will promptly file a proposed rule change to delete Rule 7.34–E(T). The proposed language is substantially the same as text contained in 24X Rule 1.5(c) (Definitions). The Exchange would also revise current Rule 1.1 to add two definitions. First, the Exchange would define ‘‘Equity Data Plans’’ to mean the effective national market system plan(s) governing the collection, consolidation, processing and dissemination of consolidated equity market data via the exclusive securities information processors (‘‘SIPs’’), including (1) Consolidated Tape Association Plan (‘‘CTA Plan’’), (2) Consolidated Quotation Plan (‘‘CQ Plan’’), (3) the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for NasdaqListed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis (‘‘UTP Plan’’), (4) the CT Plan established by the Limited Liability Company Agreement of CT Plan LLC, and (5) any successor thereto to the named Plan(s). Except for the reference to the CT Plan established by the Limited Liability Company Agreement of CT Plan LLC, the proposed definition is the same as 24X Rule 1.5(o). Second, the Exchange would define Extended Hours Trading to mean trading during the Early Trading Session PO 00000 Frm 00307 Fmt 4703 Sfmt 4703 and the Late Trading Session. The term is used without capitalization in current Rule 7.34–E(d) describing required customer disclosures. The Exchange proposes to use the proposed definition in proposed Rule 7.34–E(T)(d) and current Rule 7.34–E(d), with the exception of subsection (d)(4) of the current and proposed temporary rules, which use the phrase generically. The Exchange believes the proposal would add transparency and clarity to the Exchange’s rules. The Exchange would also make certain technical, conforming changes to Rule 5.1–E(a) and Commentary .08 to Rule 9.5320–E as follows. First, the Exchange would replace obsolete references to the ‘‘Opening session’’ and ‘‘Late Trading Session’’ and the associated session start and end times in Pacific Time in Rule 5.1– E(a)(2)(i) with the defined term ‘‘Extended Hours Trading.’’ The Exchange would also delete a stray period at the end of the rule heading. The proposed changes would add transparency and clarity to the Exchange’s rules. Finally, the Exchange would replace the obsolete reference to ‘‘6:30 a.m. to 1:00 p.m. Pacific Standard Time’’ in Commentary .08 to Rule 9.5320–E with ‘‘the Core Trading Session.’’ The proposed change would also add transparency and clarity to the Exchange’s rules. The Exchange believes that the proposal will benefit investors and the national market system by increasing market accessibility, promoting capital formation, and facilitating portfolio management. The proposed extended trading sessions would operate in the same fashion as the current sessions, and the rules that apply to the current sessions would apply to the proposed longer Early and Late Trading Sessions in unmodified form. In addition, all NMS stocks would continue to be eligible to trade in the proposed longer extended hours sessions. Moreover, as discussed below, the existing safeguards applicable to pre-market and postmarket sessions including, among other things, operational safeguards, availability of consolidated last sale and quotation information, and specific disclosures to investors regarding the heightened risks of after-hours trading, and market surveillance capabilities, would be applicable to the proposed extended Early and Late Trading Sessions. Operations As noted, the proposed longer trading sessions will operate in the same way as the current sessions from an operational E:\FR\FM\30DEN1.SGM 30DEN1 ddrumheller on DSK120RN23PROD with NOTICES1 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices perspective. All order types eligible for such sessions and order type behaviors will remain unchanged. The Exchange will also route to away markets between 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday, just as it currently does between 4:00 a.m. E.T. and 9:30 a.m. E.T. and between 4:00 p.m. E.T. and 8:00 p.m. E.T. Order processing during the proposed longer trading sessions will also function the same way as it does in the current sessions. There will be no changes to the ranking, display, or decrementation processes or rules. The Exchange will report the best bid and offer on the Exchange to the appropriate network processor, as it currently does beginning at 4:00 a.m. E.T. using the same formats and delivery mechanisms. Trades executed and reported outside of the Core Trading Session as proposed will be reported to the appropriate network processor with the ‘‘.T’’ modifier, just as currently. No fee changes are proposed in connection with this proposal. In addition, the Exchange will continue to work with primary listing exchanges to coordinate trading halts where appropriate, including halts implemented due to significant material events (i.e., a bankruptcy declaration). During the proposed extended Early and Late Trading Sessions, the Exchange would pause trading in the underlying security until trading resumes on the primary listing market for the security. Generally, regardless of trading session, when a halt has been declared on the primary market, the Exchange will also halt trading automatically in the subject security on NYSE Arca. Exchange staff will be available during the proposed extended trading sessions in order to maintain a fair and orderly market, make any necessary rulings or take any action that may be necessary. Similarly, Exchange staff will be available if any action such as declaration of a halt in a NYSE Arca primary symbol would be necessary in the event of a system malfunction or significant material event such as a bankruptcy declaration. The Exchange notes that, to the extent material corporate news is released during the Extended Trading Hours and the primary listing market does not impose a halt, the requirements of proposed Rule 7.34–E(T)(d)(3)(v) (which is part of the current rule) and proposed Rules 7.34–E(T)(d)(3)(viii)–(xiii) that disclosures be provided to investors relating to the risks associated with news announcements and the additional risks of trading during Extended Trading Hours, respectively, will help ensure that market participants, VerDate Sep<11>2014 23:58 Dec 27, 2024 Jkt 265001 including investors, are informed about the potential risks associated with trading during that time period.12 Securities Information Processor (‘‘SIP’’) Readiness The Exchange will submit all quotes and trades that are generated in the extended Early and Late Trading Session to the consolidated quote and trade systems maintained by the SIPs for public dissemination. Accordingly, once these extended trading hours are operative, quotes and trades will be made available to the investing public in the same manner that quotes and trades are currently made available. The two SIPs—the Securities Industry Automation Corporation (‘‘SIAC’’) and Nasdaq—both currently operate from 4:00 a.m. E.T. through 8:00 p.m. E.T. The Exchange has informed both SIPs, as well as the Operating Committee of the CTA and the CQ Plans and the UTP Plan (collectively, the ‘‘Operating Committee’’), of its intention to extend trading hours to commence at 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday, and has submitted change requests to both SIPs requesting that the SIPs similarly extend their hours of operation. The Exchange will work with the Operating Committee and the SIPs regarding the extension of the SIPs’ operating hours and, in the near term, expects to request a vote of the Operating Committee instructing the SIPs to proceed with such extension. As noted above, the Exchange will not make the proposed extended hours operative unless the Equity Data Plans have established a mechanism to collect, consolidate, process and disseminate quotation and transaction information at all times during Extended Trading Hours that is equivalent to the mechanism established for the Core Trading Session, and provided the Exchange with notification that they are prepared to collect, consolidate, process and disseminate quotation and transaction information to accommodate Extended Trading Hours. As also previously noted, at that point the Exchange will file a proposed rule change to, among other things, confirm that such Equity Data Plans are prepared to collect, consolidate, process and disseminate quotation and transaction information at all times during Extended Trading Hours. Market Surveillance Trading on the Exchange is subject to a comprehensive regulatory program applicable to the current Early, Core, and Late Trading Sessions that includes a suite of surveillances that reviews trading during each trading session as well as routine examinations of ETP Holders consistent with the current exam-based regulatory program. The Exchange’s current regulatory program would be fully applicable to trading in the proposed extended Early and Late Trading Sessions. Customer Disclosures As noted above, given the potential trading and other risks of extended hours trading Products, Rule 7.34–E(d) prohibits ETP Holders from accepting orders from non-ETP Holders for execution during the Early or Late Trading Session without making the specified disclosures in the Rule. As further discussed above, the Exchange proposes to enhance these disclosures by including additional mandatory disclosures regarding the potential risks associated with trading during Extended Hours Trading based on recently approved 24X Rule 3.21.13 The Exchange notes that Rule 7.34–E(d), as amended, would be fully applicable to the proposed extended trading sessions and would place the same disclosure obligation on ETP Holders. Implementation The Exchange will begin accepting orders for the extended Early and Late Trading Session as set forth in proposed Rule 7.34–E(T) subject to the effectiveness of this proposed rule change and subject to the conditions set forth in the proposed legend to current Rule 7.34–E described above. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,14 in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. Generally, the Exchange believes that the proposal, including the proposed temporary rule to support longer extended hours trading, would remove 13 See 12 See PO 00000 Release No. 101777, 89 FR at 97109. Frm 00308 Fmt 4703 Sfmt 4703 106713 14 15 E:\FR\FM\30DEN1.SGM text accompanying note 10, supra. U.S.C. 78f(b)(5). 30DEN1 ddrumheller on DSK120RN23PROD with NOTICES1 106714 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices impediments to and perfect the mechanism of a free and open market and a national market system by providing a rules framework to support the lengthening of the current extended trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday, which the Exchange believes will increase market accessibility, promote capital formation, and facilitate portfolio management. The Exchange further believes that adopting a temporary rule that would only be operative upon transition to the new proposed Extended Trading Hours, and adding a legend to the current version of Rule 7.34–E specifying that the current rule will remain operative until that time, would promote transparency in Exchange rules and add clarity as to which rules are operative and when, thereby reducing potential confusion, and making the Exchange’s rules easier to navigate. Moreover, the proposed legend would provide that the Exchange will not commence operation of the longer Extended Trading Hours prior to filing a proposed rule change to amend its rules confirming that the Exchange is able to comply with its obligations under the Act during the longer extended trading session and that the Equity Data Plans are prepared to collect, consolidate, process and disseminate quotation and transaction information at all times during the proposed Extended Trading Hours. This requirement would promote transparency because trading will not occur unless the Equity Data Plans are able to collect, consolidate, process and disseminate consolidated quotation and transaction data during the proposed longer session. The requirement would also be designed to ensure that consolidated quotation and transaction data are provided in a manner that is consistent with the Exchange’s current extended hours sessions, and that the proposed change is thus designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to and facilitating transactions in NMS stocks, and perfect the mechanism of a free and open market and a national market system. Finally, the Exchange believes that applying the current requirements for extended hours trading such as order designation, permitted orders, and mandatory customer disclosures as well as the operational and regulatory safeguards already in place for the VerDate Sep<11>2014 23:58 Dec 27, 2024 Jkt 265001 current Early, Core, and Late Sessions to the proposed extended sessions, would promote just and equitable principles of trade and protect investors and the public interest. In addition, the proposed enhanced disclosures based on the approved rules of another exchange will, together with the existing disclosures, provide investors with important information that should help to inform their decisions as to whether trading during the Exchange’s proposed longer extended hours is suitable for them. The Exchange believes that the expanded customer disclosures are consistent with the Act and, in particular, the Section 6(b)(5) 15 requirement that an exchange’s rules be designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system, and protect investors and the public interest. The Exchange believes that adding a definition of Equity Data Plan to Rule 1.1 would remove impediments to and perfect the mechanism of a free and open market and national market system by adding clarity and transparency to the Exchange’s rules with respect to the a [sic] critical element that must be in place for the proposed longer extended trading session. As discussed above, trading in the new extended session will not occur unless the Equity Data Plans are able to collect, consolidate, process and disseminate consolidated quotation and transaction data during the new session. Similarly, the Exchange believes that adding a definition of Extended Hours Trading to Rule 1.1 would remove impediments to and perfect the mechanism of a free and open market and national market system by adding clarity to the Exchange’s rules through the introduction of a definition that can be utilized immediately and that would not need to be updated once the Exchange migrates to 22 hour trading, 5 days a week. The Exchange further believes that eliminating obsolete legacy material from Rule 5.1– E(a) and Commentary .08 to Rule 9.5320–E similarly removes impediments to and perfects the mechanism of a free and open market by removing confusion that may result from having obsolete material in the Exchange’s rulebook. The Exchange believes that eliminating such obsolete material would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from increased transparency, thereby reducing potential confusion. 15 15 PO 00000 U.S.C. 78f(b)(5). Frm 00309 Fmt 4703 Sfmt 4703 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is designed to propose rule changes to lengthen the current extended trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday. The Exchange operates in a highly competitive environment in which unaffiliated exchange competitors and new entrants could compete to offer extended hours trading of similar duration, and the proposal would therefore enable the Exchange to compete on a more level playing field with these competitors. 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. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 1, 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–2024–89 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–2024–89. 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 E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices 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–NYSEARCA–2024–89 and should be submitted on or before January 21, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Vanessa A. Countryman, Secretary. [FR Doc. 2024–30903 Filed 12–27–24; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–102006; File No. SR– NASDAQ–2024–085] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Exchange Rules 1015, 9261, 9341, 9524 and 9830 To Permit Hearings by Video Conference ddrumheller on DSK120RN23PROD with NOTICES1 December 19, 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 December 19, 2024, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. CFR 200.30–3(a)(12). 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 VerDate Sep<11>2014 23:58 Dec 27, 2024 Jkt 265001 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P 16 17 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Exchange Rules 1015, 9261, 9341, 9524 and 9830 to allow for video conference hearings before the Office of Hearing Officers (‘‘OHO’’) and the Exchange Review Council (‘‘ERC’’) under specified conditions. 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. 1. Purpose The Exchange proposes to harmonize Exchange Rules 1015, 9261, 9341, 9524 and 9830 with changes by the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) to its Rules 1015, 9261, 9341, 9524 and 9830 that would allow for the use of video conference for reasons in addition to COVID–19. The proposal also deletes expired references to temporary amendments.3 The Exchange originally filed proposed rule change SR–NASDAQ–2020–076, which allowed the Exchange’s Office of Hearing Officers (‘‘OHO’’) and the Exchange Review Council (‘‘ERC’’) to conduct hearings, on a temporary basis, by video conference, if warranted by the COVID– 19-related public health risks posed by an in-person hearing.4 These were extended several times due to the continuing public health risks and 3 See Securities Exchange Act Release No. 96282 (November 9,2022), 87 FR 68788 (November 16, 2022) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ–2022–059) (temporary amendments expiring on January 31, 2023). 4 See Securities Exchange Act Release No. 90390 (November 10, 2020), 85 FR 73302 (November 17, 2020) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ–2020–076). PO 00000 Frm 00310 Fmt 4703 Sfmt 4703 106715 logistical challenges related to COVID– 19, including whether hearing participants could safely travel and abide by state or local quarantine requirements.5 The use of high quality, secure and user-friendly video conference technology in hearings has demonstrated that video is an effective and efficient alternative to in-person hearings.6 The Exchange is proposing to make the temporary amendments regarding video conference hearings permanent, with some modifications that would allow for the use of video conference for reasons in addition to COVID–19. The proposed rule change will continue to improve and modernize the Exchange’s operations so that parties, panelists, and the Exchange staff may proceed expeditiously by video conference in the event of certain circumstances, including where unforeseen events make appearing in person difficult or impracticable. As described below, impracticability is intended to account for an uncommon situation or extraordinary circumstance. The proposed rule change further promotes efficiency by giving OHO and the ERC authority to act quickly if a future unexpected event impaired their ability to conduct in-person hearings safely. OHO conducts hearings in disciplinary proceedings and hearings for temporary and permanent cease and desist orders. When orders in disciplinary proceedings are appealed, the ERC holds hearings on oral argument. The ERC also conducts hearings in membership proceedings and eligibility proceedings. Under the proposed rule change, OHO and the ERC’s authority to order hearings by 5 See Securities Exchange Act Release No. 90774 (December 22, 2020), 85 FR 86614 (December 30, 2020) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ–2020–092); Securities Exchange Act Release No. 91763 (May 4, 2021), 86 FR 25055 (May 10, 2021) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ– 2021–033); Securities Exchange Act Release No. 92911 (September 9, 2021), 86 FR 51395 (September 15, 2021) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ–2021–067); Securities Exchange Act Release No. 93852 (December 22, 2021), 86 FR 74201 (December 29, 2021) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ–2021–104); Securities Exchange Act Release No. 94610 (April 5, 2022), 87 FR 21225 (April 11, 2022) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ– 2022–028); Securities Exchange Act Release No. 95436 (August 5, 2022), 87 FR 49624 (August 11, 2022) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ–2022–044); Securities Exchange Act Release No. 96282 (November 9,2022), 87 FR 68788 (November 16, 2022) (Notice of Filing and Immediate Effectiveness of File No. SR–NASDAQ–2022–059). 6 See Securities Exchange Act Release No. 97403 (April 28, 2023), 88 FR 28645 (May 4, 2023) (SR– FINRA–2023–008). E:\FR\FM\30DEN1.SGM 30DEN1

Agencies

[Federal Register Volume 89, Number 249 (Monday, December 30, 2024)]
[Notices]
[Pages 106709-106715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30903]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101985; File No. SR-NYSEARCA-2024-89]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 1 to a Proposed Rule Change To Adopt Temporary Rule 
7.34-E(T) and Revise Rules 1.1 and 7.34-E to Lengthen the Current 
Extended Trading Sessions

December 19, 2024.
    On October 25, 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 adopt temporary rule 7.34-E(T) and revise rules 
1.1 and 7.34-E to lengthen the current extended trading sessions. The 
proposed rule change was published for comment in the Federal Register 
on November 14, 2024.\3\ On December 13, 2024, the Exchange filed 
Amendment No. 1 to the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. Amendment No. 
1

[[Page 106710]]

amended and replaced 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 101559 (November 7, 
2024), 89 FR 90143 (``Initial Proposal'').
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt temporary Rule 7.34-E(T) and revise 
Rules 1.1 and 7.34-E to permit the Exchange to lengthen the current 
extended trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 
p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 
p.m. E.T. on Friday. This Amendment No. 1 supersedes the Initial 
Proposal in its entirety.
    The text of 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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt temporary Rule 7.34-E(T) and revise 
Rules 1.1 (Definitions) and 7.34-E (Trading Sessions) to permit the 
Exchange to lengthen current extended trading hours for NMS stocks to 
1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 
1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday. The Exchange also 
proposes certain technical, conforming changes to Rule 5.1-E(a) 
(General Provisions and Unlisted Trading Privileges) and Commentary .08 
to Rule 9.5320-E (Prohibition Against Trading Ahead of Customer 
Orders).
Background
    The Exchange currently offers three trading sessions each day the 
Exchange is open for business unless the Exchange determines otherwise, 
as follows.
    The Exchange's first trading session, the Early Trading Session, 
begins at 4:00 a.m. Eastern Time (``E.T.'') and concludes at the 
commencement of the Core Trading Session.\4\ The Exchange begins 
accepting orders 90 minutes before the Early Trading Session begins.\5\
---------------------------------------------------------------------------

    \4\ See Rule 7.34-E(a)(1).
    \5\ See id.
---------------------------------------------------------------------------

    The second or Core Trading Session begins for each security at 9:30 
a.m. E.T. and ends at the conclusion of Core Trading Hours or the Core 
Closing Auction, whichever comes later.\6\ The final session is the 
Late Trading Session, which begins following the conclusion of the Core 
Trading Session and concludes at 8:00 p.m. E.T.
---------------------------------------------------------------------------

    \6\ See Rule 7.34-E(a)(2). ``Core Trading Hours'' means the 
hours of 9:30 a.m. E.T. through 4:00 p.m. E.T. or such other hours 
as may be determined by the Exchange from time to time. See Rule 
1.1.
---------------------------------------------------------------------------

    Current Rule 7.34-E(b) requires that orders entered into the 
Exchange marketplace include a designation for which trading session(s) 
the order will remain in effect. The Exchange will reject orders 
entered without a trading session designation. An order is only 
eligible to participate in the designated trading session(s) and may 
remain in effect for one or more consecutive trading sessions on a 
particular day. Unless otherwise specified, an order designated for a 
later trading session will be accepted but not eligible to trade until 
the designated trading session begins. The Exchange will reject orders 
designated solely for a trading session that has already ended.
    Current Rule 7.34-E(c) describes the order types that are permitted 
in each session, as follows.
Early Trading Session
    Orders and modifiers defined in Rule 7.31-E designated for the 
Early Trading Session are eligible to participate in the Early Trading 
Session unless otherwise specified in Rule 7.34-E(c)(1)(A)-(F).
    Pursuant to Rule 7.34-E(c)(1)(A), Market Orders and Pegged Orders 
are not eligible to participate in the Early Trading Session, and such 
orders that include a designation for the Early Trading Session will be 
rejected. Market Pegged Orders and Discretionary Pegged Orders, 
regardless of the session designated for the order, may not be entered 
before or during the Early Trading Session and will also be rejected. 
Under Rule 7.34-E(c)(1)(B), Limit Orders designated Immediate or Cancel 
(``IOC'') are ineligible to participate in the Early Open Auction and 
will be rejected if entered before the Early Open Auction concludes. 
Pursuant to Rule 7.34-E(c)(1)(C), Limit Orders designated IOC entered 
before or during the Early Trading Session and designated for the Core 
Trading Session will be rejected if entered before the Auction 
Processing Period for the Core Open Auction.
    Rule 7.34-E(c)(1)(D) provides that for securities that are not 
eligible for an auction on the Exchange, Market Orders designated for 
the Core Trading Session and Auction-Only Orders will be routed to the 
primary listing market on arrival. Any order routed directly to the 
primary listing market on arrival will be cancelled if that market is 
not accepting orders.
    Pursuant to Rule 7.34-E(c)(1)(E), Market-on-Open Orders (``MOO 
Orders''), Market-on-Close Orders (``MOC Orders''), Limit-on-Close 
Orders (``LOC Orders''), Primary Only Orders, and Directed Orders 
designated for the Early Trading Session will be rejected.
    Finally, pursuant to Rule 7.34-E(c)(1)(F), Non-Displayed Limit 
Orders, Mid-Point Liquidity Orders (``MPL Orders''), Tracking Orders, 
and RPI Orders entered before the Auction Processing Period for the 
Early Open Auction concludes will also be rejected.
Core Trading Session
    All orders and modifiers defined in Rule 7.31-E that are designated 
for the Core Trading Session are eligible to participate in the Core 
Trading Session unless otherwise specified in Rules 7.34-E(c)(2)(A)-
(C).
    Pursuant to Rule 7.34-E(c)(2)(A), Market Orders in securities that 
are not eligible for the Core Open Auction will be routed to the 
primary listing market until the first opening print of any size on the 
primary listing market or 10:00 a.m. E.T., whichever is earlier. 
Pursuant to Rule 7.34-E(c)(2)(B), Auction-Only Orders in securities 
that are not eligible for an auction on the Exchange will be accepted 
and routed directly to the primary listing market. Finally, Rule 7.34-
E(c)(2)(C) provides that Limit Orders designated IOC entered before or 
during the Core Trading Session and designated for the Late Trading 
Session will be rejected if entered before the Auction Processing 
Period for the Closing Auction.
Late Trading Session
    The orders and modifiers defined in Rule 7.31-E that are designated 
for the Late Trading Session are eligible to participate in the Late 
Trading Session unless otherwise specified in Rules 7.34-E(c)(3)(A)-
(C).

[[Page 106711]]

    Pursuant to Rule 7.34-E(c)(3)(A), Market Orders and Pegged Orders 
are not eligible to participate in the Late Trading Session. The 
Exchange will reject Market Orders and Pegged Orders that include a 
designation for the Late Trading Session. Further, under Rule 7.34-
E(c)(3)(B), orders that are routed directly to the primary listing 
market on arrival will be cancelled if that market is not accepting 
orders. Finally, pursuant to Rule 7.34-E(c)(3)(C), MOO Orders, MOC 
Orders, LOC Orders, Primary Only Orders, and Directed Orders designated 
for the Late Trading Session will be rejected.
Customer Disclosures
    Rule 7.34-E(d) provides that no ETP Holder may accept an order from 
a non-ETP Holder for execution in the Early or Late Trading Session 
without disclosing to such non-ETP Holder that Limit Orders are the 
only orders that are eligible for execution during the Early and Late 
Trading Sessions \7\ and that an order must be designated specifically 
for trading in the Early and/or Late Trading Session to be eligible for 
trading in the Early and/or Late Trading Session.\8\ In addition, Rule 
7.34-E(d)(3) provides that an ETP Holder must disclose to non-ETP 
Holders that extended hours trading involves material trading risks, 
including the possibility of lower liquidity, high volatility, changing 
prices, unlinked markets, an exaggerated effect from news 
announcements, wider spreads and any other relevant risk. The absence 
of an updated underlying index value or intraday indicative value is an 
additional trading risk in extended hours for Derivative Securities 
Products.
---------------------------------------------------------------------------

    \7\ See Rule 7.34-E(d)(1).
    \8\ See id. at (d)(2).
---------------------------------------------------------------------------

    The disclosures required pursuant to Rule 7.34-E(d)(3) may take the 
form described in subparagraphs (1) through (7) thereunder or such 
other form as provides substantially similar information, including 
risks of lower liquidity; higher volatility; changing prices; unlinked 
markets; news announcements; wider spreads; and lack of calculation or 
dissemination of underlying index value or intraday indicative value.
    Finally, Rule 7.34-E(e) provides that trades on the Exchange 
executed and reported outside of the Core Trading Session are 
designated as .T trades.
Proposed Rule Change
    As recently announced,\9\ the Exchange proposes to facilitate the 
trading of NMS securities on the Exchange beginning at 1:30 a.m. E.T. 
through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. 
through 8:00 p.m. E.T. on Friday. The Exchange would retain the current 
structure of the Early and Late Trading Sessions, including eligible 
order types and required disclosures as described above, while 
extending the beginning of the Early Trading Session and end time of 
the Late Trading Session and accepting orders earlier than currently.
---------------------------------------------------------------------------

    \9\ See ``The New York Stock Exchange Plans to Extend Weekday 
Trading on its NYSE Arca Equities Exchange to 22 Hours a Day,'' 
October 25, 2024, available at https://ir.theice.com/press/news-details/2024/The-New-York-Stock-Exchange-Plans-to-Extend-Weekday-Trading-on-its-NYSE-Arca-Equities-Exchange-to-22-Hours-a-Day/default.aspx.
---------------------------------------------------------------------------

    To effectuate these changes, the Exchange proposes to adopt a 
temporary Rule 7.34-E titled ``7.34-E(T).'' The proposed temporary rule 
would be identical to current Rule 7.34-E with three exceptions.
    First, the beginning and ending times of the Early and Late Trading 
Sessions, respectively, as set forth in Rule 7.34-E(a)(1) and (3) would 
be changed to reflect the proposed longer extended trading hours. The 
Exchange proposes to end the Late Trading Session at 8:00 p.m. E.T. on 
Friday in order to maximize the available time to make changes at the 
end of the week before weekend testing.
    Second, the Exchange would shorten the time it will begin accepting 
orders before commencement of the Early Trading Session as set forth in 
proposed Rule 7.34-E(a)(1) from 90 minutes to 30 minutes such that 
orders would be accepted beginning at 1:00 a.m. E.T. The Exchange does 
not propose to change the time when the Core Trading Session would 
begin or end or make any other rule changes impacting the Core Trading 
Session.
    Third, the Exchange proposes to supplement its current customer 
disclosures set forth in proposed Rule 7.34-E(d)(3) to add six 
additional potential risks associated with Extended Hours Trading based 
on the recently approved rules of 24X National Exchange LLC,\10\ as 
follows:
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    \10\ See Securities Exchange Act Release No. 101777 (November 
27, 2024), 89 FR 97092, 97110-111 (December 06, 2024) (In the Matter 
of the Application of 24X National Exchange LLC for Registration as 
a National Securities Exchange; Findings, Opinion, and Order of the 
Commission) (``Release No. 101777''); see 24X Rule 3.21(g) & (i)(1)-
(5).
---------------------------------------------------------------------------

     Proposed Rule 7.34-E(d)(viii) would address the potential 
risks of trading during when financial market infrastructure companies 
such as other markets, banks, Fedwire Funds Service, and certain other 
providers of settlement services, would be closed. The proposed rule 
would advise that during hours in which these financial market 
infrastructure companies are closed may lead to an increased passage of 
time between execution and final settlement of the resulting 
transaction. Proposed Rule 7.34-E(d)(viii) is based on and 
substantially the same as 24X Rule 3.21(g).
     Proposed Rule 7.34-E(d)(ix) would address the potential 
risks of trading during hours in which primary listing markets may not 
be open. As proposed, proposed [sic] Rule 7.34-E(d)(ix) would provide 
that during Extended Hours Trading, the primary listing exchanges for 
securities traded on the Exchange may not be open and, thus, trading in 
listed securities may not be occurring on the primary listing 
exchanges. The proposed rule would also advise customers that the 
primary listing exchanges may not be available to perform their 
regulatory surveillance and other regulatory obligations with regard to 
their listed securities during Extended Hours Trading. Proposed Rule 
7.34-E(d)(ix) is based on and substantially the same as 24X Rule 
3.21(i)(1).
     Proposed Rule 7.34-E(d)(x) would address the potential 
risks of trading during hours in which there may be limited or 
different regulatory protections. As proposed, the rule would advise 
that the regulatory protections available during Extended Hours Trading 
may be more limited or different than those available during the Core 
Trading Session. For example, the proposed rule would note that certain 
mechanisms that address volatility in individual symbols and the 
equities market may not be available during Extended Hours Trading. 
Proposed Rule 7.34-E(d)(x) is based on and substantially the same as 
24X Rule 3.21(i)(2).
     Proposed Rule 7.34-E(d)(xi) would address the potential 
risk of trading because of limited trading alternatives. As proposed, 
the rule would advise that Exchange may be the only exchange trading 
certain securities during Extended Hours Trading and that, with more 
limited trading alternatives during Extended Hours Trading, customers 
may experience losses if their orders cannot be executed normally due 
to systems failures or other issues on the Exchange. Proposed Rule 
7.34-E(d)(xi) is based on and substantially the same as 24X Rule 
3.21(i)(3).
     Proposed Rule 7.34-E(d)(xii) would address the potential 
risk related to continuous trading during Extended Hours Trading. As 
proposed, the rule would advise that, with more limited breaks in 
trading, there may be a greater

[[Page 106712]]

risk related to system maintenance and testing, as well as the pausing 
and resumption of trading. Proposed Rule 7.34-E(d)(xii) is based on and 
substantially the same as 24X Rule 3.21(i)(4).
     Finally, proposed Rule 7.34-E(d)(xiii) would advise that 
Extended Hours Trading may present additional unforeseen risks in 
addition to those discussed above. Proposed Rule 7.34-E(d)(xiii) is 
based on and substantially the same as 24X Rule 3.21(i)(5).
    The current version of Rule 7.34-E would remain operative until 
transition to the proposed new Extended Trading Hours set forth in Rule 
7.34-E(T)(a) becomes operative. As proposed, the Exchange would not 
commence operation of Extended Hours Trading as set forth in Rule 7.34-
E(T)(a) unless the Equity Data Plans (as proposed to be defined in Rule 
1.1, discussed below) have established a mechanism to collect, 
consolidate, process and disseminate quotation and transaction 
information at all times during Extended Trading Hours that is 
equivalent to the mechanism established for the Core Trading Session, 
and (2) have provided the Exchange with notification that they are 
prepared to collect, consolidate, process and disseminate quotation and 
transaction information to accommodate Extended Trading Hours. 
Specifically, prior to commencing operation during Extended Hours 
Trading as set forth in Rule 7.34-E(T)(a), the Exchange will file a 
proposed rule change pursuant to Section 19(b) of the Act and the rules 
thereunder to amend its rules to delete the current version of Rule 
7.34-E and preamble and delete the ``T'' designation in Rule 7.34-E(T), 
and confirm that the Exchange is able to comply with its obligations 
under the Act and the rules thereunder during Extended Trading Hours 
and that such Equity Data Plans are prepared to collect, consolidate, 
process and disseminate quotation and transaction information at all 
times during Extended Trading Hours. The Exchange believes that these 
limitations are designed to reasonably ensure that consolidated 
quotation and transaction data are provided in a manner that is 
consistent with the existing extended hours sessions on exchanges.\11\
---------------------------------------------------------------------------

    \11\ See Release No. 101777, 89 FR at 97105.
---------------------------------------------------------------------------

    The Exchange would accordingly add the following legend to current 
Rule 7.34-E (new text italicized):

    This version of Rule 7.34-E will remain operative until Extended 
Hours Trading as set forth in Rule 7.34-E(T) is operative. For the 
avoidance of doubt, notwithstanding anything to the contrary in 
these Rules, the Exchange shall not commence operation of Extended 
Hours Trading as set forth in Rule 7.34-E(T) unless the Equity Data 
Plans (1) have established a mechanism to collect, consolidate, 
process and disseminate quotation and transaction information at all 
times during Extended Trading Hours that is equivalent to the 
mechanism established for the Core Trading Session, and (2) have 
provided the Exchange with notification that they are prepared to 
collect, consolidate, process and disseminate quotation and 
transaction information to accommodate Extended Trading Hours. Prior 
to commencing operation during Extended Hours Trading as set forth 
in Rule 7.34-E(T), the Exchange will file a proposed rule change 
pursuant to Section 19(b) of the Exchange Act and the rules 
thereunder to amend its rules to delete the current version of Rule 
7.34-E and preamble and delete the ``T'' designation in Rule 7.34-
E(T), and confirm that the Exchange is able to comply with its 
obligations under the Exchange Act and the rules thereunder during 
Extended Trading Hours and that such Equity Data Plans are prepared 
to collect, consolidate, process and disseminate quotation and 
transaction information at all times during Extended Trading Hours. 
The rule change must be filed with the SEC within 18 months of the 
SEC's approval of the Exchange's rule filing adopting Rule 7.34-
E(T). If the Exchange fails to file such a rule change within 18 
months of approval of Rule 7.34-E(T), the Exchange will promptly 
file a proposed rule change to delete Rule 7.34-E(T).

    The proposed language is substantially the same as text contained 
in 24X Rule 1.5(c) (Definitions). The Exchange would also revise 
current Rule 1.1 to add two definitions.
    First, the Exchange would define ``Equity Data Plans'' to mean the 
effective national market system plan(s) governing the collection, 
consolidation, processing and dissemination of consolidated equity 
market data via the exclusive securities information processors 
(``SIPs''), including (1) Consolidated Tape Association Plan (``CTA 
Plan''), (2) Consolidated Quotation Plan (``CQ Plan''), (3) the Joint 
Self-Regulatory Organization Plan Governing the Collection, 
Consolidation and Dissemination of Quotation and Transaction 
Information for Nasdaq-Listed Securities Traded on Exchanges on an 
Unlisted Trading Privileges Basis (``UTP Plan''), (4) the CT Plan 
established by the Limited Liability Company Agreement of CT Plan LLC, 
and (5) any successor thereto to the named Plan(s). Except for the 
reference to the CT Plan established by the Limited Liability Company 
Agreement of CT Plan LLC, the proposed definition is the same as 24X 
Rule 1.5(o).
    Second, the Exchange would define Extended Hours Trading to mean 
trading during the Early Trading Session and the Late Trading Session. 
The term is used without capitalization in current Rule 7.34-E(d) 
describing required customer disclosures. The Exchange proposes to use 
the proposed definition in proposed Rule 7.34-E(T)(d) and current Rule 
7.34-E(d), with the exception of subsection (d)(4) of the current and 
proposed temporary rules, which use the phrase generically. The 
Exchange believes the proposal would add transparency and clarity to 
the Exchange's rules.
    The Exchange would also make certain technical, conforming changes 
to Rule 5.1-E(a) and Commentary .08 to Rule 9.5320-E as follows.
    First, the Exchange would replace obsolete references to the 
``Opening session'' and ``Late Trading Session'' and the associated 
session start and end times in Pacific Time in Rule 5.1-E(a)(2)(i) with 
the defined term ``Extended Hours Trading.'' The Exchange would also 
delete a stray period at the end of the rule heading. The proposed 
changes would add transparency and clarity to the Exchange's rules.
    Finally, the Exchange would replace the obsolete reference to 
``6:30 a.m. to 1:00 p.m. Pacific Standard Time'' in Commentary .08 to 
Rule 9.5320-E with ``the Core Trading Session.'' The proposed change 
would also add transparency and clarity to the Exchange's rules.
    The Exchange believes that the proposal will benefit investors and 
the national market system by increasing market accessibility, 
promoting capital formation, and facilitating portfolio management. The 
proposed extended trading sessions would operate in the same fashion as 
the current sessions, and the rules that apply to the current sessions 
would apply to the proposed longer Early and Late Trading Sessions in 
unmodified form. In addition, all NMS stocks would continue to be 
eligible to trade in the proposed longer extended hours sessions. 
Moreover, as discussed below, the existing safeguards applicable to 
pre-market and post-market sessions including, among other things, 
operational safeguards, availability of consolidated last sale and 
quotation information, and specific disclosures to investors regarding 
the heightened risks of after-hours trading, and market surveillance 
capabilities, would be applicable to the proposed extended Early and 
Late Trading Sessions.
Operations
    As noted, the proposed longer trading sessions will operate in the 
same way as the current sessions from an operational

[[Page 106713]]

perspective. All order types eligible for such sessions and order type 
behaviors will remain unchanged. The Exchange will also route to away 
markets between 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday 
through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday, 
just as it currently does between 4:00 a.m. E.T. and 9:30 a.m. E.T. and 
between 4:00 p.m. E.T. and 8:00 p.m. E.T. Order processing during the 
proposed longer trading sessions will also function the same way as it 
does in the current sessions. There will be no changes to the ranking, 
display, or decrementation processes or rules. The Exchange will report 
the best bid and offer on the Exchange to the appropriate network 
processor, as it currently does beginning at 4:00 a.m. E.T. using the 
same formats and delivery mechanisms. Trades executed and reported 
outside of the Core Trading Session as proposed will be reported to the 
appropriate network processor with the ``.T'' modifier, just as 
currently. No fee changes are proposed in connection with this 
proposal.
    In addition, the Exchange will continue to work with primary 
listing exchanges to coordinate trading halts where appropriate, 
including halts implemented due to significant material events (i.e., a 
bankruptcy declaration). During the proposed extended Early and Late 
Trading Sessions, the Exchange would pause trading in the underlying 
security until trading resumes on the primary listing market for the 
security. Generally, regardless of trading session, when a halt has 
been declared on the primary market, the Exchange will also halt 
trading automatically in the subject security on NYSE Arca. Exchange 
staff will be available during the proposed extended trading sessions 
in order to maintain a fair and orderly market, make any necessary 
rulings or take any action that may be necessary. Similarly, Exchange 
staff will be available if any action such as declaration of a halt in 
a NYSE Arca primary symbol would be necessary in the event of a system 
malfunction or significant material event such as a bankruptcy 
declaration.
    The Exchange notes that, to the extent material corporate news is 
released during the Extended Trading Hours and the primary listing 
market does not impose a halt, the requirements of proposed Rule 7.34-
E(T)(d)(3)(v) (which is part of the current rule) and proposed Rules 
7.34-E(T)(d)(3)(viii)-(xiii) that disclosures be provided to investors 
relating to the risks associated with news announcements and the 
additional risks of trading during Extended Trading Hours, 
respectively, will help ensure that market participants, including 
investors, are informed about the potential risks associated with 
trading during that time period.\12\
---------------------------------------------------------------------------

    \12\ See Release No. 101777, 89 FR at 97109.
---------------------------------------------------------------------------

Securities Information Processor (``SIP'') Readiness
    The Exchange will submit all quotes and trades that are generated 
in the extended Early and Late Trading Session to the consolidated 
quote and trade systems maintained by the SIPs for public 
dissemination. Accordingly, once these extended trading hours are 
operative, quotes and trades will be made available to the investing 
public in the same manner that quotes and trades are currently made 
available.
    The two SIPs--the Securities Industry Automation Corporation 
(``SIAC'') and Nasdaq--both currently operate from 4:00 a.m. E.T. 
through 8:00 p.m. E.T. The Exchange has informed both SIPs, as well as 
the Operating Committee of the CTA and the CQ Plans and the UTP Plan 
(collectively, the ``Operating Committee''), of its intention to extend 
trading hours to commence at 1:30 a.m. E.T. through 11:30 p.m. E.T. on 
Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on 
Friday, and has submitted change requests to both SIPs requesting that 
the SIPs similarly extend their hours of operation. The Exchange will 
work with the Operating Committee and the SIPs regarding the extension 
of the SIPs' operating hours and, in the near term, expects to request 
a vote of the Operating Committee instructing the SIPs to proceed with 
such extension.
    As noted above, the Exchange will not make the proposed extended 
hours operative unless the Equity Data Plans have established a 
mechanism to collect, consolidate, process and disseminate quotation 
and transaction information at all times during Extended Trading Hours 
that is equivalent to the mechanism established for the Core Trading 
Session, and provided the Exchange with notification that they are 
prepared to collect, consolidate, process and disseminate quotation and 
transaction information to accommodate Extended Trading Hours. As also 
previously noted, at that point the Exchange will file a proposed rule 
change to, among other things, confirm that such Equity Data Plans are 
prepared to collect, consolidate, process and disseminate quotation and 
transaction information at all times during Extended Trading Hours.
Market Surveillance
    Trading on the Exchange is subject to a comprehensive regulatory 
program applicable to the current Early, Core, and Late Trading 
Sessions that includes a suite of surveillances that reviews trading 
during each trading session as well as routine examinations of ETP 
Holders consistent with the current exam-based regulatory program. The 
Exchange's current regulatory program would be fully applicable to 
trading in the proposed extended Early and Late Trading Sessions.
Customer Disclosures
    As noted above, given the potential trading and other risks of 
extended hours trading Products, Rule 7.34-E(d) prohibits ETP Holders 
from accepting orders from non-ETP Holders for execution during the 
Early or Late Trading Session without making the specified disclosures 
in the Rule. As further discussed above, the Exchange proposes to 
enhance these disclosures by including additional mandatory disclosures 
regarding the potential risks associated with trading during Extended 
Hours Trading based on recently approved 24X Rule 3.21.\13\ The 
Exchange notes that Rule 7.34-E(d), as amended, would be fully 
applicable to the proposed extended trading sessions and would place 
the same disclosure obligation on ETP Holders.
---------------------------------------------------------------------------

    \13\ See text accompanying note 10, supra.
---------------------------------------------------------------------------

Implementation
    The Exchange will begin accepting orders for the extended Early and 
Late Trading Session as set forth in proposed Rule 7.34-E(T) subject to 
the effectiveness of this proposed rule change and subject to the 
conditions set forth in the proposed legend to current Rule 7.34-E 
described above.

2. Statutory Basis

    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Act,\14\ in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system and, in general, to protect 
investors and the public interest.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Generally, the Exchange believes that the proposal, including the 
proposed temporary rule to support longer extended hours trading, would 
remove

[[Page 106714]]

impediments to and perfect the mechanism of a free and open market and 
a national market system by providing a rules framework to support the 
lengthening of the current extended trading hours for NMS stocks to 
1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 
1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday, which the Exchange 
believes will increase market accessibility, promote capital formation, 
and facilitate portfolio management.
    The Exchange further believes that adopting a temporary rule that 
would only be operative upon transition to the new proposed Extended 
Trading Hours, and adding a legend to the current version of Rule 7.34-
E specifying that the current rule will remain operative until that 
time, would promote transparency in Exchange rules and add clarity as 
to which rules are operative and when, thereby reducing potential 
confusion, and making the Exchange's rules easier to navigate. 
Moreover, the proposed legend would provide that the Exchange will not 
commence operation of the longer Extended Trading Hours prior to filing 
a proposed rule change to amend its rules confirming that the Exchange 
is able to comply with its obligations under the Act during the longer 
extended trading session and that the Equity Data Plans are prepared to 
collect, consolidate, process and disseminate quotation and transaction 
information at all times during the proposed Extended Trading Hours. 
This requirement would promote transparency because trading will not 
occur unless the Equity Data Plans are able to collect, consolidate, 
process and disseminate consolidated quotation and transaction data 
during the proposed longer session. The requirement would also be 
designed to ensure that consolidated quotation and transaction data are 
provided in a manner that is consistent with the Exchange's current 
extended hours sessions, and that the proposed change is thus designed 
to prevent fraudulent and manipulative acts and practices, promote just 
and equitable principles of trade, foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to and facilitating transactions in NMS 
stocks, and perfect the mechanism of a free and open market and a 
national market system.
    Finally, the Exchange believes that applying the current 
requirements for extended hours trading such as order designation, 
permitted orders, and mandatory customer disclosures as well as the 
operational and regulatory safeguards already in place for the current 
Early, Core, and Late Sessions to the proposed extended sessions, would 
promote just and equitable principles of trade and protect investors 
and the public interest. In addition, the proposed enhanced disclosures 
based on the approved rules of another exchange will, together with the 
existing disclosures, provide investors with important information that 
should help to inform their decisions as to whether trading during the 
Exchange's proposed longer extended hours is suitable for them. The 
Exchange believes that the expanded customer disclosures are consistent 
with the Act and, in particular, the Section 6(b)(5) \15\ requirement 
that an exchange's rules be designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanisms 
of a free and open market and a national market system, and protect 
investors and the public interest.
---------------------------------------------------------------------------

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

    The Exchange believes that adding a definition of Equity Data Plan 
to Rule 1.1 would remove impediments to and perfect the mechanism of a 
free and open market and national market system by adding clarity and 
transparency to the Exchange's rules with respect to the a [sic] 
critical element that must be in place for the proposed longer extended 
trading session. As discussed above, trading in the new extended 
session will not occur unless the Equity Data Plans are able to 
collect, consolidate, process and disseminate consolidated quotation 
and transaction data during the new session. Similarly, the Exchange 
believes that adding a definition of Extended Hours Trading to Rule 1.1 
would remove impediments to and perfect the mechanism of a free and 
open market and national market system by adding clarity to the 
Exchange's rules through the introduction of a definition that can be 
utilized immediately and that would not need to be updated once the 
Exchange migrates to 22 hour trading, 5 days a week. The Exchange 
further believes that eliminating obsolete legacy material from Rule 
5.1-E(a) and Commentary .08 to Rule 9.5320-E similarly removes 
impediments to and perfects the mechanism of a free and open market by 
removing confusion that may result from having obsolete material in the 
Exchange's rulebook. The Exchange believes that eliminating such 
obsolete material would not be inconsistent with the public interest 
and the protection of investors because investors will not be harmed 
and in fact would benefit from increased transparency, thereby reducing 
potential confusion.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is 
designed to propose rule changes to lengthen the current extended 
trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 p.m. E.T. 
on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. 
on Friday. The Exchange operates in a highly competitive environment in 
which unaffiliated exchange competitors and new entrants could compete 
to offer extended hours trading of similar duration, and the proposal 
would therefore enable the Exchange to compete on a more level playing 
field with these competitors.

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. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as modified by Amendment No. 1, 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-2024-89 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-2024-89. 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

[[Page 106715]]

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-NYSEARCA-2024-89 and should be submitted on or before January 21, 
2025.

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

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-30903 Filed 12-27-24; 8:45 am]
BILLING CODE 8011-01-P
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