Notice2022-08801
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule6.37AP-O
Primary source
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Published
April 26, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 80 (Tuesday, April 26, 2022)</title>
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[Federal Register Volume 87, Number 80 (Tuesday, April 26, 2022)]
[Notices]
[Pages 24594-24595]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-08801]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94764; File No. SR-NYSEArca-2022-22]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule
6.37AP-O
April 20, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on April 8, 2022, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend Rule 6.37AP-O (Market Maker
Quotations). The proposed rule change is available on the Exchange's
website at <a href="http://www.nyse.com">www.nyse.com</a>, at the principal office of the Exchange, and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to modify Rule 6.37AP-O to clarify the
Exchange's handling of certain Market Maker quotations on Pillar as set
forth below.\4\
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\4\ Rule 6.37AP-O describes Market Maker quoting obligations,
including defining ``quotation,'' describing the treatment of each
such quotation, and specifying Market Maker and LMM quoting
obligations. The Exchange notes that because it has not yet migrated
to the Pillar platform, Rule 6.37A-O continues to apply to the
Market Maker quotations, which rule is not being modified by this
filing. At the time of this filing, the Exchange has not announced
the planned migration date(s) for Pillar but will do so via Trader
Update.
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Rule 6.37AP-O(a)(1) provides that the term ``quote'' or
``quotation'' means ``a bid or offer sent by a Market Maker that is not
sent as an order,'' \5\ and that ``[a] quotation sent by a Market Maker
will replace a previously displayed same-side quotation that was sent
from the same order/quote entry port of that Market Maker.'' Thus,
under the current rule, any Market Maker quotations in a given option
series would be replaced, i.e., ``updated,'' when that Market Maker
sends a subsequent same-side quote in the same series from the same
quote entry port.
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\5\ Rule 6.37AP-O(a)(2) provides that a Market Maker may
designate either a Non-Routable Limit Order or an ALO Order as a
quote and such quotes would be processed as described in Rule 6.62P-
O(e).
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The Exchange proposes to modify Rule 6.37AP-O(a)(1) to make clear
that ``[i]f multiple same-side quotations are submitted via the same
quote entry port, the Exchange will display the Market Maker's most
recent same-side quotation.'' \6\ This proposed additional detail is
designed to clarify the Exchange's handling of successive Market Maker
quotations (from the same quote entry port in the same side and series)
should a Market Maker's quotations queue during a period of excessive
message traffic. No system, including Pillar, has unlimited capacity.
As such, the Exchange seeks to clarify that, should the Exchange be in
receipt of multiple same-side quotations in the same series from the
same Market Maker, the Exchange would display only the most recent
quotation to ensure accurate representation of that Market Maker's
quoting interest.
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\6\ See proposed Rule 6.37AP-O(a)(1).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\7\ in general, and
furthers the objectives of Section 6(b)(5),\8\ in particular, because
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in 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.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change to specify the
Exchange handling of successive quotations in the same option series
would promote just and equitable principles of trade and remove
impediments to and perfect the mechanism of a free and open market and
a national market system and protect investors. This proposed
[[Page 24595]]
additional detail would clarify the Exchange's handling of multiple
Market Maker quotations (from the same quote entry port in the same
side and series) should a Market Maker's quotations queue during a
period of excessive message traffic. No system, including Pillar, has
unlimited capacity. The Exchange therefore believes that displaying
only the most recent Market Maker quote when it is in receipt of
multiple same-side quotations in the same series from such Market
Maker, would protect investors and the public interest by ensuring
accurate representation of that Market Maker's quoting interest. The
Exchange also believes that the proposed change would add clarity and
transparency to Exchange rules making them easier to navigate and
comprehend.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change is not
intended to address competition, but rather to clarify the Exchange's
handling of certain Market Maker quotations. The proposed change would
apply to all similarly-situated Market Makers and would inure to the
benefit of all market participants because the proposed rule change is
designed to ensure accurate representation of a Market Maker's quoting
interest, particularly at times of excessive quote message traffic.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
Because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative prior
to 30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) of the Act \13\ to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#ef9d9a838ac28c8082828a819b9caf9c8a8cc1888099"><span class="__cf_email__" data-cfemail="e795928b82ca84888a8a82899394a7948284c9808891">[email protected]</span></a>. Please include
File Number SR-NYSEArca-2022-22 on the subject line.
Paper Comments
<bullet> 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-2022-22. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly.
All submissions should refer to File Number SR-NYSEArca-2022-22 and
should be submitted on or before May 17, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-08801 Filed 4-25-22; 8:45 am]
BILLING CODE 8011-01-P
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