Notice2022-15542
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 952NY
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 21, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 139 (Thursday, July 21, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Notices]
[Pages 43590-43592]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-15542]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95296; File No. SR-NYSEAMER-2022-29]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 952NY
July 15, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on July 7, 2022, NYSE American LLC (``NYSE American'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposal to amend Rule 952NY (Opening Process)
regarding the option for ATP Holders to instruct the Exchange to cancel
Marketable orders if a series is not opened within a specified time
period. 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 amend Rule 952NY (Opening Process)
regarding the option for ATP Holders to instruct the Exchange to cancel
Marketable \4\ orders if a series is not opened within a specified time
period. Specifically, the Exchange proposes to exclude Good-Til-
Cancelled (GTC) Orders.\5\
---------------------------------------------------------------------------
\4\ The term ``Marketable'' is defined in Rule 900.2NY(39) to
mean, for a Limit Order, the price matches or crosses the NBBO on
the other side of the market and that market orders are always
considered marketable.
\5\ See Rule 900.3NY(n) (defining GTC Orders as ``[a]n order to
buy or sell that remains in force until the order is filled,
cancelled or the option contract expires; provided, however, that
GTC Orders will be cancelled in the event of a corporate action that
results in an adjustment to the terms of an option contract'').
---------------------------------------------------------------------------
Rule 952NY sets forth the Exchange's process for opening and
reopening a series for trading. Rule 952NY(d) provides ATP Holders with
an option to instruct the Exchange to cancel their Marketable orders if
an option series has not been opened within a specified time period.\6\
Per subparagraph (d) to Rule 952NY, an ATP Holder has the option to
instruct the Exchange to cancel all Marketable orders in a series,
including GTC Orders, if that series has not opened within a designated
time period after the Exchange receives notification that the primary
market for the underlying security has disseminated a quote and a trade
that is at or within the quote. Because the current rule explicitly
includes GTC Orders, once an ATP Holder opts to utilize the ``bulk''
cancellation feature provided by Rule 952NY(d), this feature also
applies to its GTC Orders. The Exchange specifically included GTC
Orders when it adopted the ``bulk'' cancellation feature in Rule
952NY(d) to make clear to market participants that such order would be
included in that functionality.
---------------------------------------------------------------------------
\6\ The Exchange announced on February 17, 2022, that the
applicable time period utilized during the Opening Process would be
two seconds, as announced here: <a href="https://www.nyse.com/trader-update/history#110000412424">https://www.nyse.com/trader-update/history#110000412424</a>.
---------------------------------------------------------------------------
The Exchange now proposes to modify paragraph (d) to Rule 952NY to
explicitly exclude GTC Orders on the basis that such orders are
designed to remain in force until executed or specifically cancelled by
the order sender. The Exchange believes this proposal would take into
account that GTC Order senders tend to be more focused on obtaining an
execution thus are willing to wait for the opening of a series rather
than cancelling their order. As such, the proposed change would allow
the GTC instructions to persist rather than be included in the ``bulk
cancel'' under this paragraph (i.e., persist until executed or
specifically cancelled by the GTC order sender). The Exchange believes
this proposed treatment is consistent with the properties of the order
type and the intentions of market participants who utilize GTC Orders,
which intent is for an (eventual) execution unless cancelled. This does
not mean, however, that such orders cannot be cancelled if a series has
not opened per Rule 952NY(d). Rather, ATP Holders (whether they utilize
this optional ``bulk'' cancel functionality or not) would still have
the option to submit specific requests to cancel certain (or all) of
its GTC Orders themselves if a series has not opened on the Exchange
per Rule 952NY(d).
The Exchange will announce via Trader Update when this proposed
rule change would be implemented, which, subject to effectiveness of
this proposed rule change, the Exchange anticipates will be in early
August 2022, but no later than September 2022.
2. Statutory Basis
For the reasons set forth above, the Exchange believes the proposed
rule change is consistent with Section 6(b) of
[[Page 43591]]
the Act \7\ in general, and furthers the objectives of Section 6(b)(5)
of the Act,\8\ in that it is designed to promote just and equitable
principles of trade, 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it is designed to exclude GTC Orders
from the bulk cancel operation of Rule 952NY(d), which would allow the
GTC instructions to persist rather than be included in the ``bulk
cancel'' under this paragraph (i.e., persist until executed or
specifically cancelled by the GTC order sender). The Exchange believes
this proposal would take into account that GTC Order senders tend to be
more focused on obtaining an execution thus are willing to wait for the
opening of a series rather than cancelling their order. As such, the
Exchange believes this proposed treatment is consistent with the
properties of the order type and the intentions of market participants
who utilize GTC Orders, which intent is for an (eventual) execution
unless cancelled. This does not mean, however, that such orders cannot
be cancelled if a series has not opened per Rule 952NY(d). Rather, ATP
Holders (whether they utilize this optional ``bulk'' cancel
functionality or not) would still have the option to submit specific
requests to cancel certain (or all) of its GTC Orders themselves if a
series has not opened on the Exchange per Rule 952NY(d).
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 Exchange does not
believe the proposed rule change would impose any burden on intermarket
competition, as the proposed rule change is designed to exclude GTC
Orders from the bulk cancel operation of Rule 952NY(d), which would
allow the GTC instructions to persist rather than be included in the
``bulk cancel'' under this paragraph (i.e., persist until (eventually)
executed or specifically cancelled by the GTC order sender). ATP
Holders would still have the option to submit specific requests to
cancel certain (or all) of its GTC Orders themselves if a series has
not opened on the Exchange per Rule 952NY(d).
The Exchange does not believe that the proposed rule change would
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed rule change relates to the exclusion of GTC Orders from
optional functionality, which functionality ATP Holders are not
required to utilize.
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 for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \11\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\12\
---------------------------------------------------------------------------
\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)(iii).
\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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange asked
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Exchange
states that such waiver would be consistent with the protection of
investors and the public interest because the proposed rule change
would allow GTC Orders to be treated in a manner that is consistent
with the properties of the order type and the intentions of market
participants who utilize GTC Orders. Market participants continue to be
able to decide when their GTC Orders should be canceled. For these
reasons, the Commission believes that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest. Therefore, the Commission hereby waives the 30-day operative
delay and designates the proposed rule change as operative upon
filing.\15\
---------------------------------------------------------------------------
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<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#fc8e899099d19f9391919992888fbc8f999fd29b938a"><span class="__cf_email__" data-cfemail="1c6e697079317f7371717972686f5c6f797f327b736a">[email protected]</span></a>. Please include
File Number SR-NYSEAMER-2022-29 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-NYSEAMER-2022-29. 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
[[Page 43592]]
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-NYSEAMER-2022-29 and should be submitted
on or before August 11, 2022.
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-15542 Filed 7-20-22; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on July 21, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.