Notice2022-21561
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Permit the Exchange To Declare a Regulatory Halt
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
October 5, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 192 (Wednesday, October 5, 2022)</title>
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[Federal Register Volume 87, Number 192 (Wednesday, October 5, 2022)]
[Notices]
[Pages 60428-60430]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-21561]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95945; File No. SR-NYSEAMER-2022-44]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Permit
the Exchange To Declare a Regulatory Halt
September 29, 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 September 23, 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.
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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 Substance
of the Proposed Rule Change
The Exchange proposes to permit the Exchange to declare a
regulatory halt in a security that has not been listed on a national
securities exchange immediately prior to the initial pricing based on
the rules of its affiliate New York Stock Exchange LLC. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to permit the Exchange to declare a
regulatory halt in a security that has not been listed on a national
securities exchange immediately prior to the initial pricing based on
the rules of its affiliate New York Stock Exchange LLC (``NYSE''). More
specifically, the Exchange proposes to add a new subsection (e) to Rule
7.18E (Halts) that would, except for a non-substantive conforming
change, be identical to subsection (d) of NYSE Rule 123D (Halts in
Trading).
Overview
Rule 7.18E governs halts in trading on the Pillar trading platform,
and how orders are processed during halts, suspensions, or pauses. Rule
7.18E was adopted in connection with the Exchange's transition from a
floor-based market to a fully automated market on the Pillar trading
platform. At the time, halts were governed by Rule 123D--Equities
(Openings and Halts in Trading), which was in turn based on NYSE Rule
123D.\4\ In 2017, Rule 123D--Equities was designated as inapplicable to
trading on Pillar and deleted in its entirety.\5\
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\4\ See Securities Exchange Act Release Nos. 80590 (May 4,
2017), 82 FR 21843 (May 10, 2017) and 79993 (February 9, 2017), 82
FR 10814 (February 15, 2017) (SR-NYSEMKT-2017-01).
\5\ See Securities Exchange Act Release No. 82212 (December 4,
2017), 82 FR 58036 (December 8, 2017) (SR-NYSEAmer-2017-34).
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[[Page 60429]]
The NYSE adopted its version of Rule 7.18 governing halts on the
Pillar trading platform in 2015. In 2017, NYSE Rule 123D was designated
as inapplicable to trading in Pillar. Following completion of the
transition to Pillar in August 2019, the NYSE deleted NYSE Rule 123D as
obsolete, but retained subsection (d), among others, governing initial
listing regulatory halts.\6\ As described below, the Exchange now
proposes to adopt subsection (d) of NYSE Rule 123D.
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\6\ See Securities Exchange Act Release Nos. 85962 (May 29,
2019), 84 FR 26188 (June 5, 2019) and 81225 (July 27, 2017), 82 FR
36033 (August 2, 2017) (SR-NYSE-2017-35); Securities Exchange Act
Release No. 90750 (December 21, 2020), 85 FR 85769 (December 29,
2020) (SR-NYSE-2020-101). Rule 123D was also renamed ``Halts in
Trading'' in 2020. See id.
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Proposed Rule Change
The Exchange proposes to amend Rule 7.18E to adopt a regulatory
halt condition for initial Exchange listings based on NYSE Rule
123D(d).
As proposed, new Rule 7.18E(d) would be titled ``Initial Listing
Regulatory Halt.'' The proposed rule would provide that Exchange may
declare a regulatory halt in a security that is the subject of an
initial pricing on the Exchange of a security that has not been listed
on a national securities exchange immediately prior to the initial
pricing, and that the regulatory halt will be terminated when the
security opens. The rule is identical to NYSE Rule 123D(d) except for
the removal of the reference to the Designated Market Maker (``DMM'')
opening the security since NYSE American DMMs are not responsible for
opening or closing individual securities on the Exchange. The Exchange
believes that it would be consistent with the protection of investors
and the public interest for the Exchange, as a primary listing
exchange, to have to the limited authority to declare a regulatory halt
for security that is the subject of an initial pricing on the Exchange
of a security that has not been listed on a national securities
exchange immediately prior to the initial pricing.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\7\ in general, and furthers the objectives of Section 6(b)(5),\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. Specifically, the Exchange believes that proposed
Rule 7.18E(e) would remove impediments to and perfect the mechanism of
a free and open market and a national market system because it would
provide the Exchange with the authority to declare a regulatory halt in
a security that the subject of an initial pricing on the Exchange of a
security that has not previously been listed on a national securities
exchange immediately prior to the initial pricing. The Exchange
believes that permitting the Exchange to declare a regulatory halt in
such securities before trading on the Exchange begins would promote
fair and orderly markets and, in the case of securities where the
initial listing is not a transfer from another national securities
exchange, avoid potential price disparities or anomalies that may occur
during any trading before the first transaction on the primary listing
exchange. The Exchange therefore believes that having the proposed
authority to declare a regulatory halt is consistent with the
protection of investors and the public interest and would promote fair
and orderly markets by helping to protect against volatility in pricing
before the initial transaction on the primary listing exchange.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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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 believes that
the benefit to investors to halt trading in a security before the
initial listing on the primary listing exchange outweighs any burden on
competition that may result from a regulatory halt in such security.
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 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)
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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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 has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest
because it will, without delay, permit the Exchange to initiate a
regulatory halt in a security that is the subject of an initial pricing
on the exchange in order to promote fair and orderly markets and avoid
potential price disparities or anomalies. Accordingly, the Commission
hereby waives the 30-day operative delay and designates the proposal
operative upon filing.\15\
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\15\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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
[[Page 60430]]
under Section 19(b)(2)(B) \16\ of the Act to determine whether the
proposed rule change should be approved or disapproved.
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\16\ 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#6715120b024a04080a0a020913142714020449000811"><span class="__cf_email__" data-cfemail="1765627b723a74787a7a727963645764727439707861">[email protected]</span></a>. Please include
File Number SR-NYSEAMER-2022-44 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-2022-44. 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-NYSEAMER-2022-44, and should be
submitted on or before October 26, 2022.
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\17\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21561 Filed 10-4-22; 8:45 am]
BILLING CODE 8011-01-P
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