Notice2023-06781
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Rule 7.25E
Primary source
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Published
April 3, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 63 (Monday, April 3, 2023)</title>
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[Federal Register Volume 88, Number 63 (Monday, April 3, 2023)]
[Notices]
[Pages 19685-19687]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-06781]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97214; File No. SR-NYSEAMER-2023-23]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend Rule
7.25E
March 28, 2023.
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 March 22, 2023, 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, II,
and III 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 amend Rule 7.25E, which governs the
allocation of securities to Designated Market Makers. 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 7.25E, which governs the
allocation of securities to Designated Market Makers (``DMMs'').
Specifically, the Exchange proposes to require issuers to select all
DMM units to interview. The Exchange also proposes to correct a
typographical error.
Background and Proposed Rule Change
Rule 7.25E currently provides two options for the allocation of
securities to DMMs: (1) the issuer selects the DMM unit; or (2) the
issuer delegates selection of the DMM unit to the Exchange.
If the issuer proceeds under the first option, Rule 7.25E(b)(1)(A)
provides that the listing company will select a minimum of four DMMs to
interview from the pool of DMMs eligible to participate in the
allocation process.\4\ The Exchange proposes amending Rule
7.25E(b)(1)(A) to require that issuers select all DMM units to
interview. To effectuate this change, the Exchange would delete ``a
minimum of four'' and add ``all'' after ``select'' and before ``DMM
units to interview.''
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\4\ See Rule 7.25E(b)(1)(A). As of the date of this filing,
there are currently three active DMMs on the Exchange.
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The proposed change would conform Rule 7.25E(b)(1)(A) with Rule
103B(III)(A)(1) of the Exchange's affiliate New York Stock Exchange LLC
(``NYSE''), which does not specify a minimum number of DMMs to be
interviewed. The Exchange believes that not specifying a number of DMMs
to be interviewed would ensure that all eligible DMM units would have
an opportunity to participate in the allocation process at all times
irrespective of the number of DMMs operating on the Exchange.
In addition, the Exchange proposes a non-substantive change to Rule
7.25E(b)(1)(A) to replace ``shall'' with ``must'' before ``select.''
Finally, the Exchange also proposes to correct the heading in Rule
7.25E(b)(1), which should read ``Issuer Selection.'' These proposed
changes would further align the Exchange's Rule with NYSE Rule 103B.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\5\ in general, and furthers the objectives of
[[Page 19686]]
Section 6(b)(5),\6\ 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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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that the proposed amendments to
Rule 7.25E(b)(1)(A) to provide that issuers interview all DMMs would
promote just and equitable principles of trade because no eligible DMM
unit would be excluded from the issuer interview. For the same reason,
the Exchange believes the proposal is designed to remove impediments
to, and perfect the mechanism of a free and open market and a national
market system. The Exchange believes that requiring all DMM units to
participate in issuer interviews would also continue to foster
competition and optimal performance among DMMs. In addition, the
Exchange believes that harmonizing the Exchange's rule with that of its
NYSE affiliate would provide greater harmonization among affiliated
exchanges that have adopted substantially similar requirements for DMM
interviews, thereby resulting in similarly efficient administration of
listing interviews across exchanges.
Finally, the Exchange's proposed technical, non-substantive
changes--correcting a typographical error and replacing ``will'' with
``must''--adds clarity and transparency to the Exchange's Rules and
reduces potential investor confusion, which would remove impediments to
and perfect the mechanism of a free and open market and a national
market system.
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 proposed changes would continue to foster competition and optimal
performance among DMMs, thereby enhancing the quality of the services
DMMs provide to issuers. Further, the Exchange believes that the
proposed changes would not be burdensome to issuers since issuers are
currently interviewing all DMMs. Even assuming an increase in the
burden on issuers during the allocation process if the number of DMMs
on the Exchange should increase, the Exchange believes that any such
increased burden would be small relative to the benefits that
additional competition among DMM units may provide. Issuers could,
moreover, permit the Exchange to select the DMM unit pursuant to the
process found in Rule 7.25E(b)(2).
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 \7\ and Rule 19b-4(f)(6) thereunder.\8\
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\10\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \11\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\11\ 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#5c2e293039713f3331313932282f1c2f393f723b332a"><span class="__cf_email__" data-cfemail="9ceee9f0f9b1fff3f1f1f9f2e8efdceff9ffb2fbf3ea">[email protected]</span></a>. Please include
File Number SR-NYSEAMER-2023-23 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-2023-23. 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-2023-23 and should be submitted
on or before April 24, 2023.
[[Page 19687]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06781 Filed 3-31-23; 8:45 am]
BILLING CODE 8011-01-P
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