Notice2024-19646
24X National Exchange LLC; Notice of Filing of Amendment No. 1 to an Application for Registration as a National Securities Exchange Under Section 6 of the Securities Exchange Act of 1934
Primary source
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Published
September 3, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 170 (Tuesday, September 3, 2024)</title>
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[Federal Register Volume 89, Number 170 (Tuesday, September 3, 2024)]
[Notices]
[Pages 71471-71472]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-19646]
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SECURITIES AND EXCHANGE COMMISSION
[Release 34-100839; File No. 10-242]
24X National Exchange LLC; Notice of Filing of Amendment No. 1 to
an Application for Registration as a National Securities Exchange Under
Section 6 of the Securities Exchange Act of 1934
August 27, 2024.
On February 6, 2024, 24X National Exchange LLC (``24X'') filed with
the Securities and Exchange Commission (``Commission'') a Form 1
application under the Securities Exchange Act of 1934 (``Act'') seeking
registration as a national securities exchange under Section 6 of the
Act.\1\ Notice of the application was published for comment in the
Federal Register on March 4, 2024.\2\ The Commission received comments
on the Form 1 \3\ and a letter responding to the comments from 24X.\4\
On May 31, 2024, the Commission instituted proceedings pursuant to
Section 19(a)(1)(B) of the Act \5\ to determine whether to grant or
deny 24X's application for registration as a national securities
exchange under Section 6 of the Act (the ``OIP'').\6\ The Commission
received comment letters in response to the OIP \7\ and a letter
responding to the OIP and comments from 24X.\8\ On August 21, 2024, 24X
filed an amendment to its Form 1 application (``Amendment No. 1'').\9\
The
[[Page 71472]]
Commission is publishing this notice in order to solicit views of
interested persons on 24X's Form 1, as amended by Amendment No. 1.
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\1\ 15 U.S.C. 78f.
\2\ See Securities Exchange Act Release No. 99614 (Feb. 27,
2024), 89 FR 15621 (``Notice'').
\3\ The public comment file for 24X's Form 1 (File No. 10-242)
is available on the Commission's website at: <a href="https://www.sec.gov/comments/10-242/10-242.htm">https://www.sec.gov/comments/10-242/10-242.htm</a>.
\4\ See letter to Secretary, Commission, from David Sassoon,
General Counsel, 24X, dated May 30, 2024 (``24X Letter'').
\5\ 15 U.S.C. 78s(a)(1)(B).
\6\ See Securities Exchange Act Release No. 100254 (May 31,
2024), 89 FR 48466 (Jun. 6, 2024).
\7\ See letters to Secretary, Commission, from Richard Montone,
JD/MBA student, Hofstra University, dated Jun. 26, 2024; Ellen
Greene, Managing Director, Equity and Options Market Structure,
Securities Industry and Financial Markets Association, dated Jun.
27, 2024; Benjamin L. Schiffrin, Director of Securities Policy,
Better Markets, Inc., dated Jun. 27, 2024; Chris Nagy, Research
Director, and Tyler Gellasch, President and Chief Executive Officer,
Healthy Markets Association, dated Jun. 28, 2024; Jeffrey M.
Pasquerella, Chief Legal Officer, DriveWealth, LLC., dated Jun. 28,
2024; Joanna Mallers, Secretary, FIA Principal Traders Group, dated
Jul. 26, 2024. The public comment file for 24X's Form 1 (File No.
10-242) is available on the Commission's website at: <a href="https://www.sec.gov/comments/10-242/10-242.htm">https://www.sec.gov/comments/10-242/10-242.htm</a>.
\8\ See letter to Secretary, Commission, from David Sassoon,
General Counsel, 24X, dated Aug. 21, 2024 (``24X OIP Letter'').
\9\ Amendment No. 1 is available on the Commission's website at:
<a href="https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/24x-form-1">https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/24x-form-1</a>.
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I. Description of 24X's Proposed Trading System
As described in the Notice, 24X proposes to significantly expand
trading outside of regular trading hours \10\ for NMS stocks by
operating a national securities exchange 23 hours a day, seven days a
week, 365 days a year, including holidays, subject to certain trading
pauses.\11\
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\10\ ``Regular trading hours'' is defined in Commission Rule
600(b)(88) as ``the time between 9:30 a.m. and 4:00 p.m. Eastern
Time.'' 17 CFR 242.600(b)(88).
\11\ See proposed 24X Rule 11.1 (describing the hours of trading
and trading days for 24X).
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II. Amendment No. 1 to 24X's Form 1
In Amendment No. 1, 24X proposes to revise Exhibit B-1 to: (1)
revise proposed 24X Rule 1.5(c) (the definition of ``24X Market
Session'') to expressly condition the operation of the 24X Market
Session; \12\ (2) revise proposed 24X Rule 3.21 (``Customer
Disclosures'') to provide greater specificity with regard to the
additional risks of trading during the 24X Market Session; (3) revise
proposed 24X Rule 11.2 (``Securities Eligible for Trading'') to
eliminate restrictions on the classes of securities that would be
eligible to become designated for trading on 24X during the 24X Market
Session; \13\ (4) revise paragraph (g) of proposed 24X Rule 11.9
(``Order Execution'') relating to the determination of the reference
price for purposes of limit order price protection; (5) revise proposed
24X Rule 11.14 (``Clearly Erroneous Executions'') to delete
subparagraph (d)(4) regarding calculation of the reference price when
the proposed 24X price band would have been in effect during the 24X
Market Session; and (6) revise proposed 24X Rule 11.15 (``24X Market
Session Price Bands and Trading Halts, Suspensions and Pauses'') to
delete all references to the proposed 24X price band and to clarify its
rules relating to trading halts made in conjunction with trading halts
on the primary listing market.\14\
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\12\ Specifically, Amendment No. 1 would revise the definition
of ``24X Market Session'' in proposed Rule 1.5(c) to read, ``(i) the
time between 8:00 p.m. and 4:00 a.m. Eastern Time, (ii) any time
that falls on a Saturday or a Sunday Eastern Time, (iii) any time
that falls on one of the following U.S. holidays: New Year's Day,
Martin Luther King Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Juneteenth National Independence Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day Eastern Time, or such other
U.S. holiday(s) as published by the Exchange from time to time;
provided, however, it shall not include any trading pauses as
described in Rule 11.15(c). For the avoidance of doubt,
notwithstanding anything to the contrary in these Rules, the
Exchange shall not commence operation of the 24X Market Session
unless (1) the equity data national market system plans have
established a mechanism to collect, consolidate and disseminate
quotation and transaction information during the 24X Market Session,
or (2) the Securities and Exchange Commission has provided exemptive
or other relief from the requirements under Rule 601, 602 and such
plans (or their successors) applicable to the 24X Market Session.''
\13\ In Amendment No. 1, 24X also proposes conforming changes to
Exhibit N to reflect this revision.
\14\ 24X also proposes a non-substantive correction to proposed
Rule 11.21.
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In Amendment No. 1, 24X also proposes to revise proposed Exhibits
C, C-2, D (including Exhibits D-1 through D-4), E, and E-1. More
specifically, in Amendment No. 1, 24X proposes to (1) revise proposed
Exhibit C to reflect 24X's intention to enter into a technology
services agreement with MEMX Technologies, LLC (``MEMX Technologies'')
to license the technology underlying 24X from MEMX Technologies; (2)
revise proposed Exhibit C-2 to update the number of authorized
ownership units for 24X Bermuda Holdings LLC, the ultimate holding
company for 24X; (3) revise proposed Exhibit D, including proposed
Exhibits D-1 through D-4, to provide updated financial information on
24X's affiliates; and (4) revise proposed Exhibit E and E-1 to describe
24X's proposed compliance with Regulation Systems Compliance and
Integrity, its arrangement with MEMX Technologies, and make other
conforming changes to reflect Amendment No. 1.
III. Request for Written Comment
The Commission requests that interested persons provide written
views and data with respect to 24X's Form 1, as amended by Amendment
No. 1. 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#e795928b82ca84888a8a82899394a7948284c9808891"><span class="__cf_email__" data-cfemail="384a4d545d155b5755555d564c4b784b5d5b165f574e">[email protected]</span></a>. Please include
File Number 10-242 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 10-242. 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/other.shtml">http://www.sec.gov/rules/other.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to 24X's Form 1, as amended by Amendment No. 1,
filed with the Commission, and all written communications relating to
the application 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. All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from submissions. You should submit
only information that you wish to make publicly available.
All submissions should refer to File Number 10-242 and should be
submitted on or before September 24, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(71)(ii).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-19646 Filed 8-30-24; 8:45 am]
BILLING CODE 8011-01-P
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