Notice2024-21873
Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.31
Primary source
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Published
September 25, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 186 (Wednesday, September 25, 2024)</title>
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[Federal Register Volume 89, Number 186 (Wednesday, September 25, 2024)]
[Notices]
[Pages 78414-78416]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21873]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101102; File No. SR-NYSENAT-2024-26]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 7.31
September 19, 2024.
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 September 9, 2024, NYSE National, Inc. (``NYSE National'' 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 amend Rule 7.31 regarding the Minimum
Trade Size Modifier. 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
[[Page 78415]]
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 7.31 regarding the Minimum
Trade Size (``MTS'') Modifier.
Rule 7.31(i)(3) provides that a Limit IOC Order, Non-Displayed
Limit Order, MPL Order, or Tracking Order may be designated with an MTS
Modifier. Rule 7.31(i)(3)(A) currently provides that an MTS must be a
minimum of a round lot and that an order with an MTS Modifier will be
rejected if the MTS is less than a round lot or if the MTS is larger
than the size of the order. The Exchange proposes to amend Rule
7.31(i)(3)(A) to provide that an MTS may be an odd lot quantity and
thus proposes to eliminate rule text currently providing that an MTS
must be a minimum of a round lot and that an order with an MTS of less
than one round lot would be rejected. The Exchange believes that
restricting the use of the MTS Modifier to round lot sizes only is
unnecessary and that providing ETP Holders with the option to use the
MTS Modifier with an odd lot quantity could increase liquidity and
enhance opportunities for order execution on the Exchange. The Exchange
notes that permitting odd-lot order quantities is not novel on the
Exchange or other equity exchanges and believes that this proposed
change is consistent with other equity exchanges' approaches to the use
of instructions similar to the MTS Modifier.\4\
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\4\ The rules of Cboe EDGA Exchange, Inc. (``EDGA''), Cboe EDGX
Exchange, Inc. (``EDGX''), and Members Exchange (``MEMX'') appear to
permit the use of instructions comparable to the MTS Modifier in any
size. See EDGA Rules 11.2 (providing that orders are eligible for
odd-lot, round-lot, and mixed-lot executions unless otherwise
indicated) and 11.6(h) (defining Minimum Execution Quantity
instruction); EDGX Rules 11.2 and 11.6(h) (same); MEMX Rules 11.2
and 11.6(f) (same). See also, e.g., IEX Rule 1190(b)(3) (providing
that a non-displayed order may be a Minimum Quantity Order and may
be an odd lot order).
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The Exchange also proposes to amend Rule 7.31(i)(3) to include the
non-displayed ALO Order as an order type that could be designated with
an MTS Modifier. This clarifying change is intended only to reflect
current behavior, by providing a complete list of the order types that
may be designated with an MTS Modifier. The Exchange notes that the
inclusion of the non-displayed ALO Order \5\ as an order type that may
be designated with an MTS Modifier is consistent with the existing use
of the MTS Modifier with non-displayed order types such as Non-
Displayed Limit Orders and MPL Orders (including MPL-ALO Orders).
Moreover, although the non-displayed ALO Order is a Limit Order that is
non-displayed, the Exchange believes that specifically including the
non-displayed ALO Order in the text of Rule 7.31(i)(3) would reduce
ambiguity as to the order types that may be designated with an MTS
Modifier.
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\5\ An ALO Order is a Non-Routable Limit Order that, unless it
receives price improvement, will not remove liquidity from the
Exchange Book; an ALO Order may be designated as non-displayed. See
Rule 7.31(e)(2).
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Because of the technology changes associated with this proposed
rule change, the Exchange will announce the implementation date by
Trader Update, which, subject to effectiveness of this proposed rule
change, will be no later than in the fourth quarter of 2024.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\6\ in general, and furthers the objectives of Section 6(b)(5),\7\
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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed change would remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system, and protect investors and the public
interest because it would provide ETP Holders with the option to use
the MTS Modifier with odd lot quantities, which could encourage order
flow to the Exchange and promote opportunities for order execution on
the Exchange, to the benefit of all market participants. The proposed
change would also clarify that the MTS Modifier may be used in
conjunction with non-displayed ALO Orders, thereby removing impediments
to, and perfecting the mechanism of, a free and open market and a
national market system by updating Exchange rules to ensure that they
reflect the current availability of the MTS Modifier and promoting
consistency and specificity in Exchange rules as to the use of such
modifier with non-displayed order types. The Exchange notes that the
proposed change would not otherwise impact the operation of the MTS
Modifier as provided under current Exchange rules. The Exchange also
believes that the proposed change would align Exchange rules with the
use of instructions similar to the MTS Modifier on other equity
exchanges, thereby removing impediments to, and perfecting the
mechanism of, a free and open market and a national market system.\8\
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\8\ See note 4, supra.
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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 proposed change would
allow the optional MTS Modifier to be used with an odd lot quantity and
accurately reflect the order types that may be designated with an MTS
Modifier. The Exchange believes that the proposed change would promote
competition among exchanges by offering ETP Holders options available
on other equity exchanges and, to the extent the proposed change would
increase opportunities for order execution, promote competition by
making the Exchange a more attractive venue for order flow and
enhancing market quality for all market participants.
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
[[Page 78416]]
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)(iii) 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)(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 fulfilled 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 19b4(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 take effect as soon as the technology associated with the proposed
change is available, which is anticipated to be less than 30 days from
the date of this filing. The Commission believes that waiver of the
operative delay is consistent with the protection of investors and the
public interest because the proposal raises no novel issues and would
allow use of the MTS Modifier with odd lot quantities without delay and
promote clarity in Exchange rules as to the order types that may be
designated with an MTS Modifier. Accordingly, the Commission hereby
waives the 30-day operative delay and designates the proposal operative
upon filing.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\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 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#8ffdfae3eaa2ece0e2e2eae1fbfccffceaeca1e8e0f9"><span class="__cf_email__" data-cfemail="88fafde4eda5ebe7e5e5ede6fcfbc8fbedeba6efe7fe">[email protected]</span></a>. Please include
file number SR-NYSENAT-2024-26 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-NYSENAT-2024-26. 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="https://www.sec.gov/rules/sro.shtml">https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSENAT-2024-26 and should
be submitted on or before October 16, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-21873 Filed 9-24-24; 8:45 am]
BILLING CODE 8011-01-P
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