Notice2025-15624
Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.18 and Make Conforming Changes to Rules 1.1 and 7.11
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
August 18, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 157 (Monday, August 18, 2025)</title>
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[Federal Register Volume 90, Number 157 (Monday, August 18, 2025)]
[Notices]
[Pages 40108-40114]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-15624]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103698; File No. SR-NYSENAT-2025-17]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 7.18 and Make Conforming Changes to Rules 1.1 and 7.11
August 13, 2025.
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 August 5, 2025, 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 7.18 (``Halts'') to effectuate
amendments to Second Restatement of the CTA Plan and the Restated CQ
Plan (together, the ``Amended CTA Plan''). In addition, the Exchange
proposes to make conforming changes to Rules 1.1 and 7.11. The proposed
rule change is available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a> and
at the principal office of the Exchange.
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
NYSE National, Inc. (``NYSE National'' or the ``Exchange'')
proposes to amend Rule 7.18 (``Halts'') to effectuate amendments to
Second Restatement of the CTA Plan and the Restated CQ Plan (together,
the ``Amended CTA Plan'').\4\ The proposed changes would amend the rule
pertaining to regulatory and operational halts, improve the rule's
clarity, and adopt defined terms from the Amended CTA Plan.\5\ In
addition, the Exchange
[[Page 40109]]
proposes to make conforming changes to Rules 1.1 and 7.11.
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\4\ On February 3, 2021, the CTA/CQ Plan participants
(``Participants'') filed Amendment 36 to the Second Restatement of
the CTA Plan and Amendment 27 to the Restated CQ Plan, to revise
provisions governing regulatory and operational halts. See Letter
from Robert Books, Chair, CTA/CQ Operating Committee, to Vanessa
Countryman, Secretary, Securities and Exchange Commission, dated
February 3, 2021. The SEC approved the amendments on May 28, 2021
(the ``Amended CTA Plan''). See Securities Exchange Act Release No.
92070 (May 28, 2021), 86 FR 29849 (June 3, 2021) (SR-CTA/CQ-2021-
01). The SEC also approved similar amendments to the Nasdaq UTP
Plan. See Securities Exchange Act Release No. 92071 (May 28, 2021),
86 FR 29846 (June 3, 2021) (S7-24-89) (the ``Amended Nasdaq UTP
Plan''). The Amended CTA Plan and the Amended Nasdaq UTP Plan
include provisions requiring Participant self-regulatory
organizations (``SROs'') to honor a Regulatory Halt declared by the
Primary Listing Market. The provisions in the Amended CTA Plan and
the Amended Nasdaq UTP Plan include provisions similar to the
changes proposed by the Exchange in this filing.
\5\ The Exchange notes that this proposed rule change is based
on a similar rule change filed by the Nasdaq Stock Market LLC
(``Nasdaq'') that was approved by the SEC in 2022. See Securities
Exchange Act Release No. 95069 (June 8, 2022), 87 FR 36018 (June 14,
2022) (SR-NASDAQ-2022-017). In addition, the Exchange's affiliate
exchanges, NYSE American LLC (``NYSE American'') the New York Stock
Exchange LLC (``NYSE''), NYSE Arca, Inc. (``NYSE Arca''), and NYSE
Texas, Inc. (``NYSE Texas'') have filed similar rule changes. See
Securities Exchange Act Release Nos. 102810 (April 10, 2025), 90 FR
16041 (April 16, 2025) (SR-NYSEAMER-2025-19); 103356 (June 30, 2025)
(SR-NYSE-2025-21); 103476 (July 16, 2025), 90 FR 34314 (July 21,
2025) (SR-NYSEARCA-2025-50); SR-NYSETEX-2025-23. The Exchange's
proposal here provides the Exchange with more limited authority to
declare Regulatory Halts than its affiliate exchanges because the
Exchange, unlike its affiliates, is not a Primary Listing Market.
Given that difference, certain definitions and concepts from the
Amended CTA Plan are not included herein. Several exchanges that do
not operate Primary Listing Markets have also filed similar rule
changes. See Securities Exchange Act Release Nos. 96574 (December
22, 2022), 87 FR 80213 (December 29, 2022) (SR-Phlx-2022-49); 97093
(March 9, 2023), 88 FR 16045 (March 15, 2023) (SR-PEARL-2023-11);
and 97824 (June 29, 2023), 88 FR 43159 (July 6, 2023) (SR-MEMX-2023-
11).
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Background
The Exchange has been working with other SROs to establish common
criteria and procedures for halting and resuming trading in equity
securities in the event of regulatory or operational issues. These
common standards are designed to ensure that events that might impact
multiple exchanges are handled in a consistent manner that is
transparent. The Exchange believes that implementation of these common
standards will assist the SROs in maintaining fair and orderly markets.
Notwithstanding the development of these common standards, the Exchange
will retain discretion in certain instances as to whether and how to
handle halts, as is discussed below.
Every U.S.-listed equity security has its primary listing on a
specific stock exchange (its ``Primary Listing Market'') \6\ that is
responsible for a number of regulatory functions. These include
confirming that the security continues to meet the exchange's listing
standards, monitoring trading in that security, and taking action to
halt trading in the security when necessary to protect investors and to
ensure and fair and orderly market. While these core responsibilities
remain with the Primary Listing Market, trading in the security can
occur on multiple exchanges that have unlisted trading privileges for
the security or in the over-the-counter market, regulated by the
Financial Industry Regulatory Authority, Inc. (``FINRA''). The
exchanges and FINRA are responsible for monitoring activity on the
markets over which they have oversight, but also must abide by the
regulatory decisions made by the Primary Listing Market. For example, a
venue trading a security pursuant to unlisted trading privileges must
halt trading in that security during a Regulatory Halt, which is a
defined term under the proposed rules,\7\ and may only trade the
security once the Primary Listing Market has cleared the security to
resume trading.
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\6\ The Exchange proposes to incorporate into Rule 7.18 the same
definition of ``Primary Listing Market'' as appears in Section
XI.(a)(i)(H) of the Amended CTA Plan: ```Primary Listing Market'
means the national securities exchange on which an Eligible Security
is listed. If an Eligible Security is listed on more than one
national securities exchange, Primary Listing Market means the
exchange on which the security has been listed the longest.''
\7\ See proposed Rule 7.18(a)(11).
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While the Exchange and the other SROs intend to harmonize certain
aspects of their trading halt rules, other elements of the rules will
continue to be unique to each market. The Exchange believes that this
is appropriate to reflect different products listed or traded on each
market.
The Exchange will implement all of the changes proposed herein in
conjunction with the Processor and other SROs implementing the
necessary rule changes. The Exchange will publish a trader notice at
least 30 business days before implementing the proposed changes.
Proposed Exchange Rule Changes
The Exchange proposes to amend Rule 7.18 to add new definitions and
proposed categories of regulatory and operational halts that are
designed to address the type of market-wide events described in the
Amended CTA Plan. Amended Rule 7.18 would also cross-reference the
Exchange's current halt authority. The Exchange also proposes to rename
Rule 7.18 from ``Halts'' to ``Trading Halts.''
Definitions
Amended Rule 7.18(a) would set forth definitions, many of which
cross-reference definitions in the Amended CTA Plan.\8\
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\8\ The Exchange notes that these terms are defined identically
in the Amended CTA Plan and the Amended Nasdaq UTP Plan, such that
there will be uniformity in the meaning of the terms among such
plans as well as among the rules of the SROs. The Exchange proposes
to adopt in Rule 7.18(a) all of the definitions in the Amended CTA
Plan Section XI(a)(i) except for definition of ``Regular Trading
Hours'' at Section XI(a)(i)(I), because the Exchange uses different
terminology for its trading sessions and those terms are already
defined in the Exchange's rules. See Rule 7.34(a) defining ``Early
Trading Session,'' ``Core Trading Session,'' and ``Late Trading
Session.''
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First, the Exchange proposes to add the definition of ``Primary
Listing Market'' \9\ to Rule 7.18, which will have the same meaning as
in the Amended CTA Plan, Section XI(a)(i)(H). As is currently the case
under the Exchange's rules and under the Amended CTA Plan, all
Regulatory Halt decisions are made by the market on which the security
has its primary listing. This reflects the regulatory responsibility
that the Primary Listing Market has for fair and orderly trading in the
securities that list on its market and its direct access to its listed
companies, which are required to advise it of certain events and
maintain lines of communication with the Primary Listing Market. The
proposed definition makes clear that if a security is listed on more
than one market (a dually-listed security), the Primary Listing Market
means the exchange on which the security has been listed the longest.
This provision matches language used in the definition of ``Primary
Listing Exchange'' in the Limit Up-Limit Down Plan and will avoid
conflict in the event of dually-listed securities.
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\9\ See proposed Rule 7.18(a)(9).
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Second, the Exchange proposes to add a definition for the term
``Extraordinary Market Activity,'' \10\ which would represent a
modified version of the term defined in the Amended CTA Plan.\11\
Specifically, the Exchange proposes to remove the concept of a
``market-wide basis'' from the Amended CTA Plan's definition of
Extraordinary Market Activity for purposes of the Exchange's rules
because the term ``Extraordinary Market Activity'' would only be used
in the Exchange's rules as a basis for the Exchange to initiate an
Operational Halt, which would only occur on the market declaring the
halt (i.e., the Exchange). The current rule does not include a
definition for Extraordinary Market Activity. The proposed definition
for the term is as follows:
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\10\ See proposed Rule 7.18(a)(1).
\11\ See Amended CTA Plan, Section XI(a)(i)(H).
``Extraordinary Market Activity'' means a disruption or
malfunction of any electronic quotation, communication, reporting,
or execution system operated by, or linked to, the Processor or a
Trading Center that has a severe and continuing negative impact on
quoting, order, or trading activity or on the availability of market
information necessary to maintain a fair and orderly market. For
purposes of this definition, a severe and continuing negative impact
on quoting, order, or trading activity includes (i) a series of
quotes, orders, or transactions at prices substantially unrelated to
the current market for the security or securities; (ii) duplicative
or erroneous quoting, order, trade reporting, or other related
message traffic between one or more Trading Centers or their
members; or (iii) the unavailability of quoting, order, transaction
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information, or regulatory messages for a sustained period.
Third, the Exchange proposes to add a set of new definitions that
would be
[[Page 40110]]
specific to events involving the SIP. While the Exchange recognizes
that many events involving the SIP would also meet the definition of
``Extraordinary Market Activity'' as defined in the Amended CTA Plan,
the Exchange believes that the critical role of the SIPs in market
infrastructure weighs in favor having the Exchange's rules specify how
such events would be handled. The definitions of ``SIP Outage,'' \12\
``Material SIP Latency,'' \13\ ``SIP Halt,'' \14\ and ``SIP Halt Resume
Time'' \15\ are intended to provide specificity to address this subset
of potential market issues. In addition, the Exchange is proposing to
define terms related to SIP governance needed in order to understand
these definitions:
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\12\ See proposed Rule 7.18(a)(14).
\13\ See proposed Rule 7.18(a)(5).
\14\ See proposed Rule 7.18(a)(12).
\15\ See proposed Rule 7.18(a)(13).
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<bullet> ``Processor'' or ``SIP'' \16\ would have the same meaning
as the term ``Processor'' in the Nasdaq UTP Plan or the CTA Plan, as
applicable.\17\
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\16\ See proposed Rule 7.18(a)(10).
\17\ See, e.g., Amended CTA Plan, Section I(x), which provides:
`` `Processor' means the organization designated as recipient and
processor of last sale price information furnished by Participants
pursuant to this CTA Plan, as Section V describes.''
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<bullet> ``SIP Plan'' \18\ would be defined as ``the national
market system plan governing the SIP, as applicable.''
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\18\ See proposed Rule 7.18(a)(15).
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<bullet> ``Operating Committee'' \19\ would be defined as having
the same meaning as in the CTA Plan, namely the committee charged with
administering the CTA Plan.
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\19\ See proposed Rule 7.18(a)(7).
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<bullet> ``Trading Center'' \20\ would have the same meaning as in
Rule 600(b)(95) of Regulation NMS.
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\20\ See proposed Rule 7.18(a)(16).
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The Exchange proposes to adopt a category of Regulatory Halt,
called a ``SIP Halt,'' \21\ that would have the same meaning as that
term is defined in the Amended CTA Plan, namely ``a Regulatory Halt to
trading in one or more securities that a Primary Listing Market
declares in the event of a SIP Outage or Material SIP Latency.'' \22\
This new category of Regulatory Halt would address situations where the
Primary Listing Market declares a Regulatory Halt in one or more
securities as a result of a SIP Outage \23\ or a Material SIP
Latency.\24\
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\21\ See proposed Rule 7.18(a)(12).
\22\ See Amended CTA Plan, Section XI(a)(1)(K).
\23\ ``SIP Outage'' means ``a situation in which the Processor
has ceased, or anticipates being unable, to provide updated and/or
accurate quotation or last sale price information in one or more
securities for a material period that exceeds the time thresholds
for an orderly failover to backup facilities established by mutual
agreement among the Processor, the Primary Listing Market for the
affected securities, and the Operating Committee unless the Primary
Listing Market, in consultation with the Processor and the Operating
Committee, determines that resumption of accurate data is expected
in the near future.'' See Amended CTA Plan, Section XI(a)(1)(M).
\24\ ``Material SIP Latency'' means ``a delay of quotation or
last sale price information in one or more securities between the
time data is received by the Processor and the time the Processor
disseminates the data over the high speed line or over the ``high
speed line'' under the CQ Plan, which delay the Primary Listing
Market determines, in consultation with, and in accordance with,
publicly disclosed guidelines established by the Operating
Committee, to be (a) material and (b) unlikely to be resolved in the
near future.'' See Amended CTA Plan, Section XI(a)(1)(E).
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Fourth, the Exchange proposes to add a definition of ``Regulatory
Halt,'' \25\ which would be a new defined term that incorporates the
Exchange's existing regulatory halt authority as well as the proposed
new regulatory halt authority. The Exchange proposes that the term
would have the same meaning as in the Amended CTA Plan,\26\ as follows:
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\25\ See proposed Rule 7.18(a)(11).
\26\ See Amended CTA Plan, Section XI(a)(1)(J).
a halt declared by the Primary Listing Market in trading in one or
more securities on all Trading Centers for regulatory purposes,
including for the dissemination of material news, news pending,
suspensions, or where otherwise necessary to maintain a fair and
orderly market. A Regulatory Halt includes a trading pause triggered
by Limit Up Limit Down,\27\ a halt based on Extraordinary Market
Activity as defined in the Amended CTA Plan, a trading halt
triggered by a Market-Wide Circuit Breaker,\28\ and a SIP Halt.
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\27\ The Exchange proposes to incorporate the Amended CTA Plan's
definition of ``Limit Up Limit Down.'' See proposed Rule 7.18(a)(2).
\28\ The Exchange proposes to incorporate the Amended CTA Plan's
definition of ``Market-Wide Circuit Breaker.'' See proposed Rule
7.18(a)(4).
Fifth, the Exchange proposes to add a definition of ``Operational
Halt,'' \29\ which would be a new definition for the Exchange. The
Exchange proposes that this term would have the same meaning as in the
Amended CTA Plan, which is: ``a halt in trading in one or more
securities only on a Market declared by such Participant and is not a
Regulatory Halt.'' \30\ An Operational Halt is effective only on the
Exchange; other markets are not required to halt trading in the
affected securities. In practice, the Exchange has always had the
capacity to implement operational halts and local trading suspensions
in specified circumstances, but such halts are not currently referred
to as ``operational halts'' in the Exchange's rules.\31\ The proposed
change would provide greater clarity on when an Operational Halt may be
implemented and the process for halting and resuming trading in the
event of an Operational Halt. An Operational Halt is not a Regulatory
Halt.
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\29\ See proposed Rule 7.18(a)(8).
\30\ See Amended CTA Plan, Section XI(a)(1)(G).
\31\ See Rule 7.13 (Trading Suspensions).
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Regulatory Halts
Proposed Rule 7.18(b) would set forth requirements relating to
Regulatory Halts.
Authority To Initiate a Regulatory Halt
Proposed Rule 7.18(b)(1) would describe the three circumstances in
which the Exchange must halt pursuant to a Regulatory Halt: (a) when a
UTP Listing Market has declared a Trading Pause pursuant to Rule 7.11
\32\ concerning Limit Up-Limit Down; \33\ (b) in the event of
extraordinary market volatility as set forth in Rule 7.12 \34\
concerning Market-Wide Circuit Breakers; and (c) when a UTP Listing
Market initiates a Regulatory Halt.
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\32\ Rule 7.11 is the Exchange's rule governing Limit Up Limit
Down.
\33\ The Exchange, as a non-Primary Listing Market, does not
itself declare Trading Pauses pursuant to the Limit Up-Limit Down
Plan, but rather implements such pauses declared by Primary Listing
Markets.
\34\ Rule 7.12 is the Exchange's rule governing Market-Wide
Circuit Breaker.
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Implementing a UTP Regulatory Halt
Proposed Rule 7.18(b)(2) would specify how the Exchange would
implement Regulatory Halts declared by other Primary Listing Markets,
referred to by the Exchange as a ``UTP Regulatory Halt.'' \35\
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\35\ The term ``UTP Listing Market'' is defined in Rule 1.1(jj)
to mean the primary listing market for a UTP Security. The term
``UTP Security'' is defined in Rule 1.1(ii) to mean a security that
is listed on a UTP Listing Market and that trades on the Exchange
pursuant to unlisted trading privileges. The term ``UTP Regulatory
Halt'' is defined in Rule 1.1(kk). The Exchange proposes a non-
substantive amendment to this definition to cross-reference the
definition of ``Regulatory Halt'' in proposed Rule 7.18 and delete
the clause ``that requires all market centers to halt trading in
that security'' as duplicative of the proposed new definition of
Regulatory Halt, described above.
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Proposed Rule 7.18(b)(2)(A) would provide that the Exchange would
halt trading in a UTP Security when the UTP Listing Market declares a
UTP Regulatory Halt for any such securities. This proposed rule text is
based on Section XI(a)(iii) of the Amended CTA Plan, as well as the
first sentence of current Rule 7.18(a),\36\ which provides
[[Page 40111]]
in part that if the UTP Listing Market declares a UTP Regulatory Halt,
the Exchange will halt trading in that security.
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\36\ As discussed below, the Exchange proposes to delete current
Rule 7.18(a) in its entirety.
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Proposed Rule 7.18(b)(2)(B) would provide that the start time of a
UTP Regulatory Halt is when the UTP Listing Market declares the halt,
regardless of whether an issue with communications impacts the
dissemination of the notice. This provision is consistent with Section
XI(a)(iv)(A) of the Amended CTA Plan, and would provide market
participants with certainty on the official start time of the
Regulatory Halt. Under the proposed rule, the start time is fixed by
the UTP Listing Market; it is not dependent on whether notice is
disseminated immediately. This will avoid possible disagreement if the
UTP Regulatory Halt time were tied to dissemination or receipt of
notification, which may occur at different times. The Exchange
recognizes that in situations where communication is interrupted,
trades may continue to occur until news of the UTP Regulatory Halt
reaches all trading centers. However, a fixed ``official'' Regulatory
Halt start time will allow SROs to revisit trades after the fact and
determine in a consistent manner whether specific trades should stand.
Proposed Rule 7.18(b)(2)(C)(i), (ii), and (iii) would set forth
rules for trading halts in UTP Exchange Traded Products.\37\ This
proposed rule text is based on current Rule 7.18(c)(1)(A), (B), and (C)
with non-substantive differences to replace the term ``primary listing
market'' with the term ``Primary Listing Market'' in proposed Rule
7.18(b)(2)(C)(ii) and (iii)(b). The Exchange proposes to delete current
Rule 7.18(c) and its sub-paragraphs as duplicative of the proposed rule
text.
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\37\ The term ``UTP Exchange Traded Product'' is defined in Rule
1.1(m) to mean a security that meets the definition of ``derivative
securities product'' in Rule 19b-4(e) under the Securities Exchange
Act of 1934 and that trades on the Exchange pursuant to unlisted
trading privileges.
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Resumption of Trading After a Regulatory Halt
The SROs have jointly developed processes to govern the resumption
of trading in the event of a Regulatory Halt. While the actual process
of re-launching trading will remain unique to each exchange, the
proposed rule would harmonize certain common elements of the reopening
process that would benefit from consistency across markets. These
common elements include the primacy of the Primary Listing Market in
resumption decisions, the requirement that the Primary Listing Market
make its determination to resume trading in good faith, and certain
parts of the complex process for reopening trading after a SIP Halt.
With respect to a SIP Halt, common elements of the reopening process
include the interaction among SROs (including the Primary Listing
Market with the SIP), the requirement that the Primary Listing Market
terminate a SIP Halt with a notification that specifies a SIP Halt
Resume Time, the minimum quoting times before resumption of trading,
the cutoff time after which trading would not resume during Core
Trading Hours, and the time when trading may resume if the Primary
Listing Market does not open a security within the amount of time
specified in its rules after the SIP Halt Resume Time.
Proposed Rule 7.18(b)(3) would provide the process for resuming
trading upon the conclusion of a Regulatory Halt. This new rule, which
would effectuate Section XI(a)(v) and (vi) of the Amended CTA Plan, is
divided into the following two subparagraphs concerning resumption of
trading: (A) after a Regulatory Halt other than a SIP Halt; and (B)
after a SIP Halt.
Proposed Rule 7.18(b)(3)(A) would provide that, for a Regulatory
Halt other than a SIP Halt, the Exchange may resume trading by starting
to accept orders after the Exchange receives notification \38\ from the
UTP Listing Market that the UTP Regulatory Halt has been terminated,
provided that, during Core Trading Hours, the Exchange will not resume
trading in any security that is subject to the Limit Up Limit Down Plan
until the Exchange receives the first Price Band in that security. This
proposed rule text is based on the first sentence of current Rule
7.18(a).\39\ The Exchange proposes to delete the first sentence of
current Rule 7.18(a) as duplicative of the proposed rule text.
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\38\ The manner and timing of such notice would be determined by
the UTP Listing Market.
\39\ The Exchange does not propose to include the second
sentence of current Rule 7.18(a) in the proposed rule, as that
sentence is inconsistent with the first sentence (upon which
proposed Rule 7.18(b)(3)(A) is based), and would permit the Exchange
to resume trading in a security affected by a UTP Regulatory Halt
other than a SIP Halt before the UTP Listing Market has provided
notification that the halt has ended and before the Exchange
receives the first LULD Price Bands in that security. The Exchange
accordingly proposes to delete the second sentence of current Rule
7.18(a).
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Proposed Rule 7.18(b)(3)(B) would address resumption of trading
after a SIP Halt initiated by a UTP Listing Market. The proposed rule
would provide that for UTP Securities affected by a SIP Halt, during
Core Trading Hours, the Exchange may resume trading in the affected
security after trading in the affected security has resumed on the UTP
Listing Market or notice has been received from the UTP Listing Market
that such trading may resume. The proposed rule would further provide
that during Core Trading Hours, if the UTP Listing Market does not open
a security within the amount of time listed by the rules of the UTP
Listing Market, the Exchange may resume trading in that security,
provided that the Exchange will not resume trading in any security that
is subject to the Limit Up-Limit Down Plan until it receives the first
Price Band in that security.\40\ Outside of Core Trading Hours, the
Exchange may resume trading in an affected UTP Security after the SIP
Halt Resume Time.
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\40\ The Exchange's proposal to wait for the first Limit Up
Limit Down Price Band in the affected UTP Security before resuming
trading after a SIP Halt initiated by a UTP Listing Market is
consistent with the Exchange's practice for resuming trading in
affected UTP Securities after other types of Regulatory Halts. See
proposed Rule 7.18(b)(3)(A) and current Rule 7.18(a).
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Order Processing During a Regulatory Halt
Proposed Rule 7.18(b)(4) would describe how the Exchange would
process new and existing orders in a UTP Security during a UTP
Regulatory Halt, including a SIP Halt initiated by a UTP Listing
Market. Proposed Rule 7.18(b)(4)(A)(i)-(vi) is based on current Rule
7.18(b)(1)-(6) without any differences. The Exchange proposes to delete
current Rule 7.18(b) and its sub-paragraphs as duplicative of the
proposed rule text.
Operational Halts
The Exchange proposes to address Operational Halts in proposed Rule
7.18(c). As noted above, an Operational Halt is non-regulatory in
nature and applies only to the exchange that calls the halt. As
described above, the Exchange has always had the capacity to implement
operational halts and local trading suspensions in specified
circumstances, but such halts are not currently referred to as
``operational halts'' in the Exchange's rules.\41\ As part of the
Exchange's assessment with other SROs of the halting and resumption of
trading, the Exchange believes that the markets would benefit from
greater clarity regarding when an Operational Halt may be appropriate.
In part, the proposed change is designed to cover situations similar to
those that might
[[Page 40112]]
constitute a Regulatory Halt but where the impact is limited to a
single market. For example, just as a market disruption might trigger a
Regulatory Halt for Extraordinary Market Activity (as defined in the
Amended CTA Plan) if it affects multiple markets, a disruption at the
Exchange, such as a technical issue affecting trading in one or more
securities, could impact trading on the Exchange so significantly that
an Operational Halt is appropriate in one or more securities. In such
an instance, it would be in the public interest to institute an
Operational Halt to minimize the impact of a disruption that, if
trading were allowed to continue, might negatively affect a greater
number of market participants. An Operational Halt does not implicate
other trading centers.
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\41\ See Rule 7.13 (Trading Suspensions). The Exchange also
notes that its proposed Rule 7.18(c) regarding Operational Halts is
substantially identical to the revised NYSE, NYSE American, NYSE
Arca, NYSE Texas, Nasdaq, Phlx, MIAX Pearl, and MEMX rules cited in
note 4 above, and is therefore not novel.
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Proposed Rule 7.18(c)(1) would specify the Exchange's authority to
initiate an Operational Halt, which is discretionary, and provide that
the Exchange may declare an Operational Halt for any security trading
on the Exchange: if it is experiencing Extraordinary Market Activity on
the Exchange (Proposed Rule 7.18(c)(1)(A)) or when otherwise necessary
to maintain a fair and orderly market or in the public interest
(Proposed Rule 7.18(c)(1)(B)).
Under proposed Rule 7.18(c)(2), the Exchange would notify the
Processor if it has concerns about its ability to collect and transmit
quotes, orders, or last sale prices, or where it has declared an
Operational Halt or suspension of trading in one or more Eligible
Securities (as that term is defined in the CTA Plan), pursuant to the
procedures adopted by the Operating Committee.
Proposed Rule 7.18(c)(3) would set out rules for order processing
during an Operational Halt. In such a case, proposed Rule 7.18(c)(3)(A)
would provide that the Exchange would cancel all unexecuted orders
resting on the Exchange Book, and proposed Rule 7.18(c)(3)(B) would
provide that the Exchange would reject all other incoming order
instructions until the Exchange resumes trading. The Exchange currently
processes new and existing orders in this manner when it suspends
trading. The Exchange proposes to include this processing in Rule 7.18
to specify that this processing would also be applicable to when the
Exchange resumes trading following an Operational Halt in an Exchange-
listed security.
Proposed Rule 7.18(c)(4) would specify how the Exchange resumes
trading after an Operational Halt. Proposed Rule 7.18(c)(4)(A) would
provide that the Exchange would resume trading following an Operational
Halt when it determines that trading may resume in a fair and orderly
manner consistent with the Exchange's rules. Proposed Rule
7.18(c)(4)(B) would address ``Communications,'' and provide that
trading in a halted security shall resume at the time specified by the
Exchange in a notice. It would further specify that Exchange will
notify all other Plan participants and the SIP of such Operational Halt
as well as provide notice that an Operational Halt has been lifted
using such protocols and other emergency procedures as may be mutually
agreed to between the Operating Committee and the Exchange. If the SIP
is unable to disseminate notice of an Operational Halt or the Exchange
is not open for trading, the Exchange would take reasonable steps to
provide notice of an Operational Halt, which shall include both the
type and start time of the Operational Halt. Each Plan participant
shall continuously monitor communication protocols established by the
Operating Committee and the Processor during market hours to
disseminate notice of an Operational Halt, and the failure of a
participant to do so shall not prevent the Exchange from initiating an
Operational Halt.
Conforming Changes to Other Rules
The Exchange also proposes non-substantive amendments of two other
rules.
First, as noted above, the Exchange proposes a non-substantive
amendment to the definition of ``UTP Regulatory Halt'' in Rule 1.1(kk)
to cross-reference the definition of ``Regulatory Halt'' in proposed
Rule 7.18 and delete the clauses ``trade, suspension, halt, or pause''
and ``that requires all market centers to halt trading in that
security'' as duplicative of the proposed new definition of Regulatory
Halt.
Second, the Exchange proposes to amend Rule 7.11 (Limit Up-Limit
Down Plan and Trading Pauses in Individual Securities Due to
Extraordinary Market Volatility). Current Rule 7.11(b)(2) provides that
if a primary listing market other than the Exchange issues a Trading
Pause, the Exchange will resume trading as provided for in Rule 7.18(a)
regarding UTP Regulatory Halts. The Exchange proposes to replace the
term ``primary listing market'' with ``UTP Listing Market'' for
clarity.
Implementation
The Exchange will implement all of the changes proposed herein in
conjunction with the Processors and the other SROs implementing the
necessary rule changes and related technology and procedural changes.
The Exchange will publish a trader notice at least 30 business days
before implementing the proposed changes.
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\42\ Specifically, the
proposal is consistent with Section 6(b)(5) of the Act \43\ because it
would 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, protect investors and
the public interest.
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\42\ 15 U.S.C. 78f(b).
\43\ 15 U.S.C. 78f(b)(5).
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As described above, the Exchange and other SROs are seeking to
adopt harmonized rules related to halting and resuming trading in U.S.-
listed equity securities. The Exchange believes that the proposed rules
will provide greater transparency and clarity with respect to the
situations in which trading will be halted and the process through
which that halt will be implemented and terminated. Particularly, the
proposed changes seek to achieve consistent results for participants
across U.S. equities exchanges and in the over-the-counter market while
maintaining a fair and orderly market, protecting investors, and
protecting the public interest. Based on the foregoing, the Exchange
believes that the proposed rules are consistent with Section 6(b)(5) of
the Act \44\ because they will foster cooperation and coordination with
persons engaged in regulating and facilitating transactions in
securities.
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\44\ 15 U.S.C. 78f(b)(5).
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As discussed previously, the Exchange believes that the various
provisions of the proposed rules that will apply to all SROs are
focused on the type of cross-market event where a consistent approach
will assist market participants and reduce confusion during a crisis.
Because market participants often trade the same security across
multiple venues and trade securities listed on different exchanges as
part of a common strategy, the Exchange believes that the proposed
rules will lessen the risk that market participants holding a basket of
securities will have to deal with divergent outcomes depending on where
the securities are listed or traded. Conversely, the proposed rules
would still allow individual SROs to react
[[Page 40113]]
differently to events that impact various securities or markets in
different ways. This avoids the ``brittle market'' risk where an
isolated event at a single market forces all markets trading equities
securities to halt or halts trading in all securities where the issue
affected only a subset of securities. By addressing both concerns, the
Exchange believes that the proposed rules further the Act's goal of
maintaining fair and orderly markets.
The Exchange believes that the proposed rule's focus of
responsibility on the Primary Listing Market for decisions related to a
Regulatory Halt and the resumption of trading is consistent with the
Act, which itself imposes obligations on exchanges with respect to
issuers that are listed. As is currently the case, the Primary Listing
Market would be responsible for the many regulatory functions related
to its listings, including the determination of when to declare a
Regulatory Halt. While these core responsibilities remain with the
Primary Listing Market, trading in the security can occur on multiple
exchanges that have unlisted trading privileges for the security or in
the over-the-counter market, regulated by FINRA. These other venues are
responsible for monitoring activity on their own markets, but also have
agreed to honor a Regulatory Halt.
The proposed changes relating to Regulatory Halts would ensure that
all SROs handle the situations covered therein in a consistent manner
that would prevent conflicting outcomes in cross-market events, and
ensure that all Trading Centers recognize a Regulatory Halt declared by
the Primary Listing Market. The changes are consistent with and
implement the Amended CTA Plan.
The Exchange believes that the other definitions in the proposed
rules are also consistent with the Act. The Exchange is adopting a
modified form of the term ``Extraordinary Market Activity'' from the
Amended CTA Plan, as described above, to further the Act's goal of
promoting fair and orderly markets. The Exchange is also proposing to
adopt definitions for ``SIP Outage,'' ``Material SIP Latency'' and
``SIP Halt,'' to explicitly address situations that may disrupt the
markets, and these definitions are identical to the definitions in the
Amended CTA Plan. The proposed rules specify when the Exchange should
seek information from the Operating Committee, other SROs, and market
participants as well as means for dissemination of important
information to the market, consistent with the Amended CTA Plan. The
Exchange believes these provisions strike the right balance in
outlining a process to address unforeseen events without preventing
SROs from taking action needed to protect the market.
The Exchange believes that the proposed rules, which make halts
consistent across exchange rules, is consistent with the Act in that it
will foster cooperation and coordination with persons engaged in
regulating the equities markets. In particular, the Exchange believes
it is important for SROs to coordinate when there is a widespread and
significant event, as multiple Trading Centers are affected in such an
event. Further, while the Exchange recognizes that the proposed rule
will not guarantee a consistent result on every market in all
situations, the Exchange does believe that it will assist in that
outcome. While the proposed rule relating to Regulatory Halts focuses
primarily on the kinds of cross-market events that would likely impact
multiple markets, individual SROs will still retain flexibility to deal
with unique products or smaller situations confined to a particular
market.
Also consistent with the Act, and with the Amended CTA Plan, is the
Exchange's proposal in Rule 7.18(c) to address Operational Halts, which
are non-regulatory in nature and apply only to the exchange that
declares the halt. As noted earlier, the Exchange has always had the
capacity to implement operational halts and local trading suspensions,
but such halts are not currently referred to as ``operational halts''
in the Exchange's rules.\45\ The Exchange also notes that its proposed
Rule 7.18(c) regarding Operational Halts is substantially identical to
the revised NYSE, NYSE American, NYSE Arca, NYSE Texas, Nasdaq, Phlx,
MIAX Pearl, and MEMX rules cited above,\46\ and is therefore not novel.
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\45\ See Rule 7.13 (Trading Suspensions).
\46\ See supra note 5.
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The Exchange believes that the markets would benefit from greater
clarity regarding when an Operational Halt may be appropriate. In part,
the proposed change is designed to cover situations similar to those
that might constitute a Regulatory Halt, but where the impact is
limited to a single market. For example, a disruption at the Exchange,
such as a technical issue affecting trading in one or more securities,
could impact trading on the Exchange so significantly that an
Operational Halt is appropriate in one or more securities. In such an
instance, it would be in the public interest to institute an
Operational Halt to minimize the impact of a disruption that, if
trading were allowed to continue, might negatively affect a greater
number of market participants. An Operational Halt does not implicate
other trading centers.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposal is consistent with Section
6(b)(8) of the Act \47\ in that it does not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act as explained below.
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\47\ 15 U.S.C. 78f(b)(8).
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Importantly, the Exchange believes the proposal would not impose a
burden on intermarket competition but rather would alleviate any burden
on competition because it is the result of a collaborative effort by
all SROs to harmonize and improve the process related to the halting
and resumption of trading in U.S.-listed equity securities. In this
area, the Exchange believes that all SROs should have consistent rules
to the extent possible in order to provide additional transparency and
certainty to market participants and to avoid inconsistent outcomes
that could cause confusion and erode market confidence. The proposed
changes would ensure that all SROs handle the situations covered
therein in a consistent manner and ensure that all Trading Centers
handle a Regulatory Halt consistently. The Exchange understands that
all other Primary Listing Markets intend to file proposals that are
substantially similar to this proposed rule change.
The Exchange does not believe that its proposals concerning
Operational Halts impose and undue burden on competition. Under its
existing rules, the Exchange already possesses discretionary authority
to impose halts and trading suspensions for various reasons. The
proposed rule change clarifies and broadens the circumstances in which
the Exchange may impose such Operational Halts, and specifies
procedures for both imposing and lifting then. The Exchange does not
intend for these proposals to have any competitive impact whatsoever.
Indeed, the Exchange expects that other exchanges will adopt similar
rules and procedures to govern operational halts, to the extent that
they have not done so already.
The Exchange does not believe that the proposed rule change imposes
a burden on intramarket competition because the proposed rule would
apply to all market participants equally. In addition, information
regarding the halting and resumption of trading will be disseminated
using several freely-accessible sources to ensure broad
[[Page 40114]]
availability of information in addition to the SIP data and proprietary
data feeds offered by the Exchange and other SROs that are available to
subscribers. In addition, the proposed rule change includes several
provisions related to the declaration and timing of trading halts and
the resumption of trading designed to avoid any advantage to those who
can react more quickly than other participants. The proposals encourage
early and frequent communication among the SROs, SIPs, and market
participants to enable the dissemination of timely and accurate
information concerning the market to 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 \48\ and Rule 19b-4(f)(6) thereunder.\49\
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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\48\ 15 U.S.C. 78s(b)(3)(A)(iii).
\49\ 17 CFR 240.19b-4(f)(6).
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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 will institute proceedings to
determine whether the proposed rule change 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="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#cab8bfa6afe7a9a5a7a7afa4beb98ab9afa9e4ada5bc"><span class="__cf_email__" data-cfemail="3f4d4a535a125c5052525a514b4c7f4c5a5c11585049">[email protected]</span></a>. Please include
file number SR-NYSENAT-2025-17 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-2025-17. 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 filing 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-2025-17 and should be submitted
on or before September 8, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\50\
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\50\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-15624 Filed 8-15-25; 8:45 am]
BILLING CODE 8011-01-P
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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.