Notice2025-16069
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Amend Rule 7.35-E
Primary source
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Published
August 22, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 161 (Friday, August 22, 2025)</title>
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[Federal Register Volume 90, Number 161 (Friday, August 22, 2025)]
[Notices]
[Pages 41143-41145]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-16069]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103740; File No. SR-NYSEARCA-2025-60]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To Amend Rule 7.35-E
August 19, 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 15, 2025, NYSE Arca, Inc. (``NYSE Arca'' 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 7.35-E (Auctions) regarding the
calculation of the Auction Reference Price. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 7.35-E (Auctions), which
describes how the Exchange conducts auctions, to enhance reference
price calculations for the Core Open Auction, Trading Halt Auction, and
Closing Auction. The proposed change would reflect an augmented
calculation of the Auction Reference Price, as defined in Rule 7.35-
E(a)(8)(A), that more accurately reflects price movements in a dynamic
market environment, thereby promoting greater transparency in the
auction process and the Exchange's marketplace.
The Auction Reference Price is a price used in determining the
Indicative Match Price \4\ for an auction. For example, as provided in
Rule 7.35-E(a)(8)(A), if there are two or more prices at which the
maximum volume of shares is tradable, the Indicative Match Price will
be the price closest to the Auction Reference Price, provided that the
Indicative Match Price will not be lower (higher) than the price of an
order to buy (sell) ranked Priority 2--Display Orders that was eligible
to participate in the applicable auction.
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\4\ The Indicative Match Price is the best price at which the
maximum volume of shares, including the non-displayed quantity of
Reserve Orders, is tradable in the applicable auction, subject to
Auction Collars. See Rule 7.35-E(a)(8).
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Rule 7.35-E(a)(8)(A) currently defines the Auction Reference Price
for the Core Open Auction as the midpoint of the Auction NBBO or, if
the Auction NBBO is locked, the locked price. If there is no Auction
NBBO, the Auction Reference Price would be the prior trading day's
Official Closing Price. The Auction Reference Price for the Closing
Auction is defined as the last consolidated round-lot price of that
trading day and, if none, the prior trading day's Official Closing
Price. The Auction Reference Price for a Trading Halt Auction is
defined as the last consolidated round-lot price of that trading day
and, if none, the prior trading day's Official Closing Price (except as
provided for in Rule 7.35-E(e)(7)(A)).
The Exchange proposes to amend Rule 7.35-E(a)(8)(A) regarding the
calculation of the Auction Reference Price for the Core Open Auction to
reflect a cascading calculation that would consider, in addition to the
benchmarks currently reflected in the rule, the price of the last
consolidated trade of at least one round lot of that trading day. The
Exchange notes that this proposed change would promote consistency with
the Auction Reference Price calculation for the Closing Auction and
Trading Halt Auction.\5\ As proposed, the Auction Reference Price for
the Core Open Auction would be defined as:
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\5\ The Exchange proposes conforming changes to the definition
of Auction Reference Price for the Closing Auction and Trading Halt
Auction to use the same language as is proposed for the Auction
Reference Price for the Core Open Auction. Specifically, the
Exchange proposes to use the ``price of the last consolidated trade
of at least one round lot of that trading day'' formulation in place
of the existing ``last consolidated round-lot price of that trading
day.'' These proposed changes are not intended to change how the
Exchange determines the Auction Reference Price for the Closing
Auction or Trading Halt Auction, but would add clarity and
consistency in Rule 7.35-E(a)(8)(A) with respect to the
determination of the Auction Reference Price. The Exchange also
proposes non-substantive grammatical changes to the Auction
Reference Price definitions for the Early Open Auction, Closing
Auction, Trading Halt Auction, and IPO Auction to further improve
clarity in Rule 7.35-E(a)(8)(A).
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<bullet> The price of the last consolidated trade of at least one
round lot of that trading day, or
<bullet> If there were no such trades, the midpoint of the Auction
NBBO, or
<bullet> If the Auction NBBO is locked, the locked price, or
<bullet> If there is no Auction NBBO, the prior trading day's
Official Closing Price for the initial calculation of the Auction
Reference Price, and for each subsequent calculation of the Auction
Reference Price, the most recently calculated Auction Reference Price.
With the addition of the price of the last consolidated trade of at
least one round lot of that trading day as a benchmark for calculating
the Auction Reference Price for the Core Open Auction, the Exchange
proposes to distinguish between the initial calculation of the Auction
Reference Price for the Core Open Auction and subsequent calculations
pursuant to the cascading calculation, in the event that there is no
Auction NBBO. For the initial calculation, the Exchange proposes that,
if there is no Auction NBBO, the Auction Reference Price would, as
currently, be the prior trading day's Official Closing Price. However,
for subsequent calculations of the Auction Reference Price when there
is no Auction NBBO, the Exchange proposes that the Auction Reference
Price would instead be the most recent Auction Reference Price, which
the Exchange believes would provide a more recent reference price for
the auction. In addition, the Exchange proposes to specify that each
Auction Reference Price calculation would be based on an evaluation of
the period since the last calculation of the Auction Reference Price.
This proposed change
[[Page 41144]]
is intended to ensure that, in cases where there was no consolidated
trade of at least one round lot in the period since the last
calculation of the Auction Reference Price, the Auction Reference Price
would instead be the midpoint of the Auction NBBO (or other price as
provided for in Rule 7.35-E(a)(8)(A)) to reflect a more recent
reference price for the auction.
The Exchange also proposes that Auction Reference Price
calculations for the Core Open Auction, Closing Auction, and Trading
Halt Auction would exclude trades on Trade Reporting Facilities during
the Early Trading Session or Late Trading Session, which may not
reflect the actual market in a security, thus providing for a more
accurate snapshot of the current market.
The Exchange believes the proposed enhancements to the calculations
of the Auction Reference Price for auctions on the Exchange would
better reflect more recent trading activity, and such price may reflect
a more recent valuation for a security, to the benefit of investors.
The proposed rule change would therefore promote the fair and orderly
operation of auctions on the Exchange by using reference prices that
are consistent with the most recent market activity in a given
security, which would also allow more buy and sell interest to
participate in such auctions.
Because of the technology changes associated with the proposed
changes, the Exchange proposes to announce the implementation date of
these changes by Trader Update. Subject to approval of this proposed
rule change, the Exchange anticipates that such changes will be
implemented before the end of the fourth quarter of 2025.
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 the proposed change 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
protect investors and the public interest because it is intended to
enhance the process for reference price calculations for auctions
conducted by the Exchange. Specifically, the proposed change is
intended to reflect an augmented calculation of the Auction Reference
Price for the Core Open Auction, Closing Auction, and Trading Halt
Auction to more accurately reflect price movements in a dynamic market
environment, thereby promoting transparency and removing impediments to
and perfecting the mechanisms of a free and open market and a national
market system. As noted above, the proposed changes to Rule 7.35-
E(a)(8)(A) would reflect that the calculation of the Auction Reference
Price for the Core Open Auction would take into account the price of
the last consolidated sale of at least one round lot of the trading day
and would be based on an evaluation of the period since the last
calculation of the Auction Reference Price. In addition, the Auction
Reference Price calculations for the Core Open Auction, Closing
Auction, and Trading Halt Auction would exclude trades on Trade
Reporting Facilities during the Early Trading Session or Late Trading
Session. The Exchange believes that the proposed change would result in
Auction Reference Prices that better reflect more recent trading
activity and which may reflect a more recent valuation for a security.
The Exchange believes that the proposed change would thus remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system because it is intended to provide market
participants with reference price information that could encourage
additional liquidity in auctions conducted on the Exchange.
The Exchange believes that the proposed non-substantive grammatical
changes to the Auction Reference Price definitions for the Early Open
Auction, Closing Auction, Trading Halt Auction, and IPO Auction 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 they are not intended to effect any change to
these definitions and are intended only to promote clarity in Rule
7.35-E(a)(8)(A).
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 rule change is
not intended to address competitive issues but rather is concerned
solely with enhancing the quality of the reference prices the Exchange
utilizes for the Core Open Auction, Closing Auction, and Trading Halt
Auction. The proposed rule change does not implicate any intermarket
competition concerns because it relates to how the Exchange would
facilitate auctions in Exchange-listed securities.
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be 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#acded9c0c981cfc3c1c1c9c2d8dfecdfc9cf82cbc3da"><span class="__cf_email__" data-cfemail="750700191058161a1818101b0106350610165b121a03">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-60 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-NYSEARCA-2025-60. 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
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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-NYSEARCA-2025-60 and should be submitted on or
before September 12, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-16069 Filed 8-21-25; 8:45 am]
BILLING CODE 8011-01-P
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