Notice2025-17001
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.62P-O
Primary source
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Published
September 5, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 170 (Friday, September 5, 2025)</title>
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[Federal Register Volume 90, Number 170 (Friday, September 5, 2025)]
[Notices]
[Pages 43016-43018]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-17001]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103822; File No. SR-NYSEARCA-2025-65]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule
6.62P-O
September 2, 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 25, 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 6.62P-O (Orders and Modifiers)
regarding the handling of Market Orders. 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
The Exchange proposes to amend Rule 6.62P-O (Orders and Modifiers)
regarding the handling of Market Orders. Specifically, the Exchange
proposes to eliminate one of the circumstances under which certain
Market Orders would be cancelled or rejected.
Per Rule 6.62P-O(a)(1), a Market Order is ``[a]n unpriced order
message to buy or sell a stated number of option contracts at the best
price obtainable, subject to the Trading Collar assigned to the
order.'' \4\ Rule 6.62P-O(a)(1)(A) provides that ``[a] Market Order
that arrives during continuous trading will be rejected, or that was
routed, returns unexecuted, and has no resting quantity to join will be
cancelled'' if it fails the validations specified in Rule 6.62P-
O(a)(1)(A)(i)-(iv).\5\ One such validation provides that, subject to
certain exceptions, the Market Order will be rejected/cancelled if
``[t]here are no contra-side Market Maker quotes on the Exchange or
contra-side ABBO [Away Market Best Bid or Best Offer].'' \6\ At the
time it was adopted, the Exchange believed the validation would
``prevent a Market Order from trading at prices that may not be current
for that series in the absence of Market Maker quotations or an ABBO
[Away Best Bid or Best Offer].'' \7\ In this regard, this validation
aligned with the Exchange's
[[Page 43017]]
treatment of a Market Order received when there is no NBB or NBO, per
Rule 6.62P-O(a)(1)(A)(i) and (ii).
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\4\ See Rule 6.62P-O(a)(1).
\5\ See id.
\6\ See id. The exception to Rule 6.62P-O(a)(1)(A)(iii) applies
to Market Orders to sell, as set forth in provided for in paragraph
(a)(1)(A)(ii) of this Rule.
\7\ See Securities Exchange Act Release No. 94072 (January 26,
2022), 87 FR 5592, 5607 (February 1, 2022) (SR-NYSEArca-2021-47)
(order approving rules applicable to options trading on the Pillar
technology platform, including regarding the handling of Market
Orders).
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However, the Exchange has determined that this validation proved to
be suboptimal because it would result in missed execution opportunities
for the inbound Market Orders against the resting orders on the
Consolidated Book that would otherwise be eligible to execute with the
inbound Market Order. The Exchange believes the benefit of providing
more execution opportunities outweighs the risk of Market Orders
trading at prices that may not be current. Thus, the Exchange proposes
to delete this validation, which will improve execution opportunities
for local interest and the inbound Market Order, and to renumber the
balance of Rule in conformance with this change.\8\
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\8\ See proposed Rule 6.62P-O(a)(1)(A)(i)-(iii). In addition to
renumbering the Rule, the Exchange has added ``or'' to new paragraph
(a)(1)(A)(iii). See id.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\9\ in general, and
furthers the objectives of Section 6(b)(5),\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it would prevent the rejection or
cancelation of Market Orders that may be executable against resting
orders on the Exchange. The Exchange believes that increasing execution
opportunities--including for resting Customer interest--would promote
just and equitable principles of trade and serve to protect investors
and the public interest. Further, the proposed change (including the
technical conforming changes) would remove impediments to and perfect
the mechanism of a free and open market and a national market system
because it would promote clarity and transparency regarding the
Exchange's handling of Market Orders.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange notes that the
proposed changes are not designed to address any competitive issues,
but rather to amend the Exchange's rules relating to the handling of
Market Orders.
The Exchange does not believe that its proposed rule change will
impose any burden on intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because it would
apply in the same manner to all similarly-situated market participants
that opt to utilize Market Orders.
The Exchange does not believe that its proposed rule change will
impose any burden on inter-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed change is designed to improve execution opportunities for
orders submitted to the Exchange.
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the foregoing 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 for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \13\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\14\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 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 satisfied this requirement.
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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) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 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#3c4e495059115f5351515952484f7c4f595f125b534a"><span class="__cf_email__" data-cfemail="ef9d9a838ac28c8082828a819b9caf9c8a8cc1888099">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-65 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-2025-65. 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-NYSEARCA-2025-65 and should be submitted
on or before September 26, 2025.
[[Page 43018]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-17001 Filed 9-4-25; 8:45 am]
BILLING CODE 8011-01-P
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