Notice2026-03439
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Rule 7.35E
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Published
February 23, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 35 (Monday, February 23, 2026)</title>
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[Federal Register Volume 91, Number 35 (Monday, February 23, 2026)]
[Notices]
[Pages 8543-8546]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-03439]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104854; File No. SR-NYSEAMER-2026-10]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend Rule
7.35E
February 18, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 6, 2026, NYSE American LLC (``NYSE American'' 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\ 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 7.35E (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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 7.35E (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
[[Page 8544]]
proposed change would reflect an augmented calculation of the Auction
Reference Price, as defined in Rule 7.35E(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 \3\ for an auction. For example, as provided in
Rule 7.35E(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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\3\ 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 7.35E(a)(8).
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Rule 7.35E(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 7.35E(e)(7)(A)).
The Exchange proposes to amend Rule 7.35E(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.\4\ As proposed, the Auction Reference Price for
the Core Open Auction would be defined as:
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\4\ 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 7.35E(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
7.35E(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 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 7.35E(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.
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. The Exchange further notes that the
proposed changes to its Auction Reference Price calculations are
comparable to approaches currently taken by other equities exchanges in
considering only certain pricing benchmarks, as specified in their
rules, in determining reference prices for their auctions.\5\
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\5\ For example, the Nasdaq Stock Market (``Nasdaq'') uses
certain auction reference prices based on either the previous
trading day's Nasdaq Official Closing Price, Nasdaq last sale price,
or consolidated closing price. See, e.g., Nasdaq Rules 4752(a)(8)
(defining ``First Opening Reference Price,'' in connection with the
Nasdaq opening process, as the previous day's Nasdaq Official
Closing Price of the security for Nasdaq-listed securities or the
consolidated closing price otherwise); 4120(c)(7)(A) (defining
``Auction Reference Price,'' in connection with releasing a security
for trading following certain trading halts, as the Nasdaq last sale
price or, if there is no such price, the prior trading day's Nasdaq
Official Closing Price). In addition, like the Exchange's Auction
Reference Price, Nasdaq disseminates the ``Current Reference Price''
as part of its ``Order Imbalance Indicator'' in connection with its
opening, reopening, and closing processes. See, e.g., Nasdaq Rules
4752(a)(3)(A) and 4754(a)(7)(A) (defining ``Current Reference
Price,'' in connection with the Nasdaq opening and closing
processes, respectively, as the price at or within the current
Nasdaq Market Center best bid and offer at which the maximum number
of shares of certain auction-eligible orders can be paired, or other
alternative prices as set forth in subparagraphs (ii) through (iv)
if more than one such price exists under each subsequent specified
calculation); 4752(a)(3) (describing the Order Imbalance Indicator
for the Nasdaq Opening Cross); 4753(a)(3) (describing the Order
Imbalance indicator for the Nasdaq Halt Cross); 4754(a)(3)
(describing the Order Imbalance Indicator for the Nasdaq Closing
Cross). In connection with its auction process, Cboe BZX Exchange
(``BZX'') uses a ``Reference Price'' and ``Reference Price Range,''
where the Reference Price is the price within the Reference Price
Range that maximizes the number of Eligible Auction Order shares
associated with the lesser of the Reference Buy Shares and the
Reference Sell Shares as determined at each price level within the
Reference Price Range, that minimizes the absolute difference
between Reference Buy Shares and Reference Sell Shares, and
minimizes the distance from the Volume Based Tie Breaker. See BZX
Rules 11.23(a)(19) (defining ``Reference Price''); 11.23(a)(23)
(defining ``Volume Based Tie Breaker'' as the midpoint of the NBBO
for a particular security if the NBBO is a Valid NBBO or else the
price of the Final Last Sale Eligible Trade). The Reference Price
Range is the range between the NBB and NBO for a particular security
or, if there is no NBB or NBO, the price of the Final Last Sale
Eligible Trade. See BZX Rules 11.23(a)(20) (defining ``Reference
Price Range''); 11.23(a)(9) (defining ``Final Last Sale Eligible
Trade'' as the last round lot trade occurring during Regular Trading
Hours on the BZX if the trade was executed during the last one
second prior to either the Closing Auction or, for Halt Auctions,
trading was halted, or else the last round lot trade reported to the
consolidated tape received by BZX during Regular Trading Hours or
prior to trading being halted (as applicable), or else the BZX
Official Closing Price from the previous trading day). Like the
Exchange's Auction Reference Price, the Reference Price is published
by BZX in advance of opening, closing, IPO, and halt auctions. See,
e.g., BZX Rules 11.23(b)(2)(A) (describing the publication of
auction information related to the BZX opening auction);
11.23(c)(2)(A) (describing the publication of auction information
related to the BZX closing auction); 11.23(d)(2)(A) (describing the
publication of auction information related to BZX IPO and trading
halt auctions).
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[[Page 8545]]
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 effectiveness of this
proposed rule change, the Exchange anticipates that such changes will
be implemented no later than in the third quarter of 2026.
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
7.35E(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 notes that the proposed calculation of the Auction Reference
Price is comparable to the methods used by other equities exchanges for
their auction reference prices, in that it looks to certain pricing
benchmarks, as specified in the Exchange's rules, to determine the
Auction Reference Price.\8\
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\8\ See note 6, supra.
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The Exchange believes that the proposed non-substantive grammatical
changes to the Auction Reference Price definitions for the Early Open
Auction, Closing 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 7.35E(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
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 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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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \13\ of the Act to determine whether the proposed
rule
[[Page 8546]]
change should be approved or disapproved.
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\13\ 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#691b1c050c440a0604040c071d1a291a0c0a470e061f"><span class="__cf_email__" data-cfemail="2d5f584148004e4240404843595e6d5e484e034a425b">[email protected]</span></a>. Please include
file number SR-NYSEAMER-2026-10 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-NYSEAMER-2026-10. 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-NYSEAMER-2026-10 and should be submitted
on or before March 16, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-03439 Filed 2-20-26; 8:45 am]
BILLING CODE 8011-01-P
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