Notice2026-04144
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Commentary .03 to Rule 7.19
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
March 3, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 41 (Tuesday, March 3, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 41 (Tuesday, March 3, 2026)]
[Notices]
[Pages 10432-10434]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04144]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104897; File No. SR-NYSE-2026-12]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Commentary .03 to Rule 7.19
February 26, 2026.
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 February 19, 2026, New York Stock Exchange LLC (``NYSE'' 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Commentary .03 to Rule 7.19
regarding the availability of pre-trade risk controls to Floor brokers.
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 Commentary .03 to Rule 7.19
regarding the availability of pre-trade risk controls to Floor brokers.
Prior to 2025, paragraph (a) of Commentary .03 to Rule 7.19
provided \4\ that with respect to a Floor broker's trading activity on
the Exchange on behalf of a customer, a Floor broker could set the full
suite of Pre-Trade Risk Controls and Kill Switch Actions described in
Rule 7.19 when the Floor broker used its own MPID, but could only set a
small subset of such risk controls \5\ if the Floor broker used a
member organization's MPID for such trading.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 99677 (March 5,
2024), 89 FR 17530 (March 11, 2024) (SR-NYSE-2024-10).
\5\ Specifically, only the Pre-Trade Risk Controls in paragraphs
(b)(1)(A) and (b)(2)(A) or Kill Switch Actions in paragraph (h).
---------------------------------------------------------------------------
In 2025, in an attempt to streamline the rule, the Exchange removed
the ability of a Floor broker to set any risk controls for its trading
activity on the Exchange on behalf of a member organization when using
the member organization's MPID.\6\ In filing for this change, the
Exchange stated its belief that the change would result in a more
streamlined approach whereby the member organization would be the sole
entity with the ability to set Entering Firm risk controls with respect
to trading activity on the Exchange when the member organization's MPID
is being used.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 102753 (April 1,
2025), 90 FR 15017 (April 7, 2025) (SR-NYSE-2025-07).
---------------------------------------------------------------------------
Since implementing that change, the Exchange has received feedback
from market participants requesting that the Exchange restore, and
indeed expand, the ability of a Floor broker to set pre-trade risk
controls with respect to its trading activity on the Exchange on behalf
of a member organization when using the member organization's MPID.
Both Floor brokers and member organizations have expressed their
preference for restoring Floor brokers' access to such controls,
arguing that because Floor brokers are at the point of sale, they have
exposure to market changes in real time and are well-positioned to
promptly make adjustments to risk thresholds to better protect member
organizations.
As a result of such feedback, the Exchange has undertaken
technological changes to support the restoration and expansion of Floor
broker access to Entering Firm risk controls when trading on behalf of
a member organization using the member organization's MPID. The
Exchange proposes to amend its rules to permit a Floor broker to set
the full suite (except for three limited exceptions) of Pre-Trade Risk
Controls and Kill Switch Actions in Rule 7.19 with respect to its
trading activity on the Exchange on behalf of a member organization
when using the member organization's MPID. Accordingly, the Exchange
proposes to delete the current text in paragraph (a) of Commentary .03,
and to amend paragraph (a) to provide:
Regarding a Floor broker's trading activity on the Exchange on
behalf of a firm that is not a member organization, the Floor broker
will use its own MPID and may act as an ``Entering Firm'' to set any
of the Pre-Trade Risk Controls and Kill Switch Actions identified in
this rule with respect to such trading activity. Regarding a Floor
broker's trading activity on the Exchange on behalf of a firm that
is a member organization, the member organization may designate the
Floor broker to use the member organization's MPID and to act as an
``Entering Firm'' to set the Pre-Trade Risk Controls and Kill Switch
Actions identified in this rule with respect to such trading
activity, except for a subset of risk controls available pursuant to
paragraph (b)(2)(D).\7\
---------------------------------------------------------------------------
\7\ As is currently the case, a member organization would retain
the ability to set Pre-Trade Risk Controls and Kill Switch Actions
on its own behalf as an ``Entering Firm.''
The limited exception relates to three of the Exchange's single-
order risk controls that ``restrict the types of securities transacted
(including but not limited to restricted securities)'' pursuant to
paragraph (b)(2)(D) of Rule 7.19. Specifically, due to current
technological configurations, Floor brokers using a member
organization's MPID will not have access to symbol-level risk controls,
such as those pertaining to sell-short controls for individual symbols
and limitations on restricted symbols. If the Exchange eventually opts
to make such risk controls available to Floor brokers, the Exchange
will file a proposed rule change.
The Exchange proposes no other changes to Rule 7.19 or its
Commentary.
[[Page 10433]]
Continuing Obligations of Member Organizations Under Rule 15c3-5
The proposed Pre-Trade Risk Controls described here are meant to
supplement, and not replace, the member organizations' own internal
systems, monitoring, and procedures related to risk management. The
Exchange does not guarantee that these controls will be sufficiently
comprehensive to meet all of a member organization's needs, the
controls are not designed to be the sole means of risk management, and
using these controls will not necessarily meet a member organization's
obligations required by Exchange or federal rules (including, without
limitation, the Rule 15c3-5 under the Act \8\ (``Rule 15c3-5'')). Use
of the Exchange's Pre-Trade Risk Controls will not automatically
constitute compliance with Exchange or federal rules and responsibility
for compliance with all Exchange and SEC rules remains with the member
organization.\9\
---------------------------------------------------------------------------
\8\ See 17 CFR 240.15c3-5.
\9\ See also Commentary .01 to Rule 7.19, which provides that
``[t]he pre-trade risk controls described in this Rule are meant to
supplement, and not replace, the member organization's own internal
systems, monitoring and procedures related to risk management and
are not designed for compliance with Rule 15c3-5 under the Exchange
Act. Responsibility for compliance with all Exchange and SEC rules
remains with the member organization.''
---------------------------------------------------------------------------
Timing and Implementation
The Exchange anticipates implementing the proposed change in the
first quarter of 2026 and, in any event, will implement the proposed
rule change no later than the end of second quarter of 2026. The
Exchange will announce the timing of such changes by Trader Update.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\11\ 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 regulating,
clearing, settling, processing information with respect to, and
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,
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed revision of paragraph (a)
of Commentary .03 will remove impediments to and perfect the mechanism
of a free and open market and a national market system and would
protect investors and the public interest by restoring the ability of
Floor brokers to access all but a few of the Exchange's Pre-Trade Risk
Controls and Kill Switch Actions when using a member organization's
MPID. The Exchange believes that restoring and expanding Floor brokers'
access to such controls would enhance the protection of investors and
the public interest because Floor brokers are at the point of sale,
such that they have exposure to market changes in real time and are
well-positioned to promptly make adjustments to risk thresholds to
better protect member organizations.
The Exchange believes that the proposed rule change does not
unfairly discriminate among market participants. Commentary .03 applies
only to the ability of a Floor broker to set Pre-Trade Risk Controls
and Kill Switch Actions for its trading activity on the Exchange, and
the proposed change would apply equally to all Floor brokers. Further,
use of the Pre-Trade Risk Controls and Kill Switch Actions described in
the rule is optional and is not a prerequisite for participation on the
Exchange.
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
does not address competition, but rather restores the ability of Floor
brokers to access the Exchange's Pre-Trade Risk Controls and Kill
Switch Actions when using a member organization's MPID. The proposed
rule change would apply equally to all Floor brokers.
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) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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 \14\ and Rule 19b-
4(f)(6) \15\ thereunder.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange 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.
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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#681a1d040d450b0705050d061c1b281b0d0b460f071e"><span class="__cf_email__" data-cfemail="e193948d84cc828e8c8c848f9592a1928482cf868e97">[email protected]</span></a>. Please include
file number SR-NYSE-2026-12 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-NYSE-2026-12. This file
number should be included on the
[[Page 10434]]
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-NYSE-2026-12
and should be submitted on or before March 24, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-04144 Filed 3-2-26; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on March 3, 2026.
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.