Notice2026-10538
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Rule 928NYP
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Published
May 28, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 102 (Thursday, May 28, 2026)</title>
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[Federal Register Volume 91, Number 102 (Thursday, May 28, 2026)]
[Notices]
[Pages 31749-31751]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10538]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105547; File No. SR-NYSEAMER-2026-42]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend Rule
928NYP
May 22, 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 May 19, 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 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 928NYP to provide its American
Trading Permit (``ATP'') Holders with additional flexibility in
establishing how their trading activity counts toward certain risk
parameters. 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 928NYP (Pre-Trade and Activity-
Based Risk Controls). Specifically, the Exchange proposes to adopt
Commentary .03 to provide an Entering Firm \4\ with additional
flexibility in establishing how their trading activity counts toward
certain risk parameters.
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\4\ ``Entering Firm'' means an ATP Holder (including those
acting as Market Makers). See Rule 928NYP(a)(1).
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Background and Proposed Rule Change
The Exchange offers a suite of configurable risk controls on its
Pillar trading platform to its members.\5\ As part of these controls,
the Exchange offers Activity-based Controls for the Options Market that
are mandatory for Market Makers and optional for all other Entering
Firms.
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\5\ Pillar is the NYSE's integrated trading technology platform
which enables member firms to connect to all NYSE equities and
options markets using a standard protocol.
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The risk control features are intended to be supplemental to the
Exchange member's internal monitoring and procedures related to risk
management and are not designed to be a member's sole means of risk
control. The controls are configurable and under the direct control and
supervision of the firm. The use of risk controls will not
automatically constitute compliance with any Exchange or federal rules
for which it is the member's sole responsibility to comply.
Activity-Based Risk Controls provides Entering Firms with the
ability to manage their order and execution risk. The controls refer to
activity-based risk limits that may be applied to orders and quotes in
an options class (excluding those represented in open outcry, except
``clear-the-book'' (CTB) orders) based on the following specified
thresholds measured over the course of an interval: \6\ (i) number of
orders and quotes that can be executed (``transaction''); (ii) number
of contracts that can be executed (``volume''); and (iii) the
percentage of contracts executed as measured against the full size of
orders and quotes executed (``percentage'').\7\
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\6\ The Exchange will specify by Trader Update the interval for
Activity-Based Risk Controls, which will not be less than 100
milliseconds and will not be greater than 300,000 milliseconds. See
Rule 928NYP(c)(2)(F).
\7\ See Rule 928NYP(a)(3). Per Rule 928NYP(c)(2)(A), an Entering
Firm acting as a Market Maker is required to apply one of the
Activity-Based Risk Controls to all of its orders and quotes. An
Entering Firm that is not acting as a Market Maker may, but is not
required to, apply one of the Activity-Based Risk Controls to its
orders.
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To determine when an Activity-Based Risk Control has been breached,
the Exchange will maintain a trade counter that will be incremented
every time an order or quote trades and will aggregate the number of
contracts traded during each such execution.\8\ When designating one of
the three Activity-Based Risk Controls, the Entering Firm must indicate
which of the following actions it wishes the Exchange to take if a risk
limit is breached: (i) notification only (the Exchange will continue to
accept new order and quote messages and related instructions and will
not cancel any unexecuted orders or quotes); (ii) block only (the
Exchange will reject new orders and related instructions, except
instructions to cancel one or more orders or quotes; or (iii) cancel
and block (in addition to block, above, the Exchange will cancel all
unexecuted orders and quotes in the Consolidated Book other than
Auction-Only Orders, and orders designated GTC).\9\
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\8\ See Rule 928NYP(c)(2)(B).
\9\ See Rule 928NYP(c)(2)(C).
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The Exchange proposes to amend Rule 928NYP to enhance the Activity-
Based Risk Controls to provide Entering Firms flexibility in
establishing how their trading activity counts toward the risk limits.
Specifically, the Exchange would add Commentary .03 to allow an
Entering Firm the option to count its limit on a contra-party (i.e.,
Customer,\10\ Professional Customer,\11\ Broker,\12\ Market Maker,\13\
Away Market Maker \14\
[[Page 31750]]
or Firm \15\) basis. Under the proposed change, for the activity-based
risk limits established under Rule 928NYP(a)(3), an Entering Firm may
specify a weight (up to 200%) based on contra-party capacity to count
towards the Entering Firm's Transaction, Volume and Percentage limits.
For instance, an Entering Firm could specify that only 50% of the
quantity on each trade with a Customer contra-party would be used
towards the Entering Firm's activity-based risk limit.\16\
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\10\ ``Customer'' means an individual or organization that is
not a Broker/Dealer. See Rule 900.2NY (Definitions).
\11\ The term ``Professional Customer'' means an individual or
organization that (i) is not a Broker/Dealer in securities, and (ii)
places more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s). See Rule
900.2NY (Definitions).
\12\ The term ``broker'' means the same as set out in Section
3(a)(4) of the Securities Exchange Act of 1934. See Rule 900.2NY
(Definitions). Per Section 3(a)(4) of the Exchange Act, ``[t]he term
`broker' means any person engaged in the business of effecting
transactions in securities for the account of others.
\13\ The term ``Market Maker'' refers to an ATP Holder that acts
as a Market Maker pursuant to Rule 920NY. See Rule 900.2NY
(Definitions).
\14\ The term ``Away Market'' means any Trading Center (1) with
which the Exchange maintains an electronic linkage, and (2) that
provides instantaneous responses to orders routed from the Exchange.
See Rule 900.2NY (Definitions).
\15\ The term ``Firm'' means a broker-dealer that is not
registered as a dealer-specialist or market maker on a registered
national securities exchange or association. See Rule 900.2NY
(Definitions).
\16\ Similarly, an Entering Firm could specify a weight of up to
200% for each counterparty class.
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The proposed rule change is based on recently amended CBOE Rule
5.34(c),\17\ which permits its Users to specify a percentage of up to
100% and MIAX Pearl Rule 517A and 517B which permits the use of a
multiplier with a minimum value of 0 and maximum value of 10 in its
members calculating their Allowable Engagement Percentage.\18\
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\17\ See Securities Exchange Act Release No. 104674 (January 23,
2026), 91 FR 3763 (January 28, 2026) (SR-CBOE-2026-006) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Rule 5.34(c) With Respect to Its Risk Monitor Mechanism, To
Provide Users With Additional Flexibility in Establishing How Their
Trading Activity Counts Towards Certain Risk Parameters).
\18\ See Securities Exchange Act Release 104299 (December 3,
2025) 90 FR 56809 (December 8, 2025) (SR-PEARL-2025-47) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Exchange Rule 517A, Aggregate Risk Manager for EEMs (``ARM-
E''), and Rule 517B, Aggregate Risk Manager for Market Makers
(``ARM-M'').
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\19\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\20\ in that 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. In addition, the Exchange
believes that the proposed rule change is consistent with the Section
6(b)(5) \21\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ 15 U.S.C. 78f(b)(5).
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In particular, the Exchange believes that allowing Entering Firms
to tailor their risk parameters promotes risk management processes that
better reflect the risks of different types of trading activity. The
Exchange believes that the proposed rule change will protect investors
and the public interest because the proposed enhancement will assist
Entering Firms in minimizing their risk exposure, thereby reducing the
potential for disruptive, market-wide events.
The Exchange further believes its proposal to allow Entering Firms
to establish risk parameters on a contra-party capacity basis is
reasonable, as different contra-party types present different risk
profiles. For example, this enhancement may be beneficial for Market-
Makers or other liquidity providers who may wish to establish lower
limits for when providing liquidity to Customer orders while
establishing stricter parameters for trades against other institutional
contra-parties which may involve different risk considerations. The
Exchange believes allowing Entering Firms the option to adjust their
risk tolerance based on contra-party capacity provides the opportunity
for a more precise risk management approach.
Finally, the Exchange believes the proposed change is not unfairly
discriminatory, as the proposed enhancement is available to all
Entering Firms and apply uniformly to all Entering Firms who may choose
to utilize the enhanced risk parameter settings. As noted above, use of
the proposed enhancement is optional and Entering Firms are free to
utilize them or not, at their discretion.
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 enhancement is
available to all Entering Firms and applies uniformly to all Entering
Firms who may choose to utilize the enhanced risk parameter settings.
As noted above, use of the proposed enhancement is optional and
Entering Firms are free to utilize them or not, at their discretion.
Similarly, the Exchange does not believe that the proposed rule
change will impose any burden on intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the proposed enhancement applies only to trading on the
Exchange. Again, the Exchange notes that it is voluntary for the
Entering Firms to determine whether to make use of the new enhancement
of the Activity-Based Risk Controls. To the extent that the proposed
changes may make the Exchange a more attractive trading venue for
market participants on other exchanges, such market participants may
elect to become an Exchange market participant.
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 \22\ and Rule 19b-4(f)(6) thereunder.\23\
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.\24\
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\22\ 15 U.S.C. 78s(b)(3)(A)(iii).
\23\ 17 CFR 240.19b-4(f)(6).
\24\ 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) \25\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\25\ 15 U.S.C. 78s(b)(2)(B).
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[[Page 31751]]
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#4c3e392029612f2321212922383f0c3f292f622b233a"><span class="__cf_email__" data-cfemail="b1c3c4ddd49cd2dedcdcd4dfc5c2f1c2d4d29fd6dec7">[email protected]</span></a>. Please include
file number SR-NYSEAMER-2026-42 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-2026-42. 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-2026-42 and should be submitted
on or before June 18, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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\26\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-10538 Filed 5-27-26; 8:45 am]
BILLING CODE 8011-01-P
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