Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules 7.18-E, 7.35-E(a)(8)(A), and 7.35-E(f) Regarding Trading Halts

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<title>Federal Register, Volume 91 Issue 205 (Monday, October 26, 2026)</title>
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[Federal Register Volume 91, Number 205 (Monday, October 26, 2026)]
[Notices]
[Pages 67368-67370]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21739]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106709; File No. SR-NYSEARCA-2026-103]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rules 
7.18-E, 7.35-E(a)(8)(A), and 7.35-E(f) Regarding Trading Halts

October 21, 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 October 7, 2026, 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 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 7.18-E (``Trading Halts'') 
regarding Initial Listing Regulatory Halts, Rule 7.35-E(a)(8)(A) 
regarding the definition of ``Auction Reference Price'' for a Trading 
Halt Auction, and Rule 7.35-E(f) regarding IPO Auctions. 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
    NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'') proposes to 
amend Rule 7.18-E (``Trading Halts'') regarding Initial Listing 
Regulatory Halts, Rule 7.35-E(a)(8)(A) regarding the definition of 
``Auction Reference Price'' for a Trading Halt Auction, and Rule 7.35-
E(f) regarding IPO Auctions.
Background
    Rule 7.18-E(b)(1)(B) lists the types of discretionary regulatory 
halts the Exchange may declare, including, at subparagraph (i), an 
``Initial Listing Regulatory Halt.''
    The Initial Listing Regulatory Halt was first adopted in 2018 on 
the Exchange's affiliate exchange, the New York Stock Exchange LLC 
(``NYSE''), as NYSE Rule 123D(d).\4\ The text of that rule stated, in 
pertinent part, that the Exchange ``may declare a regulatory halt in a 
security that is the subject of an initial pricing on the Exchange of a 
security that has not been listed on a national securities exchange . . 
. immediately prior to the initial pricing.'' \5\ NYSE's Rule 19b-4 
filing in support of the rule specified that the purpose of the rule 
change was to ``provide authority to declare a regulatory halt for a 
new listing that is not the subject of an IPO.'' \6\ In its order 
granting approval of the rule, the Commission noted that the rule 
``should facilitate the initial opening . . . of certain securities not 
listed in connection with an underwritten IPO . . . .'' \7\
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    \4\ See Securities Exchange Act Release No. 82627 (February 2, 
2028), 83 FR 5650 (February 8, 2018) (SR-NYSE-2017-30) (Notice of 
Filing of Amendment No. 3 and Order Granting Accelerated Approval of 
Proposed Rule Change as Modified by Amendment No. 3).
    \5\ See NYSE Rule 123D(d) (SR-NYSE-2017-30 version).
    \6\ See NYSE Form 19b-4 in support of SR-NYSE-2017-30, available 
at <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse/rule-filings/filings/2017/NYSE-2017-30,%20Am%203.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse/rule-filings/filings/2017/NYSE-2017-30,%20Am%203.pdf</a> (``Proposed Rule 123D(d) 
would provide authority for the Exchange to declare a regulatory 
halt for a security that is having its initial listing on the 
Exchange, is not an IPO, and has not been listed on a national 
securities exchange . . . prior to the initial pricing.'').
    \7\ See supra note 4, 83 FR at 5655.
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    The Exchange adopted the Initial Listing Regulatory Halt as part of 
a reorganization of Rule 7.18-E (``Trading Halts'') that was 
implemented in August 2026.\8\ Rule 7.18-E(b)(1)(B)(1) defines the 
Initial Listing Regulatory Halt as ``of a security that is the subject 
of an initial pricing on the Exchange that has not been listed on a 
national securities exchange immediately prior to initial pricing.'' 
\9\
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    \8\ See Securities Exchange Act Release No. 103476 (July 16, 
2025), 90 FR 34314 (July 21, 2025) (SR-NYSEARCA-2025-50).
    \9\ See id.
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Proposed Change to Rule 7.18-E(b)(1)(B)(i)
    The Exchange proposes to amend the text of Rule 7.18-E(b)(1)(B)(i) 
to explicitly specify that the Initial Listing Regulatory Halt does not 
apply to corporate securities that are subject to an IPO. The Exchange 
believes that the transparency and clarity of the rule would be 
enhanced by specifying that the Exchange may declare an Initial Listing 
Regulatory Halt if a security is the subject of an initial pricing on 
the Exchange, ``except for (a) IPOs in equity securities that are not 
derivative security products, or (b) securities that are listed on a 
national securities exchange immediately prior to initial pricing.'' 
Because both these exceptions are covered by the existing rule, the 
proposed change is not substantive, but rather clarifying in nature.
Proposed Changes to Rule 7.18-E(b)(5)(B)(v), Rule 7.35-E(a)(8)(A), and 
Rule 7.35-E(f)
    Rule 7.18-E(b)(5)(B)(v) describes how the Exchange will resume 
trading after an Initial Listing Regulatory Halt. The current rule text 
provides that the Exchange ``will resume trading after an Initial 
Listing Regulatory Halt when the security is open for trading,'' but 
does not specify the mechanism by which the security will reopen.
    The Exchange proposes to amend Rule 7.18-E(b)(5)(B)(v) to provide 
that ``[t]he Exchange will resume trading after an Initial Listing 
Regulatory Halt with a Trading Halt Auction, except that an ETP New 
Issue as defined in Rule 7.35-E(f) will (a) reopen after 9:30 a.m.

[[Page 67369]]

ET with an IPO Auction, or (b) if the issuer elects, at or after 4:00 
a.m. ET with a Trading Halt Auction.''
    The proposed change to the first clause is not substantive. 
Currently, trading after an Initial Listing Regulatory Halt generally 
reopens with a Trading Halt Auction,\10\ which is the default process 
described in Rule 7.18-E(b)(5)(B).\11\ Adding reference to a Trading 
Halt Auction in the base clause of Rule 7.18-E(b)(5)(B)(v) would add 
specificity without making any substantive change.
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    \10\ The term ``Trading Halt Auction'' is defined in Rule 7.35-
E(e).
    \11\ Rule 7.18-E(b)(5)(B) provides: ``The Exchange will resume 
trading after a Regulatory Halt other than a SIP Halt with a Trading 
Halt Auction pursuant to Rule 7.35-E, except as provided below . . . 
.''
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    Similarly, proposed clause (v)(a) is also a non-substantive change, 
because it is already provided for in the Exchange's rules. Rule 7.35-
E(f) currently provides that an ``ETP IPO Security'' will participate 
in an IPO Auction during the Core Trading Session (i.e., after 9:30 
a.m. ET) on its first day of trading. The Exchange proposes to 
reference that rule in Rule 7.18-E(b)(5)(B)(v) to enhance the 
transparency and specificity of the rule. Concurrently with this 
change, the Exchange proposes to replace the term ``ETP IPO Security'' 
in current Rule 7.35-E(f) with ``ETP New Issue,'' which more accurately 
describes the initial listing of an ETP security on the Exchange. The 
term ``ETP New Issue'' would also be used in the proposed revision of 
Rule 7.18-E(b)(5)(B)(v), as indicated above.
    Regarding proposed clause (v)(b), the Exchange recently amended 
Rule 7.35-E(f) to add that the issuer of an ETP IPO Security (i.e., ETP 
New Issue) may elect to commence trading in the Early Trading Session 
(which commences at 4:00 a.m. ET) with an Early Open Auction.\12\ The 
Exchange proposes to amend Rule 7.35-E(f) to conduct a Trading Halt 
Auction to open an ETP New Issue in the Early Trading Session and to 
reflect that change in the proposed clause (v)(b) of Rule 7.18-
E(b)(5)(B).
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    \12\ See Securities Exchange Act Release No. 105670 (June 11, 
2026), 91 FR 36224 (June 16, 2026) (SR-NYSEARCA-2026-60).
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    This change is necessary in connection with the implementation of 
23/5 Trading, under which trading on the Exchange will commence each 
day at 9:00 p.m. ET. Under that model, the Exchange could not conduct a 
4:00 a.m. ET auction to open an ETP New Issue without first issuing a 
regulatory halt to prevent the security from trading beginning at 9:00 
p.m. ET. The Exchange, however, cannot operationally support 
commencement of trading in a security subject to a regulatory halt 
through an Early Open Auction and instead must use a Trading Halt 
Auction. Accordingly, the Exchange proposes to replace the reference in 
Rule 7.35-E(f) to ``Early Open Auction'' with ``Trading Halt Auction'' 
and include the reference to ``Trading Halt Auction'' in Rule 7.18-
E(b)(5)(B)(v).
    Substantively, a Trading Halt Auction differs from an Early Open 
Auction because it is conducted following a regulatory halt and is 
therefore subject to auction protections and pricing parameters, 
including, where applicable, auction collars. Pursuant to Rule 7.35-
E(e)(5) and (6), if, at 4:00 a.m. ET, the Indicative Match Price is 
below (above) the Lower (Upper) Auction Collar, the Exchange will not 
conduct the Trading Halt Auction but will instead extend the time of 
the auction in increments of five minutes until the Trading Halt 
Auction can occur at the Indicative Match Price. As a result, as 
proposed, the timing of the Trading Halt Auction for an ETP New Issue 
may be at or slightly after 4:00 a.m. ET.
    As part of this change, the Exchange proposes to amend the 
definition of ``Auction Reference Price'' for Trading Halt Auctions in 
Rule 7.35-E(a)(8)(A). The rule currently provides that the Auction 
Reference Price for a Trading Halt Auction will be ``[t]he price of the 
last consolidated trade of at least one round lot 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)).'' An ETP New Issue would not 
have traded the prior day and would not have a prior trading day's 
Official Closing Price, but it is customary for ETP issuers to provide 
exchanges with a value to use in place of that Official Closing Price 
(sometimes referred to as a ``Seeding NAV''). Accordingly, to account 
for the opening of an ETP New Issue using a Trading Halt Auction, the 
Exchange proposes to add the following to the provision above: ``or, in 
the case of an ETP New Issue, a value provided to the Exchange by the 
issuer.'' \13\
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    \13\ The Exchange notes that there is precedent for a similar 
approach in Nasdaq Stock Market's (``Nasdaq'') Rule 4120(b)(4)(A) 
regarding the resumption of trading after a Regulatory Halt other 
than an IPO or SIP Halt. Rule 4120(b)(4)(A)(i)(a)(1) provides that 
Nasdaq will establish an Auction Reference Price based on ``(i) the 
Nasdaq last sale price (either round or odd lot); and (ii) if there 
is no Nasdaq last sale price, the prior trading day's Nasdaq 
Official Closing Price (`NOCP'),'' and ``[i]n the event there is no 
Nasdaq last sale price of NOCP, Nasdaq's MarketWatch Department 
retains discretion to set the Auction Reference Price.''
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    The Exchange believes that this proposed change will not negatively 
impact issuers or market participants. ETP issuers have expressed a 
preference to retain the option to open ETP New Issues with an auction 
at or after 4:00 a.m. ET, notwithstanding that such trading would begin 
through a Trading Halt Auction instead of an Early Open Auction. While 
a Trading Halt Auction is subject to auction collars and extensions 
that do not apply to an Early Open Auction, the Exchange believes those 
features are designed to promote fair and orderly price discovery and 
reduce the likelihood of executions at prices that are not reasonably 
related to the value of the underlying ETP. Accordingly, the proposed 
change preserves issuers' ability to launch ETP New Issues during the 
Early Trading Session while providing market participants with the 
additional pricing protections associated with a Trading Halt Auction.
Implementation
    The Exchange proposes that this rule change would become operative 
at the commencement of 23/5 Trading, which is scheduled to commence 
industry-wide on December 6, 2026.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\14\ Specifically, the 
proposal is consistent with Section 6(b)(5) of the Act \15\ because it 
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, in general, protect investors and 
the public interest.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed rule change would protect 
investors and the public interest and perfect the mechanism of a free 
and open market and a national market system by adding transparency and 
specificity to the rule.
    Regarding the proposed change to Rule 7.18-E(b)(1)(B)(i), the 
existing text and the history of the rule are clear that an Initial 
Listing Regulatory Halt will not be used in the case of an IPO of a 
corporate security. The Exchange believes that stating that exception 
explicitly in the rule text will enhance

[[Page 67370]]

the transparency of the rule and benefit the public interest.
    Similarly, the current text of Rule 7.18-E(b)(5)(B)(v) does not 
specify the mechanism for reopening trading after an Initial Listing 
Regulatory Halt, and the Exchange believes that explicitly specifying 
those mechanisms in the rule text will enhance the transparency of the 
rule and benefit the public interest. Rule 7.18-E(b)(5)(B) already 
states that a Trading Halt Auction is the default method of reopening 
after a Regulatory Halt other than a SIP Halt, and Rule 7.35-E(f) 
already provides that an ETP IPO Security (i.e., ETP New Issue) 
generally opens with an IPO Auction. The proposed rule change would 
make those rules explicit in the text of Rule 7.18-E(b)(5)(B)(v), 
thereby adding further specificity and transparency to the Exchange's 
rules.
    Finally, the proposal to amend Rule 7.35-E(f), to make a supporting 
change to Rule 7.35-E(a)(8)(A), and to reflect such changes in Rule 
7.18-E(b)(5)(B)(v) to provide that the Exchange would use a Trading 
Halt Auction to open the security if the issuer of an ETP New Issue 
elects to commence trading in the Early Trading Session 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. The proposed change preserves the issuer's ability to choose 
that an ETP New Issue start trading in the Early Trading Session in the 
23/5 Trading environment, while providing market participants with the 
additional pricing protections associated with a Trading Halt Auction.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposal is consistent with Section 
6(b)(8) of the Act \16\ in that it does not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act as explained below. The majority of the proposed 
changes are non-substantive and, rather than impacting competition, 
would simply enhance the specificity and transparency of the rule. As 
for the proposed change to use a Trading Halt Auction to open trading 
in an ETP New Issue where the issuer elects to start trading in the 
Early Trading Session, the Exchange understands that other listing 
exchanges are making similar changes to their rules in light of 23/5 
Trading, and as such, the proposed change would enhance, rather than 
burden, competition.
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    \16\ 15 U.S.C. 78f(b)(8).
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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

    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 after 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 \17\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \18\ 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) \19\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \19\ 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#8af8ffe6efa7e9e5e7e7efe4fef9caf9efe9a4ede5fc"><span class="__cf_email__" data-cfemail="98eaedf4fdb5fbf7f5f5fdf6ecebd8ebfdfbb6fff7ee">[email&#160;protected]</span></a>. Please include 
file number SR-NYSEARCA-2026-103 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-2026-103. 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-2026-103 and should be 
submitted on or before November 16, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-21739 Filed 10-23-26; 8:45 am]
BILLING CODE 8011-01-P


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