[Federal Register Volume 85, Number 250 (Wednesday, December 30, 2020)]
[Notices]
[Pages 86608-86610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28893]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90795; File No. SR-NYSE-2020-106]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend the Temporary Period for Specified Commentaries to Rules 7.35, 
7.35A, 7.35B, and 7.35C and Temporary Rule Relief in Rule 36.30

December 23, 2020.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on December 21, 2020, 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.
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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 extend the temporary period for specified 
Commentaries to Rules 7.35, 7.35A, 7.35B, and 7.35C and temporary rule 
relief in Rule 36.30, to end on the earlier of a full reopening of the 
Trading Floor facilities to DMMs or after the Exchange closes on April 
30, 2021. The proposed rule change is available on the Exchange's 
website at www.nyse.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

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 extend the temporary period for specified 
Commentaries to Rules 7.35, 7.35A, 7.35B, and 7.35C and temporary rule 
relief to Rule 36.30, to end on the earlier of a full reopening of the 
Trading Floor facilities to DMMs or after the Exchange closes on April 
30, 2021. The current temporary period that these Rules are in effect 
ends on the earlier of a full reopening of the Trading Floor facilities 
to DMMs or after the Exchange closes on December 31, 2020.
Background
    To slow the spread of COVID-19 through social-distancing measures, 
on March 18, 2020, the CEO of the Exchange made a determination under 
Rule 7.1(c)(3) that, beginning March 23, 2020, the Trading Floor 
facilities located at 11 Wall Street in New York City would close and 
the Exchange would move, on a temporary basis, to fully electronic 
trading.\4\ On May 14, 2020, the CEO of the Exchange made a 
determination under Rule 7.1(c)(3) to reopen the Trading Floor on a 
limited basis on May 26, 2020 to a subset of Floor brokers, subject to 
safety measures designed to prevent the spread of COVID-19.\5\ On June 
15, 2020, the CEO of the Exchange made a determination under Rule 
7.1(c)(3) to begin the second phase of the Trading Floor reopening by 
allowing DMMs to return on June 17, 2020, subject to safety measures 
designed to prevent the spread of COVID-19.\6\ Consistent with these 
safety measures, both DMMs and Floor broker firms continue to operate 
with reduced staff on the Trading Floor.
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    \4\ Pursuant to Rule 7.1(e), the CEO notified the Board of 
Directors of the Exchange of this determination. The Exchange's 
current rules establish how the Exchange will function fully-
electronically. The CEO also closed the NYSE American Options 
Trading Floor, which is located at the same 11 Wall Street 
facilities, and the NYSE Arca Options Trading Floor, which is 
located in San Francisco, CA. See Press Release, dated March 18, 
2020, available here: https://ir.theice.com/press/press-releases/all-categories/2020/03-18-2020-204202110.
    \5\ See Securities Exchange Act Release No. 88933 (May 22, 
2020), 85 FR 32059 (May 28, 2020) (SR-NYSE-2020-47) (Notice of 
filing and immediate effectiveness of proposed rule change).
    \6\ See Securities Exchange Act Release No. 89086 (June 17, 
2020) (SR-NYSE-2020-52) (Notice of filing and immediate 
effectiveness of proposed rule change).
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Proposed Rule Change
    The Exchange has modified its rules to add Commentaries to Rules 
7.35, 7.35A, 7.35B, and 7.35C and rule relief in Rule 36.30 \7\ that 
are in effect until the earlier of a full reopening of the Trading

[[Page 86609]]

Floor facilities to DMMs or after the Exchange closes on December 31, 
2020.\8\
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    \7\ See Securities Exchange Act Release Nos. 88413 (March 18, 
2020), 85 FR 16713 (March 24, 2020) (SR-NYSE-2020-19) (amending Rule 
7.35C to add Commentary .01); 88444 (March 20, 2020), 85 FR 17141 
(March 26, 2020) (SR-NYSE-2020-22) (amending Rules 7.35A to add 
Commentary .01, 7.35B to add Commentary .01, and 7.35C to add 
Commentary .02); 88488 (March 26, 2020), 85 FR 18286 (April 1, 2020) 
(SR-NYSE-2020-23) (amending Rule 7.35A to add Commentary .02); 88546 
(April 2, 2020), 85 FR 19782 (April 8, 2020) (SR-NYSE-2020-28) 
(amending Rule 7.35A to add Commentary .03); 88562 (April 3, 2020), 
85 FR 20002 (April 9, 2020) (SR-NYSE-2020-29) (amending Rule 7.35C 
to add Commentary .03); 88705 (April 21, 2020), 85 FR 23413 (April 
27, 2020) (SR-NYSE-2020-35) (amending Rule 7.35A to add Commentary 
.04); 88725 (April 22, 2020), 85 FR 23583 (April 28, 2020) (SR-NYSE-
2020-37) (amending Rule 7.35 to add Commentary .01); 88950 (May 26, 
2020), 85 FR 33252 (June 1, 2020) (SR-NYSE-2020-48) (amending Rule 
7.35A to add Commentary .05); 89059 (June 12, 2020), 85 FR 36911 
(June 18, 2020) (SR-NYSE-2020-50) (amending Rule 7.35C to add 
Commentary .04); 89086 (June 17, 2020), 85 FR 37712 (SR-NYSE-2020-
52) (amending Rules 7.35A to add Commentary .06, 7.35B to add 
Commentary .03, 76 to add Supplementary Material 20, and 
Supplementary Material .30 to Rule 36); and 89925 (September 18, 
2020) (SR-NYSE-2020-75) (amending Rule 7.35 to add Commentary .02).
    \8\ See Securities Exchange Act Release No. 90005 (September 25, 
2020), 85 FR 61999 (October 1, 2020) (SR-NYSE-2020-78) (Notice of 
filing and immediate effectiveness of proposed rule change to extend 
the temporary period for specified Commentaries to Rules 7.35, 
7.35A, 7.35B, and 7.35C and temporary rule relief in Rule 36.30). 
See also Securities Exchange Act Release Nos. 89425 (July 30, 2020), 
85 FR 47446 (August 5, 2020) (SR-NYSE-2020-63) (Notice of filing and 
immediate effectiveness of proposed rule change to extend the 
temporary period for Commentaries to Rules 7.35, 7.35A, 7.35B, and 
7.35C and temporary rule relief in Rule 36.30 to end on the earlier 
of a full reopening of the Trading Floor facilities to DMMs or after 
the Exchange closes on September 30, 2020); 89199 (June 30, 2020), 
85 FR 40718 (July 7, 2020) (SR-NYSE-2020-56) (Notice of filing and 
immediate effectiveness of proposed rule change to extend the 
temporary period for Commentaries to Rules 7.35, 7.35A, 7.35B, and 
7.35C; Supplementary Material .20 to Rule 76; and temporary rule 
relief in Rule 36.30 to end on the earlier of a full reopening of 
the Trading Floor facilities to DMMs or after the Exchange closes on 
July 31, 2020); and 89368 (July 21, 2020), 85 FR 45272 (July 27, 
2020) (SR-NYSE-2020-61) (Notice of filing and immediate 
effectiveness of proposed rule change to lift the temporary 
suspension to Rule 76 and delete Supplementary Material .20 to Rule 
76).
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    The first and second phases of the reopening of the Trading Floor 
are subject to safety measures designed to prevent the spread of COVID-
19. To meet these safety measures, Floor brokers and DMM units that 
have chosen to return to the Trading Floor are operating with reduced 
staff. The Exchange is therefore proposing to extend the following 
temporary rules until such time that there is a full reopening of the 
Trading Floor facilities to DMMs:
    <bullet> Commentaries .01 and .02 to Rule 7.35; \9\
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    \9\ Because DMMs are not obligated to return to a Floor, an IPO 
Auction may still be conducted by a DMM remotely as provided for in 
Commentary .04 to Rule 7.35A. If a DMM chooses to conduct an IPO 
Auction remotely, Floor brokers on the Trading Floor will not have 
access to IPO Auction imbalance information. The Exchange proposed a 
non-substantive change to Commentary .02 to Rule 7.35 to change the 
start date of that Commentary from September 20, 2020 to September 
4, 2020, which is consistent with the date represented in the 
proposed rule change adopting that Commentary. See Securities 
Exchange Act Release No. 89925 (September 18, 2020) (SR-NYSE-2020-
75) (amending Rule 7.35 to add Commentary .02).
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    <bullet> Commentaries .01, .02, .03, .04, .05, and .06 to Rule 
7.35A;
    <bullet> Commentaries .01 and .03 to Rule 7.35B;
    <bullet> Commentaries .01, .02, .03, and .04 to Rule 7.35C; and
    <bullet> Amendments to Rule 36.30.
    The Exchange is not proposing any substantive changes to these 
Rules.
2. Statutory Basis
    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, 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    To reduce the spread of COVID-19, the CEO of the Exchange made a 
determination under Rule 7.1(c)(3) that beginning March 23, 2020, the 
Trading Floor facilities located at 11 Wall Street in New York City 
would close and the Exchange would move, on a temporary basis, to fully 
electronic trading. On May 14, 2020, the CEO made a determination under 
Rule 7.1(c)(3) that, beginning May 26, 2020, the Trading Floor would be 
partially reopened to allow a subset of Floor brokers to return to the 
Trading Floor. On June 15, 2020, the CEO made a determination under 
Rule 7.1(c)(3) that, beginning June 17, 2020, DMM units may choose to 
return a subset of staff to the Trading Floor.
    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 the Trading Floor has not yet reopened 
in full to DMMs or Floor brokers. Accordingly, the Exchange believes 
that the temporary rule changes in effect pursuant to the Commentaries 
to Rules 7.35, 7.35A, 7.35B, and 7.35C and amendments to Rule 36.30, 
which are intended to be in effect during the temporary period while 
the Trading Floor has not yet opened in full to DMMs, should be 
extended until such time that there is a full reopening of the Trading 
Floor facilities to DMMs. The Exchange is not proposing any substantive 
changes to these Rules.
    The Exchange believes that, by clearly stating that this relief 
will be in effect through the earlier of a full reopening of the 
Trading Floor facilities to DMMs or the close of the Exchange on April 
30, 2021, market participants will have advance notice of the temporary 
period during which the Commentaries to Rules 7.35, 7.35A, 7.35B, and 
7.35C and amendments to Rule 36.30 will be in effect.

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

    The Exchange does not believe that the proposed rule change would 
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 designed to address any competitive issues but rather would extend 
the period during which Commentaries .01 and .02 to Rule 7.35; 
Commentaries .01, .02, .03, .04, 05, and .06 to Rule 7.35A; 
Commentaries .01 and .03 to Rule 7.35B; Commentaries .01, .02, .03, and 
.04 to Rule 7.35C; and amendments to Rule 36.30 will be in effect. 
These Commentaries are intended to be in effect during the temporary 
period while the Trading Floor has not yet been opened in full to DMMs 
and Floor brokers and currently expire on December 31, 2020. Because 
the Trading Floor has not been opened in full to DMMs, the Exchange 
proposes to extend the temporary period for these temporary rules to 
end on the earlier of a full reopening of the Trading Floor facilities 
to DMMs or after the Exchange closes on April 30, 2021.

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 \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; or (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)(iii) of the Act \14\ and Rule 
19b-4(f)(6)(iii) thereunder.\15\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 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 fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant

[[Page 86610]]

to Rule 19b-4(f)(6)(iii),\17\ the Commission may designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange has asked the Commission to waive the 
30-day operative delay so that the proposal may take effect 
immediately. The Commission believes that waiver of the operative delay 
is consistent with the protection of investors and the public interest 
because it will allow the rules discussed above to remain in effect 
during the temporary period during which the Trading Floor has not yet 
been reopened in full to DMMs because of health precautions related to 
the Covid-19 pandemic. Accordingly, the Commission hereby waives the 
30-day operative delay and designates the proposal operative upon 
filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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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 (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#c4b6b1a8a1e9a7aba9a9a1aab0b784b7a1a7eaa3abb2"><span class="__cf_email__" data-cfemail="e99b9c858cc48a8684848c879d9aa99a8c8ac78e869f">[email protected]</span></a>. Please include 
File Number SR-NYSE-2020-106 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-2020-106. 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 (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2020-106 and should be submitted on 
or before January 21, 2021.

    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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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2020-28893 Filed 12-29-20; 8:45 am]
BILLING CODE 8011-01-P


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