57508 Federal Register / Vol. 88, No. 162 / Wednesday, August 23, 2023 / Notices 

19 15 U.S.C. 78s(b)(3)(A)(ii). 

20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

Customers that choose not to 

purchase the BX FPGA Service are not 

impacted by the proposal. 

The BX FPGA Service will be 

available to all customers on a nondiscriminatory basis, and therefore the 

proposed fees are not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

This Proposal, a response to customer 

demand, is a product of a competitive 

marketplace. To date, lower levels of 

peak activity at the BX Exchange 

relative to the Nasdaq exchange have 

been associated with low levels of 

customer interest in this product. 

Recently, however, BX has heard from 

customers interested in using FPGA 

technology for BX TotalView. To 

address this customer demand, and to 

drive liquidity to the BX Exchange by 

making it a more attractive trading 

venue, BX has decided to offer this 

product. 

Approval of this Proposal will further 

promote competition by providing 

market participants additional choices 

in the transmission of depth of book 

data. 

Nothing in the Proposal burdens 

inter-market competition (the 

competition among self-regulatory 

organizations) because approval of the 

Proposal does not impose any burden 

on the ability of other exchanges to 

compete. As noted above, FPGA 

technology is generally available and 

any exchange has the ability to offer it 

if it so chooses. 

Nothing in the Proposal burdens 

intra-market competition (the 

competition among consumers of 

exchange data) because the BX FPGA 

Service will be available to any 

customer under the same fee schedule 

as any other customer, and any market 

participant that wishes to purchase the 

BX FPGA Service can do so on a nondiscriminatory basis. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to section 

19(b)(3)(A)(ii) of the Act.19

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

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 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

BX–2023–020 on the subject line. 

Paper Comments 

• 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–BX–2023–020. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

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–BX–2023–020 and should be 

submitted on or before September 13, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–18104 Filed 8–22–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98169; File No. SR– 

NYSENAT–2023–17] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 7.44 

August 18, 2023. 

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 August 8, 

2023, NYSE National, Inc. (‘‘NYSE 

National’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 7.44 to provide for a Retail 

Liquidity Program. 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. 


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Federal Register / Vol. 88, No. 162 / Wednesday, August 23, 2023 / Notices 57509 

3See proposed Rule 7.44(a)(3). 4See proposed Rule 7.44(e). The Exchange notes 

that it will seek an exemption from the provisions 

of Regulation NMS Rule 602, 17 CFR 242.602(d) 

(the ‘‘Quote Rule’’) with respect to its planned 

dissemination of a Retail Liquidity Identifier to 

allow it to disseminate the Retail Liquidity 

Identifier to indicate the presence of RPI Order 

interest without including such interest in the 

Exchange’s quotation. The Exchange will not 

implement the proposed Program unless and until 

its request for exemption from the requirements of 

the Quote Rule has been granted. 

5See proposed Rules 7.44(a)(1), 7.44(a)(2), and 

7.44(f). 

6See NYSE Rule 7.44; NYSE Arca Rule 7.44–E. 

The Exchange notes that NYSE Arca has proposed 

to decommission its Retail Liquidity Program in a 

separate rule filing. See SR–NYSEARCA–2023–55. 

The Exchange proposes to implement the Program 

in the third quarter of 2023, in tandem with the 

discontinuation of the NYSE Arca Retail Liquidity 

Program, on a date to be announced by Trader 

Update. 

7The Exchange notes that it is not seeking an 

exemption under Rule 612 of Regulation NMS, 17 

CFR 242.612 (the ‘‘Sub-Penny Rule’’) because it will 

not accept or rank orders priced greater than $1.00 

per share in an increment smaller than $0.01. The 

Program will thus differ from the NYSE and NYSE 

Arca Retail Liquidity Programs in this respect, as 

both of those programs operate pursuant to 

exemptive relief granted by the Commission from 

the requirements of the Sub-Penny Rule. 

8See, e.g., Investors Exchange LLC (‘‘IEX’’) Rule 

11.232 (describing the IEX Retail Program, which is 

designed to provide retail order flow with price 

improvement opportunities at the midpoint); Cboe 

BYX Exchange, Inc. (‘‘BYX’’) Rule 11.24 (setting 

forth BYX’s Retail Price Improvement Program); 

Nasdaq BX, Inc. (‘‘BX’’) Rule 4780 (setting forth 

BX’s Retail Price Improvement Program). The 

Exchange further notes that Nasdaq BX, like the 

Exchange, utilizes a ‘‘taker-maker’’ or inverted fee 

model; accordingly, offering a retail price 

improvement program on an exchange that operates 

with such a model is not novel. 

9The Exchange notes that it does not propose that 

the Program include a role for Retail Liquidity 

Providers (‘‘RLPs’’), unlike the NYSE and NYSE 

Arca Retail Liquidity Programs. See NYSE Rules 

7.44(a)(1), 7.44(a)(4)(D), 7.44(c)—(g), 7.44(i); NYSE 

Arca Rules 7.44–E(a)(1), 7.44–E(a)(4)(C), 7.44–E(c)— 

(g), 7.44–E(i). The Exchange believes that the 

Program can operate effectively without RLPs, 

including because any ETP Holder may enter RPI 

Orders, as proposed, and notes that other exchanges 

currently operate retail price improvement 

programs that likewise do not include an RLP 

function. See, e.g., IEX Rule 11.232 (describing IEX 

Retail Price Improvement Program); Nasdaq BX 

Rule 4780 (describing Nasdaq BX Retail Price 

Improvement Program). 10The phrase ‘‘substantively identical’’ is used in 

this filing to indicate that the proposed rules are the 

same as the rules of another exchange except for 

non-substantive grammatical or stylistic differences, 

including differences in nomenclature or 

numbering (for example, whereas the Exchange and 

NYSE Arca use the term ‘‘ETP Holder’’ to generally 

refer to member firms, NYSE uses the term 

‘‘member organization’’). 

11The Exchange notes that NYSE Rule 7.44(a)(3) 

and NYSE Arca Rule 7.44–E(a)(3) differ from each 

other in two ways. First, NYSE Rule 7.44(a)(3) 

provides that a Retail Order is an Immediate or 

Cancel Order. NYSE Arca Rule 7.44–E(a)(3) does 

not provide the same because the NYSE Arca Retail 

Liquidity Program offers Retail Order types that are 

not IOC. The Exchange does not propose to include 

this detail in Proposed Rule 7.44(a)(2), as the 

operation of Retail Orders is further outlined in 

proposed Rule 7.44(f). Second, NYSE Arca Rule 

7.44–E(a)(3) provides that a Retail Order may be an 

odd lot, round lot, or mixed lot. NYSE Rule 

7.44(a)(3) previously included the same language, 

which NYSE recently proposed to delete as 

extraneous. See Securities Exchange Act Release 

No. 96944 (February 16, 2023), 88 FR 11499 

(February 23, 2023) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Modify 

Rule 7.44 Relating to the Retail Liquidity Program). 

Proposed Rule 7.44(a)(2) would be consistent with 

NYSE Rule 7.44(a)(3) rather than NYSE Arca Rule 

7.44–E(a)(3) in this regard. 

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 7.44, which is currently designated 

as Reserved, to provide for a Retail 

Liquidity Program (the ‘‘Program’’). The 

purpose of the Program would be to 

attract retail order flow to the Exchange 

and allow such order flow to receive 

potential price improvement at the 

midpoint or better. As described in 

greater detail below, the Program would 

allow ETP Holders to provide potential 

price improvement to retail investor 

orders in the form of a non-displayed 

order that is priced at the less aggressive 

of the midpoint of the PBBO or its limit 

price, called a Retail Price Improvement 

Order (‘‘RPI Order’’).3 When there is an 

RPI Order in a particular security that is 

eligible to trade at the midpoint of the 

PBBO, the Exchange would disseminate 

an indicator, known as the Retail 

Liquidity Identifier, that such interest 

exists.4 Retail Member Organizations 

(‘‘RMOs’’) would be able to submit a 

Retail Order to the Exchange, which 

interacts, to the extent possible, with 

available contra-side RPI Orders and 

may interact with other liquidity on the 

Exchange, depending on the Retail 

Order’s instructions.5 The segmentation 

in the Program would allow retail order 

flow to receive potential price 

improvement as a result of that order 

flow being deemed more desirable by 

liquidity providers. 

The rules providing for the proposed 

Program are structured similarly to the 

Retail Liquidity Programs currently 

offered by its affiliated exchanges, New 

York Stock Exchange, LLC (‘‘NYSE’’) 

and NYSE Arca, Inc. (‘‘NYSE Arca’’) 

except for differences as further 

described below relating to RPI Orders 

and Retail Orders, and uses the same 

terminology as is used in the approved 

rules governing the NYSE and NYSE 

Arca Retail Liquidity Programs.6

Accordingly, proposed Rule 7.44 is 

based on NYSE Rule 7.44 and NYSE 

Arca Rule 7.44–E, except as described in 

further detail below to reflect that the 

proposed Program would differ 

substantively from the NYSE and NYSE 

Arca Retail Liquidity Programs in that it 

would primarily seek to provide retail 

order flow with price improvement 

opportunities at the midpoint or better.7

The Exchange notes that several other 

equities exchanges also offer retail price 

improvement programs, one of which 

offers trading opportunities at the 

midpoint, similar to the Program, as 

proposed.8

Definitions 

The Exchange proposes to adopt the 

following definitions for the Program 

under proposed Rule 7.44(a).9

• Proposed Rule 7.44(a)(1) would 

define a Retail Member Organization or 

RMO as an ETP Holder that is approved 

by the Exchange under Rule 7.44 to 

submit Retail Orders. Proposed Rule 

7.44(a)(1) is substantively identical 10 to 

NYSE Rule 7.44(a)(2) and NYSE Arca 

Rule 7.44–E(a)(2) and is also 

substantially similar to IEX Rule 

11.232(a)(1). 

• Proposed Rule 7.44(a)(2) would 

define a Retail Order as an agency order 

or riskless principal order that meets the 

criteria of FINRA Rule 5320.03, 

originating from a natural person, and 

that is submitted to the Exchange by an 

RMO, provided that no change is made 

to the terms of the order with respect to 

price or side of market and the order 

does not originate from a trading 

algorithm or any other computerized 

methodology. A Retail Order would 

operate in accordance with proposed 

Rule 7.44(f) (as described below). 

Proposed Rule 7.44(a)(2) is 

substantively identical to NYSE Rule 

7.44(a)(3) and NYSE Arca Rule 7.44– 

E(a)(3) as to the core definition of a 

Retail Order and the provision that the 

operation of a Retail Order would be 

outlined further in a later section of the 

rule.11 Proposed Rule 7.44(a)(2) is also 

substantially similar to IEX Rule 

11.190(b)(15). 

• Proposed Rule 7.44(a)(3) would 

define a Retail Price Improvement Order 


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12An MPL Order is a Limit Order to buy (sell) 

that is not displayed and does not route, with a 

working price at the lower (higher) of the midpoint 

of the PBBO or its limit price. An MPL Order is 

ranked Priority 3—Non-Display Orders and may be 

entered during any Exchange trading session. See 

Rule 7.31(d)(3). An MPL Order to buy (sell) must 

be designated with a limit price in the minimum 

price variation for the security and will be eligible 

to trade at its working price. See Rule 7.31(d)(3)(A). 

If there is no PBB or PBO, or if the PBBO is locked 

or crossed, an arriving or resting MPL Order will 

not be eligible to trade until the PBBO is not locked 

or crossed. See Rule 7.31(d)(3)(B). An Aggressing 

MPL Order to buy (sell) will trade at the working 

price of resting orders to sell (buy) when such 

resting orders have a working price at or below 

(above) the working price of the MPL Order. Resting 

MPL Orders to buy (sell) will trade against all 

Aggressing Orders to sell (buy) priced at or below 

(above) the working price of the MPL Order. See 

Rule 7.31(d)(3)(C). An MPL Order may be 

designated IOC (‘‘MPL–IOC Order’’) and, subject to 

such IOC instructions, will follow the same trading 

and priority rules as an MPL Order except that an 

MPL–IOC Order will be rejected if there is no PBBO 

or the PBBO is locked or crossed. See Rule 

7.31(d)(3)(D). 

13See Rules 7.31(b)(2) (providing that an order 

with an IOC Modifier will be traded in whole or in 

part on the Exchange as soon as such order is 

received, with any untraded quantity cancelled); 

7.31(e)(2) (providing that an ALO Order is a NonRoutable Limit Order that, unless it receives price 

improvement, will not remove liquidity from the 

Exchange Book); 7.31(i)(3) (providing that the MTS 

Modifier designates an order with a minimum trade 

size and an order with an MTS Modifier will be 

rejected if the MTS is less than a round lot or if 

the MTS is larger than the size of the order). 

14See NYSE Arca Rule 7.44–E(a)(4)(D) (‘‘An RPI 

must be designated as either a Limit Non-Displayed 

Order or MPL Order. . . .’’); IEX Rule 11.190(b)(14) 

(defining Retail Liquidity Provider Order as a 

Midpoint Peg order that is only eligible to execute 

against retail orders through the execution process 

described in IEX Rule 11.232(e)). 

15Proposed Rule 7.44(b)(2) would further provide 

that such supporting documentation may include 

sample marketing literature, website screenshots, 

other publicly disclosed materials describing the 

ETP Holder’s retail order flow, and any other 

documentation and information requested by the 

Exchange in order to confirm that the applicant’s 

order flow would meet the requirements of the 

Retail Order definition. 

or RPI as an MPL Order 12 that is eligible 

to trade only with incoming Retail 

Orders submitted by an RMO. This 

proposed rule would also provide that 

an RPI may not be designated IOC, ALO, 

or with an MTS Modifier.13 Proposed 

Rule 7.44(a)(3) further provides that an 

RPI remains non-displayed in its 

entirety and is ranked Priority 3—NonDisplay Orders. 

The definition of an RPI as a nondisplayed order that trades only with 

Retail Orders is consistent with NYSE 

Rule 7.44(a)(4) and NYSE Arca Rule 

7.44–E(a)(4). However, proposed Rule 

7.44(a)(3) differs substantively from the 

definition of RPI Orders under NYSE 

Rule 7.44(a)(4) and NYSE Arca Rule 

7.44–E(a)(4) in that RPI Orders in the 

Program will only be MPL Orders, in 

accordance with the goal of the Program 

to provide potential price improvement 

to retail orders at the midpoint or better. 

The Exchange notes that it would not be 

novel for RPI Orders to function as MPL 

Orders to offer retail orders trading 

opportunities at the midpoint. NYSE 

Arca Rule 7.44–E(a)(4) currently 

provides that RPI Orders in the NYSE 

Arca Retail Liquidity Program may be 

designated as either Limit Orders or 

MPL Orders, and, similar to the 

Program, as proposed, the IEX Retail 

Price Improvement Program provides 

for Retail Liquidity Provider Orders that 

are non-displayed orders priced at the 

less aggressive of the midpoint price or 

the order’s limit price and interact with 

eligible retail orders in price-time 

priority at the midpoint price.14

RMO Qualifications and Application 

Process 

As noted above, Retail Orders may be 

submitted by RMOs. Under proposed 

Rule 7.44(b)(1), any ETP Holder could 

qualify as an RMO if it conducts retail 

business or routes retail orders on behalf 

of another broker-dealer. For purposes 

of this rule, the Exchange proposes that 

conducting a retail business includes 

carrying retail customer accounts on a 

fully disclosed basis. Proposed Rule 

7.44(b)(2) would provide that, to 

become an RMO, an ETP Holder must 

submit: (1) an application form; (2) 

supporting documentation sufficient to 

demonstrate the retail nature and 

characteristics of the applicant’s order 

flow; 15 and (3) an attestation, in a form 

prescribed by the Exchange, that any 

order submitted by the ETP Holder as a 

Retail Order would meet the 

qualifications for such orders under 

Rule 7.44. Proposed Rule 7.44(b)(3) 

would provide that the Exchange would 

notify an applicant of its decision in 

writing after an applicant submits the 

application form, supporting 

documentation, and attestation. 

Proposed Rule 7.44(b)(4) would provide 

that a disapproved applicant may 

request an appeal of such disapproval 

by the Exchange as provided in 

proposed Rule 7.44(d) (discussed 

further below) and/or reapply for RMO 

status 90 days after the disapproval 

notice issued by the Exchange. An RMO 

may also voluntarily withdraw from 

such status at any time by giving written 

notice to the Exchange, as set forth in 

proposed Rule 7.44(b)(5). 

An RMO must have written policies 

and procedures reasonably designed to 

assure that it will only designate orders 

as Retail Orders if all requirements of a 

Retail Order are met, pursuant to 

proposed Rule 7.44(b)(6). Such written 

policies and procedures must require 

the ETP Holder to (i) exercise due 

diligence before entering a Retail Order 

to assure that entry as a Retail Order is 

in compliance with the requirements of 

Rule 7.44, and (ii) monitor whether 

orders entered as Retail Orders meet the 

applicable requirements. If the RMO 

represents Retail Orders from another 

broker-dealer customer, the RMO’s 

supervisory procedures must be 

reasonably designed to assure that the 

orders it receives from such brokerdealer customer that it designates as 

Retail Orders meet the definition of a 

Retail Order. The RMO must (i) obtain 

an annual written representation, in a 

form acceptable to the Exchange, from 

each broker-dealer customer that sends 

its orders to be designated as Retail 

Orders that entry of such orders as 

Retail Orders will be in compliance 

with the requirements of this rule, and 

(ii) monitor whether its broker-dealer 

customer’s Retail Order flow continues 

to meet the applicable requirements. 

Proposed Rule 7.44(b) is substantively 

identical to NYSE Rule 7.44(b) and 

NYSE Arca Rule 7.44–E(b) and is also 

substantially similar to IEX Rule 

11.232(b). 

Failure of RMO To Abide by Retail 

Order Requirements 

Proposed Rule 7.44(c) addresses an 

RMO’s failure to abide by Retail Order 

requirements. If an RMO designated 

orders submitted to the Exchange as 

Retail Orders and the Exchange 

determined, in its sole discretion, that 

those orders failed to meet the 

requirements of Retail Orders, the 

Exchange could disqualify an ETP 

Holder from its status as an RMO. When 

disqualification determinations are 

made, the Exchange would provide a 

written disqualification notice to the 

ETP Holder. A disqualified RMO could 

appeal the disqualification as provided 

in proposed Rule 7.44(d), discussed 

below, and/or reapply for RMO status 

90 days after the disqualification notice 

was issued by the Exchange. 

Proposed Rule 7.44(c) is substantively 

identical to NYSE Rule 7.44(h) and 

NYSE Arca Rule 7.44–E(h) and is also 

substantially similar to IEX Rule 

11.232(c). 

Appeal of Disapproval or 

Disqualification 

Proposed Rule 7.44(d) provides 

appeal rights to ETP Holders that are 

disapproved or disqualified as RMOs. If 

an ETP Holder disputes the Exchange’s 

decision to disapprove it under 

proposed Rule 7.44(b) or disqualify it 

under proposed Rule 7.44(c), such ETP 

Holder could request, within five 

business days after notice of the 

decision was issued by the Exchange, 


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16The Exchange notes that the availability of an 

MTS Modifier with retail orders is not novel, as it 

is currently offered on other exchanges operating 

retail price improvement programs. See, e.g., 

Investors Exchange LLC Rules 11.190(b)(9)(G), 

11.190(b)(10)(G), and 11.232(a)(2) (providing that a 

Retail order may be a Discretionary Peg order or 

Midpoint Peg order, either of which may be 

designated with a minimum trade size). In addition, 

the Commission recently noticed for immediate 

effectiveness a proposed rule change by the NYSE 

to permit Retail Orders to be designated with an 

MTS Modifier. See Securities Exchange Act Release 

No. 96944 (February 16, 2023), 88 FR 11499 

(February 23, 2023) (SR–NYSE–2023–11) (Notice of 

Filing and Immediate Effectiveness of Proposed 

Rule Change To Modify Rule 7.44 Relating to the 

Retail Liquidity Program). 

17See note 13, supra (describing the MPL Order); 

IEX Rule 11.232(a)(2) (providing that a retail order 

must be a Discretionary Peg order or Midpoint Peg 

order with a Time-in-Force of IOC or FOK that is 

only eligible to trade at a price between the NBB 

and the Midpoint Price (for bids) or between the 

NBO and the Midpoint Price (for offers)). 

the Retail Liquidity Program Panel 

(‘‘RLP Panel’’) review the decision to 

determine if it was correct. 

The RLP Panel would consist of the 

NYSE’s Chief Regulatory Officer 

(‘‘CRO’’), or a designee of the CRO, and 

two qualified Exchange employees. The 

RLP Panel would review the facts and 

render a decision within the time frame 

prescribed by the Exchange. The RLP 

Panel may overturn or modify an action 

taken by the Exchange, and all 

determinations by the RLP Panel would 

constitute final action by the Exchange 

on the matter at issue. 

Proposed Rule 7.44(d) is substantively 

identical to NYSE Rule 7.44(i) and 

NYSE Arca Rule 7.44–E(i) and is also 

substantially similar to IEX Rule 

11.232(d). 

Retail Liquidity Identifier 

Proposed Rule 7.44(e) would provide 

for the Retail Liquidity Identifier, which 

is an identifier disseminated by the 

Exchange through proprietary data feeds 

and through the Consolidated Quotation 

System or the UTP Quote Data Feed, as 

applicable, when RPI interest eligible to 

trade at the midpoint of the PBBO for a 

particular security is available in 

Exchange systems. The Retail Liquidity 

Identifier would reflect the symbol for 

the particular security and the side (buy 

or sell) of the RPI interest but would not 

include the price or size of the RPI 

interest. 

Proposed Rule 7.44(e) is the same as 

NYSE Rule 7.44(j), aside from 

differences to reflect that the Program’s 

Retail Liquidity Identifier would 

indicate when RPI interest is available 

at the midpoint of the PBBO, consistent 

with the goal of the Program to offer 

trading opportunities to Retail Orders at 

the midpoint or better. 

Retail Order Designation 

Proposed Rule 7.44(f) would describe 

the operation of Retail Orders in the 

Program. A Retail Order may be 

designated with an MTS Modifier.16

Proposed Rule 7.44(f) provides for two 

types of Retail Orders, and an RMO 

would be able to designate how a Retail 

Order will trade with available contraside interest. 

Proposed Rule 7.44(f)(1) would define 

the Type 1 Retail Order. A Type 1 Retail 

Order to buy (sell) would be an MPL 

IOC Order with a working price at the 

lower (higher) of the midpoint of the 

PBBO or its limit price and that will 

trade only with available RPI Orders to 

sell (buy) and all other orders to sell 

(buy) with a working price below 

(above) or equal to the midpoint of the 

PBBO on the Exchange Book. A Type 1 

Retail Order would not route, and the 

quantity of a Type 1 Retail Order to buy 

(sell) that does not trade with eligible 

orders to sell (buy) will be immediately 

and automatically cancelled. A Type 1 

Retail Order would be cancelled on 

arrival if there is no PBBO or the PBBO 

is locked or crossed. 

Proposed Rule 7.44(f)(1) is similar to 

NYSE Rule 7.44(k) and NYSE Arca Rule 

7.44–E(k)(1) except that the Type 1 

Retail Order, as proposed, would differ 

from the NYSE Retail Order and the 

NYSE Arca Type 1 Retail Order in that 

it would be an MPL Order (rather than 

a Limit Order), to reflect the intent of 

the Program to provide potential price 

improvement opportunities for retail 

order flow at the midpoint or better. The 

Type 1 Retail Order, as an order eligible 

to trade at the midpoint or better, 

accordingly also shares characteristics 

with the existing MPL Order type 

available on the Exchange and is similar 

to the retail order in IEX’s Retail Price 

Improvement Program.17

Proposed Rule 7.44(f)(2) would define 

the Type 2 Retail Order. A Type 2 Retail 

Order to buy (sell) would be a Limit IOC 

Order that trades first with available RPI 

Orders to sell (buy) (which, as noted 

above, are orders with a working price 

at the lower (higher) of the midpoint of 

the PBBO or their limit price) and with 

all other orders to sell (buy) with a 

working price below (above) the PBO 

(PBB) on the Exchange Book. Any 

remaining quantity of a Type 2 Retail 

Order would then trade with orders to 

sell (buy) on the Exchange Book at 

prices equal to or above (below) the PBO 

(PBB) as a Limit IOC Order and would 

not route. Any untraded quantity would 

be immediately and automatically 

cancelled. Retail Orders designated by 

the submitting RMO as Type 2 thus 

differ from Type 1 Retail Orders because 

they would be able to trade with all 

contra-side orders inside the PBBO and 

then would have the opportunity to 

trade as a Limit IOC Order, as such 

order is defined in Rule 7.31. 

Proposed Rule 7.44(f)(2) is identical to 

NYSE Arca Rule 7.44–E(k)(2)(A) except 

that proposed Rule 7.44(f)(2) references 

the Exchange Book rather than the 

NYSE Arca Book. 

Priority and Order Allocation 

Proposed Rule 7.44(g) would set forth 

priority and allocation rules for the 

Program. RPI Orders in the same 

security would be ranked together with 

all other interest ranked as Priority 3— 

Non-Display Orders, and odd lot orders 

ranked as Priority 2—Display Orders 

would have priority over orders ranked 

Priority 3—Non-Display Orders at each 

price. Any remaining unexecuted RPI 

interest would remain available to trade 

with other incoming Retail Orders. Any 

remaining unfilled quantity of the Retail 

Order would cancel in accordance with 

proposed Rule 7.44(f), as described 

above. 

Proposed Rule 7.44(g) would also 

include the following examples to 

illustrate priority and allocation of 

orders in the Program. 

Examples of priority and order 

allocation are as follows: 

PBBO for security ABC is $10.00–$10.10. 

User 1 enters a Retail Price Improvement 

Order to buy ABC at $10.06 for 500. 

User 2 then enters a Retail Price 

Improvement Order to buy ABC at $10.09 for 

400. 

User 3 then enters a Retail Price 

Improvement Order to buy ABC at $10.04 for 

500. 

An incoming Type 1 Retail Order to sell 

ABC for 1,000 at $10.00 would trade first 

with User 1’s bid for 500 at $10.05. The 

Retail Order would then trade with User 2’s 

bid for 400 at $10.05, because User 2’s bid 

is ranked at the same price as User 1’s but 

arrived later. User 3 would not be filled 

because the limit price of its order is not 

priced to execute at or above the current 

midpoint price of $10.05, and the remaining 

100 shares of the Retail Order would be 

cancelled back to the Retail Member 

Organization. The Retail Order trades with 

RPI Orders in price/time priority, as 

illustrated by this example. 

The result would be the same as the above 

if User 1’s order was instead either an MPL 

Order to buy ABC at $10.06 for 500 or a nondisplayed order to buy ABC at $10.05 for 500. 

The incoming Retail Order would trade first 

with User 1 for 500 at $10.05, then with User 

2 for 400 at $10.05. User 3 would not be 

filled because the limit price of its order is 

not priced to execute at or above the current 

midpoint price of $10.05, and the remaining 

100 shares of the Retail Order would be 

cancelled back to the Retail Member 

Organization. 

As a final example, assume the original 

facts, except that User 3’s order was not an 


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57512 Federal Register / Vol. 88, No. 162 / Wednesday, August 23, 2023 / Notices 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(5). 20See note 9, supra. 

RPI Order, but rather, a non-displayed order 

to buy ABC at $10.09 for 400 and User 4 

enters a displayed odd lot limit order to buy 

ABC at $10.05 for 60. The incoming Retail 

Order to sell for 1,000 would trade first with 

User 3’s bid for 400 at $10.09, because it is 

the best-priced bid, then with User 4’s bid for 

60 at $10.05 because it is the next best-priced 

bid and is ranked Priority 2—Display Orders 

and has priority over same-priced nondisplayed orders (RPIs and non-displayed 

limit orders). The incoming Retail Order 

would then trade with User 1’s bid for 500 

at $10.05 and, finally, with User 2 for 40 at 

$10.05, at which point the entire size of the 

Retail Order to sell 1,000 would be depleted. 

The balance of User 2’s bid would remain on 

the Exchange Book and be eligible to trade 

with the next incoming Retail Order to sell. 

To demonstrate how a Type 2 Retail Order 

would trade with available Exchange interest, 

assume the following facts: 

PBBO for security DEF is $19.99—$20.03. 

User 1 enters a Limit Order to buy DEF at 

$20.00 for 100 (updated PBBO 20.00 × 20.03.) 

User 2 then enters a Retail Price 

Improvement Order to buy DEF at $20.03 for 

100. 

User 3 then enters an MPL Order to buy 

DEF at $21.00 for 100. 

User 4 then enters a Non-Displayed Order 

to buy DEF at $20.01 for 100. 

User 5 then enters a Non-Displayed Order 

to buy DEF at $20.02 for 100. 

An incoming Type 2 Retail Order to sell 

DEF for 1,000 at $20.00 would trade first 

with User 5’s bid for 100 at $20.02, because 

it is the best-priced bid. The incoming Retail 

Order would then trade with User 2’s bid for 

100 at $20.015, because it is the next bestpriced bid, then with User 3’s bid for 100 at 

$20.015, because User 3’s bid is ranked at the 

same price as User 2’s but arrived later. The 

incoming Retail Order would then trade with 

User 4’s bid for 100 at $20.01 because it is 

the next best-priced bid. Finally, the Retail 

Order would trade with User 1’s bid for 100 

at $20.00. The remaining 500 shares of the 

Retail Order would be cancelled back to the 

Retail Member Organization. 

Finally, proposed Rule 7.44(g) would 

limit the Program to trades occurring at 

prices equal to or greater than $1.00 per 

share and provide that Exchange 

systems will reject Retail Orders and 

RPI Orders priced below $1.00. The 

Program will operate only during the 

Core Trading Session and Retail Orders 

will be accepted during Core Trading 

Hours only. 

Proposed Rule 7.44(g) is substantially 

the same as NYSE Arca Rule 7.44–E(l) 

except that it provides that remaining 

unfilled quantities of Retail Orders 

would cancel only (because all Retail 

Orders in the Program, as proposed, 

would be IOC Orders) and is also 

substantially the same as NYSE Rule 

7.44(l) except to the extent the NYSE 

rule refers to the allocation of Retail 

Orders pursuant to NYSE Rule 7.37(b). 

The examples of priority and allocation 

provided in proposed Rule 7.44(g) are 

structured similarly to those that appear 

in NYSE Arca Rule 7.44–E(l), with 

differences to reflect that RPI Orders 

and Type 1 Retail Orders in the Program 

would function as MPL Orders. 

* * * * * 

Subject to effectiveness of this 

proposed rule change, the Exchange will 

implement this change no later than in 

the third quarter of 2023 and announce 

the implementation date by Trader 

Update. 

2. Statutory Basis 

The proposed rule change is 

consistent with section 6(b) of the Act,18

in general, and furthers the objectives of 

section 6(b)(5),19 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. 

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 proposed Rule 7.44 is based on 

NYSE Rule 7.44 and NYSE Arca Rule 

7.44–E providing for the NYSE and 

NYSE Arca Retail Liquidity Programs, 

respectively, and is also substantially 

similar to rules providing for the IEX 

Retail Price Improvement Program. 

Proposed Rule 7.44 sets forth 

definitions, order types, processes for 

RMO application, qualification, 

disapproval and disqualification for the 

Program, and the operation, priority, 

and allocation of orders in the Program 

that are based on rules previously 

approved by the Commission for retail 

price improvement programs currently 

offered by equities exchanges. 

Accordingly, the Exchange also 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 

by promoting consistency among 

exchange rules setting forth retail price 

improvement programs, which could 

encourage retail investors to direct order 

flow to the Program to seek out price 

improvement opportunities. 

The Exchange also believes that the 

proposed change would promote just 

and equitable principles of trade and 

remove impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system because it 

is intended to attract retail order flow to 

the Exchange, including by facilitating 

opportunities for such order flow to 

receive potential price improvement at 

the midpoint or better. The proposed 

change would also promote competition 

for retail order flow among execution 

venues, which would benefit retail 

investors by creating additional price 

improvement opportunities for 

marketable retail order flow on a public 

exchange. In particular, the Exchange 

believes that providing for RPI Orders 

and Retail Orders that function as MPL 

Orders could provide more 

deterministic price improvement 

opportunities for Retail Orders, thereby 

attracting additional retail order flow to 

the Exchange. In addition, the Exchange 

believes that also offering a Retail Order 

to buy (sell) that could trade with orders 

to sell (buy) on the Exchange Book at 

prices equal to or above (below) the PBO 

(PBB) (after trading with RPI Orders and 

interest on the Exchange Book with a 

working price below (above) the PBO 

(PBB)) could provide for additional 

trading opportunities for Retail Orders 

designated as Type 2 by the RMO. The 

Exchange notes that this type of Retail 

Order is currently offered in the NYSE 

Arca Retail Liquidity Program. The 

Exchange also believes that the 

proposed change would allow it to 

compete with other exchanges that 

similarly promote additional trading 

opportunities for retail order flow at the 

midpoint.20

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 

Exchange believes that the proposed 

change could encourage competition by 

promoting additional trading 

opportunities at the midpoint and 

supporting price improvement 

opportunities at the midpoint of the 

PBBO or better for retail investors. The 

Exchange further believes that the 

proposed change could promote 

competition between the Exchange and 

other exchanges that offer retail price 

improvement programs, including an 

exchange that operates a retail price 

improvement program intended to 


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Federal Register / Vol. 88, No. 162 / Wednesday, August 23, 2023 / Notices 57513 

21See note 9, supra. 

22 15 U.S.C. 78s(b)(3)(A)(iii). 

23 17 CFR 240.19b–4(f)(6). 

24 15 U.S.C. 78s(b)(3)(A). 

25 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 the Exchange’s 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. 

26 17 CFR 240.19b–4(f)(6). 

27 17 CFR 240.19b–4(f)(6)(iii). 

28For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

29 15 U.S.C. 78s(b)(2)(B). 30 17 CFR 200.30–3(a)(12). 

provide additional trading opportunities 

at the midpoint.21

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 24 and Rule 19b–4(f)(6)(iii) 

thereunder.25

A proposed rule change filed under 

Rule 19b–4(f)(6) 26 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),27 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 

become operative immediately upon 

filing. The Exchange stated that it 

anticipates that it will be 

technologically ready to implement the 

Program within 30 days of the date of 

filing, and a waiver of the 30-day 

operative delay would allow the 

Exchange to provide beneficial price 

improvement opportunities to retail 

investors as soon as practicable. Further, 

the Exchange stated that waiver of the 

operative delay would encourage 

competition for retail order flow among 

execution venues. The Commission 

believes that waiver of the operative 

delay is consistent with the protection 

of investors and the public interest 

because it would allow the Exchange to 

implement its Program to provide retail 

investors with price improvement 

opportunities and compete with other 

execution venues for retail order flow. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.28

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) 29 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

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 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSENAT–2023–17 on the subject line. 

Paper Comments 

• 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–NYSENAT–2023–17. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

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–NYSENAT–2023–17 and should be 

submitted on or before September 13, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–18190 Filed 8–22–23; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

Delegation of Authority DA 543; 

Designation of Chief International 

Agreements Officer 

By virtue of the authority vested in 

the Secretary of State by the laws of the 

United States, including 5 U.S.C. 301, 

2104, 2105 and 3101, I hereby appoint 

Joshua L. Dorosin as an Officer of the 

United States. 

Pursuant to 1 U.S.C. 112b, and section 

1 of the State Department Basic 

Authorities Act (22 U.S.C. 2651a), I 

hereby designate Joshua L. Dorosin as 

the Chief International Agreements 

Officer of the Department of State, with 

the title of International Agreements 

Compliance Officer. 

This document will be published in 

the Federal Register. 

Dated: August 10, 2023. 

Antony J. Blinken, 

Secretary of State. 

[FR Doc. 2023–18098 Filed 8–22–23; 8:45 am] 

BILLING CODE 4710–08–P 


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