87444 Federal Register / Vol. 89, No. 212 / Friday, November 1, 2024 / Notices 

25Partial Amendment No. 1 would also amend 

the definition of Netting Member Capital to use the 

defined terms Net Assets and Equity Capital. 

26 17 CFR 200.30–3(a)(31). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Netting Member’s Sponsoring Member 

Omnibus Account Required Fund 

Deposit or Segregated Customer Margin 

Requirement for such Account and not 

for purposes of calculating the Net 

Settlement Position under Rule 11, FICC 

shall allocate the positions in the 

manner specified.25

Regarding the changes described in 

(5) above, Partial Amendment No. 1 

makes several changes to the Proposed 

Rule Change and existing rules 

regarding the use of the term Brokered 

Transactions, including changes to its 

definition. Specifically, Partial 

Amendment No. 1 would delete and 

add text to the definition of Brokered 

Transaction to clarify that a Brokered 

Transaction means the side of a 

transaction, including a Repo 

Transaction, that is submitted to the 

Corporation for Novation by an InterDealer Broker Netting Member calling 

for the delivery of an Eligible Netting 

Security, or the posting of cash or an 

Eligible Netting Security as collateral, 

that such Inter-Dealer Broker Netting 

Member enters into with another 

Netting Member or a Sponsored Member 

or Executing Firm Customer through the 

Inter-Dealer Broker Netting Member’s 

own trading platform. As initially 

proposed, the definition of Brokered 

Transaction referred only to any 

transaction, including a Repo 

Transaction, calling for the delivery of 

an Eligible Netting Security, or the 

posting of cash or an Eligible Netting 

Security as collateral. 

Partial Amendment No. 1 also revises 

text proposed in SR–FICC–2024–005 

regarding the treatment of Agent 

Clearing Transactions and deletes 

reference to the term Brokered 

Transactions, such that Brokered 

Transactions would not be excluded 

from being an Agent Clearing 

Transaction. 

Additionally, Partial Amendment No. 

1 makes the following changes to delete 

references to the term Brokered 

Transactions: (i) amends text from the 

Proposed Rule Change regarding Rule 1, 

to remove the term Brokered 

Transactions from the definition of 

Dealer Account; (ii) revises Rule 4, 

Section 7 regarding loss allocation for 

Inter-Dealer Broker Netting Members, to 

replace a reference to a Segregated Repo 

Account, with a reference to a Broker 

Account, and to remove a reference to 

a Non-IDB Repo Broker, as the Proposed 

Rule Change deletes the use of that term 

from the Rules; and (iii) amends existing 

Rule 3A Section 5 regarding Sponsored 

Member Trades and deletes reference to 

the term Brokered Transactions, such 

that the text now states that Sponsored 

Member Trades (other than Sponsored 

GC Trades) may be any type of 

transaction eligible for submission to 

FICC for netting with the exception of 

Netting Eligible Auction Purchases and 

GCF Repo Transactions. 

Finally, Partial Amendment No. 1 

makes several technical and conforming 

changes throughout the Proposed Rule 

Change, such as renumbering section 

numbers to reflect the addition of new 

sections. 

Partial Amendment No. 1 would not 

change the purpose of, or statutory basis 

for the proposed rule change. All other 

representations in the Proposed Rule 

Change remain as stated therein and no 

other changes are being made. 

II. 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-regulations/self-regulatoryorganization-rulemaking); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

FICC–2024–007 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–FICC–2024–007. 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-regulations/self-regulatoryorganization-rulemaking). 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 such 

filing also will be available for 

inspection and copying at the principal 

office of FICC and on DTCC’s website at 

(https://dtcc.com/legal/sec-rulefilings.aspx). 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–FICC–2024–007 and should 

be submitted on or before November 18, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25429 Filed 10–31–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101452; File No. SR– 

NYSEAMER–2024–62] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Change To Modify Rule 971.2NYP 

October 28, 2024. 

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 

22, 2024, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify 

Rule 971.2NYP regarding the Customer 

Best Execution Auction for Complex 

Orders. The proposed rule change is 

available on the Exchange’s website at 


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Federal Register / Vol. 89, No. 212 / Friday, November 1, 2024 / Notices 87445 

4 In June 2022, Cboe Exchange, Inc. (‘‘Cboe’’) 

began supporting the electronic processing of 

certain stock-option orders in nonconforming ratios, 

including orders submitted to Cboe’s Complex 

Automated Improvement Mechanism (‘‘c–AIM’’). 

See Cboe Exchange Alert, ‘‘Schedule Update—Cboe 

Options Introduces New Net, Leg Price Increments 

and Enhanced Electronic, Open Outcry Handling 

for Complex Orders with Non-Conforming Ratios, 

Reference ID: C2022060301 available online at 

https://cdn.cboe.com/resources/release_notes/2022/ 

Schedule-Update-Cboe-Options-Introduces-NewNet-Leg-Price-Increments-and-Enhanced-ElectronicOpen-Outcry-Handling-for-Complex-Orders-withNon-Conforming-Ratios.pdf (providing, in relevant 

part, that beginning June 12, 2022, ‘‘automated 

handling via COA, COB, AIM, and QCC will be 

available for applicable non-conforming orders, 

except in SPX/SPXW’’) (referred to herein as the 

‘‘Cboe Trader Update’’). See also Securities 

Exchange Act Release Nos. 94204 (February 9, 

2022), 87 FR 8625 (February 15, 2022) (SR–CBOE– 

2021–046) (order approving Cboe’s proposal, as 

amended, to permit complex orders with ratios less 

than one-to-three and greater than three-to-one to be 

eligible for electronic processing and to trade in 

penny increments); 95006 (May 31, 2022), 87 FR 

34334 (June 6, 2022) (SR–CBOE–2022–024) 

(allowing Cboe to retain discretion to determine on 

a class-by-class basis eligibility for electronic 

processing of complex orders with ratios less than 

one-to-three and greater than three-to-one (i.e., 

ratios other than the conforming ratio requirement). 

In 2023, Miami International Securities Exchange, 

LLC (‘‘MIAX’’) amended its rules to permit complex 

orders to trade in nonconforming ratios, including 

orders submitted to ‘‘cPRIME,’’ its price 

improvement auction for complex orders. See 

Securities Exchange Act Release Nos. 94204 

(February 9, 2022), 87 FR 8625 (February 15, 2022) 

(SR–MIAX–2023–01) (immediately effective filing 

adopting pricing for nonconforming complex orders 

(per MIAX Rule 518), including as it relates to 

orders executed in cPRIME (per Rule 515A, 

Interpretations and Policies .12)). Like the Complex 

CUBE, both c–AIM and cPRIME are ‘‘CUBE-like’’ 

paired auctions with price improvement 

mechanisms. While these CUBE-like auction 

mechanisms are not identical, the Exchange 

believes that, for purposes of this proposal, they 

provide valid bases for comparison. 

5The Exchange notes that Complex Orders in 

conforming ratios may qualify for the ‘‘Complex 

Trade’’ exception to trade through the NBBO. See 

Rules 990NY(4) (defining Complex Trade as it 

relates to order protection) and 991NY(b)(7) 

(exempting from trade-through liability transactions 

effected as a portion of a Complex Trade). 

6See Securities Exchange Act Release No. 98279 

(September 22, 2023), 88 FR 62115 (September 28, 

2023) (SR–NYSEAMER–2023–44) (immediately 

effective rule change to modify Rule 900.3NYP(g)(1) 

to allow Complex QCC Orders in nonconforming 

ratios). See also Rule 900.3NYP(g)(1)(G) (‘‘Complex 

QCC Orders are eligible for electronic processing 

regardless of the ratio in the component legs’’). The 

Exchange currently permits the execution of certain 

nonconforming Complex Orders on the Trading 

Floor. See, e.g., Rule 900.3NYP(h)(6)(B) (regarding 

Stock/Complex Orders that are only available for 

trading in Open Outcry and are not subject to the 

conforming ratio requirement). 

7See Rule 971.2NYP(a). 

8See generally Rule 971.2NYP (Complex 

Electronic Cross Transactions). The capitalized 

terms related to the Complex CUBE as used herein 

have the same meaning as set forth in the Rule. The 

definitions relevant to the Auction are set forth in 

Rule 971.2NYP(a)(1)(A). 

9See Rule 971.2NYP(a). 

10The Complex CUBE Order may be submitted on 

behalf of a public customer, broker dealer, or any 

other entity whereas the Complex Contra Order 

represents principal interest or non-Customer 

interest solicited to trade solely with the Complex 

CUBE Order. See Rule 971.2NYP(a) and (a)(1), 

respectively. 

11See Rule 971.2NYP(a)(2). 

12See id. See Rule 971.2NYP(a)(1)(A)(ii) 

regarding the definition of the CUBE BBO. 

13See Rule 971.2NYP(c)(1)(C)(i). The Exchange 

notes that, like Complex QCC Orders, Complex GTX 

Orders are never placed in the Consolidated Book 

and instead execute or cancel. Compare Rule 

900.3NYP(g) with Rule 971.2NYP(c)(1)(C)(i)(b). 

Unrelated Complex Orders received during the 

Auction will be treated as responses to the Complex 

CUBE and will trade with the Complex CUBE 

Order, if eligible. See Rule 971.2NYP(c)(1)(C)(ii). 

The Exchange notes that, unlike Complex GTX 

Orders, ‘‘unrelated Complex Orders’’ are not 

designated to trade solely in the Complex CUBE 

Auction (i.e., such orders may execute outside of 

the Auction). 

14See Rule 971.2NYP(c)(3)(A)–(B). 

15See Rule 971.2NYP(a)(1)(A)(v) (defining the 

‘‘range of permissible executions’’). See also Rule 

971.2NYP(c)(4) (regarding the allocation of the 

Complex CUBE Order). The Exchange notes that, 

like Complex QCC Orders, Complex CUBE Orders 

are never placed in the Consolidated Book. 

Complex QCC Orders execute immediately or 

cancel and Complex CUBE Orders are guaranteed 

to execute in full. Compare Rule 900.3NYP(g) with 

Rule 971.2NYP(a)(1). 

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 modify 

Rule 971.2NYP regarding the Customer 

Best Execution Auction for Complex 

Orders (‘‘Complex CUBE Auction’’ or 

‘‘Auction’’), which is a paired auction 

with a price improvement mechanism. 

The Exchange proposes to modify Rule 

971.2NYP (the ‘‘Rule’’) to permit 

Complex CUBE Auctions in 

nonconforming ratios (as defined 

below). This filing is a competitive 

filing as it will align Complex CUBE 

Auctions with auction functionality 

already available on competing options 

exchanges.4

Conforming and Nonconforming 

Complex Orders 

Rule 900.3NYP(f) provides that a 

Complex Order is any order involving 

the simultaneous purchase and/or sale 

of two or more option series in the same 

underlying security (the ‘‘legs’’ or 

‘‘components’’ of the Complex Order), 

for the same account, in a ratio that is 

equal to or greater than one-to-three 

(.333) and less than or equal to three-toone (3.00) (referred to herein as the 

‘‘conforming ratio’’ or ‘‘conforming ratio 

requirement’’).5 The Exchange recently 

amended its rules to permit Complex 

Qualified Contingent Cross (‘‘QCC’’) 

Orders with ratios greater than three-toone or less than one-to-three 

(‘‘nonconforming ratios’’) to trade 

electronically.6 A Complex CUBE Order 

is subject to the conforming ratio 

requirement as it is defined, in part, as 

a ‘‘Complex Order’’ pursuant to Rule 

900.3NYP(f).7 The Exchange proposes to 

modify the Rule to permit Auctions of 

Complex CUBE Orders with 

nonconforming ratios as described 

herein. 

Overview of Complex CUBE Auctions 

The Complex CUBE Auction is a 

paired auction, with a price 

improvement mechanism, for Complex 

CUBE Orders.8 A Complex CUBE Order 

is a Complex Order, per Rule 

900.3NYP(f) (as described above), that is 

submitted to the Complex CUBE 

Auction by an Initiating Participant.9

The Initiating Participant represents the 

Complex CUBE Order as agent and 

guarantees the execution of such order 

by submitting a Contra Order.10 The 

time at which the Auction is initiated 

will also be considered the time of 

execution for the Complex CUBE 

Order.11 To initiate a Complex CUBE 

Auction, the net price of a Complex 

CUBE Order to buy (sell) must be equal 

to or higher (lower) than the CUBE BB 

(BO).12 ATP Holders that respond to an 

Auction have the option of submitting a 

Complex GTX Order, which order is 

designed to interact with the Complex 

CUBE Order (if at all), then cancel.13 A 

Complex CUBE Auction will end early 

(i.e., before the Exchange-established 

minimum duration) based on certain 

market updates.14 At the conclusion of 

the Auction, the entire Complex CUBE 

Order will execute within a range of 

permissible executions with the bestpriced available interest during the 

Auction, or the Complex Contra Order, 

as applicable.15

Proposed Rule 

The Exchange proposes to modify the 

Rule to allow the execution of Complex 


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16This proposal does not impact existing 

Complex CUBE Orders, the definitions related 

thereto, or the processing of such orders in the 

CUBE Auction. Rather, it specifies only the 

requirements for and handling of the proposed 

nonconforming Complex CUBE Orders. 

17See proposed Rule 971.2NYP(a)(1)(A)(vii). 

18See, e.g., Cboe Rule 1.1 (providing that a 

‘‘Nonconforming Complex Order’’ means ‘‘a 

complex order with a ratio on the options legs less 

than one-to-three (.333) or greater than three-to-one 

(3.00)’’) and MIAX Rule 518(a)(16) (providing that 

a ‘‘non-conforming ratio’’ is ‘‘where the ratio 

between the sizes of the components of a complex 

order comprised solely of options is greater than 

three-to-one (3.00)’’). As noted herein, both Cboe 

and MIAX permit nonconforming complex orders to 

trade in their auction mechanisms. See supra note 

4 (citing Cboe Trader Update permitting c–AIM 

Auction of Nonconforming Complex Orders and 

MIAX Rule 515A, Interpretations and Policies .12 

permitting cPRIME Auction of Nonconforming 

Complex Orders). 

19For example, in its definition of ‘‘Complex 

Order,’’ Cboe has retained discretion to determine 

‘‘on a class-by-class basis whether non-conforming 

complex orders are eligible for electronic processing 

(see Cboe Rule 1.1) and specifies in the Cboe Trader 

Update that nonconforming complex orders may 

participate in its c-AIM) (see supra note 4). If the 

Exchange opts to allow Complex Orders in 

nonconforming ratios (that are not Complex QCC 

Orders) to trade outside the of Complex CUBE 

Auction, the Exchange will submit a separate rule 

filing. 

20The CUBE BBO for conforming Complex CUBE 

Orders is comprised of better of the Complex BBO 

or DBBO. See Rule 971.2NYP(a)(1)(A)(ii)(a)–(b). The 

Complex BBO is ‘‘the best-priced complex order(s) 

in the same complex strategy to buy (sell).’’ See 

Rule 971.2NYP(a)(1)(A)(i). The DBBO has the 

meaning set forth in Rule 980NYP(a)(5). See Rule 

971.2NYP(a)(1)(A)(iii). Rule 980NYP describes the 

trading of Electronic Complex Orders on the 

Exchange. 

21See proposed Rule 971.2NYP(a)(1)(A)(ii) 

(adding definition of ‘‘Complex NBBO’’ as having 

the meaning set forth in Rule 980NYP(a)(2)’’). To 

accommodate this change, the Exchange proposes 

to re-number the balance of Rule(a)(1)(A). See 

proposed Rule 971.2NYP(a)(1)(A)(iii)–(vi). The 

Complex NBBO is an aggregation of NBBO prices, 

which aggregation is designed to ensure that the 

component legs of a nonconforming Complex CUBE 

Order do not trade through the NBBO. Relying on 

the Complex NBBO is akin to the reliance on the 

DBBO as the DBBO is an aggregation of BBO prices, 

which aggregation ensures that conforming 

Complex CUBE Orders do not trade through the 

BBO). 

22See proposed Rule 971.2NYP(a)(1)(A)(vii)(a). 

23See proposed Rule 971.2NYP(a)(1)(A)(vii)(b) 

(including cross-reference to—and specifying that— 

for purposes of the determining the proposed 

‘‘initiating price,’’ the applicable ‘‘CUBE BO (BB)’’ 

for nonconforming Complex CUBE Orders is as 

defined in proposed Rule 

971.2NYP(a)(1)(A)(vii)(a)). 

24See Rule 900.3NYP(g)(1)(D)(i)–(iii) (providing, 

in relevant part, that each option leg of a Complex 

QCC Order must meet the pricing requirements for 

a single-leg QCC Order and must also trade at a 

price that: is equal to or better than the Exchange 

BBO; is equal to or better than the best-priced 

Complex Orders on the Exchange; and, if the bestprice Complex Order on the Exchange includes 

displayed Customer interest, improves the price of 

such displayed Customer interest by at least one 

cent ($0.01). The pricing requirements for the 

proposed nonconforming CUBE Orders are the same 

as for Complex QCC Orders even though the latter 

does not rely on the (shorthand) reference 

‘‘Complex NBBO,’’ which definition the Exchange 

adopted after it had adopted the Complex QCC 

Order type (i.e., it is a distinction without a 

difference). 

25See, e.g., Cboe Trader Update, supra note 4 

(proving that, for nonconforming Complex Orders, 

execution prices for each option leg must be at or 

inside the NBBO and must improve the local BBO 

by at least $0.01 when there is a Priority Customer 

Order resting at the BBO on that leg. Cboe notes 

that, ‘‘by contrast, conforming complex orders may 

potentially trade at the same price as a Priority 

Customer Order resting at the BBO on a given leg 

(but not all legs) if certain conditions are satisfied,’’ 

and cites to Cboe Rules 5.33(f)(2) and 5.85(b)). The 

same distinction likewise applies for 

nonconforming versus conforming Complex CUBE 

Orders, respectively. Compare proposed Rule 

971.2NYP(a)(1)(A)(vii)(a)–(b) with Rule 

971.2NYP(a)(1)(A)(ii)(a)–(b). See also MIAX Rule 

518(c)(1)(v) (providing, in relevant part, that a 

complex order with a nonconforming ratio, will not 

be executed at a net price that would cause any 

option component of the complex strategy to be 

executed ‘‘ahead of a Priority Customer Order at the 

MBBO [MIAX BBO] on the Simple Order Book’’ or 

‘‘at a price that is through the NBBO’’). 

26See Rule 971.2NYP(c)(3)(B). The Exchange 

notes that there is no need to modify the early-end 

scenario set forth in Rule 971.2NYP(c)(3)(A) 

because this scenario is based on same-side updates 

to the CUBE BBO that improve the initiating price 

and applies equally to Auctions of the 

nonconforming Complex CUBE Orders. 

27See proposed Rule 971.2NYP(c)(3)(B). The 

Exchange believes that removing reference to the 

DBBO rather than adding reference to the Complex 

NBBO results in a proposed Rule provision that is 

more concise and easier to comprehend. 

28See, e.g., MIAX Rule 515A, Interpretations and 

Policies .12(d)(viii) (providing that a cPRIME of an 

Agency Order with a nonconforming ratio will end 

early upon the arrival of a Priority Customer Order 

in MIAX’s Simple Order Book (i.e., the leg markets) 

that ‘‘causes any component of the cPRIME Agency 

Order to lock or cross a Priority Customer Order at 

(A) the best price opposite the cPRIME Agency 

Order; or (B) the initiating price’’; or (ix) ‘‘the NBBO 

for a component of a cPRIME Agency Order with 

CUBE Orders in nonconforming ratios 

as follows.16

First, the Exchange proposes to adopt 

a definition of a ‘‘nonconforming 

Complex CUBE Order.’’ As proposed, a 

nonconforming Complex CUBE Order 

‘‘may have a leg ratio that is greater than 

three-to-one (3.00) or less than one-to 

three (.333),’’ 17 which mirrors the leg 

ratio description utilized by other 

options exchanges that permit complex 

orders in nonconforming ratios to trade 

in their CUBE-like mechanisms.18 While 

other options exchanges have authority 

to trade nonconforming complex orders 

outside of their CUBE-like auction 

mechanisms, this proposal is focused 

solely on allowing nonconforming 

Complex CUBE Orders to trade in the 

Auction.19

Next, the Exchange proposes to 

specify the pricing requirements 

applicable to an Auction of a 

nonconforming Complex CUBE Order, 

including that it must be priced within 

the Complex NBBO.20 The Complex 

NBBO, as defined in Rule 980NYP(a)(2), 

refers to ‘‘the derived national best net 

bid and derived national best net offer 

for a complex strategy calculated using 

the NBB and NBO for each component 

leg of a complex strategy.’’ 21 Thus, as 

proposed: 

The ‘‘CUBE BB (BO)’’ for a nonconforming 

Complex CUBE Order to buy (sell) is the 

Complex NBB (NBO), provided that for each 

component leg of the Complex NBB (NBO) 

that represents displayed Customer interest 

on the Exchange, the CUBE BB (BO) will 

improve the price of such displayed 

Customer interest by at least one cent 

($0.01).22

This proposed requirement would 

ensure that every component leg of a 

nonconforming Complex CUBE Order 

trades at a price that is equal to or better 

than the NBBO and better than 

displayed Customer interest on the 

Exchange. 

Consistent with the proposed 

definition of CUBE BBO for 

nonconforming Complex CUBE Orders, 

the Exchange proposes to define the 

‘‘initiating price’’ for such orders. As 

proposed, ‘‘[t]he ‘initiating price’ for a 

nonconforming Complex CUBE Order to 

buy (sell) is the lower (higher) of the 

Complex CUBE Order’s net price or the 

price that locks the CUBE BO (BB).’’ 23

The proposed pricing requirements are 

identical to the requirements for 

Complex QCC Orders, which also trade 

in nonconforming ratios.24 Moreover, 

the proposed pricing requirements 

mirror those imposed by competing 

options exchanges that permit complex 

orders in nonconforming ratios to be 

submitted to price improvement 

auctions like the Complex CUBE.25

In addition, the Exchange proposes to 

modify the Rule to account for leg 

market updates that would result in the 

early end of an Auction of a 

nonconforming Complex CUBE Order. 

Currently, a Complex CUBE Auction 

will end early based on certain updates 

to the contra-side CUBE BBO but only 

when the CUBE BBO is based on the 

DBBO (i.e., the leg markets).26 Because 

nonconforming Complex CUBE Orders 

are based on the Complex NBBO and 

not the DBBO, the Exchange proposes to 

remove reference to the DBBO. As 

proposed, the Rule would specify that a 

Complex CUBE Auction will end early 

upon the arrival of ‘‘[a]ny opposite-side 

interest in the leg markets that adjusts 

the CUBE BO (BB) to be lower (higher) 

than the initiating price,’’ 27 which 

includes updates to the DBBO or 

Complex NBBO, as applicable. This 

proposed modification is consistent 

with early end scenarios on other 

options exchanges that permit complex 

orders in nonconforming ratios to be 

submitted to CUBE-like price 

improvement auctions.28


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a non-conforming ratio updates to a price that 

would cause any option component of the cPRIME 

Agency Order to be executed at a price through the 

NBBO’’). 

29See proposed Rule 971.2NYP(c)(1)(C)(i)(e). The 

Exchanges notes that unrelated Complex Orders 

that trade in a Complex CUBE Auction (i.e., not 

designated as Complex GTX Orders) are not eligible 

to trade in nonconforming ratios. As noted herein, 

if the Exchange opts to allow Complex Orders in 

nonconforming ratios to trade on the Exchange—in 

addition to those designated to trade in an Auction 

or as Complex QCC Orders, the Exchange will 

submit a separate rule filing. 

30See, e.g., supra notes 4, 18, and 25. 

31See supra note 18 (regarding Cboe and MIAX 

definitions of nonconforming complex orders). 

32See supra notes 4 (regarding the trading of 

nonconforming complex orders in Cboe’s c-AIM 

and in MIAX’s cPRIME auction and associated) and 

24 (regarding pricing Cboe’s and MIAX’s pricing 

requirements for nonconforming complex orders). 

33See supra note 28 (regarding leg marker 

updates that result in the early-end of a cPRIME on 

MIAX). 

34See supra notes 4 and 18 (regarding ability of 

Cboe and MIAX to trade nonconforming complex 

orders, including in their CUBE-like auction 

mechanisms). 

35See supra note 24 (regarding pricing 

requirements for Complex QCC Orders). 

36See, e.g., supra notes 4 and 18 (regarding ability 

of Cboe and MIAX to trade nonconforming complex 

orders, including in their CUBE-like auction 

mechanisms) and 27 (regarding MIAX leg market 

updates that cause the early end of cPRIME of 

nonconforming complex order). 

37 15 U.S.C. 78s(b)(3)(A)(iii). 

38 17 CFR 240.19b–4(f)(6). 

Finally, the Exchange proposes to 

modify the Rule to specify that 

‘‘Complex GTX Orders are eligible for 

processing regardless of ratio, including 

against nonconforming Complex CUBE 

Orders.’’ 29 As noted here, competing 

options exchanges already allow 

complex orders in nonconforming ratios 

to execute in CUBE-like auctions.30

Implementation 

Because of the technology changes 

associated with this proposed rule 

change, the Exchange will announce the 

implementation date by Trader Update, 

which, subject to effectiveness of this 

proposed rule change, will be no later 

than in the first quarter of 2025. 

2. Statutory Basis 

For the reasons set forth above, the 

Exchange believes the proposed rule 

change is consistent with Section 6(b) of 

the Act in general, and furthers the 

objectives of Section 6(b)(5) of the Act, 

in that it is designed to promote just and 

equitable principles of trade,remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

In particular, the proposed rule 

change will remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it will enable the 

Exchange to compete on equal footing 

with other exchanges that conduct price 

improvement auctions (like the 

Complex CUBE) of nonconforming 

complex orders. First, the proposed 

definition for the leg ratio of a 

‘‘nonconforming Complex CUBE Order’’ 

is identical to the definitions utilized on 

other options exchanges that 

accommodate the trading of complex 

orders in nonconforming ratios.31

Second, as noted herein, the proposed 

pricing requirements for a 

nonconforming Complex CUBE Order, 

including that the CUBE BBO be based 

on the Complex NBBO, are substantially 

the same as the requirements imposed 

on competing options exchanges.32

Similarly, also consistent with the rules 

of other options exchanges, is the 

proposed Rule change to account for leg 

market updates (i.e., to the Complex 

NBBO) that result in the early end of an 

Auction of the nonconforming Complex 

CUBE Order.33 Finally, the proposal to 

permit the execution of Complex GTX 

Orders in any ratio, including against 

nonconforming Complex CUBE Orders, 

is likewise consistent with rules already 

in place on competing options 

exchanges.34

Finally, the proposed rule change will 

also promote internal consistency as the 

Exchange already permits the trading of 

Complex QCC Orders in nonconforming 

ratios and the proposed nonconforming 

Complex CUBE Orders must adhere to 

the same pricing requirements as such 

Complex QCC Orders.35 As such, the 

proposal would ensure that each 

nonconforming Complex CUBE Order is 

priced equal to or better than the 

Complex NBBO and will improve the 

price of any displayed Customer interest 

on the Exchange at the NBBO. 

In addition, 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, in 

general to protect investors and the 

public interest because it would provide 

another venue for nonconforming 

Complex Orders to execute in a price 

improvement auction such as the 

Complex CUBE. The Exchange also 

believes that the proposed rule change 

would not permit unfair discrimination 

among market participants, as all market 

participants may opt to trade Complex 

CUBE Orders with nonconforming 

ratios. 

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 does not believe that its 

proposed rule change will impose any 

burden on intra-market competition as it 

would apply equally to all market 

participants that opt to submit 

nonconforming Complex CUBE Orders, 

which orders the Exchange will process 

in a uniform manner. 

The Exchange does not believe that its 

proposed rule change will impose any 

burden on inter-market competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act, 

rather the Exchange believes that its 

proposal will promote inter-market 

competition. As noted herein, the 

proposed change is competitive as other 

options exchanges currently conduct 

CUBE-like price improvement auctions 

of complex orders in nonconforming 

ratios based on similar pricing 

requirements and early end scenarios.36

As such, the Exchange’s proposal will 

enhance inter-market competition by 

providing investors with an additional 

venue on which to submit for auction 

Complex Orders in nonconforming 

ratios. Market participants may find it 

more convenient to access one exchange 

over another or may choose to 

concentrate volume at a particular 

exchange to maximize the impact of 

volume-based incentive programs or 

may prefer the trade execution services 

of one exchange over another. 

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 37 and Rule 

19b–4(f)(6) thereunder.38 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) 


khammond on DSKJM1Z7X2PROD with NOTICES
87448 Federal Register / Vol. 89, No. 212 / Friday, November 1, 2024 / Notices 

39 17 CFR 240.19b–4(f)(6)(iii). In addition, 

Rule19b–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. 

40 17 CFR 240.19b–4(f)(6). 

41 17 CFR 240.19b–4(f)(6)(iii). 

42 15 U.S.C. 78s(b)(2)(B). 

43 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b-4. 

3See Securities Exchange Act Release No. 100046 

(May 1, 2024), 89 FR 38203 (May 7, 2024) 

(‘‘Notice’’). Comments received on the proposed 

rule change are available at: https://www.sec.gov/ 

comments/sr-finra-2024-007/srfinra2024007.htm. 

4See Securities Exchange Act Release No. 100305 

(June 10, 2024), 89 FR 50644 (June 14, 2024). 

5 15 U.S.C. 78s(b)(2)(B). 

6See Securities Exchange Act Release No. 100655 

(August 5, 2024), 89 FR 65441 (August 9, 2024) 

(‘‘Order Instituting Proceedings’’). 

7 15 U.S.C. 78s(b)(2). 

8See Notice, supra note 3. 

9 15 U.S.C. 78s(b)(2). 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder.39

A proposed rule change filed under 

Rule 19b–4(f)(6) 40 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),41 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. 

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) 42 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– 

NYSEAMER–2024–62 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–NYSEAMER–2024–62. 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–NYSEAMER–2024–62 and should 

be submitted on or before November 22, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.43

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25427 Filed 10–31–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101450; File No. SR– 

FINRA–2024–007] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Designation 

of Longer Period for Commission 

Action on Proceedings To Determine 

Whether To Approve or Disapprove 

Proposed Rule Change To Adopt the 

FINRA Rule 6500 Series (Securities 

Lending and Transparency Engine 

(SLATETM)) 

October 28, 2024. 

On May 1, 2024, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2 a 

proposed rule change to adopt the new 

FINRA Rule 6500 Series (Securities 

Lending and Transparency Engine 

(SLATETM)) to (1) require reporting of 

securities loans; and (2) provide for the 

public dissemination of loan 

information. The proposed rule change 

was published for comment in the 

Federal Register on May 7, 2024.3 On 

June 10, 2024, the Commission 

extended, until August 5, 2024, the time 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.4

On August 5, 2024, the Commission 

instituted proceedings under Section 

19(b)(2)(B) of the Act 5 to determine 

whether to approve or disapprove the 

proposed rule change, and allow for 

additional analysis of, and input from 

commenters with respect to, the scope 

and implementation of the proposed 

rules.6

Section 19(b)(2) of the Act 7 provides 

that, after initiating proceedings, the 

Commission shall issue an order 

approving or disapproving the proposed 

rule change not later than 180 days after 

the date of publication of notice of filing 

of the proposed rule change. The 

Commission may extend the period for 

issuing an order approving or 

disapproving the proposed rule change, 

however, by not more than 60 days if 

the Commission determines that a 

longer period is appropriate and 

publishes the reasons for such 

determination. The proposed rule 

change was published for notice and 

comment in the Federal Register on 

May 7, 2024.8 November 3, 2024 is 180 

days from that date, and January 2, 2025 

is 240 days from that date. 

The Commission finds it is 

appropriate to designate a longer period 

within which to issue an order 

approving or disapproving the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change 

and its comments. Accordingly, the 

Commission, pursuant to Section 

19(b)(2) of the Act,9 designates January 

2, 2025 as the date by which the 

Commission shall either approve or 


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