Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 91825 

1The rule requires a contract with the FCM to 

contain two provisions requiring the FCM to 

comply with existing requirements under the CEA 

and rules adopted thereunder; thus, to the extent 

these provisions could be considered collections of 

information, the hours required for compliance 

would be included in the collection of information 

burden hours submitted by the CFTC for its rules. 

2This estimate is based on the average number of 

funds that reported on Form N–CEN from April 

2021–March 2024, in response to sub-items C.12.6. 

and D.14.6; money market funds are excluded from 

this estimate because exchange-traded futures 

contracts or commodity options are not eligible 

securities for money market funds; the number of 

series and funds that reported on Form N–CEN in 

response these sub-items were: 1,112 series of 150 

funds for the period April 2021–March 2022; 1,180 

series of 152 funds for the period April 2022–March 

2023; and 1,210 series of 151 funds for the period 

April 2023–March 2024 (for filings received 

through June 30, 2024). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 101189 

(Sept. 25, 2024), 89 FR 79978 (Oct. 1, 2024) (File 

No. SR–OCC–2024–013) (‘‘Notice’’). 

4All capitalized terms not defined herein have 

the same meaning as set forth in the OCC By-Laws 

and Rules, available at https://www.theocc.com/ 

Company-Information/Documents-and-Archives/ 

By-Laws-and-Rules. 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–392, OMB Control No. 

3235–0447] 

Submission for OMB Review; 

Comment Request; Extension: Rule 

17f–6 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA 

Services, 100 F Street NE, 

Washington, DC 20549–2736 

Notice is hereby given that, under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3520), the Securities and 

Exchange Commission (the 

‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 17f–6 (17 CFR 270.17f–6) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a) permits registered 

investment companies (‘‘funds’’) to 

maintain assets (i.e., margin) with 

futures commission merchants 

(‘‘FCMs’’) in connection with 

commodity transactions effected on 

both domestic and foreign exchanges. 

Before the rule was adopted, funds 

generally were required to maintain 

such assets in special accounts with a 

custodian bank. 

The rule requires a written contract 

that contains certain provisions 

designed to ensure important safeguards 

and other benefits relating to the 

custody of fund assets by FCMs. To 

protect fund assets, the contract must 

require that FCMs comply with the 

segregation or secured amount 

requirements of the Commodity 

Exchange Act (‘‘CEA’’) and the rules 

under that statute. The contract also 

must contain a requirement that FCMs 

obtain an acknowledgment from any 

clearing organization that the fund’s 

assets are held on behalf of the FCM’s 

customers according to CEA provisions. 

Because rule 17f–6 does not impose 

any ongoing obligations on funds or 

FCMs, Commission staff estimates there 

are only costs related to new contracts 

between funds and FCMs. This estimate 

does not include the time required by an 

FCM to comply with the rule’s contract 

requirements because, to the extent that 

complying with the contract provisions 

could be considered ‘‘collections of 

information,’’ the burden hours for 

compliance are already included in 

other PRA submissions.1 Commission 

staff estimates that approximately 1,164 

series of 151 funds which report that 

futures commission merchants and 

commodity clearing organizations 

provide custodial services to the fund.2

Based on these estimates, the total 

annual burden hours associated with 

rule 17f–6 is 27 hours. The estimated 

total annual burden hours associated 

with rule 17f–6 have decreased 1 hour, 

from 28 to 27 hours and external costs 

increased from $11,900 to $15,534. 

These changes in burden hours and 

external costs reflect changes in the 

number of affected entities and in the 

external cost associated with the 

information collection requirements. 

These changes reflect revised estimates. 

These estimates are made solely for 

the purposes of the Paperwork 

Reduction Act, and are not derived from 

a comprehensive or even a 

representative survey or study of the 

costs of Commission rules and forms. 

The collections of information 

requirements of the rule are necessary to 

obtain the benefit of relying on the rule. 

An agency may not conduct or sponsor, 

and a person is not required to respond 

to, a collection of information unless it 

displays a currently valid control 

number. 

The public may view background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice by December 20, 2024 to (i) 

www.reginfo.gov/public/do/PRAMain or 

MBX.OMB.OIRA.SEC_desk_officer@

omb.eop.gov, and (ii) Austin Gerig, 

Director/Chief Data Officer, Securities 

and Exchange Commission, c/o Tanya 

Ruttenberg, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: November 15, 2024. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–27117 Filed 11–19–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101621; File No. SR–OCC– 

2024–013] 

Self-Regulatory Organizations; 

Options Clearing Corporation; Order 

Approving Proposed Rule Change by 

The Options Clearing Corporation 

Concerning Modifications to Its ByLaws and Rules Primarily To 

Discontinue Certain Outmoded or 

Unused Products and Services 

November 14, 2024. 

I. Introduction 

On September 13, 2024, The Options 

Clearing Corporation (‘‘OCC’’), 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 make modifications to its ByLaws and Rules primarily to 

discontinue certain outmoded or 

unused products and services 

(‘‘Proposed Rule Change’’). The 

Proposed Rule Change was published 

for comment in the Federal Register on 

October 1, 2024.3 The Commission has 

not received any comments on the 

Proposed Rule Change. For the reasons 

discussed below, the Commission is 

approving the Proposed Rule Change. 

II. Description of the Proposed Rule 

Change 

OCC is a clearing agency that clears a 

number of transactions including 

standardized equity options listed on 

national securities exchanges and 

registered with the Commission, stock 

loans, and futures.4 Since 2000, for its 

core clearing, risk management, and 

data management applications, OCC has 

relied on a platform it calls ‘‘ENCORE.’’ 

ENCORE operates in on-premises data 


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91826 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 

5Securities Exchange Act Release No. 96113 

(October 20, 2022), 87 FR 64824, 64825 (Oct. 26, 

2022) (File No. SR–OCC–2021–802). 

6Notice, 89 FR at 79978–79. 

7 Id.; Notice, 89 FR at 79979. 

8 Id. at 79978–79. 

9 Id. at 79979. 

10An OTC option is an option contract with 

variable terms that are negotiated bilaterally 

between the parties to such transaction (subject to 

any specific requirements applicable to such 

products as set forth in the By-Laws and Rules), and 

that is affirmed through the facilities of an OTC 

Trade Source and submitted to OCC for clearing as 

a confirmed trade. OCC By-Laws, Article I. 

11Securities Exchange Act Release No. 88974 

(May 29, 2020), 85 FR 34468, 34469 (June 4, 2020) 

(File No. SR–OCC–2020–005). 

12Securities Exchange Act Release No. 49841 

(June 9, 2004), 69 FR 34207, 34207 (June 18, 2004) 

(File No. SR–OCC–2003–011). 

13Notice, 89 FR at 79979. 

14OCC proposes to replace the deleted text in 

Rule 504(e) with the word Reserved. 

15Specifically, OCC requires Clearing Members 

making such an election to specifically register that 

aspect of their CMTA arrangement with OCC. 

Clearing Members making such election authorize 

(1) the Executing Clearing Member to enter into 

OCC’s systems fee and commission information 

with respect to transfers effected pursuant to the 

CMTA arrangement between the Clearing members, 

subject to such system checks as may be established 

by OCC from time to time and (2) OCC to calculate 

and settle, in accordance with the applicable 

provisions of Rule 504, the aggregate of such 

entered amounts on the next following business day 

without any further authorization or consent of the 

Carrying Clearing Member. 

16Rule 407 notes that any entries of commission 

and fee information under Rule 407(a)(2) shall be 

solely fees and commissions related to transfers 

effected pursuant to the Clearing Members’ CMTA 

arrangement and for no other purposes. 

17Further, Rule 504(e) also indicates how OCC 

determines the aggregate amounts to be settled, 

warns that OCC is not obligated to validate the 

accuracy of information input into OCC’s systems 

to determine settlement amounts, indicates when 

OCC effects settlement, and confirms that OCC 

settlement facilitation under the CMTA 

arrangement does not require the Carrying Clearing 

Member to give any additional authorization or 

consent and that OCC does not have any role in 

resolving disputes between the Carrying Clearing 

Member and the Executing Clearing Member 

regarding these settlements. OCC would replace the 

text of Rule 504(e) with the word ‘‘Reserved.’’ 

18Securities Exchange Act Release No. 68434 

(Dec. 14, 2012), 77 FR 75243 (Dec. 19, 2012) (File 

No. SR–OCC–2012–14). 

19Notice, 89 FR at 79980. 

20 Id. 

21 Id. OCC indicates that it would submit a 

proposed rule change to the Commission as 

necessary in the event that it decides to support the 

centers.5 Among other things, ENCORE 

is OCC’s system for receiving trade and 

post-trade data on a transaction by 

transaction basis, maintaining clearing 

member positions, calculating margin 

and clearing fund requirements, and 

providing reporting to OCC staff, 

regulators and clearing members.6 OCC 

plans to discontinue ENCORE and 

migrate its functions to a cloud-based 

successor clearing system that it calls 

Ovation.7

As part of the transition to Ovation, 

OCC is determining which features of 

ENCORE will migrate to Ovation.8 The 

Proposed Rule Change describes certain 

functions that OCC proposes 

discontinuing because they are 

outmoded, unused,9 or no longer 

support OCC’s ability to clear and settle 

transactions. In this category, under the 

Proposed Rule Change, OCC would (i) 

no longer facilitate the settlement of 

commissions and fees owed between 

Clearing Members that are party to a 

Clearing Member Trade Assignment 

(‘‘CMTA’’) arrangement; (ii) delete rule 

provisions related to over-the-counter 

(‘‘OTC’’) option products; 10 (iii) delete 

from its rules the ‘‘associated Market 

Maker’’ account subtype; and (iv) no 

longer require that Clearing Members 

maintain records of both parties to a 

trade. 

The Proposed Rule Change also 

includes three sets of additional changes 

that OCC proposed to make in 

connection with the transition to 

Ovation. In this category, OCC proposes 

to (i) allow Clearing Members to ‘‘giveup’’ one or more positions in cleared 

contracts that are futures or futures 

options to another Clearing Member 

without designating the specific account 

of the Given-Up Clearing Member to 

which such positions must be allocated; 

(ii) categorize a trade as an opening 

transaction when an opening or closing 

indicator is not included on a trade; and 

(iii) conform rules related to the 

discharge of broker-to-broker settlement 

obligations to current practice. 

A. Discontinuing Existing Functions 

i. Discontinuing the Facilitation of 

Commissions and Fees Between CMTA 

Clearing Members 

CMTA arrangements allow a Clearing 

Member that executed a securities 

options trade (Executing Clearing 

Member), to send the trade directly 

through OCC to another Clearing 

Member (Carrying Clearing Member) for 

clearance and settlement.11 Clearing 

Members generally use CMTA 

arrangements when they execute 

transactions for correspondent brokers 

that custody their assets with separate 

Carrying Clearing Members or execute 

transactions for an institutional 

customer that has a prime brokerage 

arrangement with a separate Clearing 

Member.12

Currently, subject to certain 

conditions, Clearing Members that are 

parties to a CMTA arrangement may opt 

to have OCC facilitate the settlement of 

fees and commissions for transactions 

pursuant to the CMTA arrangement. 

However, no Clearing Member has used 

the service since 2016, nor have any 

expressed interest in using it in the 

future.13 Accordingly, OCC proposes to 

eliminate it. 

To effect the discontinuation of the 

service, OCC proposes a number of 

changes to its Rules. Specifically, OCC 

proposes deleting Rules 407(a)(2) and 

504(e), as well as certain text in Rule 

504(g).14

Rule 407(a)(2) allows Clearing 

Members that are parties to a CMTA 

arrangement to authorize OCC to settle 

fees and commissions owed by the 

Carrying Clearing Member to the 

Executing Clearing Member in respect of 

transfers effected pursuant to the CMTA 

arrangement. It also discusses Clearing 

Members’ requirements 15 and 

restrictions 16 for electing to have OCC 

settle the applicable fees and 

commissions for transactions under the 

CMTA as well as guidance as to when 

the Clearing Members’ election to have 

OCC settle applicable fees and 

commissions under the CMTA 

arrangement is effective. 

Rule 504(e) provides that OCC, as 

agent, is authorized to effect nonguaranteed settlement of fees and 

commissions owed by a Carrying 

Clearing Member to an Executing 

Clearing Member for transfers effected 

pursuant to their registered CMTA 

arrangement, provided their CMTA 

registration authorizes OCC to effect 

such settlements.17

Finally, certain text in Rule 504(g) 

indicates that OCC has no obligation to 

effect settlement of fees and 

commissions as provided in Rule 407 if 

either the Executing Clearing Member or 

the Carrying Clearing Member has been 

suspended by OCC. The Proposed Rule 

Change would delete this text but leave 

the remainder of Rule 504(g) untouched. 

ii. Deleting Provisions Related to 

Clearing and Settling OTC Options 

OCC’s current Rules and By-Laws are 

designed to support the clearing and 

settling of OTC options.18 However, 

OCC has only ever cleared OTC options 

based on the S&P 500 index,19 and has 

not cleared and settled an OTC option 

since 2014. OCC does not currently have 

any open interest in OTC options and 

OCC’s Clearing Members have not 

expressed interest in clearing OTC 

options with OCC in the future.20 As 

such, OCC proposes removing all 

provisions from its By-Laws and Rules 

related to clearing and settling OTC 

options.21


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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 91827 

clearance and settlement of OTC Options in the 

future. Id. 

22OCC proposes deleting definitions for ‘‘OTC 

Index Option Clearing Member’’ and ‘‘Origination 

Date.’’ Additionally, OCC proposes deleting text 

from the definitions for ‘‘Class,’’ ‘‘Clearing 

Member,’’ ‘‘Confirmed Trade,’’ ‘‘Index Multiplier,’’ 

‘‘Index Value Determinant,’’ ‘‘Trade Date,’’ and 

‘‘Variable Terms’’ that discusses the definitions in 

the context of OTC Options or that is related to OTC 

Options. As a result of the removal of provisions 

related to OTC Options, the Proposed Rule change 

would also delete text from Interpretation and 

Policy .01 to Section C of Article I that indicates 

that the term ‘‘Exchange Transaction’’ was removed 

from the By-Laws and Rules and replaced with the 

term ‘‘Confirmed Trade’’ to reflect the expansion of 

OCC’s clearing activities into OTC options. Id. at 

79980 n.11. 

23OCC proposes deleting text related to OTC 

options in the definitions for ‘‘Class of Options,’’ 

‘‘Current Underlying Interest Value; Current Index 

Value,’’ ‘‘Expiration Date,’’ ‘‘Expiration Time 

(deleted entirely),’’ ‘‘Reporting Authority,’’ and 

‘‘Series of Options.’’ 

24A Proprietary Market-Maker is a Market-Maker 

that is (A) a non-customer of such Clearing Member 

or (B) a Related Person of such Clearing Member 

that (i) is not a customer of such Clearing Member 

for purposes of Rule 15c3–3 of the Securities and 

Exchange Commission, (ii) does not carry the 

accounts of persons who are customers of such 

Market-Maker for purposes of Rule 15c3–3, and (iii) 

has consented to be treated as a proprietary MarketMaker for purposes of the By-Laws and Rules. This 

term includes any participant, as such, in an 

account that is not required to be segregated under 

Section 4d of the Commodity Exchange Act of 

which 10% or more is owned by a proprietary 

Market-Maker. 

25An Associated Market-Maker is a person 

maintaining an account with a Clearing Member as 

a Market-Maker, specialist, stock market-maker, 

stock specialist, or Registered Trader that is a 

Related Person of the Clearing Member and shall 

include any participant, as such in an account of 

which 10% or more is owned by an associated 

Market-Maker, or an aggregate of 10% or more of 

which is owned by one or more associated MarketMakers. 

26OCC By-Laws, Article VI, Section 3, 

Interpretation and Policy .06. The Commission has 

previously acknowledged that Clearing Members 

may find these accounts attractive because 

positions in these accounts can offset one another 

in a manner that may lead to lower margin 

requirements. Securities Exchange Act Release No. 

33492 (Jan. 19, 1994), 59 FR 3896, 3897 n.11 (Jan. 

27, 1994) (File No. SR–OCC–90–11). 

27Notice, 89 FR at 79982. 

28Under Rule 208, Clearing Members must keep 

records showing all confirmed trade data required 

by OCC’s By-Laws and Rules including confirmed 

trade information reported to OCC under Rule 401. 

OCC Rules, Rule 208. Rule 401 requires that 

confirmed trades include the identity of the 

Purchasing Clearing Member and the Writing 

Clearing Member to the transaction. OCC Rules, 

Rule 401(a)(1)(i). 

29Notice, 89 FR at 79980. 

30 Id. 

31 Id. at 79981. Additionally, OCC asserts that 

configuring Ovation to maintain such records 

would require OCC to invest significant resources 

that could impact Ovation’s release timeline. Id. at 

79980. 

To effect this change, OCC proposes 

deleting from the By-Laws the 

definitions for ‘‘OTC option,’’ ‘‘OTC 

index option,’’ ‘‘OTC Trade Source,’’ 

‘‘OTC Trade Source Rules,’’ and 

‘‘Backloaded OTC Option.’’ The 

Proposed Rule Change would also 

delete text in provisions of the By-Laws 

and Rules that reference the above terms 

or that are otherwise related to OCC’s 

clearance and settlement of OTC 

options. As a result, the following 

provisions in the By-Laws would have 

relevant OTC-related terms deleted from 

them (or, where indicated, be deleted in 

their entirety): Article I; 22 Article VI, 

Section 1, Interpretation and Policies 

.01(a); Article VI, Section 3, 

Interpretations and Policies .09 (deleted 

in its entirety); Article VI, Sections 10(b) 

and (g); Article VI, Sections 27(a) and 

(b); Article XVII, Introduction; Article 

XVII, Definitions, Section 1; 23 Article 

XVII, Section 3(h); Article XVII, Section 

3, Interpretation and Policies .01 

(deleted in its entirety); Article XVII, 

Section 4(a)(2); Article XVII, Section 

5(a); and Article XVII, Section 6 (deleted 

in its entirety). 

Likewise, the following provisions in 

the Rules would have relevant OTCrelated terms deleted from them (or, 

where indicated, be deleted in their 

entirety): Rule 201(b)(6) (deleted in its 

entirety); Rules 401(a), (a)(1)(i), (b), (d), 

(e), (f), and (g); Rule 405; Rule 406; Rule 

407(l) (deleted in its entirety); Rule 

408(a); Rules 611(a), (b), and (d) (deleted 

in its entirety); Rule 801(b); Rule 803 

Interpretation and Policy .01; Rule 804; 

Rule 1003 Interpretation and Policy .02 

(deleted in its entirety); Rule 1104 

Interpretation and Policy .03 (deleted in 

its entirety); Rule 1105; Rule 1106(e)(2) 

(deleted in its entirety); Rule 1106 

Interpretation and Policy .01; Chapter 

XVIII of the Rules, Introduction; Rules 

1804(b) and (c); and Rule 1804 

Interpretation and Policy .03 (deleted in 

its entirety). 

iii. Eliminating the Associated Market 

Maker Sub-Account Type 

OCC currently allows its Clearing 

Members to use combined market maker 

accounts. OCC’s rules provide for three 

types of combined market maker 

accounts: a combined account limited to 

Market-Makers that are neither 

Proprietary Market-Makers 24 nor 

Associated Market-Makers; 25 a 

combined account limited to Proprietary 

Market-Makers; and a combined account 

limited to Associated Market-Makers.26

Currently, Clearing Members do not 

use the Associated Market-Maker subaccount type. Thus, OCC proposes 

deleting references to this sub-account 

type from its By-Laws.27 To effect this 

change, the Proposed Rule Change 

would delete the definition for 

Associated Market-Maker from Article I 

of the By-Laws. It would also remove 

from the By-Laws language related to 

Associated Market-Makers and the 

accounts their trades may be included 

in from Article VI, Section 3(c), 

Interpretation and Policy .03, and 

Interpretation and Policy .06. Finally, 

the Proposed Rule Change would 

replace a reference to Section 3(i) with 

a reference to Section 3(c) in the first 

sentence of Interpretation and Policy 

.06. As a result of the changes, OCC’s 

By-Laws would provide for only two 

combined market-maker accounts going 

forward—one limited to Market-Makers 

that are not proprietary Market-Makers 

and one limited to Proprietary MarketMakers. 

iv. Recordkeeping Requirements 

OCC’s rules currently require Clearing 

Members to maintain a record of the 

Purchasing Clearing Member and the 

Writing Clearing Member to each 

confirmed trade.28 Before electronic 

trading was adopted, this requirement 

helped OCC reconcile counterparty 

settlement obligations and efficiently 

clear and settle confirmed trades, which 

aided OCC in avoiding settlement 

delays and disputes.29

With the adoption of electronic 

trading, OCC no longer needs Clearing 

Members to keep a record of the 

Purchasing Clearing Member and the 

Writing Clearing Member to each 

transaction.30 OCC’s role as a CCP 

further diminishes the need for this 

requirement because OCC novates all 

confirmed trades in options contracts so 

that it becomes the buyer to every seller 

and the seller to every buyer. As such, 

the original counterparty information in 

transactions is not relevant or necessary 

in respect of OCC’s clearance and 

settlement process.31

OCC proposes no longer requiring that 

Clearing Members keep records of the 

Purchasing Clearing Member and the 

Writing Clearing Member to 

transactions. To accomplish this, OCC 

proposes adding an exception to its Rule 

208 so that it would require only that 

Clearing Members keep records showing 

all confirmed trade data required 

pursuant to OCC’s By-Laws and Rules, 

including confirmed trade information 

reported to OCC under Rule 401 except 

for the identity of the counterparty 

Clearing Member. 

B. Miscellaneous Changes 

As noted above, OCC also proposes 

three miscellaneous changes to its ByLaws and Rules. First, the Proposed 

Rule Change would allow Clearing 

Members to ‘‘give up’’ one or more 

positions in cleared contracts that are 

futures or futures options to another 


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91828 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 

32 Id. at 79979. 33Securities Exchange Act Release No. 85779 

(May 6, 2019), 84 FR 20689 (May 10, 2019) (File No. 

SR–OCC–2019–003). 34Notice, 89 FR at 79981. 35 Id. 

36 Id. 

37 Id. 

38 Id. As discussed above, proposed Rule 408(b) 

would indicate that OCC will adjust positions in the 

respective designated accounts of the Giving-Up 

and Given-Up Clearing Members in accordance 

with an allocation instruction only after the GivenUp Clearing Member designates the account to 

which the allocation instruction will be made. 

Moreover, Rule 408(d) would provide that if the 

Given-Up Clearing Member has rejected or not 

provided OCC with notice of its affirmative 

acceptance of an allocation at or before the deadline 

prescribed by OCC, the position(s) that is (are) the 

subject of such allocation instruction shall remain 

in the account of the Giving-Up Clearing Member, 

which shall be responsible for all settlement and 

other obligations in respect thereof, unless the 

position is transferred or adjusted pursuant to other 

provisions of the By-Laws and Rules. 

39Notice, 89 FR at 79981. 

40Rule 408(c) provides that the registration of an 

allocation agreement constitutes notice to OCC that 

the Giving-Up Clearing Member has been 

authorized by the Given-Up clearing Member to 

allocate positions to an account of the Given-Up 

Clearing Member without further action by the 

Given-Up Clearing Member. 

41Notice, 89 FR at 79981. 

Clearing Member without designating 

the specific account of the Given-Up 

Clearing Member to which such 

positions must be allocated in order to 

better facilitate give-up allocations to 

the appropriate account. Second, OCC’s 

amendments would categorize a trade as 

an opening transaction when an 

opening or closing indicator is not 

included on a trade for an options or 

futures contract to ensure that an 

existing position is not inadvertently 

closed out. Third, OCC proposes 

changes related to the discharge of 

broker-to-broker settlement obligations 

to better reflect its current practice.32

i. Designating the Appropriate Given-Up 

Clearing Member Account 

Similar to the CMTA arrangements 

described above, a second way that OCC 

provides flexibility with respect to 

which broker executes a transaction is 

through give-up transactions.33 Rule 408 

allows for one or more positions in 

cleared contracts to be allocated from a 

designated account of a Giving-Up 

Clearing Member to a designated 

account of a Given-Up Clearing 

Member. Mechanically, these 

transactions are initiated post-trade by 

the Giving-Up Clearing Member by 

instructing OCC to move a position in 

one of its accounts to the designated 

account of the Given-Up Clearing 

Member. The Giving-Up Clearing 

Member may designate the Given-Up 

Clearing Member’s account to which it 

would like to allocate positions. 

Currently, this allocation process is only 

available for positions in futures and 

options on futures cleared and settled 

by OCC.34

OCC proposes changing which 

Clearing Member must designate the 

account to which OCC should allocate 

given-up positions from the Giving-Up 

Clearing Member to the Given-Up 

Clearing Member. OCC believes this 

change will help reduce the risk of 

positions being transferred to an 

incorrect account because it would 

provide the Given-Up Clearing Member 

with more control over where positions 

it executes ultimately are transferred.35

To do this, OCC would delete certain 

references to designated accounts in 

Rules 408(a) and (b). Currently, Rule 

408(a) provides that positions may be 

allocated to a designated account of a 

Given-Up Clearing Member. OCC 

proposes deleting the reference to a 

designated account so that Rule 408(a) 

provides that positions may be allocated 

to a Given-Up Clearing Member. Rule 

408(b) contemplates instructions to 

allocate positions from a designated 

account of the Giving-Up Clearing 

Member to a designated account of the 

Given-Up Clearing Member. Under 

OCC’s proposal, the revised rule text 

would instead contemplate instructions 

to allocate positions from a designated 

account of the Giving-Up Clearing 

Member to a Given-Up Clearing 

Member. OCC also proposed to add text 

to Rule 408(b) indicating that, if certain 

conditions are met, the Given-Up 

Clearing Member may designate an 

account to which the allocation will be 

made. Once the Given-Up Clearing 

Member designates an account, OCC 

will adjust the positions in the 

respective designated accounts of the 

Giving-Up and Given-Up Clearing 

Members in accordance with the 

allocation instruction. 

In line with current practice, the 

Proposed Rule Change would also 

clarify that this allocation process is 

only available for futures and options on 

futures. OCC would amend the title of 

Rule 408 to be ‘‘Allocations of Positions 

for Futures and Futures Options’’ rather 

than just ‘‘Allocations of Positions.’’ 

Currently, Rule 408(a) provides that give 

up allocations are available for cleared 

contracts. OCC’s proposal would clarify 

that one or more positions in cleared 

contracts that are futures or futures 

options may be allocated in a give up 

allocation. Similarly, in Rule 408(e), 

OCC proposes replacing the word 

‘‘options’’ with ‘‘futures options’’ in 

multiple locations to clarify that give-up 

allocations are only available for futures 

and options on futures contracts.36

To remove duplicative text from Rule 

408, OCC proposes deleting the last 

sentence from Rule 408(b), which 

currently provides that if the Giving-Up 

Clearing Member and the Given-Up 

Clearing Member are not parties to an 

allocation agreement registered with 

OCC, then OCC shall adjust the 

positions in the respective designated 

accounts of the Giving-Up and GivenUp Clearing Member in accordance with 

the allocation instruction only upon 

receipt of notice from the Given-Up 

Clearing Member of its affirmative 

acceptance of the allocation.37 OCC 

believes this rule text is already covered 

elsewhere in Rule 408.38

Similarly, OCC proposes removing a 

reference to allocation agreements in 

Rule 408(b) because that reference is 

duplicative of Rule 408(d).39 Rule 

408(b) requires the Giving-Up Clearing 

Member and the Given-Up clearing 

Member to be parties to an allocation 

agreement registered with OCC before 

OCC is required to allocate positions 

pursuant to a give-up transaction. OCC 

Rule 408(d), however, provides that the 

Given-Up Clearing Member is 

responsible for all settlement and other 

obligations in respect of each position 

that has been allocated to one of its 

accounts pursuant to a its acceptance of 

an allocation instruction. Further, under 

Rule 408(c) registration of an allocation 

agreement functionally is notice of 

affirmative acceptance of an 

allocation.40 In OCC’s view, because of 

Rule 408(c), there is no need for this 

separate requirement in Rule 408(b). 

OCC also proposes removing 

duplicative text from Rule 408(d) to 

clarify Rule 408.41 Currently, Rule 

408(d) contains references to registered 

allocation agreements alongside 

references to acceptances of allocation 

instructions. For instance, 408(d) 

indicates that the Given-Up Clearing 

Member shall be responsible for all 

settlement and other obligations in 

respect of each position that has been 

allocated to one of its accounts pursuant 

to a registered allocation agreement or 

pursuant to its acceptance of an 

allocation instruction. Rule 408(d) also 

provides that, if there is not a registered 

allocation agreement on file with OCC 

or the Given-Up Clearing Member has 

rejected or not timely provided OCC 

with notice of its affirmative acceptance 

of an allocation, the relevant position 

will remain in the account of the 

Giving-Up Clearing Member. As noted 

above, registration of an allocation 

agreement is functionally the same as 

notice of affirmative acceptance of an 

allocation. Thus, referring to allocation 


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42Notice, 89 FR at 79981. 43 Id. 44 Id. at 79982. 45See Interpretation and Policy .02 to OCC Rule 

901. 

46 Id. The term CCC-eligible means that securities 

contracts in the underlying security arising from the 

exercise or maturity of a cleared security are eligible 

for settlement through the Continuous Net 

Settlement Accounting Operation of NSCC. OCC 

By-Laws, Article I, Section C.6. 

47Taking such action is allowed under Article VI, 

Section 19 of the By-Laws. 

48OCC states that the practice of systematically 

calculating cash amounts helps OCC avoid 

processing notices entered by Clearing Members 

that may be inaccurate. See Notice, 89 FR at 79982. 

49 15 U.S.C. 78s(b)(2)(C). 

50Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

51 Id. 

52 Id. 

53Susquehanna Int’l Group, LLP v. Securities and 

Exchange Commission, 866 F.3d 442, 447 (D.C. Cir. 

2017) (‘‘Susquehanna’’). 

54 15 U.S.C. 78q–1(b)(3)(F). 

55 17 CFR 240Ad–22(e)(21). 

agreements in addition to acceptance of 

allocation instructions is duplicative. As 

such, OCC proposes removing 

references to allocation agreements in 

Rule 408(d).42

ii. Default Treatment for Certain 

Confirmed Transactions 

OCC currently accepts and novates 

confirmed transactions in options, sent 

to OCC by an options exchange, 

irrespective of whether there is an 

indication that the transaction is either 

an opening or closing transaction. In 

practice, if the transaction is not 

identified as either an opening or 

closing transaction, then OCC treats it as 

an opening transaction. 

OCC proposes to reflect this current 

practice in its rules.43 Rule 401, 

Interpretation and Policy .01 already 

provides that, in the case of futures, 

trade information submitted by an 

Exchange need not identify a 

transaction as opening or closing. It also 

indicates that if trade information 

submitted by an Exchange for a futures 

trade does not identify a transaction as 

opening or closing, OCC will treat all 

purchase and sale transactions in 

futures in accounts other than Market 

Maker accounts as opening transactions. 

OCC proposes to broaden the 

application of Rule 401, Interpretation 

and Policy .01 to encompass options as 

well as futures. 

OCC also proposes to broaden the 

scope of Rule 401, Interpretation and 

Policy .01 to apply to Market-Maker 

accounts. Currently, Rule 401, 

Interpretation and Policy .01 does not 

apply to purchase and sale transactions 

in futures and options in Market Maker 

accounts. OCC proposes removing this 

limitation because it believes that the 

practice of treating unidentified trades 

as opening transactions is operationally 

safer because it helps avoid the 

unintentional closure of existing 

positions, irrespective of whether the 

specific unidentified trade is in a 

Market Maker account or not.44

iii. Broker-Broker Settlement 

Obligations 

OCC proposes two changes related to 

its broker-to-broker settlement 

obligations to align its rules with its 

practices. Ordinarily, settlement of 

exercise and assignment activity occurs 

through OCC’s correspondent clearing 

corporation, the National Securities 

Clearing Corporation (‘‘NSCC’’) 

pursuant to OCC’s Rule 901.45 In certain 

circumstances, such as when an 

underlying security is not CCCeligible,46 OCC directs that settlement 

will occur on a broker-to-broker basis 

pursuant to Rules 903–912. Under OCC 

Rule 909, when settlement is not made 

through the correspondent clearing 

corporation, for example when brokerbroker settlement is directed, the 

Delivering Clearing Member and the 

Receiving Clearing Member must send 

notices to OCC as to the number of units 

of the underlying security delivered and 

the amount received. Under OCC Rule 

909(d), when a Delivering or Receiving 

Clearing Member submits to OCC notice 

of a delivery, payment, or receipt of 

delivery or payment, and the contra 

Clearing Member does not respond to 

such notice within two business days, 

the contraparty’s failure to respond 

constitutes acknowledgement to OCC 

that the obligation has been settled as 

indicated in the submitting Clearing 

Member’s notice, provided that the 

designated delivery date has occurred. 

However, OCC’s current practice differs 

from this provision in Rule 909. Rather, 

when OCC directs broker-broker 

settlement it also indicates that, if it is 

not possible for the Delivering Clearing 

Member to effect delivery of the 

underlying shares on the designated 

settlement date, then the settlement 

obligations of both Delivering and 

Receiving Clearing Members will be 

delayed until OCC designates a new 

exercise settlement date, settlement 

method, and/or settlement value.47

The Proposed Rule Change would 

amend Rule 909 to align the Rule with 

current practice. Specifically, OCC 

would amend Rule 909(d) to provide 

that OCC will construe a contraparty’s 

failure to respond to indicate that the 

obligation is unsettled until such time 

as either (i) both Delivering and 

Receiving Clearing Members mutually 

agree to settle the obligation and notify 

OCC; or (ii) OCC settles the obligation 

on behalf of both Delivering and 

Receiving Clearing Members pursuant to 

OCC’s policies and procedures. 

Separately, OCC Rule 909 currently 

requires Clearing Members to submit 

notices indicating the number of units 

of the underlying security delivered 

(received) and the amount received 

(paid) therefor for transactions not 

settled via NSCC. In practice, however, 

the amount received or paid is 

systematically determined at OCC rather 

than being specified by the Clearing 

Members.48 Therefore, OCC proposes 

removing ‘‘and the amount received 

(paid)’’ from the text of Rule 909. 

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act requires 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if it finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

the organization.49 Under the 

Commission’s Rules of Practice, the 

‘‘burden to demonstrate that a proposed 

rule change is consistent with the [Act] 

and the rules and regulations issued 

thereunder . . . is on the self-regulatory 

organization [‘SRO’] that proposed the 

rule change.’’ 50 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,51 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.52 Moreover, 

‘‘unquestioning reliance’’ on an SRO’s 

representations in a proposed rule 

change is not sufficient to justify 

Commission approval of a proposed rule 

change.53

After carefully considering the 

Proposed Rule Change, the Commission 

finds that the Proposed Rule Change is 

consistent with Section 17A(b)(3)(F) of 

the Act 54 and Rule 17Ad–22(e)(21).55

A. Consistency With Section 

17A(b)(3)(F) of the Act 

Under Section 17A(b)(3)(F) of the Act, 

OCC’s rules, among other things, must 

be ‘‘designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions and, to the extent 

applicable, derivative agreements, 


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56 15 U.S.C. 78q–1(b)(3)(F). 

57Notice, 89 FR at 79979. 

58 Id. at 79980. 

59 Id. at 79982. 

60As noted above, OCC also proposes to remove 

duplicative provisions in the rules governing such 

transactions. 

61As discussed above, other proposed changes 

that align the rules with current practice include 

clarifying that give-up transactions are only 

available for futures and options on futures; 

removing the requirement to include certain 

information in notices; and defaulting to an opening 

transaction when certain trade information do not 

indicate that a transaction is either an opening or 

closing transaction. 

62OCC also proposes correcting an inaccurate 

reference to Section 3 of its By-Laws, Paragraph I. 

This too increases the clarity of its rules. 

63 15 U.S.C. 78q–1(b)(3)(F). 

64 17 CFR 240.17Ad–22(e)(21). 

65Securities Exchange Act Release No. 78961, 81 

FR 70786, 70841 (Oct. 13, 2016) (File No. S7–03– 

14). 

66Notice, 89 FR at 79979. 

67 Id. at 79980. 

68 Id. at 79982. 

69 17 CFR 240.17Ad–22(e)(21). 

contracts, and transactions.’’ 56 Based on 

the Commission’s review of the record, 

and for the reasons discussed below, 

OCC’s proposed rule change is 

consistent with Section 17A(b)(3)(F). 

OCC proposes amending its rules to 

discontinue a number of existing 

functions that are outmoded or unused. 

As described above, OCC would no 

longer offer services through which it 

facilitates the settlement of commissions 

and fees owed between Clearing 

Members that are party to a CMTA 

arrangement because Clearing Members 

have neither expressed interest in using 

this service nor, since 2016, have they 

used it.57 OCC would cease clearing and 

settlement services with respect to OTC 

options because it has not cleared or 

settled an OTC option since 2014, its 

Clearing Members have not expressed 

interest in OCC doing so in the future, 

and it does not currently have any open 

interest in OTC options.58 OCC’s 

amendments would also discontinue the 

Associated Market-Maker account 

subtype because its Clearing Members 

do not use it.59 OCC also proposes to 

eliminate the requirement that Clearing 

Members maintain records of both 

parties to a trade because the original 

counterparty information in transactions 

is not relevant or necessary in respect of 

OCC’s clearance and settlement process. 

Discontinuing services no longer in 

use, and the rules related to such 

services, removes unnecessary 

complexity from OCC’s rules without 

impeding the clearance or settlement of 

securities transactions. Similarly, 

removing from its rules obligations on 

Clearing Members that are no longer 

necessary to support OCC’s ability to 

clear and settle transactions, such as the 

obligation for Clearing Members to 

maintain unnecessary records, reduces 

complexity without impeding OCC’s 

clearance and settlement activities. 

Reducing complexity would also 

improve the clarity of OCC’s rules. 

As described above, OCC also 

proposes changes to improve the 

accuracy of its clearance and settlement 

of transactions. Specifically, OCC 

proposes requiring the Given-Up 

Clearing Member, rather than the 

Giving-Up Clearing Member, to 

designate an account to which the 

allocation in a give up transaction will 

be made. This proposed change would 

provide a Given-Up Clearing Member 

with more control over its own account 

and could help reduce the risk that such 

a Clearing Member would receive 

positions it does not want.60 Separately, 

OCC proposes to treat confirmed 

transactions in options and futures as 

opening transactions where the trade 

information provided to OCC does not 

indicate whether the transaction is an 

opening or closing transaction. This 

would reduce the risk of an 

unintentional closure of existing 

positions. By avoiding mistakenly 

closing existing positions and reducing 

the risk that a transaction will be 

transferred to the wrong account, OCC’s 

proposed changes promote the accurate 

clearance and settlement of securities 

transactions. 

Finally, OCC proposes to amend its 

rules to no longer construe a Clearing 

Member’s failure to act as 

acknowledgement of settlement in 

broker-to-broker transactions. Rather, 

OCC would not construe such a 

transaction to have settled until either it 

receives notice from both Clearing 

Members of their mutual agreement to 

settle the obligation or OCC settles the 

positions pursuant to its policies and 

procedures. This could reduce potential 

inaccuracies in OCC’s settlement of the 

contracts it clears, and would also be 

consistent with current practice.61

By removing the duplicative portions 

of Rule 408, OCC would improve the 

clarity of its Rules,62 which in turn 

increases the likelihood that its 

participants understand the methods 

available to clear and settle transactions 

and how those methods function. 

Similarly, ensuring that the rules align 

with current practice, in the ways 

discussed above, helps prevent 

confusion by OCC’s Clearing Members 

as to the methods available to clear and 

settle transactions and how those 

methods function. By preventing such 

confusion, OCC makes it more likely 

that participants are able to efficiently 

and accurately execute their 

transactions. As such, the Proposed 

Rule Change promotes the prompt and 

accurate clearance and settlement of 

securities transactions. 

The Proposed Rule Change is, 

therefore, consistent with the 

requirements of Section 17A(b)(3)(F) of 

the Act.63

B. Consistency With Rule 17Ad– 

22(e)(21) 

Rule 17Ad–22(e)(21) requires OCC to 

‘‘establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed to . . . be efficient 

and effective in meeting the 

requirements of its participants and the 

markets it serves . . . .’’ 64 Based on its 

review of the record, and for the reasons 

discussed below, OCC’s Proposed Rule 

Change is consistent with Rule 17Ad– 

22(e)(21). When clearing agencies 

establish policies and procedures that 

address Rule 17Ad–22(e)(21), the 

Commission has indicated that they 

should ask whether their policies’ and 

procedures’ design meets the needs of 

its participants and the markets it 

serves, particularly with respect to 

choice of a clearance and settlement 

arrangement, operating structure, scope 

of products cleared, settled, or recorded, 

and use of technology and procedures.65

OCC’s policies and procedures would 

meet the needs of its participants and 

the markets it serves after its proposed 

discontinuation of products and 

services its Clearing Members no longer 

use. OCC proposes discontinuing its 

facilitation of the settlement of 

commissions and fees owed between 

Clearing Members that are party to a 

CMTA arrangement because Clearing 

Members have neither expressed 

interest in using this service nor, since 

2016, have they used it.66 OCC plans on 

no longer offering clearing and 

settlement services with respect to OTC 

options because it has not cleared and 

settled an OTC option since 2014, its 

Clearing Members have not expressed 

interest in OCC doing so in the future, 

and it does not currently have any open 

interest in OTC options.67 OCC also 

would discontinue the Associated 

Market-Maker account subtype because 

its Clearing Members do not use it.68

OCC is not obligated to offer these 

products and services. Further, its 

Clearing Members’ lack of interest in 

these products and services suggests 

that they do not need them. As such, 

OCC’s proposed discontinuation of 

these products and services is consistent 

with the requirements of Rule 17Ad– 

22(e)(21).69


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70 17 CFR 240.17Ad–22(e)(21). 

71 15 U.S.C. 78q–1(b)(3)(F). 

72 17 CFR 240.17Ad–22(e)(21). 

73 In approving the proposed rule change, the 

Commission considered the proposal’s impacts on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

74 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The proposed rule change establishing the 

NYSE American Agg Lite data feed was 

immediately effective on February 27, 2024. See 

Securities Exchange Act Release No. 99690 (March 

7, 2024), 89 FR 18445 (March 13, 2024) (SR– 

NYSEAMER–2024–14) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Establish the NYSE American Aggregated Lite 

Market Data Feed). 

5The Exchange originally filed to amend the Fee 

Schedule on May 13, 2024 (SR–NYSEAMER–2024– 

31). On July 11, 2024, the Exchange withdrew SR– 

NYSEAMER–2024–31 and replaced it with SR– 

NYSEAMER–2024–44. On September 6, 2024, the 

Exchange withdrew SR–NYSEAMER–2024–44 and 

replaced it with SR–NYSEAMER–2024–55. On 

November 4, 2024, the Exchange withdrew SR– 

NYSEAMER–2024–55 and replaced it with this 

filing. 

6See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(File No. S7–10–04) (Final Rule) (‘‘Regulation 

NMS’’). 7See Securities Exchange Act Release No. 61358, 

75 FR 3594, 3597 (January 21, 2010) (File No. S7– 

02–10) (Concept Release on Equity Market 

Structure). 

8See Cboe U.S. Equities Market Volume 

Summary, available at https://markets.cboe.com/us/ 

equities/market_share. See generally https://

www.sec.gov/fastanswers/ 

divisionsmarketregmrexchangesshtml.html. 

9See FINRA ATS Transparency Data, available at 

https://otctransparency.finra.org/otctransparency/ 

AtsIssueData. A list of alternative trading systems 

registered with the Commission is available at 

https://www.sec.gov/foia/docs/atslist.htm. 

10See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://markets.

cboe.com/us/equities/market_share/. 

The Proposed Rule Change is, 

therefore, consistent with the 

requirements of Rule 17Ad–22(e)(21).70

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act, and in 

particular, Section 17A(b)(3)(F) of the 

Act 71 and Rule 17Ad–22(e)(21).72

It is therefore Oodered pursuant to 

Section 19(b)(2) of the Act that the 

proposed rule change (SR–OCC–2024– 

013) be, and hereby is, approved.73

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.74

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–27012 Filed 11–19–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101628; File No. SR– 

NYSEAMER–2024–68] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Change To Establish Fees for the 

NYSE American Aggregated Lite Data 

Feed 

November 14, 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 

November 4, 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 establish 

fees for the NYSE American Aggregated 

Lite data feed. 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 amend the 

NYSE American LLC Equities 

Proprietary Market Data Fees Schedule 

(‘‘Fee Schedule’’) and establish fees for 

the NYSE American Aggregated Lite 

(‘‘NYSE American Agg Lite’’) data feed,4

effective November 4, 2024.5

In summary, the NYSE American Agg 

Lite is a NYSE American-only 

frequency-based depth of book market 

data feed of the NYSE American’s limit 

order book for up to ten (10) price levels 

on both the bid and offer sides of the 

order book for securities traded on the 

Exchange and for which the Exchange 

reports quotes and trades under the 

Consolidated Tape Association (‘‘CTA’’) 

Plan or the Nasdaq/UTP Plan. The 

NYSE American Agg Lite is a 

compilation of limit order data that the 

Exchange provides to vendors and 

subscribers. The NYSE American Agg 

Lite includes partial depth of book order 

data as well as security status messages. 

The security status message informs 

subscribers of changes in the status of a 

specific security, such as trading halts, 

short sale restriction, etc. In addition, 

the NYSE American Agg Lite includes 

order imbalance information prior to the 

opening and closing of trading. 

Background 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and, also, recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 6

While Regulation NMS has enhanced 

competition, it has also fostered a 

‘‘fragmented’’ market structure where 

trading in a single stock can occur 

across multiple trading centers. When 

multiple trading centers compete for 

order flow in the same stock, the 

Commission has recognized that ‘‘such 

competition can lead to the 

fragmentation of order flow in that 

stock.’’ 7 Indeed, cash equity trading is 

currently dispersed across 16 

exchanges,8 numerous alternative 

trading systems,9 and broker-dealer 

internalizers and wholesalers, all 

competing for order flow. Based on 

publicly-available information, no 

single exchange currently has more than 

20% market share (whether including or 

excluding auction volume).10

Proposed NYSE American Agg Lite Data 

Feed Fees 

The Exchange proposes to establish 

the fees listed below for the NYSE 

American Agg Lite data feed. The 


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