20010 Federal Register / Vol. 87, No. 66 / Wednesday, April 6, 2022 / Notices 

29 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. 

4See Securities Exchange Act Release No. 94441 

(March 16, 2022) (SR–NYSE–2021–40). 

5See Securities Exchange Act Release No. 67090 

(May 31, 2012), 77 FR 33531 (June 6, 2012) (SR– 

BATS–2011–038; SR–BYX–2011–025; SR–BX– 

2011–068; SR–CBOE–2011–087; SR–C2–2011–024; 

SR–CHX–2011–30; SR–EDGA–2011–31; SR–EDGX– 

2011–30; SR–FINRA–2011–054; SR–ISE–2011–61; 

SR–NASDAQ–2011–131; SR–NSX–2011–11; SR– 

NYSE–2011–48; SR–NYSEAmex–2011–73; SR– 

NYSEArca–2011–68; SR–Phlx–2011–129) (‘‘Pilot 

Rules Approval Order’’). 

6The rules of the equity options exchanges 

similarly provide for a halt in trading if the cash 

equity exchanges invoke a MWCB Halt. See, e.g., 

NYSE Arca Rule 6.65–O(d)(4). 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSECHX–2022–04 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–NYSECHX–2022–04. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. 

You should submit only information 

that you wish to make available 

publicly. All submissions should refer 

to File Number SR–NYSECHX–2022–04 

and should be submitted on or before 

April 27, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–07185 Filed 4–5–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94567; File No. SR– 

NYSENAT–2022–04] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt on a Permanent 

Basis the Pilot Program for MarketWide Circuit Breakers 

March 31, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on March 

30, 2022, NYSE National, Inc. (‘‘NYSE 

National’’ 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 adopt on a 

permanent basis the pilot program for 

Market-Wide Circuit Breakers in Rule 

7.12. 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 

On March 16, 2022, the Commission 

approved the proposal of the Exchange’s 

affiliate, the New York Stock Exchange 

LLC (‘‘NYSE’’), to adopt on a permanent 

basis the pilot program for Market-Wide 

Circuit Breakers (‘‘MWCB’’) in NYSE 

Rule 7.12.4 The Exchange now proposes 

to adopt the same change to make 

permanent the MWCB pilot program in 

Rule 7.12. 

The Pilot Rules 

The MWCB rules, including the 

Exchange’s Rule 7.12, provide an 

important, automatic mechanism that is 

invoked to promote stability and 

investor confidence during periods of 

significant stress when cash equities 

securities experience extreme marketwide declines. The MWCB rules are 

designed to slow the effects of extreme 

price declines through coordinated 

trading halts across both cash equity 

and equity options securities markets. 

The cash equities rules governing 

MWCBs were first adopted in 1988 and, 

in 2012, all U.S. cash equity exchanges 

and FINRA amended their cash equities 

uniform rules on a pilot basis (the ‘‘Pilot 

Rules,’’ i.e., Rule 7.12(a)–(d)).5 The Pilot 

Rules currently provide for trading halts 

in all cash equity securities during a 

severe market decline as measured by a 

single-day decline in the S&P 500 Index 

(‘‘SPX’’).6 Under the Pilot Rules, a 

market-wide trading halt will be 

triggered if SPX declines in price by 

specified percentages from the prior 

day’s closing price of that index. The 

triggers are set at three circuit breaker 

thresholds: 7% (Level 1), 13% (Level 2), 

and 20% (Level 3). A market decline 

that triggers a Level 1 or Level 2 halt 

after 9:30 a.m. and before 3:25 p.m. 

would halt market-wide trading for 15 

minutes, while a similar market decline 


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7See Securities Exchange Act Release No. 67091 

(May 31, 2012), 77 FR 33498 (June 6, 2012). The 

LULD Plan provides a mechanism to address 

extraordinary market volatility in individual 

securities. 

8See Securities Exchange Act Release Nos. 67090 

(May 31, 2012), 77 FR 33531 (June 6, 2012) (SR– 

NSX–2011–11) (Approval Order); and 68779 

(January 31, 2013), 78 FR 8638 (February 6, 2013) 

(SR–NSX–2013–04) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to Delay the 

Operative Date of Rule 11.20A). 

9See Securities Exchange Act Release No. 85623 

(April 11, 2019), 84 FR 16086 (April 17, 2019). 

10See Securities Exchange Act Release No. 85572 

(April 9, 2019), 84 FR 15257 (April 15, 2019) (SR– 

NYSENAT–2019–08). 

11See Securities Exchange Act Release No. 87077 

(September 24, 2019), 84 FR 51671 (September 30, 

2019) (SR–NYSENAT–2019–21). 

12See Securities Exchange Act Release No. 90133 

(October 8, 2020), 85 FR 65121 (October 14, 2020) 

(SR–NYSENAT–2020–33). 

13See Securities Exchange Act Release No. 93232 

(October 1, 2021), 86 FR 55669 (October 6, 2021) 

(SR–NYSENAT–2021–19). 

14See Securities Exchange Act Release No. 

Release No. 94418 (March 15, 2022), 87 FR 16043 

(March 21, 2022) (SR–NYSENAT–2022–02). 

15See Report of the Market-Wide Circuit Breaker 

(‘‘MWCB’’) Working Group Regarding the March 

2020 MWCB Events, submitted March 31, 2021 (the 

‘‘Study’’), available at https://www.nyse.com/ 

publicdocs/nyse/markets/nyse/Report_of_the_

Market-Wide_Circuit_Breaker_Working_Group.pdf. 

16See id. at 46. 

17See Securities Exchange Act Release No. 92428 

(July 16, 2021), 86 FR 38776 (July 22, 2021) (SR– 

NYSE–2021–40). 

18See supra note 4. 

at or after 3:25 p.m. would not halt 

market-wide trading. (Level 1 and Level 

2 halts may occur only once a day.) A 

market decline that triggers a Level 3 

halt at any time during the trading day 

would halt market-wide trading for the 

remainder of the trading day. 

The Commission approved the Pilot 

Rules, the term of which was to 

coincide with the pilot period for the 

Plan to Address Extraordinary Market 

Volatility Pursuant to Rule 608 of 

Regulation NMS (the ‘‘LULD Plan’’),7

including any extensions to the pilot 

period for the LULD Plan.8 In April 

2019, the Commission approved an 

amendment to the LULD Plan for it to 

operate on a permanent, rather than 

pilot, basis.9 In light of the proposal to 

make the LULD Plan permanent, the 

Exchange amended Rule 7.12 to untie 

the pilot’s effectiveness from that of the 

LULD Plan and to extend the pilot’s 

effectiveness to the close of business on 

October 18, 2019.10 The Exchange then 

filed to extend the pilot to the close of 

business on October 18, 2020,11 October 

18, 2021,12 March 18, 2022,13 and April 

18, 2022.14

The MWCB Working Group Study 

Beginning in February 2020, at the 

outset of the COVID–19 pandemic, the 

markets experienced increased 

volatility, culminating in four MWCB 

Level 1 halts on March 9, 12, 16, and 18, 

2020. In each instance, pursuant to the 

Pilot Rules, the markets halted as 

intended upon a 7% drop in SPX and 

did not start the process to resume 

trading until the prescribed 15-minute 

halt period ended. 

On September 17, 2020, the Director 

of the Commission’s Division of Trading 

and Markets asked the SROs to conduct 

a study of the design and operation of 

the Pilot Rules and the LULD Plan 

during the period of volatility in March 

2020. In response to the request, the 

SROs created a MWCB ‘‘Working 

Group’’ composed of SRO 

representatives and industry advisers 

that included members of the advisory 

committees to both the LULD Plan and 

the NMS Plans governing the collection, 

consolidation, and dissemination of 

last-sale transaction reports and 

quotations in NMS Stocks. The Working 

Group met regularly from September 

2020 through March 2021 to consider 

the Commission’s request, review data, 

and compile its study. 

On March 31, 2021, the MWCB 

Working Group submitted its study (the 

‘‘Study’’) to the Commission.15 The 

Study included an evaluation of the 

operation of the Pilot Rules during the 

March 2020 events and an evaluation of 

the design of the current MWCB system. 

In the Study, the Working Group 

concluded: (1) The MWCB mechanism 

set out in the Pilot Rules worked as 

intended during the March 2020 events; 

(2) the MWCB halts triggered in March 

2020 appear to have had the intended 

effect of calming volatility in the 

market, without causing harm; (3) the 

design of the MWCB mechanism with 

respect to reference value (SPX), trigger 

levels (7%/13%/20%), and halt times 

(15 minutes) is appropriate; (4) the 

change implemented in Amendment 10 

to the LULD Plan did not likely have 

any negative impact on MWCB 

functionality; and (5) no changes should 

be made to the mechanism to prevent 

the market from halting shortly after the 

opening of regular trading hours at 9:30 

a.m. 

In light of those conclusions, the 

MWCB Working Group also made 

several recommendations, including 

that (1) the Pilot Rules should be made 

permanent without any changes, and (2) 

SROs should adopt a rule requiring all 

designated Regulation SCI firms to 

participate in at least one Level 1/Level 

2 MWCB test each year and to verify 

their participation via attestation.16

Proposal To Make the Pilot Rules 

Permanent 

On July 16, 2021, the Exchange’s 

affiliate, NYSE, proposed a rule change 

to make the Pilot Rules permanent, 

consistent with the Working Group’s 

recommendations.17 On March 16, 

2022, the Commission approved NYSE’s 

proposal.18

Consistent with the Commission’s 

approval of NYSE’s proposal, the 

Exchange now proposes that the Pilot 

Rules (i.e., paragraphs (a)–(d) of Rule 

7.12) be made permanent. To 

accomplish this, the Exchange proposes 

to remove the preamble to Rule 7.12, 

which currently provides that the rule is 

in effect during a pilot period that 

expires at the close of business on April 

18, 2022. The Exchange does not 

propose any changes to paragraphs (a)– 

(d) of the Rule. 

Consistent with the Commission’s 

approval of NYSE’s proposal, the 

Exchange proposes to add new 

paragraphs (e), (f), and (g) to Rule 7.12, 

as follows: 

(e) Market-Wide Circuit Breaker (‘‘MWCB’’) 

Testing. 

1. The Exchange will participate in all 

industry-wide tests of the MWCB 

mechanism. ETP Holders designated 

pursuant to paragraph (a) of Rule 2.13 to 

participate in Exchange Back-up Systems and 

Mandatory Testing are required to participate 

in at least one industry-wide MWCB test each 

year and to verify their participation in that 

test by attesting that they are able to or have 

attempted to: 

(A) Receive and process MWCB halt 

messages from the securities information 

processors (‘‘SIPs’’); 

(B) receive and process resume messages 

from the SIPs following a MWCB halt; 

(C) receive and process market data from 

the SIPs relevant to MWCB halts; and 

(D) send orders following a Level 1 or 

Level 2 MWCB halt in a manner consistent 

with their usual trading behavior. 

2. To the extent that an ETP Holder 

participating in a MWCB test is unable to 

receive and process any of the messages 

identified in paragraph (e)(1)(A)–(D) of this 

Rule, its attestation should notify the 

Exchange which messages it was unable to 

process and, if known, why. 

3. ETP Holders not designated pursuant to 

standards established in paragraph (a) of Rule 

2.13 are permitted to participate in any 

MWCB test. 

(f) In the event that a halt is triggered under 

this Rule following a Level 1, Level 2, or 

Level 3 Market Decline, the Exchange, 

together with other SROs and industry 

representatives (the ‘‘MWCB Working 

Group’’), will review such event. The MWCB 

Working Group will prepare a report that 

documents its analysis and recommendations 

and will provide that report to the 

Commission within 6 months of the event. 

(g) In the event that there is (1) a Market 

Decline of more than 5%, or (2) an SRO 

implements a rule that changes its reopening 

process following a MWCB Halt, the 

Exchange, together with the MWCB Working 


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19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 21See 17 CFR 240.17a–1. 

Group, will review such event and consider 

whether any modifications should be made 

to this Rule. If the MWCB Working Group 

recommends that a modification should be 

made to this Rule, the MWCB Working Group 

will prepare a report that documents its 

analysis and recommendations and provide 

that report to the Commission. 

2. Statutory Basis 

The Exchange believes that the 

proposal to make the Pilot Rules 

permanent is consistent with Section 

6(b) of the Act,19 in general, and furthers 

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

Act,20 in particular, in that it is designed 

to promote just and equitable principles 

of trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest. 

The Pilot Rules set out in Rule 

7.12(a)–(d) are an important, automatic 

mechanism that is invoked to promote 

stability and investor confidence during 

periods of significant market stress 

when securities markets experience 

broad-based declines. The four MWCB 

halts that occurred in March 2020 

provided the Exchange, the other SROs, 

and market participants with real-world 

experience as to how the Pilot Rules 

actually function in practice. Based on 

the Working Group’s Study and the 

Exchange’s own analysis of those 

events, the Exchange believes that 

making the Pilot Rules permanent 

would benefit market participants, 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and protect investors and the 

public interest. 

Specifically, the Exchange believes 

that making the Pilot Rules permanent 

would benefit market participants, 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and protect investors and the 

public interest, because the Pilot Rules 

worked as intended during the March 

2020 events. As detailed above, the 

markets were in communication before, 

during, and after each of the MWCB 

Halts that occurred in March 2020. All 

9,000+ equity symbols were 

successfully halted in a timely manner 

when SPX declined 7% from the 

previous day’s closing value, as 

designed. The Exchange believes that 

market participants would benefit from 

having the Pilot Rules made permanent 

because such market participants are 

familiar with the design and operation 

of the MWCB mechanism set out in the 

Pilot Rules, and know from experience 

that it has functioned as intended on 

multiple occasions under real-life stress 

conditions. Accordingly, the Exchange 

believes that making the Pilot Rules 

permanent would enhance investor 

confidence in the ability of the markets 

to successfully halt as intended when 

under extreme stress. 

The Exchange further believes that 

making the Pilot Rules permanent 

would benefit market participants, 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and protect investors and the 

public interest, because the halts that 

were triggered pursuant to the Pilot 

Rules in March 2020 appear to have had 

the intended effect of calming volatility 

in the market without causing harm. As 

detailed above, after studying a variety 

of metrics concerning opening and 

reopening auctions, quote volatility, and 

other factors, the Exchange concluded 

that there was no significant difference 

in the percentage of securities that 

opened on a trade versus on a quote for 

the four days in March 2020 with 

MWCB Halts, versus the other periods 

studied. In addition, while the postMWCB Halt reopening auctions were 

smaller than typical opening auctions, 

the size of those post-MWCB Halt 

reopening auctions plus the earlier 

initial opening auctions in those 

symbols was on average equal to 

opening auctions in January 2020. The 

Exchange believes this indicates that the 

MWCB Halts on the four March 2020 

days did not cause liquidity to 

evaporate. Finally, the Exchange 

observes that while quote volatility was 

generally higher on the four days in 

March 2020 with MWCB Halts as 

compared to the other periods studied, 

quote volatility stabilized following the 

MWCB Halts at levels similar to the 

January 2020 levels, and LULD Trading 

Pauses worked as designed to address 

any additional volatility later in the day. 

From this evidence, the Exchange 

concludes that the Pilot Rules actually 

calmed volatility on the four MWCB 

Halt days in March 2020, without 

causing liquidity to evaporate or 

otherwise harming the market. As such, 

the Exchange believes that making the 

Pilot Rules permanent would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest. 

The Exchange believes that that 

making the Pilot Rules permanent 

without any changes would benefit 

market participants, promote just and 

equitable principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest, 

because the current design of the MWCB 

mechanism as set out in the Pilot Rules 

remains appropriate. As detailed above, 

the Exchange considered whether SPX 

should be replaced as the reference 

value, whether the current trigger levels 

(7%/13%/20%) and halt times (15 

minutes for Level 1 and 2 halts) should 

be modified, and whether changes 

should be made to prevent the market 

from halting shortly after the opening of 

regular trading hours at 9:30 a.m., and 

concluded that the MWCB mechanism 

set out in the Pilot Rules remains 

appropriate, for the reasons cited above. 

The Exchange believes that public 

confidence in the MWCB mechanism 

would be enhanced by the Pilot Rules 

being made permanent without any 

changes, given investors’ familiarity 

with the Pilot Rules and their successful 

functioning in March 2020. 

The Exchange believes that proposed 

paragraph (e) regarding MWCB testing is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest. The Working Group 

recommended that all cash equities 

exchanges adopt a rule requiring all 

designated Regulation SCI firms to 

participate in MWCB testing and to 

attest to their participation. The 

Exchange believes that these 

requirements would promote the 

stability of the markets and enhance 

investor confidence in the MWCB 

mechanism and the protections that it 

provides to the markets and to investors. 

The Exchange further believes that 

requiring firms participating in a MWCB 

test to identify any inability to process 

messages pertaining to such MWCB test 

would contribute to a fair and orderly 

market by flagging potential issues that 

should be corrected. The Exchange 

would preserve such attestations 

pursuant to its obligations to retain 

books and records of the Exchange.21

The Exchange believes that proposed 

paragraph (f) would benefit market 

participants, promote just and equitable 

principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest. 

Having the MWCB Working Group 


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

23 17 CFR 240.19b–4(f)(6). 

24 17 CFR 240.19b–4(f)(6). 

25 17 CFR 240.19b–4(f)(6)(iii). 

26For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

27 15 U.S.C. 78s(b)(2)(B). 

review any halt triggered under Rule 

7.12 and prepare a report of its analysis 

and recommendations would permit the 

Exchange, along with other market 

participants and the Commission, to 

evaluate such event and determine 

whether any modifications should be 

made to Rule 7.12 in the public interest. 

Preparation of such a report within 6 

months of the event would permit the 

Exchange, along with the MWCB 

Working Group, sufficient time to 

analyze such halt and prepare their 

recommendations. 

The Exchange believes that proposed 

paragraph (g) would benefit market 

participants, promote just and equitable 

principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest. 

Having the MWCB Working Group 

review instances of a Market Decline of 

more than 5% or an SRO implementing 

a rule that changes its reopening process 

following a MWCB Halt would allow 

the MWCB Working Group to identify 

situations where it recommends that 

Rule 7.12 be modified in the public 

interest. In such situations where the 

MWCB Working Group recommends 

that a modification should be made to 

Rule 7.12, the MWCB Working Group 

would prepare a report that documents 

its analysis and recommendations and 

provide that report to the Commission, 

thereby removing impediments to and 

perfecting the mechanism of a free and 

open market and a national market 

system while protecting investors and 

the public interest. 

For the foregoing reasons, the 

Exchange believes that the proposed 

change is consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed change is not intended to 

address competition, but rather, makes 

permanent the current MWCB Pilot 

Rules for the protection of the markets. 

The Exchange believes that making the 

current MWCB Pilot Rules permanent 

would have no discernable burden on 

competition at all, since the Pilot Rules 

have already been in effect since 2012 

and would be made permanent without 

any changes. Moreover, because the 

MWCB mechanism contained in the 

Pilot Rules requires all exchanges and 

all market participants to cease trading 

at the same time, making the Pilot Rules 

permanent would not provide a 

competitive advantage to any exchange 

or any class of market participants. 

Further, the Exchange understands 

that the other SROs will submit 

substantively identical proposals to the 

Commission. Thus, the proposed rule 

change will help to ensure consistency 

across SROs without implicating any 

competitive issues. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 22 and Rule 

19b–4(f)(6) thereunder.23 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 24 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),25 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange asked that the 

Commission waive the 30 day operative 

delay so that the proposal may become 

operative immediately upon filing. 

Waiver of the 30-day operative delay 

would allow the Exchange to 

immediately provide the protections 

included in this proposal in the event of 

a MWCB halt, which is consistent with 

the protection of investors and the 

public interest. Therefore, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposed rule change as operative upon 

filing.26

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) 27 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSENAT–2022–04 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSENAT–2022–04. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 


lotter on DSK11XQN23PROD with NOTICES1
20014 Federal Register / Vol. 87, No. 66 / Wednesday, April 6, 2022 / Notices 

28 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. 92543 

(Aug. 2, 2021), 86 FR 43289. Comments on the 

proposed rule change can be found at: https://

www.sec.gov/comments/sr-cboebzx-2021-051/ 

srcboebzx2021051.htm. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 92989, 

86 FR 52530 (Sept. 21, 2021). 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 93510, 

86 FR 61820 (Nov. 8, 2021). 

8See Securities Exchange Act Release No. 93822, 

86 FR 73360 (Dec. 27, 2021). Amendment No. 1 to 

the proposed rule change can be found at: https:// 

www.sec.gov/rules/sro/cboebzx/2021/34-93822.pdf. 

9See Securities Exchange Act Release No. 94055, 

87 FR 4980 (Jan. 31, 2022). 

10 15 U.S.C. 78f(b)(5). 

11Bitcoins are digital assets that are issued and 

transferred via a decentralized, open-source 

protocol used by a peer-to-peer computer network 

through which transactions are recorded on a 

public transaction ledger known as the ‘‘bitcoin 

blockchain.’’ The bitcoin protocol governs the 

creation of new bitcoins and the cryptographic 

system that secures and verifies bitcoin 

transactions. See, e.g., Amendment No. 1, 86 FR at 

73362. 

12See Order Setting Aside Action by Delegated 

Authority and Disapproving a Proposed Rule 

Change, as Modified by Amendments No. 1 and 2, 

To List and Trade Shares of the Winklevoss Bitcoin 

Trust, Securities Exchange Act Release No. 83723 

(July 26, 2018), 83 FR 37579 (Aug. 1, 2018) (SR– 

BatsBZX–2016–30) (‘‘Winklevoss Order’’); Order 

Disapproving a Proposed Rule Change, as Modified 

by Amendment No. 1, To Amend NYSE Arca Rule 

8.201–E (Commodity-Based Trust Shares) and To 

List and Trade Shares of the United States Bitcoin 

and Treasury Investment Trust Under NYSE Arca 

Rule 8.201–E, Securities Exchange Act Release No. 

88284 (Feb. 26, 2020), 85 FR 12595 (Mar. 3, 2020) 

(SR–NYSEArca–2019–39) (‘‘USBT Order’’); Order 

Disapproving a Proposed Rule Change To List and 

Trade Shares of the WisdomTree Bitcoin Trust 

Under BZX Rule 14.11(e)(4), Commodity-Based 

Trust Shares, Securities Exchange Act Release No. 

93700 (Dec. 1, 2021), 86 FR 69322 (Dec. 7, 2021) 

(SR–CboeBZX–2021–024) (‘‘WisdomTree Order’’); 

Order Disapproving a Proposed Rule Change To List 

and Trade Shares of the Kryptoin Bitcoin ETF Trust 

Under BZX Rule 14.11(e)(4), Commodity-Based 

Trust Shares, Securities Exchange Act Release No. 

93860 (Dec. 22, 2021), 86 FR 74166 (Dec. 29, 2021) 

(SR–CboeBZX–2021–029) (‘‘Kryptoin Order’’); 

Order Disapproving a Proposed Rule Change To List 

and Trade Shares of the Valkyrie Bitcoin Fund 

Under NYSE Arca Rule 8.201–E (Commodity-Based 

Trust Shares), Securities Exchange Act Release No. 

93859 (Dec. 22, 2021), 86 FR 74156 (Dec. 29, 2021) 

(SR–NYSEArca–2021–31) (‘‘Valkyrie Order’’); Order 

Disapproving a Proposed Rule Change To List and 

Trade Shares of the First Trust SkyBridge Bitcoin 

ETF Trust Under NYSE Arca Rule 8.201–E, 

Securities Exchange Act Release No. 94006 (Jan. 20, 

2022), 87 FR 3869 (Jan. 25, 2022) (SR–NYSEArca– 

2021–37) (‘‘Skybridge Order’’); Order Disapproving 

a Proposed Rule Change To List and Trade Shares 

of the Wise Origin Bitcoin Trust under BZX Rule 

14.11(e)(4), Commodity-Based Trust Shares, 

Securities Exchange Act Release No. 94080 (Jan. 27, 

2022), 87 FR 5527 (Feb. 1, 2022) (SR–CboeBZX– 

2021–039) (‘‘Wise Origin Order’’); Order 

Disapproving a Proposed Rule Change To List and 

Trade Shares of the NYDIG Bitcoin ETF Under 

NYSE Arca Rule 8.201–E (Commodity-Based Trust 

Shares), Securities Exchange Act Release No. 94395 

(Mar. 10, 2022), 87 FR 14932 (Mar. 16, 2022) (SR– 

NYSEArca–2021–57) (‘‘NYDIG Order’’); Order 

Disapproving a Proposed Rule Change To List and 

Trade Shares of the Global X Bitcoin Trust Under 

BZX Rule 14.11(e)(4), Commodity-Based Trust 

Shares, Securities Exchange Act Release No. 94396 

(Mar. 10, 2022), 87 FR 14912 (Mar. 16, 2022) (SR– 

CboeBZX–2021–052) (‘‘Global X Order’’). See also 

Order Disapproving a Proposed Rule Change, as 

Modified by Amendment No. 1, Relating to the 

Listing and Trading of Shares of the SolidX Bitcoin 

Trust Under NYSE Arca Equities Rule 8.201, 

Securities Exchange Act Release No. 80319 (Mar. 

28, 2017), 82 FR 16247 (Apr. 3, 2017) (SR– 

NYSEArca–2016–101) (‘‘SolidX Order’’). The 

Commission also notes that orders were issued by 

delegated authority on the following matters: Order 

Disapproving a Proposed Rule Change To List and 

Trade the Shares of the ProShares Bitcoin ETF and 

the ProShares Short Bitcoin ETF, Securities 

Exchange Act Release No. 83904 (Aug. 22, 2018), 

83 FR 43934 (Aug. 28, 2018) (SR–NYSEArca–2017– 

139) (‘‘ProShares Order’’); Order Disapproving a 

Proposed Rule Change To List and Trade the Shares 

of the GraniteShares Bitcoin ETF and the 

GraniteShares Short Bitcoin ETF, Securities 

Exchange Act Release No. 83913 (Aug. 22, 2018), 

83 FR 43923 (Aug. 28, 2018) (SR–CboeBZX–2018– 

001) (‘‘GraniteShares Order’’); Order Disapproving a 

Proposed Rule Change To List and Trade Shares of 

the VanEck Bitcoin Trust Under BZX Rule 

14.11(e)(4), Commodity-Based Trust Shares, 

Securities Exchange Act Release No. 93559 (Nov. 

12, 2021), 86 FR 64539 (Nov. 18, 2021) (SR– 

CboeBZX–2021–019) (‘‘VanEck Order’’). 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. 

You should submit only information 

that you wish to make available 

publicly. All submissions should refer 

to File Number SR–NYSENAT–2022–04 

and should be submitted on or before 

April 27, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–07186 Filed 4–5–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94571; File No. SR– 

CboeBZX–2021–051] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order 

Disapproving a Proposed Rule 

Change, as Modified by Amendment 

No. 1, To List and Trade Shares of the 

ARK 21Shares Bitcoin ETF Under BZX 

Rule 14.11(e)(4), Commodity-Based 

Trust Shares 

March 31, 2022. 

I. Introduction 

On July 20, 2021, Cboe BZX 

Exchange, Inc. (‘‘BZX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

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

proposed rule change to list and trade 

shares (‘‘Shares’’) of the ARK 21Shares 

Bitcoin ETF (‘‘Trust’’) under BZX Rule 

14.11(e)(4), Commodity-Based Trust 

Shares. The proposed rule change was 

published for comment in the Federal 

Register on August 6, 2021.3

On September 15, 2021, pursuant to 

Section 19(b)(2) of the Exchange Act,4

the Commission designated a longer 

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.5

On November 2, 2021, the Commission 

instituted proceedings under Section 

19(b)(2)(B) of the Exchange Act 6 to 

determine whether to approve or 

disapprove the proposed rule change.7

On December 9, 2021, the Exchange 

filed Amendment No. 1, which 

amended and replaced the proposed 

rule change in its entirety, and on 

December 17, 2021, the Commission 

published notice of Amendment No. 1 

to the proposed rule change.8 On 

January 25, 2022, the Commission 

designated a longer period for 

Commission action on the proposed rule 

change, as modified by Amendment No. 

1.9

This order disapproves the proposed 

rule change, as modified by Amendment 

No. 1. The Commission concludes that 

BZX has not met its burden under the 

Exchange Act and the Commission’s 

Rules of Practice to demonstrate that its 

proposal is consistent with the 

requirements of Exchange Act Section 

6(b)(5), and in particular, the 

requirement that the rules of a national 

securities exchange be ‘‘designed to 

prevent fraudulent and manipulative 

acts and practices’’ and ‘‘to protect 

investors and the public interest.’’ 10

When considering whether BZX’s 

proposal to list and trade the Shares is 

designed to prevent fraudulent and 

manipulative acts and practices, the 

Commission applies the same standard 

used in its orders considering previous 

proposals to list bitcoin 11-based 

commodity trusts and bitcoin-based 

trust issued receipts.12 As the 

Commission has explained, an exchange 

that lists bitcoin-based exchange-traded 

products (‘‘ETPs’’) can meet its 

obligations under Exchange Act Section 

6(b)(5) by demonstrating that the 

exchange has a comprehensive 

surveillance-sharing agreement with a 

regulated market of significant size 


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