```

[Federal Register Volume 89, Number 249 (Monday, December 30, 2024)]
[Notices]
[Pages 106709-106715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30903]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101985; File No. SR-NYSEARCA-2024-89]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 1 to a Proposed Rule Change To Adopt Temporary Rule 
7.34-E(T) and Revise Rules 1.1 and 7.34-E to Lengthen the Current 
Extended Trading Sessions

December 19, 2024.
    On October 25, 2024, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to adopt temporary rule 7.34-E(T) and revise rules 
1.1 and 7.34-E to lengthen the current extended trading sessions. The 
proposed rule change was published for comment in the Federal Register 
on November 14, 2024.\3\ On December 13, 2024, the Exchange filed 
Amendment No. 1 to the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. Amendment No. 
1

[[Page 106710]]

amended and replaced the proposed rule change in its entirety. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as modified by Amendment No. 1, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 101559 (November 7, 
2024), 89 FR 90143 (``Initial Proposal'').
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt temporary Rule 7.34-E(T) and revise 
Rules 1.1 and 7.34-E to permit the Exchange to lengthen the current 
extended trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 
p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 
p.m. E.T. on Friday. This Amendment No. 1 supersedes the Initial 
Proposal in its entirety.
    The text of 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 Exchange 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 these 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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt temporary Rule 7.34-E(T) and revise 
Rules 1.1 (Definitions) and 7.34-E (Trading Sessions) to permit the 
Exchange to lengthen current extended trading hours for NMS stocks to 
1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 
1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday. The Exchange also 
proposes certain technical, conforming changes to Rule 5.1-E(a) 
(General Provisions and Unlisted Trading Privileges) and Commentary .08 
to Rule 9.5320-E (Prohibition Against Trading Ahead of Customer 
Orders).
Background
    The Exchange currently offers three trading sessions each day the 
Exchange is open for business unless the Exchange determines otherwise, 
as follows.
    The Exchange's first trading session, the Early Trading Session, 
begins at 4:00 a.m. Eastern Time (``E.T.'') and concludes at the 
commencement of the Core Trading Session.\4\ The Exchange begins 
accepting orders 90 minutes before the Early Trading Session begins.\5\
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    \4\ See Rule 7.34-E(a)(1).
    \5\ See id.
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    The second or Core Trading Session begins for each security at 9:30 
a.m. E.T. and ends at the conclusion of Core Trading Hours or the Core 
Closing Auction, whichever comes later.\6\ The final session is the 
Late Trading Session, which begins following the conclusion of the Core 
Trading Session and concludes at 8:00 p.m. E.T.
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    \6\ See Rule 7.34-E(a)(2). ``Core Trading Hours'' means the 
hours of 9:30 a.m. E.T. through 4:00 p.m. E.T. or such other hours 
as may be determined by the Exchange from time to time. See Rule 
1.1.
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    Current Rule 7.34-E(b) requires that orders entered into the 
Exchange marketplace include a designation for which trading session(s) 
the order will remain in effect. The Exchange will reject orders 
entered without a trading session designation. An order is only 
eligible to participate in the designated trading session(s) and may 
remain in effect for one or more consecutive trading sessions on a 
particular day. Unless otherwise specified, an order designated for a 
later trading session will be accepted but not eligible to trade until 
the designated trading session begins. The Exchange will reject orders 
designated solely for a trading session that has already ended.
    Current Rule 7.34-E(c) describes the order types that are permitted 
in each session, as follows.
Early Trading Session
    Orders and modifiers defined in Rule 7.31-E designated for the 
Early Trading Session are eligible to participate in the Early Trading 
Session unless otherwise specified in Rule 7.34-E(c)(1)(A)-(F).
    Pursuant to Rule 7.34-E(c)(1)(A), Market Orders and Pegged Orders 
are not eligible to participate in the Early Trading Session, and such 
orders that include a designation for the Early Trading Session will be 
rejected. Market Pegged Orders and Discretionary Pegged Orders, 
regardless of the session designated for the order, may not be entered 
before or during the Early Trading Session and will also be rejected. 
Under Rule 7.34-E(c)(1)(B), Limit Orders designated Immediate or Cancel 
(``IOC'') are ineligible to participate in the Early Open Auction and 
will be rejected if entered before the Early Open Auction concludes. 
Pursuant to Rule 7.34-E(c)(1)(C), Limit Orders designated IOC entered 
before or during the Early Trading Session and designated for the Core 
Trading Session will be rejected if entered before the Auction 
Processing Period for the Core Open Auction.
    Rule 7.34-E(c)(1)(D) provides that for securities that are not 
eligible for an auction on the Exchange, Market Orders designated for 
the Core Trading Session and Auction-Only Orders will be routed to the 
primary listing market on arrival. Any order routed directly to the 
primary listing market on arrival will be cancelled if that market is 
not accepting orders.
    Pursuant to Rule 7.34-E(c)(1)(E), Market-on-Open Orders (``MOO 
Orders''), Market-on-Close Orders (``MOC Orders''), Limit-on-Close 
Orders (``LOC Orders''), Primary Only Orders, and Directed Orders 
designated for the Early Trading Session will be rejected.
    Finally, pursuant to Rule 7.34-E(c)(1)(F), Non-Displayed Limit 
Orders, Mid-Point Liquidity Orders (``MPL Orders''), Tracking Orders, 
and RPI Orders entered before the Auction Processing Period for the 
Early Open Auction concludes will also be rejected.
Core Trading Session
    All orders and modifiers defined in Rule 7.31-E that are designated 
for the Core Trading Session are eligible to participate in the Core 
Trading Session unless otherwise specified in Rules 7.34-E(c)(2)(A)-
(C).
    Pursuant to Rule 7.34-E(c)(2)(A), Market Orders in securities that 
are not eligible for the Core Open Auction will be routed to the 
primary listing market until the first opening print of any size on the 
primary listing market or 10:00 a.m. E.T., whichever is earlier. 
Pursuant to Rule 7.34-E(c)(2)(B), Auction-Only Orders in securities 
that are not eligible for an auction on the Exchange will be accepted 
and routed directly to the primary listing market. Finally, Rule 7.34-
E(c)(2)(C) provides that Limit Orders designated IOC entered before or 
during the Core Trading Session and designated for the Late Trading 
Session will be rejected if entered before the Auction Processing 
Period for the Closing Auction.
Late Trading Session
    The orders and modifiers defined in Rule 7.31-E that are designated 
for the Late Trading Session are eligible to participate in the Late 
Trading Session unless otherwise specified in Rules 7.34-E(c)(3)(A)-
(C).

[[Page 106711]]

    Pursuant to Rule 7.34-E(c)(3)(A), Market Orders and Pegged Orders 
are not eligible to participate in the Late Trading Session. The 
Exchange will reject Market Orders and Pegged Orders that include a 
designation for the Late Trading Session. Further, under Rule 7.34-
E(c)(3)(B), orders that are routed directly to the primary listing 
market on arrival will be cancelled if that market is not accepting 
orders. Finally, pursuant to Rule 7.34-E(c)(3)(C), MOO Orders, MOC 
Orders, LOC Orders, Primary Only Orders, and Directed Orders designated 
for the Late Trading Session will be rejected.
Customer Disclosures
    Rule 7.34-E(d) provides that no ETP Holder may accept an order from 
a non-ETP Holder for execution in the Early or Late Trading Session 
without disclosing to such non-ETP Holder that Limit Orders are the 
only orders that are eligible for execution during the Early and Late 
Trading Sessions \7\ and that an order must be designated specifically 
for trading in the Early and/or Late Trading Session to be eligible for 
trading in the Early and/or Late Trading Session.\8\ In addition, Rule 
7.34-E(d)(3) provides that an ETP Holder must disclose to non-ETP 
Holders that extended hours trading involves material trading risks, 
including the possibility of lower liquidity, high volatility, changing 
prices, unlinked markets, an exaggerated effect from news 
announcements, wider spreads and any other relevant risk. The absence 
of an updated underlying index value or intraday indicative value is an 
additional trading risk in extended hours for Derivative Securities 
Products.
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    \7\ See Rule 7.34-E(d)(1).
    \8\ See id. at (d)(2).
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    The disclosures required pursuant to Rule 7.34-E(d)(3) may take the 
form described in subparagraphs (1) through (7) thereunder or such 
other form as provides substantially similar information, including 
risks of lower liquidity; higher volatility; changing prices; unlinked 
markets; news announcements; wider spreads; and lack of calculation or 
dissemination of underlying index value or intraday indicative value.
    Finally, Rule 7.34-E(e) provides that trades on the Exchange 
executed and reported outside of the Core Trading Session are 
designated as .T trades.
Proposed Rule Change
    As recently announced,\9\ the Exchange proposes to facilitate the 
trading of NMS securities on the Exchange beginning at 1:30 a.m. E.T. 
through 11:30 p.m. E.T. on Monday through Thursday, and 1:30 a.m. E.T. 
through 8:00 p.m. E.T. on Friday. The Exchange would retain the current 
structure of the Early and Late Trading Sessions, including eligible 
order types and required disclosures as described above, while 
extending the beginning of the Early Trading Session and end time of 
the Late Trading Session and accepting orders earlier than currently.
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    \9\ See ``The New York Stock Exchange Plans to Extend Weekday 
Trading on its NYSE Arca Equities Exchange to 22 Hours a Day,'' 
October 25, 2024, available at https://ir.theice.com/press/news-details/2024/The-New-York-Stock-Exchange-Plans-to-Extend-Weekday-Trading-on-its-NYSE-Arca-Equities-Exchange-to-22-Hours-a-Day/default.aspx.
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    To effectuate these changes, the Exchange proposes to adopt a 
temporary Rule 7.34-E titled ``7.34-E(T).'' The proposed temporary rule 
would be identical to current Rule 7.34-E with three exceptions.
    First, the beginning and ending times of the Early and Late Trading 
Sessions, respectively, as set forth in Rule 7.34-E(a)(1) and (3) would 
be changed to reflect the proposed longer extended trading hours. The 
Exchange proposes to end the Late Trading Session at 8:00 p.m. E.T. on 
Friday in order to maximize the available time to make changes at the 
end of the week before weekend testing.
    Second, the Exchange would shorten the time it will begin accepting 
orders before commencement of the Early Trading Session as set forth in 
proposed Rule 7.34-E(a)(1) from 90 minutes to 30 minutes such that 
orders would be accepted beginning at 1:00 a.m. E.T. The Exchange does 
not propose to change the time when the Core Trading Session would 
begin or end or make any other rule changes impacting the Core Trading 
Session.
    Third, the Exchange proposes to supplement its current customer 
disclosures set forth in proposed Rule 7.34-E(d)(3) to add six 
additional potential risks associated with Extended Hours Trading based 
on the recently approved rules of 24X National Exchange LLC,\10\ as 
follows:
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    \10\ See Securities Exchange Act Release No. 101777 (November 
27, 2024), 89 FR 97092, 97110-111 (December 06, 2024) (In the Matter 
of the Application of 24X National Exchange LLC for Registration as 
a National Securities Exchange; Findings, Opinion, and Order of the 
Commission) (``Release No. 101777''); see 24X Rule 3.21(g) & (i)(1)-
(5).
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     Proposed Rule 7.34-E(d)(viii) would address the potential 
risks of trading during when financial market infrastructure companies 
such as other markets, banks, Fedwire Funds Service, and certain other 
providers of settlement services, would be closed. The proposed rule 
would advise that during hours in which these financial market 
infrastructure companies are closed may lead to an increased passage of 
time between execution and final settlement of the resulting 
transaction. Proposed Rule 7.34-E(d)(viii) is based on and 
substantially the same as 24X Rule 3.21(g).
     Proposed Rule 7.34-E(d)(ix) would address the potential 
risks of trading during hours in which primary listing markets may not 
be open. As proposed, proposed [sic] Rule 7.34-E(d)(ix) would provide 
that during Extended Hours Trading, the primary listing exchanges for 
securities traded on the Exchange may not be open and, thus, trading in 
listed securities may not be occurring on the primary listing 
exchanges. The proposed rule would also advise customers that the 
primary listing exchanges may not be available to perform their 
regulatory surveillance and other regulatory obligations with regard to 
their listed securities during Extended Hours Trading. Proposed Rule 
7.34-E(d)(ix) is based on and substantially the same as 24X Rule 
3.21(i)(1).
     Proposed Rule 7.34-E(d)(x) would address the potential 
risks of trading during hours in which there may be limited or 
different regulatory protections. As proposed, the rule would advise 
that the regulatory protections available during Extended Hours Trading 
may be more limited or different than those available during the Core 
Trading Session. For example, the proposed rule would note that certain 
mechanisms that address volatility in individual symbols and the 
equities market may not be available during Extended Hours Trading. 
Proposed Rule 7.34-E(d)(x) is based on and substantially the same as 
24X Rule 3.21(i)(2).
     Proposed Rule 7.34-E(d)(xi) would address the potential 
risk of trading because of limited trading alternatives. As proposed, 
the rule would advise that Exchange may be the only exchange trading 
certain securities during Extended Hours Trading and that, with more 
limited trading alternatives during Extended Hours Trading, customers 
may experience losses if their orders cannot be executed normally due 
to systems failures or other issues on the Exchange. Proposed Rule 
7.34-E(d)(xi) is based on and substantially the same as 24X Rule 
3.21(i)(3).
     Proposed Rule 7.34-E(d)(xii) would address the potential 
risk related to continuous trading during Extended Hours Trading. As 
proposed, the rule would advise that, with more limited breaks in 
trading, there may be a greater

[[Page 106712]]

risk related to system maintenance and testing, as well as the pausing 
and resumption of trading. Proposed Rule 7.34-E(d)(xii) is based on and 
substantially the same as 24X Rule 3.21(i)(4).
     Finally, proposed Rule 7.34-E(d)(xiii) would advise that 
Extended Hours Trading may present additional unforeseen risks in 
addition to those discussed above. Proposed Rule 7.34-E(d)(xiii) is 
based on and substantially the same as 24X Rule 3.21(i)(5).
    The current version of Rule 7.34-E would remain operative until 
transition to the proposed new Extended Trading Hours set forth in Rule 
7.34-E(T)(a) becomes operative. As proposed, the Exchange would not 
commence operation of Extended Hours Trading as set forth in Rule 7.34-
E(T)(a) unless the Equity Data Plans (as proposed to be defined in Rule 
1.1, discussed below) have established a mechanism to collect, 
consolidate, process and disseminate quotation and transaction 
information at all times during Extended Trading Hours that is 
equivalent to the mechanism established for the Core Trading Session, 
and (2) have provided the Exchange with notification that they are 
prepared to collect, consolidate, process and disseminate quotation and 
transaction information to accommodate Extended Trading Hours. 
Specifically, prior to commencing operation during Extended Hours 
Trading as set forth in Rule 7.34-E(T)(a), the Exchange will file a 
proposed rule change pursuant to Section 19(b) of the Act and the rules 
thereunder to amend its rules to delete the current version of Rule 
7.34-E and preamble and delete the ``T'' designation in Rule 7.34-E(T), 
and confirm that the Exchange is able to comply with its obligations 
under the Act and the rules thereunder during Extended Trading Hours 
and that such Equity Data Plans are prepared to collect, consolidate, 
process and disseminate quotation and transaction information at all 
times during Extended Trading Hours. The Exchange believes that these 
limitations are designed to reasonably ensure that consolidated 
quotation and transaction data are provided in a manner that is 
consistent with the existing extended hours sessions on exchanges.\11\
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    \11\ See Release No. 101777, 89 FR at 97105.
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    The Exchange would accordingly add the following legend to current 
Rule 7.34-E (new text italicized):

    This version of Rule 7.34-E will remain operative until Extended 
Hours Trading as set forth in Rule 7.34-E(T) is operative. For the 
avoidance of doubt, notwithstanding anything to the contrary in 
these Rules, the Exchange shall not commence operation of Extended 
Hours Trading as set forth in Rule 7.34-E(T) unless the Equity Data 
Plans (1) have established a mechanism to collect, consolidate, 
process and disseminate quotation and transaction information at all 
times during Extended Trading Hours that is equivalent to the 
mechanism established for the Core Trading Session, and (2) have 
provided the Exchange with notification that they are prepared to 
collect, consolidate, process and disseminate quotation and 
transaction information to accommodate Extended Trading Hours. Prior 
to commencing operation during Extended Hours Trading as set forth 
in Rule 7.34-E(T), the Exchange will file a proposed rule change 
pursuant to Section 19(b) of the Exchange Act and the rules 
thereunder to amend its rules to delete the current version of Rule 
7.34-E and preamble and delete the ``T'' designation in Rule 7.34-
E(T), and confirm that the Exchange is able to comply with its 
obligations under the Exchange Act and the rules thereunder during 
Extended Trading Hours and that such Equity Data Plans are prepared 
to collect, consolidate, process and disseminate quotation and 
transaction information at all times during Extended Trading Hours. 
The rule change must be filed with the SEC within 18 months of the 
SEC's approval of the Exchange's rule filing adopting Rule 7.34-
E(T). If the Exchange fails to file such a rule change within 18 
months of approval of Rule 7.34-E(T), the Exchange will promptly 
file a proposed rule change to delete Rule 7.34-E(T).

    The proposed language is substantially the same as text contained 
in 24X Rule 1.5(c) (Definitions). The Exchange would also revise 
current Rule 1.1 to add two definitions.
    First, the Exchange would define ``Equity Data Plans'' to mean the 
effective national market system plan(s) governing the collection, 
consolidation, processing and dissemination of consolidated equity 
market data via the exclusive securities information processors 
(``SIPs''), including (1) Consolidated Tape Association Plan (``CTA 
Plan''), (2) Consolidated Quotation Plan (``CQ Plan''), (3) the Joint 
Self-Regulatory Organization Plan Governing the Collection, 
Consolidation and Dissemination of Quotation and Transaction 
Information for Nasdaq-Listed Securities Traded on Exchanges on an 
Unlisted Trading Privileges Basis (``UTP Plan''), (4) the CT Plan 
established by the Limited Liability Company Agreement of CT Plan LLC, 
and (5) any successor thereto to the named Plan(s). Except for the 
reference to the CT Plan established by the Limited Liability Company 
Agreement of CT Plan LLC, the proposed definition is the same as 24X 
Rule 1.5(o).
    Second, the Exchange would define Extended Hours Trading to mean 
trading during the Early Trading Session and the Late Trading Session. 
The term is used without capitalization in current Rule 7.34-E(d) 
describing required customer disclosures. The Exchange proposes to use 
the proposed definition in proposed Rule 7.34-E(T)(d) and current Rule 
7.34-E(d), with the exception of subsection (d)(4) of the current and 
proposed temporary rules, which use the phrase generically. The 
Exchange believes the proposal would add transparency and clarity to 
the Exchange's rules.
    The Exchange would also make certain technical, conforming changes 
to Rule 5.1-E(a) and Commentary .08 to Rule 9.5320-E as follows.
    First, the Exchange would replace obsolete references to the 
``Opening session'' and ``Late Trading Session'' and the associated 
session start and end times in Pacific Time in Rule 5.1-E(a)(2)(i) with 
the defined term ``Extended Hours Trading.'' The Exchange would also 
delete a stray period at the end of the rule heading. The proposed 
changes would add transparency and clarity to the Exchange's rules.
    Finally, the Exchange would replace the obsolete reference to 
``6:30 a.m. to 1:00 p.m. Pacific Standard Time'' in Commentary .08 to 
Rule 9.5320-E with ``the Core Trading Session.'' The proposed change 
would also add transparency and clarity to the Exchange's rules.
    The Exchange believes that the proposal will benefit investors and 
the national market system by increasing market accessibility, 
promoting capital formation, and facilitating portfolio management. The 
proposed extended trading sessions would operate in the same fashion as 
the current sessions, and the rules that apply to the current sessions 
would apply to the proposed longer Early and Late Trading Sessions in 
unmodified form. In addition, all NMS stocks would continue to be 
eligible to trade in the proposed longer extended hours sessions. 
Moreover, as discussed below, the existing safeguards applicable to 
pre-market and post-market sessions including, among other things, 
operational safeguards, availability of consolidated last sale and 
quotation information, and specific disclosures to investors regarding 
the heightened risks of after-hours trading, and market surveillance 
capabilities, would be applicable to the proposed extended Early and 
Late Trading Sessions.
Operations
    As noted, the proposed longer trading sessions will operate in the 
same way as the current sessions from an operational

[[Page 106713]]

perspective. All order types eligible for such sessions and order type 
behaviors will remain unchanged. The Exchange will also route to away 
markets between 1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday 
through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday, 
just as it currently does between 4:00 a.m. E.T. and 9:30 a.m. E.T. and 
between 4:00 p.m. E.T. and 8:00 p.m. E.T. Order processing during the 
proposed longer trading sessions will also function the same way as it 
does in the current sessions. There will be no changes to the ranking, 
display, or decrementation processes or rules. The Exchange will report 
the best bid and offer on the Exchange to the appropriate network 
processor, as it currently does beginning at 4:00 a.m. E.T. using the 
same formats and delivery mechanisms. Trades executed and reported 
outside of the Core Trading Session as proposed will be reported to the 
appropriate network processor with the ``.T'' modifier, just as 
currently. No fee changes are proposed in connection with this 
proposal.
    In addition, the Exchange will continue to work with primary 
listing exchanges to coordinate trading halts where appropriate, 
including halts implemented due to significant material events (i.e., a 
bankruptcy declaration). During the proposed extended Early and Late 
Trading Sessions, the Exchange would pause trading in the underlying 
security until trading resumes on the primary listing market for the 
security. Generally, regardless of trading session, when a halt has 
been declared on the primary market, the Exchange will also halt 
trading automatically in the subject security on NYSE Arca. Exchange 
staff will be available during the proposed extended trading sessions 
in order to maintain a fair and orderly market, make any necessary 
rulings or take any action that may be necessary. Similarly, Exchange 
staff will be available if any action such as declaration of a halt in 
a NYSE Arca primary symbol would be necessary in the event of a system 
malfunction or significant material event such as a bankruptcy 
declaration.
    The Exchange notes that, to the extent material corporate news is 
released during the Extended Trading Hours and the primary listing 
market does not impose a halt, the requirements of proposed Rule 7.34-
E(T)(d)(3)(v) (which is part of the current rule) and proposed Rules 
7.34-E(T)(d)(3)(viii)-(xiii) that disclosures be provided to investors 
relating to the risks associated with news announcements and the 
additional risks of trading during Extended Trading Hours, 
respectively, will help ensure that market participants, including 
investors, are informed about the potential risks associated with 
trading during that time period.\12\
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    \12\ See Release No. 101777, 89 FR at 97109.
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Securities Information Processor (``SIP'') Readiness
    The Exchange will submit all quotes and trades that are generated 
in the extended Early and Late Trading Session to the consolidated 
quote and trade systems maintained by the SIPs for public 
dissemination. Accordingly, once these extended trading hours are 
operative, quotes and trades will be made available to the investing 
public in the same manner that quotes and trades are currently made 
available.
    The two SIPs--the Securities Industry Automation Corporation 
(``SIAC'') and Nasdaq--both currently operate from 4:00 a.m. E.T. 
through 8:00 p.m. E.T. The Exchange has informed both SIPs, as well as 
the Operating Committee of the CTA and the CQ Plans and the UTP Plan 
(collectively, the ``Operating Committee''), of its intention to extend 
trading hours to commence at 1:30 a.m. E.T. through 11:30 p.m. E.T. on 
Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. on 
Friday, and has submitted change requests to both SIPs requesting that 
the SIPs similarly extend their hours of operation. The Exchange will 
work with the Operating Committee and the SIPs regarding the extension 
of the SIPs' operating hours and, in the near term, expects to request 
a vote of the Operating Committee instructing the SIPs to proceed with 
such extension.
    As noted above, the Exchange will not make the proposed extended 
hours operative unless the Equity Data Plans have established a 
mechanism to collect, consolidate, process and disseminate quotation 
and transaction information at all times during Extended Trading Hours 
that is equivalent to the mechanism established for the Core Trading 
Session, and provided the Exchange with notification that they are 
prepared to collect, consolidate, process and disseminate quotation and 
transaction information to accommodate Extended Trading Hours. As also 
previously noted, at that point the Exchange will file a proposed rule 
change to, among other things, confirm that such Equity Data Plans are 
prepared to collect, consolidate, process and disseminate quotation and 
transaction information at all times during Extended Trading Hours.
Market Surveillance
    Trading on the Exchange is subject to a comprehensive regulatory 
program applicable to the current Early, Core, and Late Trading 
Sessions that includes a suite of surveillances that reviews trading 
during each trading session as well as routine examinations of ETP 
Holders consistent with the current exam-based regulatory program. The 
Exchange's current regulatory program would be fully applicable to 
trading in the proposed extended Early and Late Trading Sessions.
Customer Disclosures
    As noted above, given the potential trading and other risks of 
extended hours trading Products, Rule 7.34-E(d) prohibits ETP Holders 
from accepting orders from non-ETP Holders for execution during the 
Early or Late Trading Session without making the specified disclosures 
in the Rule. As further discussed above, the Exchange proposes to 
enhance these disclosures by including additional mandatory disclosures 
regarding the potential risks associated with trading during Extended 
Hours Trading based on recently approved 24X Rule 3.21.\13\ The 
Exchange notes that Rule 7.34-E(d), as amended, would be fully 
applicable to the proposed extended trading sessions and would place 
the same disclosure obligation on ETP Holders.
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    \13\ See text accompanying note 10, supra.
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Implementation
    The Exchange will begin accepting orders for the extended Early and 
Late Trading Session as set forth in proposed Rule 7.34-E(T) subject to 
the effectiveness of this proposed rule change and subject to the 
conditions set forth in the proposed legend to current Rule 7.34-E 
described above.

2. Statutory Basis

    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Act,\14\ in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, 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.
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    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Generally, the Exchange believes that the proposal, including the 
proposed temporary rule to support longer extended hours trading, would 
remove

[[Page 106714]]

impediments to and perfect the mechanism of a free and open market and 
a national market system by providing a rules framework to support the 
lengthening of the current extended trading hours for NMS stocks to 
1:30 a.m. E.T. through 11:30 p.m. E.T. on Monday through Thursday, and 
1:30 a.m. E.T. through 8:00 p.m. E.T. on Friday, which the Exchange 
believes will increase market accessibility, promote capital formation, 
and facilitate portfolio management.
    The Exchange further believes that adopting a temporary rule that 
would only be operative upon transition to the new proposed Extended 
Trading Hours, and adding a legend to the current version of Rule 7.34-
E specifying that the current rule will remain operative until that 
time, would promote transparency in Exchange rules and add clarity as 
to which rules are operative and when, thereby reducing potential 
confusion, and making the Exchange's rules easier to navigate. 
Moreover, the proposed legend would provide that the Exchange will not 
commence operation of the longer Extended Trading Hours prior to filing 
a proposed rule change to amend its rules confirming that the Exchange 
is able to comply with its obligations under the Act during the longer 
extended trading session and that the Equity Data Plans are prepared to 
collect, consolidate, process and disseminate quotation and transaction 
information at all times during the proposed Extended Trading Hours. 
This requirement would promote transparency because trading will not 
occur unless the Equity Data Plans are able to collect, consolidate, 
process and disseminate consolidated quotation and transaction data 
during the proposed longer session. The requirement would also be 
designed to ensure that consolidated quotation and transaction data are 
provided in a manner that is consistent with the Exchange's current 
extended hours sessions, and that the proposed change is thus designed 
to prevent fraudulent and manipulative acts and practices, promote just 
and equitable principles of trade, foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to and facilitating transactions in NMS 
stocks, and perfect the mechanism of a free and open market and a 
national market system.
    Finally, the Exchange believes that applying the current 
requirements for extended hours trading such as order designation, 
permitted orders, and mandatory customer disclosures as well as the 
operational and regulatory safeguards already in place for the current 
Early, Core, and Late Sessions to the proposed extended sessions, would 
promote just and equitable principles of trade and protect investors 
and the public interest. In addition, the proposed enhanced disclosures 
based on the approved rules of another exchange will, together with the 
existing disclosures, provide investors with important information that 
should help to inform their decisions as to whether trading during the 
Exchange's proposed longer extended hours is suitable for them. The 
Exchange believes that the expanded customer disclosures are consistent 
with the Act and, in particular, the Section 6(b)(5) \15\ requirement 
that an exchange's rules be designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanisms 
of a free and open market and a national market system, and protect 
investors and the public interest.
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    \15\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that adding a definition of Equity Data Plan 
to Rule 1.1 would remove impediments to and perfect the mechanism of a 
free and open market and national market system by adding clarity and 
transparency to the Exchange's rules with respect to the a [sic] 
critical element that must be in place for the proposed longer extended 
trading session. As discussed above, trading in the new extended 
session will not occur unless the Equity Data Plans are able to 
collect, consolidate, process and disseminate consolidated quotation 
and transaction data during the new session. Similarly, the Exchange 
believes that adding a definition of Extended Hours Trading to Rule 1.1 
would remove impediments to and perfect the mechanism of a free and 
open market and national market system by adding clarity to the 
Exchange's rules through the introduction of a definition that can be 
utilized immediately and that would not need to be updated once the 
Exchange migrates to 22 hour trading, 5 days a week. The Exchange 
further believes that eliminating obsolete legacy material from Rule 
5.1-E(a) and Commentary .08 to Rule 9.5320-E similarly removes 
impediments to and perfects the mechanism of a free and open market by 
removing confusion that may result from having obsolete material in the 
Exchange's rulebook. The Exchange believes that eliminating such 
obsolete material would not be inconsistent with the public interest 
and the protection of investors because investors will not be harmed 
and in fact would benefit from increased transparency, thereby reducing 
potential confusion.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is 
designed to propose rule changes to lengthen the current extended 
trading hours for NMS stocks to 1:30 a.m. E.T. through 11:30 p.m. E.T. 
on Monday through Thursday, and 1:30 a.m. E.T. through 8:00 p.m. E.T. 
on Friday. The Exchange operates in a highly competitive environment in 
which unaffiliated exchange competitors and new entrants could compete 
to offer extended hours trading of similar duration, and the proposal 
would therefore enable the Exchange to compete on a more level playing 
field with these competitors.

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. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as modified by Amendment No. 1, is consistent with the Act. 
Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSEARCA-2024-89 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-NYSEARCA-2024-89. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule

[[Page 106715]]

change that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. Do not include personal identifiable 
information in submissions; you should submit only information that you 
wish to make available publicly. We may redact in part or withhold 
entirely from publication submitted material that is obscene or subject 
to copyright protection. All submissions should refer to file number 
SR-NYSEARCA-2024-89 and should be submitted on or before January 21, 
2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-30903 Filed 12-27-24; 8:45 am]
BILLING CODE 8011-01-P
```