Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 33001 

21 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. 90776 

(Dec. 22, 2020), 85 FR 86625 (Dec. 30, 2020) 

(‘‘Notice’’). 

4See Securities Exchange Act Release No. 91084 

(Feb. 9, 2020), 86 FR 9545 (Feb. 16, 2021). 

5Amendment No. 1 is available on the 

Commission’s website at https://www.sec.gov/ 

comments/sr-nyse-2020-105/srnyse2020105- 

8545367-230641.pdf. 

6See Securities Exchange Act Release No. 91442 

(Mar. 30, 2021), 86 FR 17658 (Apr. 5, 2021) (Notice 

of Filing of Amendment No. 1 and Order Instituting 

Proceedings (‘‘OIP’’)). 

7See Letter from David De Gregorio, Associate 

General Counsel, New York Stock Exchange to 

Vanessa Countryman, Secretary, Office of the 

Secretary, Commission (May 10, 2021) (‘‘OIP 

Response Letter’’). 

8NYSE Rule 2(a) states that the term ‘‘member,’’ 

when referring to a natural person, means a natural 

person associated with a member organization who 

has been approved by the Exchange and designated 

by such member organization to effect transactions 

on the Exchange Trading Floor or any facility 

thereof. 

9NYSE Rule 46 (Floor Officials—Appointment) 

and NYSE Rule 46A (Executive Floor Governors) 

currently set forth the process for the Exchange to 

appoint active NYSE members as Floor Officials. In 

addition, Rule 46 permits the Exchange to appoint 

qualified employees to as act as Floor Governors. 

10The title ‘‘Floor Official’’ includes a broad 

category of titles that include, in order of increasing 

seniority, Floor Officials, Senior Floor Officials, 

Executive Floor Officials, Floor Governors, and 

Executive Floor Governors. See NYSE Rules 46 and 

46A (defining Floor Official, Floor Governor, 

Executive Floor Official, Senior Floor Official, and 

Executive Floor Governor). 

11The term ‘‘Trading Floor’’ is defined in Rule 6A 

to mean the restricted-access physical areas 

designated by the Exchange for the trading of 

securities, commonly known as the ‘‘Main Room’’ 

and the ‘‘Buttonwood Room.’’ 

12Currently, Floor Officials are appointed by the 

Board annually and must complete a mandatory 

education program and pass a qualifications exam. 

See NYSE Rules 46 and 46A. 

13Regulatory employees are not permitted to be 

Staff Governors. See NYSE Rule 46.10. 

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–ISE–2021–13 and should be 

submitted on or before July 14, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13098 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92193; File No. SR–NYSE– 

2020–105] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving a Proposed Rule Change, 

as Modified by Amendment No. 1, To 

Revise Rules 46 and 46A To Permit the 

Appointment of Trading Officials 

June 16, 2021. 

I. Introduction 

On December 15, 2020, New York 

Stock Exchange LLC (‘‘NYSE’’ 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 amend NYSE Rules 46 and 

46A, and other related rules, to provide 

for the appointment of Trading Officials. 

The proposed rule change was 

published for comment in the Federal 

Register on December 30, 2020.3

On February 9, 2020, 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 approve or disapprove the 

proposed rule change, extending the 

date for Commission action until March 

30, 2021.4 On March 25, 2021, the 

Exchange submitted Amendment No. 1 

to the proposed rule change.5

On March 30, 2021, the Commission 

published notice of Amendment No. 1 

and instituted proceedings to determine 

whether to approve or disapprove the 

proposed rule change, as modified by 

Amendment No. 1.6 The Commission 

has received one comment on the 

proposed rule change.7 This order 

approves the proposed rule change, as 

modified by Amendment No. 1. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to eliminate 

NYSE member 8 and non-member 

employee Floor Officials 9 and transition 

the related duties to the newly created 

position of Trading Official, which 

would be filled by Exchange employees 

appointed by the NYSE CEO or his or 

her designee. In order to effectuate this 

proposed rule change, the Exchange 

would: (1) Delete current NYSE Rules 

46 and 46A, (2) replace those rules with 

new NYSE Rule 46, which would define 

Trading Officials and provide for their 

appointment, and (3) make conforming 

changes to other Exchange rules related 

to the duties and responsibilities of 

Trading Officials. As a result of this 

proposal, the various seniority-based 

gradations of Floor Official would be 

eliminated,10 and the Floor-related 

functions that are currently delegated by 

Exchange Rules to member Floor 

Officials and Staff Governors would be 

performed only by Trading Officials. 

Only Exchange employees, not active 

Exchange members, would be eligible to 

serve as Trading Officials. 

The Exchange anticipates that the 

current Staff Governors, who are 

Exchange employees, would be 

appointed as Trading Officials. 

According to the Exchange, Trading 

Officials, like current Staff Governors, 

would be appointed based on 

experience and necessary business and 

rule knowledge that would enable them 

to participate in and supervise various 

trading situations on the Trading 

Floor,11 and the Exchange would train 

and supervise them.12 In addition, 

Trading Officials, like the current Staff 

Governors, would report to the Head of 

Equities. The Exchange states that this 

reporting structure is appropriate 

because Trading Officials, like Staff 

Governors, will supervise trading on the 

Exchange and will not have any 

regulatory role or responsibility.13

The Exchange is also proposing 

certain technical and conforming 

changes to NYSE Rules 7.35A, 7.35B, 

18(d), 37, 47, 75, 91.50, 93(b), 103.10, 

103A, 103B(G), 104, 112(a)(i), 124(e), 

128B.10, 308(g), and 903(d)(ii), which 

relate to the duties of Trading Officials 

and Floor supervision. Additionally, the 

Exchange proposes to amend NYSE 

Listed Company Manual Section 202.04. 

• NYSE Rule 7.35A (DMM-Facilitated 

Core Open and Trading Halt Auctions) 

sets forth the responsibility of 

designated market makers (‘‘DMMs’’) to 

ensure that registered securities open as 

close to the beginning of Core Trading 

Hours as possible or reopen at the end 

of the halt or pause. 

Æ Subsection (a)(4) provides for Floor 

Official participation in the opening and 

reopening process to provide an 

impartial professional assessment of 

unusual situations, as well as to provide 

guidance with respect to pricing when 

a significant disparity in supply and 

demand exists. The rule also 

contemplates DMM consultations with 

Floor Officials under certain specific 

circumstances. References to Floor 

Official in NYSE Rule 7.35A(a)(4) and 


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14The Exchange has separately proposed to 

delete NYSE Rule 7.35B(a)(1)(C). 

(a)(5) would be replaced with Trading 

Official. 

Æ NYSE Rule 7.35A(d) governs preopening indications. Subsection (d)(4) 

describes the procedures for publishing 

pre-opening indications and specifies 

when publication of a pre-opening 

indication requires supervision and 

approval of a Floor Governor. 

References to Floor Governor in NYSE 

Rule 7.35A(d)(4)(A) and (F)(i) would be 

replaced with references to Trading 

Official. 

• NYSE Rule 7.35B (DMM-Facilitated 

Closing Auctions) describes the 

responsibility of each DMM to ensure 

that registered securities close as soon 

after the end of Core Trading Hours as 

possible. 

Æ NYSE Rule 7.35B(a)(1)(C) provides 

that electronically-entered Floor Broker 

Interest cannot be reduced in size or 

replaced, except that DMMs can accept 

a full cancellation of electronicallyentered Floor Broker Interest to correct 

a Legitimate Error subject to Floor 

Official approval. Floor Official would 

be replaced with Trading Official in 

NYSE Rule 7.35B(a)(1).14

Æ NYSE Rule 7.35B(d) governs 

closing imbalances. Subsection (d)(1)(A) 

describes the circumstances in which a 

DMM may disseminate a Regulatory 

Closing Imbalance with prior Floor 

Official approval. Subsection (d)(2) 

provides that DMMs may disseminate a 

Manual Closing Imbalance only with 

prior Floor Official approval beginning 

one hour before the scheduled end of 

Core Trading Hours up to the Closing 

Auction Imbalance Freeze Time. In both 

subsections, references to Floor Official 

would be replaced with references to 

Trading Official. 

Æ NYSE Rule 7.35B(j) governs 

temporary rule suspensions. Subsection 

(j)(3) provides that a determination to 

declare a temporary suspension as well 

as any entry or cancellation of orders or 

closing of a security under subsection 

(j)(2) must be supervised and approved 

by an Executive Floor Governor and 

supervised by an Exchange Officer. The 

Exchange proposes that these 

determinations must be supervised and 

approved by a Trading Official. 

• NYSE Rule 18(d) (Compensation in 

Relation to Exchange System Failure) 

sets forth the process for member 

organizations to seek reimbursement for 

losses resulting from system failures. 

Subsection (d) establishes a 

Compensation Review Panel consisting 

of three Floor Governors and three 

Exchange employees to determine the 

eligibility of a claim for payment. Since 

the proposed elimination of Floor 

Governors would leave Exchange 

employees as the sole members of the 

Compensation Review Panel, the 

Exchange proposes to eliminate the 

Compensation Review Panel. The 

proposed rule would accordingly 

provide that the Exchange will review 

claims submitted pursuant to the rule 

and determine the eligibility of a claim 

for payment. 

• NYSE Rule 37 (Visitors) provides 

that visitors shall not be admitted to the 

Floor except by permission of an 

Exchange officer, Senior Floor Official, 

Executive Floor Official, Floor 

Governor, or Executive Floor Governor. 

The Exchange proposes that admission 

of visitors to the Floor be by permission 

of the Exchange. 

• As noted above, NYSE Rules 46 and 

46A would be deleted in their entirety. 

The heading of proposed NYSE Rule 46 

would be ‘‘Trading Officials.’’ 

• Under NYSE Rule 47 (Floor 

Officials—Unusual Situations), Floor 

Officials have the power to supervise 

and regulate active openings and 

unusual situations that may arise in 

connection with the making of bids, 

offers, or transactions on the Floor. 

References to Floor Official would be 

changed to Trading Officials and the 

heading would be changed to ‘‘Unusual 

Situations on the Floor.’’ Current NYSE 

Rule 49 would become NYSE Rule 48. 

• NYSE Rule 75 (Disputes as to Bids 

and Offers) mandates that disputes 

arising on bids or offers that are not 

settled by agreement between the 

interested members shall be settled by a 

Floor Official. The Exchange proposes 

that disputes arising on bids or offers be 

settled by a Trading Official and would 

amend the rule text and Supplementary 

Material .10 accordingly. The rule 

currently provides that, if both parties to 

a dispute involving either a monetary 

difference of $10,000 or more, or a 

questioned trade, the matter may be 

referred for resolution to a panel of three 

Floor Governors, Senior Floor Officials, 

or Executive Floor Officials, or any 

combination thereof (‘‘3 Floor Official 

Panel’’), whose decision shall be 

binding on the parties. As an alternative 

to the 3 Floor Official Panel under the 

current rule, members may proceed to 

resolve a dispute through long-standing 

arbitration procedures established under 

the Exchange’s rules. The Exchange 

proposes to eliminate the 3 Floor 

Official Panel. Disputes involving either 

a monetary difference of $10,000 or 

more, or a questioned trade, would thus 

be resolved exclusively through 

arbitration. 

• NYSE Rule 91.50 (Taking or 

Supplying Securities Named in Order) 

provides that if there is a continued 

pattern of rejection of a DMM’s 

principal transactions, a Floor Official 

may be called upon and require the 

broker to review his actions. Floor 

Official would be changed to Trading 

Official in NYSE Rule 91.50. 

• NYSE Rule 93(b) (Trading for Joint 

Account) provides that no member 

while on the Floor shall initiate the 

purchase or sale on the Exchange of a 

stock for any account in which the 

member, the member’s member 

organization, or any other member or 

allied member therein is directly or 

indirectly interested with any person 

other than such member organization or 

any other member or allied member 

therein, without the prior approval of a 

Floor Official. The reference to Floor 

Official would be changed to Trading 

Official. 

• NYSE Rule 103.10 (Registration and 

Capital Requirements of DMMs and 

DMM Units) governs the temporary 

reallocation of securities and provides 

that the Chief Regulatory Officer of the 

Exchange (‘‘CRO’’), or his or her 

designee, and two non-DMM Executive 

Floor Governors (or, if only one or no 

non-DMM Executive Floor Governors is 

present on the Floor, the most senior 

non-DMM Floor Governor or Governors 

based on length of consecutive service 

as a Floor Governor at the time of any 

action covered by this rule), acting by a 

majority, shall have the power to 

reallocate temporarily any security on 

an emergency basis whenever such 

reallocation would be in the public 

interest. The Exchange proposes that 

only the CRO or his or her designee 

would have the power to reallocate 

temporarily any security on an 

emergency basis. According to the 

Exchange, the proposed rule reflects the 

current process whereby determinations 

to temporarily reallocate securities in 

the public interest are determined by 

the CRO and the most senior and 

experienced members of the Floor 

community. In the absence of those 

senior Floor member representatives, 

the Exchange states that determinations 

involving the public interest should be 

made exclusively by the CRO. The 

Exchange states that, given that 

reallocating securities in the public 

interest largely raise regulatory 

concerns, such determinations are best 

left to regulatory staff without the 

involvement of Trading Officials. 

• NYSE Rule 103A (Member 

Education) provides for the Exchange to 

develop procedures and standards for 

qualification and performance of 

members active on the Floor of the 

Exchange. Currently, member Floor 

Officials are required to complete 


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educational modules, while Executive 

Floor Governors are exempt from this 

requirement. Under the proposal, 

Trading Officials, like Executive Floor 

Governors, would not be required to 

complete educational modules, and the 

rule text related to this requirement 

would be eliminated. The Exchange also 

proposes the non-substantive change of 

deleting the superfluous ‘‘(I)’’ at the 

beginning of the rule. 

• NYSE Rule 103B(G) (Security 

Allocation and Reallocation) describes 

the Exchange’s allocation freeze policy 

and provides that, following allocation 

probation, a second six-month period 

will begin during which a DMM unit 

may apply for new listings, provided 

that the unit demonstrates relevant 

efforts taken to resolve the 

circumstances that triggered the 

allocation prohibition. Currently, the 

determination as to whether a unit may 

apply for new listings is made by 

Exchange regulatory staff in 

consultation with the Executive Floor 

Governors, the most senior and 

experienced Floor Officials. The 

Exchange proposes that regulatory staff 

continue to make these determinations 

under the rule. According to the 

Exchange, it is not proposing that 

Regulatory staff consult with Trading 

Officials because Regulatory staff do not 

need the input or involvement of 

business-side staff to make these 

determinations. 

• NYSE Rule 104 (Dealings and 

Responsibilities of DMMs) governs 

dealings and responsibilities of DMMs. 

Subsection (i) provides for temporary 

DMMs and permits a Floor Governor to 

authorize a member of the Exchange 

who is not registered as a DMM in an 

Exchange-listed stock or stocks, to act as 

a temporary DMM under specific 

circumstances. The Exchange proposes 

that Trading Officials would perform 

this function under the amended rule. 

• NYSE Rule 112(a)(i) (Orders 

initiated ‘‘Off the Floor’’) provides that 

all orders in stocks for the account of a 

member organization; any member, 

principal executive, approved person, 

officer, or employee of that organization; 

or a discretionary account serviced by 

the member or member organization 

must be sent to the Floor through a 

clearing firm’s order room or other 

facilities regularly used for transmission 

of public customers’ orders to the Floor, 

except for orders, among others, when a 

Floor Official expressly invites a 

member or members to participate in a 

difficult market situation. The Exchange 

would replace Trading Official for Floor 

Official in NYSE Rule 112(a)(i). 

• NYSE Rule 124(e) (Midday 

Auction) provides that, when there is a 

significant imbalance in a Midday 

Auction Stock at the end of the Midday 

Auction Pause, the Midday Auction 

Pause may be converted to an order 

imbalance halt with the approval of a 

Floor Governor or two Floor Officials. 

The Exchange proposes that this 

approval would be given by a Trading 

Official. 

• NYSE Rule 128B (Publication of 

Changes, Corrections, Cancellations or 

Omissions and Verification of 

Transactions) governs changes and 

corrections to the Consolidated Tape. 

Æ NYSE Rule 128B.10 (Publication on 

the tape or in the ‘‘sales sheet’’) 

provides that publication of a change or 

a correction in a transaction which 

previously appeared on the tape may be 

made on the tape on the day of the 

transaction, provided that both buying 

and selling members or member 

organizations agree to the change in the 

transaction(s) and receive approval from 

a Floor Governor, Executive Floor 

Official, Senior Floor Official, or 

Executive Floor Governor. In the event 

such publication is not made on the 

tape on the day of the transaction, it 

may be published on the tape at least 

ten minutes prior to the opening of 

business on the following business day 

or in the sales sheet within three 

business days of the transaction with 

the approval of both the buying and 

selling members and a Floor Official, 

provided the price of the transaction 

does not affect the high, low, opening, 

or closing price of the security on the 

day of the transaction. The Exchange 

proposes that Trading Officials provide 

the approvals required under NYSE 

Rule 128B.10. 

• NYSE Rule 128B.13 (Other errors) 

provides that a correction in the amount 

of a transaction reported erroneously to 

the tape by a party to the transaction 

may be published on the tape on the day 

of the transaction, on the tape at least 

ten minutes prior to the opening on the 

following business day, or on the ‘‘sales 

sheet’’ within three business days of the 

transaction with the approval of a Floor 

Governor, Executive Floor Official, 

Senior Floor Official, or Executive Floor 

Governor. The Exchange proposes that 

Trading Officials provide the approvals 

required under NYSE Rule 128B.13. 

• NYSE Rule 308(g) (Acceptability 

Proceedings) provides that any person 

whose application has been 

disapproved by an Acceptability 

Committee, or any member of the Board 

of Directors of the Exchange, any 

member of the Committee for Review 

(‘‘CFR’’), any Executive Floor Governor, 

and the Division of the Exchange 

initiating the proceedings, may require 

a review by the Board of any 

determination of an Acceptability 

Committee. The Exchange proposes to 

delete Executive Floor Governors from 

the rule. The Exchange states that the 

proposed change would not affect the 

procedural safeguards of the call for 

review process since there would still 

be interested parties that could call a 

matter for Board review. Specifically, 

directors and members of the CFR, 

including the person whose application 

was disapproved, would continue to be 

able to call disapproved membership 

applications for review, thereby, 

according to the Exchange, ensuring the 

independence, integrity, and fairness of 

the membership process. The Exchange 

states that Trading Officials, who are not 

members and have no role in the 

member application process, should not 

have the ability to call matters involving 

membership applications for review. 

• NYSE Rule 903(d)(ii) (Off-Hours 

Transactions) provides that a closing 

price order to buy (sell) a security for 

the account of the DMM registered in 

such security and approved by a Floor 

Official, coupled with a closing price 

order to sell (buy) to offset all or part of 

a market-on-close imbalance in the 

stock prior to the close, shall be 

executed upon entry. The Exchange 

proposes that a Trading Official would 

provide the required approval under the 

rule. 

• NYSE Rule 906 (Impact of Trading 

Halts on Off-Hours Trading) provides 

that a closing price order to buy (sell) 

a security for the account of the DMM 

registered in that security and approved 

by a Floor Official, coupled with a 

closing price order to sell (buy) to offset 

all or part of any market-on-close 

imbalance in the stock prior to the close, 

shall not be so canceled or precluded 

from entry as result of corporate 

developments during the Off-Hours 

Trading Session. The Exchange 

proposes that a Trading Official would 

provide the required approval under the 

rule. 

• Finally, NYSE Listed Company 

Manual Section 202.04 (Exchange 

Market Surveillance) provides that a 

listed issue may be placed under special 

initial margin and capital requirements, 

which indicates a determination by the 

Exchange’s Floor Officials that the 

market in the issue has assumed a 

speculative tenor and has become 

volatile due to the influence of credit, 

which, if ignored, may lead to unfair 

and disorderly trading. The reference to 

Floor Officials would be changed to a 

reference to Trading Officials. 

III. NYSE’s OIP Response Letter 

On May 10, 2021, the NYSE 

submitted a response to the questions in 


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15See note 7, supra. 16See OIP, 86 FR at 17633; see also OIP Response 

Letter, supra note 7, at 2–3. 17See OIP Response Letter, supra note 7, at 3. 18 Id. 19 Id. 20 Id. 21 Id. at 4. 

22 Id. 

23 Id. 

24 Id. 

25 Id. 

26 Id. 

27 Id. at 4–5. 

28 Id. at 5. 

29 Id. 

30 Id. 

31 Id. at 4. 

32 Id. at 5. 

33 Id. 

34 Id. 

35 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

36 15 U.S.C. 78f(b)(3). 

the Commission’s OIP.15 Specifically, 

the Exchange responded to the 

questions in the OIP as to whether: (1) 

The proposed rule change raised issues 

related to fair representation of member 

firms in the administration of the 

Exchange’s affairs; (2) permitting only 

Exchange employees to be Trading 

Officials would create or alter conflicts 

of interest, if any, faced by Trading 

Officials in performing their duties; (3) 

mandatory training of Trading Officials 

should be required; and (4) employees 

of member firms could have relevant 

experience or knowledge that is 

important for performing the duties of a 

Trading Official.16

The Exchange states that it does not 

believe that the fair representation 

requirement of Section 6(b)(3) of the Act 

is implicated by this proposed rule 

change because Section 6(b)(3) of the 

Act is primarily concerned with 

member participation in the governance 

of a national securities exchange and 

because the members of the Exchange 

are represented on and participate on 

the Exchange’s Board and its 

committees.17 The Exchange further 

states that it is not required to delegate 

the authority to supervise and regulate 

certain trading activity to its members 

and that member Floor Officials are a 

unique feature of the Exchange, not 

replicated on other equities 

exchanges.18 Further, the Exchange 

states that its affiliates, NYSE Arca and 

NYSE American, currently have 

exchange employees who are designated 

as Trading Officials and who fulfill a 

role similar to that of the proposed 

NYSE Trading Officials, as well as to 

that of its current Floor Officials.19

Accordingly, the Exchange states that it 

does not believe that the elimination of 

member Floor Officials from the 

delegated responsibilities in the 

Exchange’s marketplace raises any fair 

representation issues or diminishes the 

fair representation of members in the 

administration of the Exchange’s 

affairs.20

With respect to potential conflicts of 

interest, the Exchange states that it does 

not believe that potential conflict of 

interests would either be created or 

altered by this proposed rule change 

because only Exchange employees 

would be Trading Officials.21 The 

Exchange states that employee-only 

Trading Officials are not novel and have 

been part of the structure of the options 

markets for many years.22 In addition, 

the Exchange states that, as a practical 

matter, the current Staff Governors, who 

already perform the functions of Floor 

Officials, would become the new 

Trading Officials and would be 

performing the same delegated 

functions in the same fashion under the 

Exchange’s rules as they currently do as 

Floor Officials.23 Thus, according to the 

Exchange, although their titles would 

change, the Staff Governors would be 

performing the same functions and the 

Exchange’s supervisory procedures 

should continue to reasonably ensure 

that Trading Officials exercise the same 

level of competence and 

professionalism, including making 

impartial assessments and avoiding 

actual and apparent conflicts of 

interest.24 In addition, the Exchange 

states that employee-only Trading 

Officials should reduce the potential for 

conflicts of interest because they would 

not be affiliated with a competing 

broker-dealer business on the Floor.25

The Exchange also states that it has 

sought to mitigate potential conflicts of 

interest by proposing to remove Trading 

Official involvement from certain 

situations in which Floor Officials 

currently have a role under Exchange 

rules.26 For instance, proposed Trading 

Officials would not be involved in 

determinations to reallocate securities 

under amended NYSE Rules 103.10 and 

103B(G) or in resolving matters 

involving a dispute involving either a 

monetary difference of $10,000 or more 

or a questioned trade under amended 

NYSE Rule 75.27

With regard to mandatory training for 

Trading Officials, the Exchange states 

that it is obligated to comply with and 

enforce its rules and securities laws, and 

that in order to fulfill this obligation it 

has an active employee supervision and 

training program already in place.28

Further, the Exchange states that the 

current mandatory training for Floor 

Officials was developed specifically for 

Floor Officials when they were 

exclusively Floor members and prior to 

the inclusion of Staff Governors.29 The 

Exchange explains that it currently 

provides its Staff Governors training and 

updates on rule changes and changes in 

Floor-related trading technology and 

that the same would be done for Trading 

Officials.30 Thus, the Exchange does not 

believe that a separate mandatory 

educational program for a subset of its 

employees (i.e., Trading Officials) is 

necessary.31

Finally, the Exchange acknowledges 

that members may have relevant 

experience or knowledge that is 

important for performing the duties of a 

Trading Official.32 The Exchange states 

that it is, in fact, because of their 

relevant experience or knowledge that 

member employees have been hired by 

the Exchange as Staff Governors, and 

the Exchange expects to continue to 

benefit from the experience of member 

employees as it hires and trains Trading 

Officials.33 The Exchange states that it 

does not, however, believe that the best 

way to utilize the knowledge and 

experience of Floor members is to 

require the retention of member Floor 

Officials in their current form.34

IV. Discussion and Commission 

Findings 

After careful review, the Commission 

is approving the proposed rule change, 

as modified by Amendment No. 1, for 

the reasons discussed below.35 The 

Commission finds that the proposed 

rule change, as modified, is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange, including Section 6(b)(3) of 

the Exchange Act, which requires, 

among other things, that the rules of a 

national securities exchange assure a 

fair representation of its members in the 

administration of its affairs,36 and 

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

which requires, among other things, that 

the rules of an exchange be 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 regulating, clearing, 

settling, processing information with 

respect to, and 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, and 

that they are not designed to permit 


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37 Id. 

38 Id. 

39 15 U.S.C. 78f(b)(5). 

40 Id. 

41 15 U.S.C. 78s(b)(2). 

42 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 Nos. 91728 

(April 29, 2021), 86 FR 24052 (SR–CBOE–2021– 

023); 91729 (April 29, 2021), 86 FR 24059 (SR– 

CboeBYX–2021–009); 91727 (April 29, 2021), 86 FR 

24083 (SR–CboeBZX–2021–028); 91725 (April 29, 

2021), 86 FR 24076 (SR–CboeEDGA–2021–009); 

91724 (April 29, 2021), 86 FR 24044 (SR– 

CboeEDGX–2021–021); 91732 (April 29, 2021), 86 

FR 24125 (SR–C2–2021–007) (collectively, 

‘‘Notices’’). 

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

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

6 17 CFR 200.30–3(a)(31). 

unfair discrimination between 

customers, issuers, brokers, or dealers.37

The Commission finds that, because 

the proposed rule change will not 

diminish the role that member firms 

will continue to play in the governance 

of the Exchange, and because having 

Trading Officials who are exclusively 

Exchange employees would be 

consistent with the Commissionapproved rules of other national 

securities exchanges, the proposed rule 

change is consistent with Section 6(b)(3) 

of the Act.38

The Commission also finds that the 

proposed rule change is consistent with 

Section 6(b)(5) of the Act. The 

Commission finds that the proposed 

rule change is reasonably designed to 

supervise and review trading on the 

Floor while ensuring that qualified 

Exchange-trained and supervised staff 

continue to perform oversight to the 

marketplace on a day-to-day basis as 

prescribed by Exchange rules and 

consistent with the Exchange’s 

obligations under the Act. The 

Commission also finds that the 

proposed rule change reasonably 

addresses potential conflicts of interest 

faced by Trading Officials by providing 

for objective assessments by 

professional staff who do not conduct a 

competing broker-dealer business on the 

Floor and by removing Trading Officials 

from involvement in certain situations, 

including disputes with a value of 

$10,000 or more. Additionally, the 

Commission finds that it is reasonable 

for the Exchange to hire, train, and 

supervise the Trading Officials in the 

manner that has been established for 

Staff Governors since, notwithstanding 

the change of title, the duties and 

responsibility will remain largely the 

same. Further, because the primary role 

of the Trading Official will be to 

supervise trading on the Exchange, the 

Commission also finds it is appropriate 

for Trading Officials to report to NYSE’s 

Head of Equities. For these reasons, the 

Commission finds that the proposed 

rule change consistent with the 

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

Act.39

Finally, the Commission finds that the 

changes to NYSE Rules 7.35A, 7.35B, 

18(d), 37, 47, 75, 91.50, 93(b), 103.10, 

103A, 103B(G), 104, 112(a)(i), 124(e), 

128B.10, 308(g), 903(d)(ii), and NYSE 

Listed Company Manual Section 202.04 

are of a conforming and technical nature 

designed to remove references to Floor 

Officials and clarify, as necessary, how 

the scope of the Trading Official’s duties 

differs from that of the Floor Official, 

and that these changes are, therefore, 

consistent with Section 6(b)(5) of the 

Act.40

For the reasons discussed above, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1, is consistent with the 

requirements of the Act and in 

particular Section 6(b)(3) and Section 

6(b)(5) because it does not impair the 

fair representation of member firms in 

the governance of the exchange, and 

because it is reasonably 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, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,41 that the 

proposed rule change SR–NYSE–2020– 

105, as modified by Amendment No. 1, 

is hereby approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13100 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92199; File Nos. SR– 

CBOE–2021–023, SR–CboeBYX–2021–009, 

SR–CboeBZX–2021–028, SR–CboeEDGA– 

2021–009, SR–CboeEDGX–2021–021, SR– 

C2–2021–007] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Cboe BYX Exchange, 

Inc.; Cboe BZX Exchange, Inc.; Cboe 

EDGA Exchange, Inc.; Cboe EDGX 

Exchange, Inc.; Cboe C2 Exchange, 

Inc.; Notice of Designation of a Longer 

Period for Commission Action on 

Proposed Rule Changes To Amend the 

Sixth Amended and Restated Bylaws 

of Cboe Global Markets, Inc. To 

Implement Proxy Access 

June 16, 2021. 

On April 16, 2021, Cboe Exchange, 

Inc., Cboe BYX Exchange, Inc., Cboe 

BZX Exchange, Inc., Cboe EDGA 

Exchange, Inc., and Cboe EDGX 

Exchange, Inc., and on April 26, 2021, 

Cboe C2 Exchange, Inc., each 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 amend the Sixth Amended 

and Restated Bylaws of their parent 

company, Cboe Global Markets, Inc., to 

implement proxy access. The proposed 

rule changes were published for 

comment in the Federal Register on 

May 5, 2021.3 The Commission has 

received no comment letters on the 

proposed rule changes. 

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a propose rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the Notices for these 

proposed rule changes is June 19, 2021. 

The Commission is extending this 45- 

day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule changes so that it has sufficient 

time to consider the proposed rule 

changes. Accordingly, pursuant to 

Section 19(b)(2) of the Act,5 the 

Commission designates August 3, 2021, 

as the date by which the Commission 

shall either approve or disapprove, or 

institute proceedings to determine 

whether to disapprove, the proposed 

rule changes (File Nos. SR–CBOE–2021– 

023, SR–CboeBYX–2021–009, SR– 

CboeBZX–2021–028, SR–CboeEDGA– 

2021–009, SR–CboeEDGX–2021–021, 

SR–C2–2021–007). 


jbell on DSKJLSW7X2PROD with NOTICES