Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 34819 

16 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 Rules 1.1E(m) (definition of ETP) & (n) 

(definition of ETP Holder). 

pathway to access the capital markets 

additional flexibility in becoming a 

public company, and in that way 

promote competition among service 

providers, such as underwriters and 

other advisors, to such companies. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: (a) By order approve or disapprove 

such proposed rule change, or (b) 

institute proceedings to determine 

whether the proposed rule change 

should be 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– 

NASDAQ–2021–045 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–NASDAQ–2021–045. 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 such 

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–NASDAQ–2021–045, and 

should be submitted on or before July 

21, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13916 Filed 6–29–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92254; File No. SR– 

NYSEAMER–2021–31] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 7.31E To 

Add a Retail Order Modifier and the 

NYSE American Equities Price List and 

Fee Schedule To Cross Reference the 

Retail Order Modifier 

June 24, 2021. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on June 21, 

2021, NYSE American LLC (‘‘NYSE 

American’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘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 amend its 

rules to add new subparagraph (i)(4) to 

Rule 7.31E and amend the NYSE 

American Equities Price List and Fee 

Schedule. The proposed rule change is 

available on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

rules to add new subparagraph (i)(4) to 

Rule 7.31E (Orders and Modifiers) to 

add a description of a Retail Order 

modifier and to amend the Price List to 

add a cross-reference to Rule 7.31E(i)(4). 

Proposed Rule Change 

The Exchange proposes to amend 

Rule 7.31E to add new subparagraph 

(i)(4) to provide for ETP Holders 4 to 

designate an order with a retail modifier 

(‘‘Retail Order’’). An order designated as 

a ‘‘Retail Order’’ pursuant to proposed 

Rule 7.31E(i)(4) would be eligible for the 

Retail Order Rates specified on the 

Exchange’s Price List. 

Proposed Modifier for ‘‘Retail Orders’’ 

To define ‘‘Retail Orders,’’ the 

Exchange proposes to amend Rule 7.31E 

(Orders and Modifiers) to add a new 

subsection (i)(4), titled ‘‘Retail 

Modifier’’ to establish requirements for 

Retail Orders on the Exchange. These 

requirements are based on the 

requirements to enter orders with 

‘‘retail’’ modifiers for purposes of rates 


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34820 Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 

5See NYSE Rule 13 regarding Retail Modifiers 

and the NYSE Arca procedures for designating 

orders with a retail modifier for purposes of fee 

rates. See Securities Exchange Act Release No. 

67540 (July 30, 2012), 77 FR 46539 (August 3, 2012) 

(SR–NYSEArca–2012–77). These requirements are 

distinct from, but related to, the requirements for 

a ‘‘Retail Order’’ on the Retail Liquidity Programs 

available on NYSE and NYSE Arca. See NYSE Rule 

7.44 and NYSE Arca Rule 7.44–E. The Exchange 

does not offer a ‘‘Retail Liquidity Program.’’ 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8As noted above (see supra note 11[sic]), the 

proposed changes are based not on the Retail 

Liquidity Programs available on NYSE and NYSE 

Arca, but on the availability of retail fees on those 

exchanges for orders properly designated as ‘‘retail’’ 

orders. See NYSE Rule 13; Securities Exchange Act 

Release No. 72253 (May 27, 2014), 79 FR 31353 

(June 2, 2014) (SR–NYSE–2014–26) (approving the 

addition of ‘‘retail’’ order modifier at NYSE Rule 

13(f)); and Securities Exchange Act Release No. 

67540 (July 30, 2012), 77 FR 46539 (August 3, 2012) 

(SR–NYSEArca–2012–77) (approving the addition 

of ‘‘retail’’ order modifier on NYSE Arca). 

9Nasdaq Equity 7, section 118; see also Cboe 

EDGX Rule 11.21 (defining ‘‘Retail Order’’ and 

available for such orders on the 

Exchange’s affiliates, New York Stock 

Exchange, LLC (‘‘NYSE’’) and NYSE 

Arca, Inc. (‘‘NYSE Arca’’).5

Proposed Rule 7.31E(i)(4)(A) would 

define ‘‘Retail Order’’ as an agency order 

or a riskless principal order that meets 

the criteria of FINRA Rule 5320.03 that 

originates from a natural person and is 

submitted to the Exchange by an ETP 

Holder, provided that no change is 

made to the terms of the order with 

respect to price or side of market and 

the order does not originate from a 

trading algorithm or any other 

computerized methodology. 

Proposed Rule 7.31E(i)(4)(B) would 

specify that in order for an ETP Holder 

to access the proposed Retail Order 

pricing, the ETP Holder would be 

required to designate an order as a 

Retail Order in the form and/or manner 

prescribed by the Exchange. 

Proposed Rule 7.31E(i)(4)(C) would 

specify that in order to submit a Retail 

Order, an ETP Holder must submit an 

attestation, in a form prescribed by the 

Exchange, that substantially all orders 

designated as ‘‘Retail Orders’’ would 

meet the requirements set out in the 

definition above. 

Proposed Rule 7.31E(i)(4)(D) would 

specify that an ETP Holder must have 

written policies and procedures 

reasonably designed to assure that it 

would only designate orders as ‘‘Retail 

Orders’’ if all requirements of a Retail 

Order are met. Such written policies 

and procedures must require the ETP 

Holder to (i) exercise due diligence 

before entering a Retail Order to assure 

that entry as a Retail Order is in 

compliance with the requirements 

specified by the Exchange, and (ii) 

monitor whether orders entered as 

Retail Orders meet the applicable 

requirements. If an ETP Holder 

represents Retail Orders from another 

broker-dealer customer, the ETP 

Holder’s supervisory procedures must 

be reasonably designed to assure that 

the orders it receives from such brokerdealer customer that it designates as 

Retail Orders meet the definition of a 

Retail Order. The ETP Holder must (i) 

obtain an annual written representation, 

in a form acceptable to the Exchange, 

from each broker-dealer customer that 

sends it orders to be designated as Retail 

Orders that entry of such orders as 

Retail Orders would be in compliance 

with the requirements specified by the 

Exchange, and (ii) monitor whether its 

broker-dealer customer’s Retail Order 

flow continues to meet the applicable 

requirements. Proposed Rule 

7.31E(i)(4)(E) would specify that an ETP 

Holder that fails to abide by the 

requirements specified in paragraphs 

(i)(4)(A)–(D) of Rule 7.31E would not be 

eligible for the Retail Order rates for 

orders it designates as ‘‘Retail Orders.’’ 

Proposed Cross-Reference in the Price 

List to Rule 7.31E(i)(4) 

The Price List currently contains a 

subheading ‘‘b. Retail Order Rates *,’’ 

with text at the asterisk as follows: ‘‘See 

section III under ‘General’ at the end of 

this Price List for information on 

designating orders as ‘Retail Orders.’ ’’ 

The Exchange proposes to amend that 

text to also include a reference to Rule 

7.31E(i)(4). 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,6 in general, and 

furthers the objectives of Sections 

6(b)(5) of the Act,7 in particular, because 

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 

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 because it is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange believes that the 

proposed amendment to Rule 7.31E(i) to 

add a Retail Modifier would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the proposed requirements are based on 

existing requirements for orders 

designated as ‘‘retail’’ on NYSE and 

NYSE Arca for purposes of fees and 

credits on those exchanges, and 

therefore are not novel. In addition, the 

proposed designation, attestation, and 

written policies and procedures are also 

based on existing procedures for 

similarly-defined orders on NYSE and 

NYSE Arca, and therefore are not 

novel.8 The Exchange believes that the 

proposed requirements to submit 

attestations and to maintain written 

policies and procedures are not unfairly 

discriminatory, because they apply 

equally to all ETP Holders that wish to 

receive the Retail Order Rates. The 

Exchange further believes that the 

proposed addition of a cross-reference 

to proposed Rule 7.31E(i)(4) in the Price 

List would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it would enhance the 

clarity and transparency of the Price List 

and reduce any potential customer 

confusion. 

The proposed retail modifier for 

purposes of providing different rates for 

‘‘Retail Orders’’ is also based in part on 

the availability of such modifiers on the 

Nasdaq Stock Market LLC (‘‘Nasdaq’’) 

and Cboe EDGX Exchange, Inc. 

(‘‘EDGX’’), which both offer pricing for 

orders designated as ‘‘retail’’ under their 

respective rules, even in the absence of 

a retail price improvement program. For 

example, Nasdaq defines the term 

‘‘Designated Retail Order’’ on its Price 

List as: 

[A]n agency or riskless principal order that 

meets the criteria of FINRA Rule 5320.03 and 

that originates from a natural person and is 

submitted to Nasdaq by a member that 

designates it pursuant to this section, 

provided that no change is made to the terms 

of the order with respect to price or side of 

market and the order does not originate from 

a trading algorithm or any other 

computerized methodology. An order from a 

‘‘natural person’’ can include orders on 

behalf of accounts that are held in a corporate 

legal form—such as an Individual Retirement 

Account, Corporation, or a Limited Liability 

Company—that has been established for the 

benefit of an individual or group of related 

family members, provided that the order is 

submitted by an individual. Members must 

submit a signed written attestation, in a form 

prescribed by Nasdaq, that they have 

implemented policies and procedures that 

are reasonably designed to ensure that 

substantially all orders designated by the 

member as ‘‘Designated Retail Orders’’ 

comply with these requirements. Orders may 

be designated on an order by-order basis, or 

by designating all orders on a particular order 

entry port as Designated Retail Orders.9


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Federal Register / Vol. 86, No. 123 / Wednesday, June 30, 2021 / Notices 34821 

establishing attestation requirement to access 

preferential pricing for such orders). 

10 15 U.S.C. 78f(b)(8). 

11See supra note 17 [sic]. 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 17 CFR 240.19b–4(f)(6). 

14 In addition, Rule 19b–4(f)(6)(iii) requires the 

Exchange to give the Commission written notice of 

the Exchange’s intent to file the proposed rule 

change, along with a brief description and text of 

the proposed rule change, at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6)(iii). 

17See supra note 5. 

18For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

19 15 U.S.C. 78s(b)(2)(B). 20 17 CFR 200.30–3(a)(12). 

Nasdaq does not have a corresponding 

definition of ‘‘Designated Retail Order’’ 

in its trading rules. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,10 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Instead, the 

Exchange believes that the proposed 

rule change would promote competition 

because it is based on the availability of 

similar ‘‘retail’’ modifiers on NYSE, 

NYSE Arca, Nasdaq, and EDGX. More 

specifically, multiple other cash equity 

exchanges offer pricing for orders 

designated as ‘‘retail’’ orders, even in 

the absence of a retail price 

improvement program on those 

exchanges.11 The Exchange believes that 

the proposed change could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer similar order types 

and comparable transaction pricing, by 

encouraging additional orders to be sent 

to the Exchange for execution. 

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 12 and Rule 

19b–4(f)(6) thereunder.13 Because the 

proposed rule change: (i) Does not 

significantly affect the protection of 

investors or the public interest; (ii) does 

not impose any significant burden on 

competition; and (iii) does not 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.14

A proposed rule change filed under 

Rule 19b–4(f)(6) 15 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),16 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission notes that the 

proposal is based on the rules of other 

national securities exchanges and finds 

that the proposal presents no legal or 

novel regulatory questions.17 For these 

reasons, the Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission waives 

the 30-day operative delay and 

designates the proposed rule change 

operative upon filing.18

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) 19 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– 

NYSEAMER–2021–31 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAMER–2021–31. 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–NYSEAMER–2021–31 and 

should be submitted on or before July 

21, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13914 Filed 6–29–21; 8:45 am] 

BILLING CODE 8011–01–P 


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