Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 40885 

22See id. at 22486. 

23See id. at 22492. 

24See id. at 22491 n.55. 

25See id. at 22492. 

26See id. 

27Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Act Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

28 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 90495 

(Nov. 24, 2020), 85 FR 77304 (Dec. 1, 2020) (SR– 

NYSE–2020–95) (‘‘Notice’’). 

significant size? 22 What are 

commenters’ views on whether there is 

a reasonable likelihood that a person 

attempting to manipulate the Shares 

would also have to trade on CME to 

manipulate the Shares? What of the 

Exchange’s assertion that the 

combination of (a) CME bitcoin futures 

leading price discovery; (b) the overall 

size of the bitcoin market; and (c) the 

ability for market participants to buy or 

sell large amounts of bitcoin without 

significant market impact helps to 

prevent the Shares from becoming the 

predominant force on pricing in either 

the bitcoin spot or CME bitcoin futures 

markets? 23

5. What are commenters’ views on the 

Exchange’s statement, generally, that 

bitcoin is resistant to price 

manipulation and that other means to 

prevent fraudulent and manipulative 

acts and practices exist to justify 

dispensing with the requisite 

surveillance sharing agreement with a 

regulated market of significant size 

related to bitcoin? 24 What of the 

Exchange’s assertion in support of such 

statement that significant liquidity in 

the spot market and the impact of 

market orders on the overall price of 

bitcoin mean that attempting to move 

the price of bitcoin is costly? 25 What of 

the assertion that offering only in-kind 

creations and redemptions provides 

unique protections against potential 

attempts to manipulate the Shares and 

that the price the Sponsor uses to value 

the Trust’s bitcoin ‘‘is not particularly 

important’’? 26

III. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5) or any other provision of the Act, 

and the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.27

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by August 19, 2021. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by September 2, 2021. 

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– 

CboeBZX–2021–029 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–CboeBZX–2021–029. 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–CboeBZX–2021–029 and 

should be submitted by August 19, 

2021. Rebuttal comments should be 

submitted by September 2, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16121 Filed 7–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92480; File No. SR–NYSE– 

2020–95] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Amendment No. 2 and Order 

Granting Accelerated Approval of 

Proposed Rule Change, as Modified by 

Amendment No. 2, To Make Permanent 

Commentaries to Rule 7.35A and 

Commentaries to Rule 7.35B and To 

Make Related Changes to Rules 7.32, 

7.35C, 46B, and 47 

July 23, 2021. 

I. Introduction 

On November 30, 2020, New York 

Stock Exchange, Inc. (‘‘NYSE’’ 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 

make permanent Commentaries .01(a) 

and (b) and .06 to Rule 7.35A (DMMFacilitated Core Open and Trading Halt 

Auctions) and Commentaries .01 and 

.03 to Rule 7.35B (DMM-Facilitated 

Closing Auctions) and to make related 

changes to NYSE Rules 7.32 (Order 

Entry), 7.35C (Exchange-Facilitated 

Closing Auctions), 46B (Regulatory 

Trading Official), and 47 (Floor 

Officials—Unusual Situations). The 

proposed rule change was published for 

comment in the Federal Register on 

December 1, 2020.3

On January 13, 2021, the Commission 

extended to March 1, 2021, the time 

period in which to approve the 


jbell on DSKJLSW7X2PROD with NOTICES
40886 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 

4See Securities Exchange Act Release No. 90917 

(Jan. 13, 2021), 86 FR 6403 (Jan. 21, 2021). 

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

6See Securities Exchange Act Release No. 91227, 

(Mar. 1, 2021), 86 FR 12991 (Mar. 5, 2021) (‘‘Order 

Instituting Proceedings’’). 

7See Letter from Martha Redding, Associate 

General Counsel, NYSE LLC, to Secretary, 

Commission (April 12, 2021). Amendment No. 1 is 

available at https://www.sec.gov/comments/sr-nyse2020-95/srnyse202095-8662901-235314.pdf. 

8 In Amendment No. 2, the Exchange proposes to: 

(i) Amend Rule 7.35A(c)(1)(H) to provide a 5% 

price parameter and eliminate the volume 

restrictions for DMM-facilitated Trading Halt 

Auctions; and (ii) amend Rule 7.35A(d)(3)(B) to 

provide that the Applicable Price Range for 

determining whether to publish a pre-opening 

indication for a Trading Halt Auction would be 5% 

for securities with an Indication Reference Price 

over $3.00 and $0.15 for securities with an 

Indication Reference Price equal to or lower than 

$3.00. See Letter from Martha Redding, Associate 

General Counsel, NYSE LLC, to Secretary, 

Commission (May 17, 2021). Amendment No. 2 is 

available at https://www.sec.gov/comments/sr-nyse2020-95/srnyse202095-8807418-237986.pdf. 

9See Securities Exchange Act Release No. 91975 

(May 24, 2021), 86 FR 28921 (May 28, 2021). 

10 In this Amendment No. 2, the Exchange 

proposes that the percentage parameter that would 

be applicable to when a DMM may electronically 

facilitate a Trading Halt Auction or would be 

required to publish a pre-opening indication would 

be 5% instead of 10%. 

11Pursuant to Rule 7.1(e), the CEO notified the 

Board of Directors of the Exchange of her 

determination under Rule 7.1(c)(3). The Exchange’s 

rules establish how the Exchange will function 

fully-electronically. See Press Release, dated March 

18, 2020, available here: https://ir.theice.com/press/ 

press-releases/all-categories/2020/03-18-2020- 

204202110. 

12See Securities Exchange Act Release No. 88933 

(May 22, 2020), 85 FR 32059 (May 28, 2020) (SR– 

NYSE–2020–47) (Notice of filing and immediate 

effectiveness of proposed rule change). 

13See Securities Exchange Act Release No. 89086 

(June 17, 2020) (SR–NYSE–2020–52) (Notice of 

filing and immediate effectiveness of proposed rule 

change). 

14See Securities Exchange Act Release Nos. 

88444 (March 20, 2020), 85 FR 17141 (March 26, 

2020) (SR–NYSE–2020–22) (amending Rules 7.35A 

to add Commentary .01, 7.35B to add Commentary 

.01, and 7.35C to add Commentary .02) and 89086 

(June 17, 2020), 85 FR 37712 (SR–NYSE–2020–52) 

(amending Rules 7.35A to add Commentary .06, 

7.35B to add Commentary .03, 76 to add 

Supplementary Material 20, and Supplementary 

Material .30 to Rule 36). 

15See Securities Exchange Act Release No. 90795 

(December 23, 2020), 85 FR 86608 (December 30, 

2020) (SR–NYSE–2020–106) (Notice of filing and 

immediate effectiveness of proposed rule change to 

extend the temporary period for Commentaries to 

Rules 7.35, 7.35A, 7.35B, and 7.35C; and temporary 

rule relief in Rule 36.30 to end on the earlier of a 

full reopening of the Trading Floor facilities to 

DMMs or after the Exchange closes on April 30, 

2021). [The Commission notes that, after 

Amendment No. 2 was filed, the Exchange 

extended the outside date for effectiveness of the 

temporary relief from April 30, 2021, to August 31, 

2021. See Securities Exchange Act Release No. 

91778 (May 5, 2021), 85 FR 25902 (May 11, 2021).] 

proposal, disapprove the proposal, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposal.4 On March 1, 2021, the 

Commission instituted proceedings 

under Section 19(b)(2)(B) of the Act 5 to 

determine whether to approve or 

disapprove the proposed rule change.6

On April 12, 2021, the Exchange filed 

Amendment No. 1 to the proposed rule 

change with the Commission and 

submitted Amendment No. 1 for 

inclusion in the public comment file.7

On May 17, 2021, the Exchange filed 

Amendment No. 2 to the proposed rule 

change with the Commission, which 

superseded the original filing, as 

amended by Amendment No. 1, in its 

entirety, and submitted Amendment No. 

2 for inclusion in the public comment 

file.8 On May 24, 2021, the Commission 

extended to July 29, 2021, the time 

period in which to approve or 

disapprove the proposal.9 The 

Commission has received no comment 

letters on the proposed rule change. 

The Commission is publishing notice 

of the filing of Amendment No. 2 to 

solicit comment from interested 

persons, and is approving the proposed 

rule change, as modified by Amendment 

No. 2, on an accelerated basis. 

II. Self-Regulatory Organization’s 

Description of the Proposal, as 

Modified by Amendment No. 2 

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 make 

permanent Commentaries .01(a) and (b) 

and .06 to Rule 7.35A (DMM-Facilitated 

Core Open and Trading Halt Auctions) 

and Commentaries .01 and .03 to Rule 

7.35B (DMM-Facilitated Closing 

Auctions) and make related changes to 

Rules 7.32 (Order Entry), 7.35C 

(Exchange-Facilitated Closing 

Auctions), 46B (Regulatory Trading 

Official), and 47 (Floor Officials— 

Unusual Situations).10

Background 

In connection with the closing of the 

Trading Floor facilities located at 11 

Wall Street in New York City as of 

March 23, 2020 and moving the 

Exchange, on a temporary basis, to fully 

electronic trading,11 and subsequent 

reopening of the Trading Floor on a 

limited basis first to Floor Brokers on 

May 26, 2020 12 and then to DMMs on 

June 15, 2020,13 the Exchange added 

Commentaries .01 and .06 to Rule 7.35A 

and Commentaries .01 and .03 to 

7.35B.14 Currently, these Commentaries 

are in effect until the earlier of a full 

reopening of the Trading Floor facilities 

to DMMs or after the Exchange closes on 

April 30, 2021.15

Specifically, Commentary .01 to Rule 

7.35A provides: 

For a temporary period that begins March 

23, 2020, when the Trading Floor facilities 

have been closed pursuant to Rule 7.1(c)(3), 

and ends on the earlier of a full reopening 

of the Trading Floor facilities to DMMs or 

after the Exchange closes on December 31, 

2020: 

(a) The percentage price parameters in 

paragraph (c)(1)(G) and (c)(2) of this Rule are 

suspended and a DMM may not effect a Core 

Open or Trading Halt Auction electronically 

if the Core Open or Trading Halt Auction 

Price will be more than 10% away from the 

Consolidated Last Sale Price. 

(b) The volume parameters in paragraph 

(c)(1)(H) of this Rule are suspended. 

(c) The requirement to publish a preopening indication pursuant to paragraph (d) 

of this Rule before either a Core Open or 

Trading Halt Auction is suspended. 

Commentary .06 to Rule 7.35A 

provides: 

For a temporary period that begins on June 

17, 2020 and ends on the earlier of a full 

reopening of the Trading Floor facilities to 

DMMs or after the Exchange closes on 

December 31, 2020, the Applicable Price 

Range specified in paragraphs (d)(3)(A) and 

(B) of this Rule is suspended and the 

Applicable Price Range will be 10% for 

securities with an Indication Reference Price 

higher than $3.00 and $0.30 for securities 

with an Indication Reference Price equal to 

or lower than $3.00. 

Commentary .01 to Rule 7.35B 

provides: 

For a temporary period that begins March 

23, 2020, when the Trading Floor facilities 

have been closed pursuant to Rule 7.1(c)(3), 

and ends on the earlier of a full reopening 

of the Trading Floor facilities to DMMs or 

after the Exchange closes on December 31, 

2020: 

(a) The percentage price parameters in 

paragraph (c)(1)(G) of this Rule are 

suspended and a DMM may not effect a 

Closing Auction electronically if the Closing 

Auction Price will be more than 10% away 

from the Exchange Last Sale Price. 

(b) The volume parameters in paragraph 

(c)(1)(H) of this Rule are suspended 

Finally, Commentary .03 to Rule 

7.35B provides: 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 40887 

16The term ‘‘Consolidated Last Sale Price’’ is 

defined in Rule 7.35 to mean the most recent 

consolidated last-sale eligible trade in a security on 

any market during Core Trading Hours on that 

trading day, and if none, the Official Closing Price 

from the prior trading day for that security. 

17The term ‘‘Exchange Last Sale Price’’ is defined 

in Rule 7.35 to mean the most recent trade on the 

Exchange of a round lot or more in a security during 

Core Trading Hours on that trading day, and if 

none, the Official Closing Price from the prior 

trading day for that security. 

18When Floor Broker Interest was eligible to 

participate in the Closing Auction, DMM 

electronically-facilitated Closing Auctions occurred 

at 4:02 p.m. Eastern Time. Because there has been 

no Floor Broker Interest for the Closing Auction 

during the period while the Trading Floor has been 

temporarily closed, the Exchange moved the time 

for DMM electronically-facilitated Closing Auctions 

to closer to 4:00 p.m. With the proposed change, 

described below, to permanently eliminate Floor 

Broker Interest for the Closing Auction, the 

Exchange would continue to conduct DMM 

electronically-facilitated Closing Auctions shortly 

after 4:00 p.m., rather than revert to the 4:02 p.m. 

time for such auctions. 

For a temporary period that begins on June 

17, 2020 and ends on the earlier of a full 

reopening of the Trading Floor facilities to 

DMMs or after the Exchange closes on 

December 31, 2020, Floor Broker Interest will 

not be eligible to participate in the Closing 

Auction. 

Proposed Rule Changes 

Proposed Changes to Parameters for 

DMM-Facilitated Electronic Auctions 

The Exchange proposes to make 

permanent the parameters for DMMfacilitated electronic auctions that are 

currently in effect on a temporary basis 

as set forth in Commentaries .01(a) and 

(b) to Rule 7.35A and Commentary .01 

to Rule 7.35B, with one proposed 

change for Trading Halt Auctions. 

Current Rules 7.35A(c)(1)(G) and (H) 

provide that a DMM may not effect a 

Core Open or Trading Halt Auction 

electronically if (i) the Auction Price 

will be more than 4% away from the 

Consolidated Last Sale Price,16 or (ii) 

the paired volume for the Auction will 

be more than 1,500 round lots for 

securities with an average opening 

volume of 1,000 round lots or fewer in 

the previous calendar quarter, or 5,000 

round lots for securities with an average 

opening volume of over 1,000 round lots 

in the previous calendar quarter. Rule 

7.35A(c)(2) further provides that if as of 

9:00 a.m., the E-mini S&P 500 Futures 

are +/¥2% from the prior day’s closing 

price of the E-mini S&P 500 Futures, or 

if the Exchange determines that it is 

necessary or appropriate for the 

maintenance of a fair and orderly 

market, a DMM may effect an opening 

or reopening electronically if the 

Auction Price will be up to 8% away 

from Consolidated Last Sale Price, 

without any volume limitations. 

Current Rule 7.35B(c)(1)(G) and (H) 

provide that a DMM may not effect a 

Closing Auction electronically if (i) the 

Auction Price will be more than a 

designated percentage away from the 

Exchange Last Sale Price,17 or (ii) the 

paired volume for the Closing Auction 

will be more than 1,000 round lots for 

such security. The designated 

percentages are currently as follows: 

Exchange last sale price Designated 

percentage 

$25.00 and below ..................... 5 

$25.01 to $50.00 ...................... 4 

Above $50.00 ........................... 2 

The Exchange proposes to make the 

price percentage parameter 10% and 

eliminate the volume restrictions for 

DMM-facilitated Core Open Auctions 

and Closing Auctions. These parameters 

are currently in effect on a temporary 

basis pursuant to Commentaries .01(a) 

and (b) to Rule 7.35A and Commentary 

.01 to Rule 7.35B not only for Core Open 

Auctions and Closing Auctions, but also 

for Trading Halt Auctions. The 

Exchange believes that making these 

temporary Commentaries permanent 

would promote fair and orderly DMMfacilitated Core Open Auctions and 

Closing Auctions. For DMM-facilitated 

Trading Halt Auctions, the Exchange 

proposes to make the price parameter 

5% (instead of 10%) and eliminate the 

volume restrictions. 

In particular, DMMs have been 

operating with the temporary 

parameters for Core Open, Trading Halt 

Auctions, and Closing Auctions since 

March 23, 2020. Accordingly, these 

temporary parameters have been in 

effect not only during the period when 

the Trading Floor was closed in full, but 

also for the period when the Trading 

Floor has partially reopened to reduced 

staff of DMM and Floor brokers firms. In 

addition, these temporary parameters 

have been in effect during periods of 

both extreme volatility and high trading 

volumes. Accordingly, DMMs have had 

over six months’ of experience of 

electronically facilitating Auctions 

within these temporary parameters and 

apply them during varying market 

conditions. 

The Exchange has observed that 

during the period when these temporary 

parameters have been in effect, DMMs 

have facilitated more Core Open 

Auctions electronically, resulting in a 

higher percentage of Core Open 

Auctions occurring within two seconds 

of 9:30 a.m. Eastern Time. For example, 

in February 2020, which was before the 

Trading Floor closed, DMMs effected 

electronically 85.9% of all Core Open 

Auctions and 75.9% of Core Open 

Auctions in S&P 500 securities. By 

contrast, for the period July 2020 

through October 2020, after when 

DMMs had returned to the Trading 

Floor, DMMs effected electronically 

96% of all Core Open Auctions and 

89.6% of Core Open Auctions in S&P 

500 securities. The increased number of 

DMM electronically-facilitated Core 

Open Auctions has resulted in more 

Core Open Auctions occurring close to 

the beginning of Core Trading Hours. 

For example, in February 2020, 85.9% 

of all Core Open Auctions, and 75.9% 

of Core Open Auctions in S&P 500 

securities, occurred within two seconds 

of 9:30 a.m. Eastern Time. By contrast, 

for the period July 2020 through October 

2020, 95.9% of all Core Open Auctions, 

and 89.6% of Core Open Auctions in 

S&P 500 securities, occurred within two 

seconds of 9:30 a.m. Eastern Time. 

The Exchange has observed similar 

trends for Closing Auctions, with DMMs 

facilitating more Closing Auctions 

electronically, which means more 

Closing Auctions occurring closer to 

4:00 p.m. Eastern Time. In February 

2020, DMMs effected electronically 57% 

of all Closing Auctions and 5.5% of 

Closing Auctions in S&P 500 securities. 

By contrast, for the period July 2020 

through October 2020, DMMs effected 

electronically 90.9% of all Closing 

Auctions, and 53.6% of Closing 

Auctions in S&P 500 securities. 

Currently, DMM electronicallyfacilitated Closing Auctions occur 

shortly after 4:00 p.m. Eastern Time.18

Accordingly, the increased number of 

DMM electronically-facilitated Closing 

Auctions translates to an increase in the 

number of Closing Auctions that occur 

close to 4:00 p.m. Eastern Time. Because 

the temporary wider percentage 

parameters and eliminated volume 

parameters have resulted in more Core 

Open Auctions and Closing Auctions 

occurring at 9:30 a.m. Eastern Time or 

4:00 p.m. Eastern Time, respectively, 

the Exchange believes that making these 

temporary parameters permanent would 

support the continued fair and orderly 

operation of Auctions on the Exchange. 

The Exchange also notes that during 

the period when the temporary 

parameters have been in place, the 

Exchange has not observed greater 

auction price dislocation compared to 

the period immediately preceding 

implementation of these temporary 

parameters, and has even observed 

modest improvement. The Exchange 

defines auction price dislocation as the 

difference between the Core Open 

Auction price and the consolidated 


jbell on DSKJLSW7X2PROD with NOTICES
40888 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 

19Market volatility was, on average, lower in 

February 2020 as compared to July 2020–October 

2020. Calculating the price dislocation metric in 

terms of a security’s average spread incorporates the 

wider spreads in the latter period and allows for a 

better comparison between the two periods. 

20Closing Auction price dislocation is generally 

lower than Core Open Auction price dislocation, 

due to the relatively lower levels of volatility 

around the Closing Auction compared to the Core 

Open Auction. 

21The Exchange notes that even though the 

requirement for pre-opening indications has been 

suspended, since June 17, 2020, when DMMs 

returned staff to the Trading Floor, DMMs have 

published pre-opening indications for IPO Auctions 

and the two Direct Listing Auctions on September 

30, 2020. 

volume-weighted average price 

(‘‘VWAP’’) over the subsequent fiveminute period, or the difference 

between the Closing Auction price and 

the consolidated VWAP over the two 

minutes preceding the Closing Auction; 

the lower the difference, the lower the 

auction price dislocation. In February 

2020, the Exchange’s average Core Open 

Auction dislocation was 3.27x a 

security’s average spread; for the period 

July 2020 through October 2020 the 

average was 3.22x a security’s average 

spread.19 Similarly, the median Core 

Open Auction dislocation fell from 

1.84x a security’s average spread to 

1.78x a security’s average spread. 

The Exchange also observed similar 

trends in the Closing Auction price 

dislocation statistics. In February 2020, 

the Exchange’s average Closing Auction 

Price Dislocation was 0.82x a security’s 

average spread; for the period July 2020 

through October 2020, the average was 

0.69x a security’s average spread.20

Median Closing Auction dislocation 

also dropped from 0.5x to 0.43x a 

security’s average spread in the 

respective periods. Because the 

temporary wider percentage parameters 

have not resulted in greater auction 

price dislocation, the Exchange believes 

that making these parameters permanent 

would continue to support fair and 

orderly Auctions on the Exchange. 

To effect these changes, the Exchange 

proposes to: 

• Amend Rule 7.35A(c)(1)(G) to 

replace the current 4% price parameter 

for Core Open Auctions with a 10% 

price parameter and amend Rule 

7.35A(c)(1)(H) to replace the current 4% 

price parameter for Trading Halt 

Auctions with a 5% price parameter. 

Because the proposed price parameter 

would be 10% for Core Open Auctions, 

the Exchange believes that the need for 

the double-wide parameters set forth in 

Rule 7.35A(c)(2) for Core Open Auctions 

would no longer be necessary and the 

Exchange proposes to delete that text. 

• Delete the volume parameters 

specified in Rule 7.35A(c)(1)(H). 

• Amend Rule 7.35A(j)(1)(A) to delete 

reference to volume parameters. 

• Amend Rule 7.35B(c)(1)(G) to 

replace the reference to ‘‘designated 

percentage’’ parameter for the Closing 

Auction with a 10% price parameter. 

The Exchange further proposes to delete 

the chart specifying the designated 

percentages for the Closing Auction. 

• Delete Rule 7.35B(c)(1)(H). 

• Delete Commentaries .01(a) and (b) 

to Rule 7.35A. 

• Delete the entirety of Commentary 

.01 to Rule 7.35B. 

The Exchange proposes to maintain 

Commentary .01(c) to Rule 7.35A, 

which provides that for a temporary 

period that begins March 23, 2020, 

when the Trading Floor facilities have 

been closed pursuant to Rule 7.1(c)(3), 

and ends on the earlier of a full 

reopening of the Trading Floor facilities 

to DMMs or after the Exchange closes on 

December 31, 2020, the requirement to 

publish a pre-opening indication 

pursuant to Rule 7.35A(d) before either 

a Core Open Auction or Trading Halt 

Auction is suspended. The Exchange 

proposes non-substantive amendments 

to delete subparagraph (c) numbering 

and move the text of that subparagraph 

into the body of Commentary .01.21

Proposed Changes to Applicable Price 

Range for Pre-Opening Indications 

The Exchange proposes to make 

permanent that the Applicable Price 

Range for determining whether to 

publish a pre-opening indication for a 

Core Open Auction would be 10% for 

securities with an Indication Reference 

Price higher than $3.00 and $0.30 for 

securities with an Indication Reference 

Price equal to or lower than $3.00, 

which is currently in effect on a 

temporary basis, as set forth in 

Commentary .06 to Rule 7.35A. The 

Exchange further proposes that the 

Applicable Price Range for determining 

whether to publish a pre-opening 

indication for a Trading Halt Auction 

would be 5% for securities with an 

Indication Reference Price over $3.00 

and $0.15 for securities with an 

Indication Reference Price equal to or 

lower than $3.00. 

Rule 7.35A(d)(1)(A) currently 

provides that a DMM will publish a preopening indication before a security 

opens or reopens if the Core Open or 

Trading Halt Auction is anticipated to 

be a change of more than the 

‘‘Applicable Price Range,’’ as specified 

in Rule 7.35A(d)(3), from a specified 

‘‘Indication Reference Price,’’ as 

specified in Rule 7.35A(d)(2). 

Rule 7.35A(d)(3)(A) provides that the 

Applicable Price Range will be 5% for 

securities with an Indication Reference 

Price over $3.00 and $0.15 for securities 

with an Indication Reference Price equal 

to or lower than $3.00. Rule 

7.35A(d)(3)(B) further provides that, 

If as of 9:00 a.m., the E-mini S&P 500 

Futures are +/¥2% from the prior day’s 

closing price of the E-mini S&P 500 Futures, 

when reopening trading following a marketwide trading halt under Rule 7.12, or if the 

Exchange determines that it is necessary or 

appropriate for the maintenance of a fair and 

order market, the Applicable Price Range for 

determining whether to publish a preopening indication will be 10% for securities 

with an Indication Reference Price over $3.00 

and $0.30 for securities with an Indication 

Reference Price equal to or lower than $3.00. 

Current Rule 7.35A(1)(A) further 

provides that a DMM may not effect a 

Core Open or Trading Halt Auction 

electronically if a pre-opening 

indication has been published for the 

Core Open Auction. Accordingly, 

Exchange Rules already provide for a 

correlation between pre-opening 

indications and whether a DMM may 

effect a Core Open or Trading Halt 

Auction electronically. Currently, that is 

achieved through similar, though not 

identical, percentage parameters: The 

price parameter for DMM-facilitated 

electronic Core Open and Trading Halt 

Auctions is 4% and the Applicable 

Price Range for pre-opening indications 

is 5%. When there is market-wide 

volatility, both are doubled. 

The Exchange believes that because of 

this existing correlation, in connection 

with permanently widening the price 

parameters for DMM-facilitated 

electronic Core Open Auctions to 10%, 

the Applicable Price Range for 

determining whether to publish a preopening indication should similarly not 

only be widened, but also be aligned to 

10%. Similarly, because the price 

parameters for DMM-facilitated 

electronic Trading Halt Auctions would 

be 5%, the Applicable Price Range for 

determining whether to publish a preopening indication should be aligned to 

be 5%. With these proposed changes, if 

there is a significant enough price 

movement to require a DMM to effect a 

Core Open or Trading Halt Auction 

manually, the DMM would be required 

to publish a pre-opening indication for 

such Core Open or Trading Halt 

Auction. The Exchange notes that if a 

DMM chooses to facilitate a Core Open 

Auction or Trading Halt Auction 

manually (i.e., if there is less than a 10% 

price movement for a Core Open 

Auction or 5% price movement for a 

Trading Halt Auction), a DMM could 

still choose to publish a pre-opening 

indication in connection with such 

Auction, even if the Applicable Price 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 40889 

22Pursuant to Commentaries .01 and .02 to Rule 

7.35, for the temporary period that ends on the 

earlier of a full reopening of the Trading Floor 

facilities to DMMs or after the Exchange closes on 

December 31, 2020, the Exchange includes IPOs 

and Direct Listings in the Auction Imbalance 

Information. The Exchange has filed a separate 

proposed rule change to include IPOs and Direct 

Listings in the Auction Imbalance Information on 

a permanent basis. See Securities Exchange Act 

Release No. 90387 (November 10, 2020) (SR–NYSE– 

2020–93) (Notice of Filing). 

23Rule 7.35(a)(4) provides that DMM Auction 

Liquidity is never included in Auction Imbalance 

Information. By its terms, DMM Auction Liquidity, 

as defined in Rule 7.35(d)(8)(A), is entered by the 

DMM either manually or electronically as part of 

the DMM unit’s electronic message to conduct an 

Auction. For an Auction effected electronically by 

the DMM, DMM Auction Liquidity is entered 

simultaneously with the DMM facilitating the 

Auction, which is why it is not included in the 

Auction Imbalance Information leading up to such 

Auction. For an Auction effected manually by the 

DMM, the DMM can factor such interest into the 

pre-opening indication price range. DMM Orders, as 

defined in Rule 7.35(d)(8)(B), that may be entered 

by the DMM in advance of such Auctions would 

be included in the Auction Imbalance Information. 

24For Exchange-listed securities, Auction-Only 

Orders are defined in Rule 7.31 to mean a Limit or 

Market Order that is to be traded only in an auction 

pursuant to the Rule 7.35 Series. The Exchange 

accepts the following Auction-Only Orders for the 

Closing Auction: Limit-on-Close Order (‘‘LOC 

Order’’), Market-on-Close Order (‘‘MOC Order’’), 

Closing D Order, and Closing Imbalance Offset 

Orders. All four types of Auction-Only Orders are 

available to Floor brokers. 

Range has not been triggered. For 

example, DMMs generally publish preopening indications for IPO Auctions 

and Direct Listing Auctions regardless 

of whether the Applicable Price Range 

has been triggered. 

The Exchange does not believe that 

permanently widening the Applicable 

Price Range for when a DMM is required 

to publish a pre-opening indication 

would reduce transparency in 

connection with Core Open Auctions. 

The Exchange currently disseminates 

Auction Imbalance Information for all 

Core Open Auctions.22 Since August 

2019, when the Exchange transitioned 

Exchange-listed securities to the Pillar 

trading platform, all Floor broker orders 

for the Core Open Auctions must be 

entered electronically. Accordingly, all 

such interest is reflected in the Auction 

Imbalance Information, which was not 

the case before the Exchange 

transitioned to Pillar. Accordingly, the 

Auction Imbalance Information includes 

information about all buy and sell 

orders entered in advance of such 

Auctions.23

To effect this change, the Exchange 

proposes to combine and amend current 

Rule 7.35A(d)(3)(A) and (B) to make it 

a single subparagraph (A) that would 

provide that the Applicable Price Range 

for determining whether to publish a 

pre-opening indication for a Core Open 

Auction would be 10% for securities 

with an Indication Reference Price over 

$3.00 and $0.30 for securities with an 

Indication Reference Price equal to or 

lower than $3.00. The Exchange 

proposes to delete the introductory text 

to Rule 7.35A(d)(3)(B) regarding 

circumstances when the Exchange could 

widen the Applicable Price Range under 

the current Rule. The Exchange further 

proposes new text for Rule 

7.35A(d)(3)(B) that would provide that 

the Applicable Price Range for 

determining whether to publish a preopening indication for a Trading Halt 

Auction would be 5% for securities 

with an Indication Reference Price over 

$3.00 and $0.15 for securities with an 

Indication Reference Price equal to or 

lower than $3.00. The Exchange further 

proposes to delete Commentary .06 to 

Rule 7.35A. 

Proposed Changes to Floor Broker 

Interest for the Closing Auction 

The Exchange proposes to make 

permanent that Floor Broker Interest 

would not be eligible to participate in 

the Closing Auction, as set forth in 

Commentary .03 to Rule 7.35B. The 

term ‘‘Floor Broker Interest’’ is defined 

in Rule 7.35(a)(9) to mean orders 

represented orally by a Floor broker at 

the point of sale. 

Rule 7.35B(a)(1) currently provides 

that Floor Broker Interest is eligible to 

participate in the Closing Auction 

provided that the Floor broker has 

electronically entered such interest 

before the Auction Processing Period for 

the Closing Auction begins. The Rule 

further provides that for such interest to 

be eligible to participate in the Closing 

Auction, a Floor broker must first, by 

the end of, but not after, Core Trading 

Hours, orally represent Floor Broker 

Interest at the point of sale, including 

symbol, side, size, and limit price, and 

then second, electronically enter such 

interest after the end of Core Trading 

Hours. Current Rules 7.35B(a)(1)(B) and 

(C) set forth additional requirements 

relating to electronic acceptance of such 

interest by the DMM and circumstances 

when such interest can be cancelled. 

On June 17, 2020, when the Exchange 

reopened the Trading Floor to limited 

numbers of DMMs, the Exchange added 

Commentary .03 to Rule 7.35B. 

Accordingly, from June 17, 2020 to the 

present, even though reduced numbers 

of DMMs and Floor brokers are present 

on the Trading Floor, Floor Broker 

Interest has not been eligible to 

participate in the Closing Auction. 

During this period, the Exchange has 

observed that even in the absence of 

Floor Broker Interest, Floor broker 

participation in Closing Auctions has 

returned to similar levels of Floor broker 

participation in the Closing Auction for 

the period before March 23, 2020. For 

example, in February 2020, 34.5% of 

Auction-Only Orders for the Closing 

Auction were entered as Closing D 

Orders, which are available only to 

Floor brokers.24 In October 2020, 38.8% 

of the Auction-Only Orders for the 

Closing Auction were Closing D Orders, 

which demonstrates that Floor broker 

participation in the Closing Auction has 

not only returned since the Trading 

Floor reopened, but has actually 

increased as compared to February 

2020. Moreover, in February 2020, only 

0.1% of total Floor broker orders for the 

Closing Auction was represented as 

Floor Broker Interest, and that Floor 

Broker Interest represented less than 

0.01% of the total interest that 

participated in the Closing Auction. 

Based on both the relatively small levels 

of Floor Broker Interest that was 

participating in the Closing Auction 

before the Trading Floor closed and the 

ongoing availability of Closing D Orders 

for Floor brokers, the Exchange does not 

believe that eliminating Floor Broker 

Interest for the Closing Auction would 

materially impact the ability of Floor 

brokers to represent customer orders for 

the Closing Auction. 

Based on this experience, the 

Exchange proposes to make permanent 

Commentary .03 to Rule 7.35B. To effect 

this change, the Exchange proposes to 

amend Rule 7.35B(a)(1) to provide that 

Floor Broker Interest would not be 

eligible to participate in the Closing 

Auction. To provide clarity that a Floor 

broker would not be permitted to 

represent verbal interest intended for 

the Closing Auction, the Exchange 

further proposes to provide that Floor 

brokers must enter any orders for the 

Closing Auction, as defined in Rule 

7.31, electronically during Core Trading 

Hours. The Exchange believes that the 

cross-reference to Rule 7.31 in the Rule 

would provide notice to Floor brokers 

and their customers of which order 

types are available for electronic entry 

by Floor brokers for the Closing 

Auction, which include both AuctionOnly Orders described in Rule 7.31(c) 

and other orders that may be resting on 

the Exchange Book that are eligible to 

participate in the Closing Auction. The 

Exchange also proposes to delete 

Commentary .03 to Rule 7.35B. 

The Exchange proposes to make 

related changes by deleting the clause 

‘‘and Floor Broker Interest intended for 

the Closing Auction as defined in Rule 

7.35B(a)(1)’’ from Rule 7.32. Similarly, 

the Exchange proposes to delete the text 


jbell on DSKJLSW7X2PROD with NOTICES
40890 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 

25The Exchange has a pending proposed rule 

change to amend Rule 7.35C(a). See (SR–NYSE– 

2020–89). 

26See Securities Exchange Act Release No. 88765 

(April 29, 2020), 85 FR 26771 (May 5, 2020) (SR– 

NYSE–2020–03) (‘‘RTO Approval Order’’). 

27 Id. at 26772. 

28RTOs were approved when the Trading Floor 

was temporarily closed. Id. Because Commentary 

.03 to Rule 7.35B was implemented when DMMs 

returned to the Trading Floor, there has not been 

any Floor Broker Interest for Closing Auctions since 

RTOs were created and therefore RTOs have not 

had to perform the functions as described in Rule 

46(b). 

29 15 U.S.C. 78f(b). 

30 15 U.S.C. 78f(b)(5). 

31See, e.g., NYSE Arca, Inc. Rule 7.35–E(e)(7) 

(specifying initial Auction Collars for Trading Halt 

Auctions). 

set forth in Rule 7.35C(a)(2) relating to 

Floor Broker Interest that provides that 

‘‘Floor Broker Interest that has been 

electronically accepted by the DMM and 

that has not been cancelled as provided 

for in Rule 7.35B(a)(1)(C) will be eligible 

to participate in an Exchange-facilitated 

Closing Auction.’’ The Exchange 

proposes to designate that subparagraph as ‘‘Reserved.’’ 25

In addition, the Exchange proposes to 

delete Rule 46B and amend Rule 47(b). 

Under Rule 47, Floor Officials have the 

authority 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.’’ The Exchange recently 

amended its rules to add Regulatory 

Trading Officials (‘‘RTO’’), which are 

defined in Rule 46B.26 As described in 

the RTO Approval Order, unusual 

situations that may arise in connection 

with Floor Broker Interest for the 

Closing Auction could be ‘‘if the Floor 

broker hand-held device malfunctions 

or ceases to work or if a Floor broker is 

physically impeded, as a result of a 

crowd condition beyond that of normal 

traffic flow on the Exchange’s trading 

Floor or some other circumstance 

beyond the Floor broker’s control, in his 

or her ability to be present at a post 

before the DMM closes the security.’’ 27

The Exchange amended Rule 47 to add 

subparagraph (b), which provides that 

RTOs, instead of Floor Officials, would 

be responsible for supervising and 

regulating situations regarding whether 

a verbal bid or verbal offer is eligible for 

inclusion in the Closing Auction by the 

DMM. 

Because the Exchange proposes to 

eliminate verbal bids or verbal offers for 

the Closing Auction, the Exchange 

proposes to delete the last clause of Rule 

47(a) and subparagraph (b) to Rule 47.28

As proposed, Rule 47 would revert to 

the rule text in effect prior to the RTO 

Approval Order and would provide that 

‘‘Floor Officials shall have 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.’’ 

With this proposed change, RTOs would 

no longer have a role under Exchange 

rules. Therefore, the Exchange proposes 

to delete Rule 46B. 

The Exchange also proposes to delete 

Commentary .02 to Rule 7.35B. This 

Commentary is obsolete because it has 

not been in effect since May 22, 2020. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act,29 in general, and furthers the 

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

Act,30 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 

mechanisms 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. 

Proposed Changes to Parameters for 

DMM-Facilitated Electronic Auctions 

The Exchange believes that the 

proposed change to make permanent the 

parameters for DMM-facilitated 

electronic Core Open Auctions and 

Closing Auctions that are currently in 

effect on a temporary basis as set forth 

in Commentaries .01(a) and (b) to Rule 

7.35A and Commentary .01 to Rule 

7.35B would remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system because the Exchange believes 

that these updated parameters would 

promote fair and orderly Auctions on 

the Exchange. These temporary 

parameters have been in effect not only 

during the period when the Trading 

Floor was closed in full, but also for the 

period when the Trading Floor has 

partially reopened to reduced staff of 

DMM and Floor brokers firms. In 

addition, these temporary parameters 

have been in effect during periods of 

both extreme volatility and high trading 

volumes. Accordingly, DMMs have had 

over six months’ of experience of 

electronically facilitating Auctions 

within these temporary parameters and 

applying them during varying market 

conditions. 

During this period, the Exchange has 

observed that with these temporary 

parameters, a higher number of Core 

Open Auctions and Closing Auctions 

have been electronically facilitated by 

the DMM, which has resulted in a 

greater number of Core Open Auctions 

and Closing Auctions occurring shortly 

after 9:30 a.m. or 4:00 p.m., respectively. 

The Exchange has further observed that 

there have been modest improvements 

in auction price dislocation during the 

period when these temporary 

parameters have been in place. 

Accordingly, the Exchange believes that 

making these parameters permanent 

would promote the continued fair and 

orderly operation of Auctions for 

Exchange-listed securities. 

In addition, the Exchange further 

believes that the proposed 5% 

percentage parameter for DMMfacilitated electronic Trading Halt 

Auctions would remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system because this percentage 

parameter would be aligned with the 

initial collars applicable to electronic 

reopening auctions following a MWCB 

Halt or trading pause on the automated 

primary listing exchanges that do not 

have trading floors.31 On the Exchange, 

DMMs are required to facilitate 

manually a Trading Halt Auction 

following a regulatory halt issued under 

Section 2 of the Listed Company 

Manual. Accordingly, the proposed 5% 

percentage parameter would be 

applicable only to DMM-facilitated 

electronic Trading Halt Auctions 

following a trading pause or MWCB 

Halt. This proposed 5% percentage 

parameter would not require such 

Trading Halt Auctions to be priced 

within that range. Rather, if the Trading 

Halt Auction were to occur outside of 

that percentage parameter, the DMM 

would be required to facilitate such 

Trading Halt Auction manually. 

Regardless of whether a Trading Halt is 

facilitated by a DMM manually or 

electronically, the DMM would be 

required to determine the Auction Price 

as provided for in Rule 7.35A(g) and 

orders would be allocated as provided 

for in Rule 7.35A(h). 

Proposed Changes to Applicable Price 

Range for Pre-Opening Indications 

The Exchange believes that the 

proposed change to make permanent 

that the Applicable Price Range for 

determining whether to publish a preopening indication for a Core Open 

Auction would be 10% for securities 

with an Indication Reference Price 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 40891 

32 15 U.S.C. 78f(b)(8). 

33As originally proposed by the Exchange, 

Trading Halt Auctions facilitated electronically by 

DMMs would differ from other primary listing 

markets’ reopening processes after LULD pauses 

and MWCB halts in that they would permit a fully 

automated reopening of trading at prices up to 10% 

away from the auction reference price immediately 

after trading pauses or halts, whereas Nasdaq, NYSE 

Arca, and Cboe BZX establish 5% price bands for 

reopening and then widen those price bands in 

increments of 5%, with additional auction 

extension messages associated with each widening, 

until market interest can be satisfied. 

higher than $3.00 and $0.30 for 

securities with an Indication Reference 

Price equal to or lower than $3.00, 

which are currently in effect on a 

temporary basis, and to provide for an 

Applicable Price Range for Trading Halt 

Auctions of 5% for securities with an 

Indication Reference Price higher than 

$3.00 and $0.15 for securities with an 

Indication Reference Price equal to or 

lower than $3.00 would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the Exchange believes that these 

updated Applicable Price Ranges would 

promote fair and orderly Auctions on 

the Exchange. 

Exchange rules already provide for a 

correlation between the parameters for 

when a DMM may facilitate an Auction 

electronically and the Applicable Price 

Range for determining whether to 

disseminate a pre-opening indication. 

The Exchange believes that the 

proposed Applicable Price Ranges 

should be aligned with the Exchange’s 

proposed parameters for when a DMM 

may facilitate an Auction electronically. 

Specifically, with this proposed change, 

if there is a significant enough price 

movement to require a DMM to effect a 

Core Open or Trading Halt Auction 

manually, the DMM would be required 

to publish a pre-opening indication for 

such Core Open or Trading Halt 

Auction. The Exchange notes that if a 

DMM chooses to facilitate a Core Open 

Auction or Trading Halt Auction 

manually (i.e., if there is less than a 10% 

price movement for a Core Open 

Auction or 5% for a Trading Halt 

Auction), a DMM could still choose to 

publish a pre-opening indication in 

connection with such Auction, even if 

the Applicable Price Range has not been 

triggered. 

The Exchange does not believe that 

permanently widening the Applicable 

Price Range for when a DMM is required 

to publish a pre-opening indication 

would reduce transparency in 

connection with Core Open Auctions. 

The Exchange currently disseminates 

Auction Imbalance Information for Core 

Open Auctions and Trading Halt 

Auctions. Since August 2019, when the 

Exchange transitioned Exchange-listed 

securities to the Pillar trading platform, 

all Floor broker orders for the Core 

Open and Trading Halt Auctions must 

be entered electronically. Accordingly, 

all such interest is reflected in the 

Auction Imbalance Information, which 

was not the case before the Exchange 

transitioned to Pillar. Accordingly, the 

Auction Imbalance Information includes 

information about all buy and sell 

orders entered in advance of such 

Auctions. 

Proposed Changes to Floor Broker 

Interest for the Closing Auction 

The Exchange believes that the 

proposed change to make permanent 

that Floor Broker Interest would not be 

eligible to participate in the Closing 

Auction, which is currently in effect on 

a temporary basis as set forth in 

Commentary .03 to Rule 7.35B, would 

remove impediments to and perfect the 

mechanism of a free and open market 

because it would promote fair and 

orderly Closing Auctions on the 

Exchange. 

The Exchange has observed that even 

in the absence of Floor Broker Interest, 

Floor broker participation in the Closing 

Auction has returned, and indeed 

increased, as compared to the level of 

Floor broker participation in the Closing 

Auction for February 2020. Moreover, 

even when Floor Broker Interest was 

available to participate in Closing 

Auctions, such interest represented only 

0.1% of total Floor broker orders that 

participated in Closing Auctions. 

Accordingly, the Exchange does not 

believe that the proposed change would 

materially alter Floor brokers’ ability to 

meaningfully participate in the Closing 

Auction. Moreover, in the absence of 

Floor Broker Interest, the Exchange was 

able to move the time for DMMfacilitated electronic Closing Auctions 

from 4:02 p.m. to shortly after 4:00. By 

making this change permanent, DMMfacilitated electronic Closing Auctions 

would continue to occur shortly after 

4:00. 

The Exchange further believes that the 

proposed amendments to Rules 7.32, 

7.35, 46B, and 47(b) would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

such rules would no longer be necessary 

in the absence of Floor Broker Interest 

for the Closing Auction. Accordingly, 

these proposed rule changes would 

promote transparency and clarity by 

removing references that would be 

obsolete. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

the Act,32 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. The 

proposed change is not designed to 

address any competitive issues. Instead, 

the proposed rule changes are designed 

to make permanent changes that have 

been implemented on a temporary basis 

relating to the functions of Auctions on 

the Exchange and that have contributed 

to the fair and orderly Auction process 

during the period that they have been in 

effect. The proposed rule change does 

not have any effect on intermarket 

competition because these proposed 

changes relate to Auctions in Exchangelisted securities for which the Exchange 

is the primary listing exchange. 

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. Order Instituting Proceedings 

In the Order Instituting Proceedings, 

the Commission requested comment on, 

among other things: (1) Whether the 

primary listing exchanges should 

harmonize their respective processes for 

reopening trading by fully automated 

auction after a limit-up/limit-down 

(‘‘LULD’’) pause or a Level 1 or Level 2 

market-wide circuit breaker (‘‘MWCB’’) 

halt; 33 (2) whether the NYSE should 

further harmonize its proposed Trading 

Halt Auction process for fully 

automated auctions facilitated 

electronically by DMMs to align with 

Nasdaq, NYSE Arca, and Cboe BZX 

regarding the establishment of permitted 

price bands, and/or the limit (or lack 

thereof) on price band adjustments; (3) 

whether the Exchange should permit a 

DMM to reopen a security up to 10% 

away from the reference price 

immediately after an LULD pause or 

MWCB halt without human 

intervention; (4) whether there are 

characteristics of the NYSE market 

structure that warrant divergence from 

the price parameters in place for other 

exchanges’ fully automated reopening 

auctions immediately following an 

LULD pause or MWCB halt; and (5) 

whether the price parameters within 

which DMMs are permitted to 

electronically facilitate auctions should 

be the same for Core Open Auctions, 

Trading Halt Auctions, and Closing 


jbell on DSKJLSW7X2PROD with NOTICES
40892 Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 

34See Order Instituting Proceedings, supra note 6, 

86 FR at 12993. 

35 In approving this proposed rule change, the 

Commission has considered the proposed rule 

change’s impact on efficiency, competition, and 

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

36 15 U.S.C. 78f(b)(5). 

37See, e.g., NYSE Arca, Inc. Rule 7.35–E(e)(7) 

(specifying initial Auction Collars for Trading Halt 

Auctions). 

38 In fact, the Exchange represents that Floor 

broker participation in the Closing Auction has 

increased despite the absence of Floor Broker 

Interest, as compared to the level of Floor broker 

participation in the Closing Auction for February 

2020. 

Auctions.34 In response to the questions 

raised in the Order Instituting 

Proceedings, the Exchange submitted 

Amendment No. 2, which changed the 

percentage parameter that would be 

applicable to when a DMM may 

electronically facilitate a Trading Halt 

Auction or would be required to publish 

a pre-opening indication from 10%, as 

originally proposed, to 5%. 

IV. Discussion and Commission 

Findings 

After careful review, the Commission 

is approving the proposed rule change, 

as modified by Amendment No. 2, 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)(5) of 

the Exchange Act,36 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest; and 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

Parameters for DMM-Facilitated 

Electronic Auctions 

The Commission finds that the 

proposed change to establish wider 

permanent parameters for DMMfacilitated electronic Core Open 

Auctions and Closing Auctions is 

reasonably designed to promote fair and 

orderly Auctions on the Exchange. The 

Commission notes that DMMs have had 

over six months of experience of 

electronically facilitating Auctions 

within these parameters under 

temporary rules of the Exchange and 

that the Exchange’s proposal includes 

statistics indicating that, during this sixmonth period, a higher percentage of 

Core Open Auctions and Closing 

Auctions have occurred shortly after 

9:30 a.m. or 4:00 p.m., respectively, and 

that this increase has not been 

accompanied by an increase in auction 

price dislocation, but has instead been 

accompanied by a modest improvement. 

The Commission also finds that the 

proposed 5% percentage parameter for 

DMM-facilitated electronic Trading Halt 

Auctions is reasonably designed to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

this change would align the percentage 

parameters for immediate electronic 

reopening auctions after a MWCB halt 

or trading pause with the initial collars 

applicable to electronic reopening 

auctions on the other primary listing 

exchanges.37

Applicable Price Range for Pre-Opening 

Indications 

The Exchange proposes to make 

permanent that the Applicable Price 

Range for determining whether to 

publish a pre-opening indication for a 

Core Open Auction would be 10% for 

securities with an Indication Reference 

Price higher than $3.00 and $0.30 for 

securities with an Indication Reference 

Price equal to or lower than $3.00. The 

Exchange also proposes to change its 

rules to provide for an Applicable Price 

Range for Trading Halt Auctions of 5% 

for securities with an Indication 

Reference Price higher than $3.00 and 

$0.15 for securities with an Indication 

Reference Price equal to or lower than 

$3.00. The Commission finds that these 

changes are reasonably designed to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

promoting fair and orderly Auctions on 

the Exchange because they would align 

the parameters within which a DMM 

may facilitate an Auction electronically 

and the Applicable Price Range for 

determining whether to disseminate a 

pre-opening indication (which, under 

the Exchange’s rules, prevents a DMM 

from facilitating an auction 

electronically). Additionally, the 

Commission does not believe that 

widening the Applicable Price Range 

that governs when a DMM is required to 

publish a pre-opening indication would 

reduce transparency in the market 

because all buy and sell orders entered 

in advance of Core Open and Trading 

Halt Auctions are already reflected in 

Auction Imbalance Information. 

Proposed Changes to Floor Broker 

Interest for the Closing Auction 

The Commission finds that the 

proposal to make permanent that Floor 

Broker Interest—orders represented 

orally by a Floor broker at the point of 

sale—would not be eligible to 

participate in the Closing Auction is 

reasonably designed to remove 

impediments to and perfect the 

mechanism of a free and open market by 

promoting fair and orderly Closing 

Auctions on the Exchange, because 

precluding participation by Floor Broker 

Interest has enabled the exchange to 

hold DMM-facilitated electronic Closing 

Auctions more quickly after the 4:00 

p.m. scheduled close of trading and 

because Floor brokers will remain able 

to participate in the Closing Auction 

through the use of Closing D Orders.38

For the reasons discussed above, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 2, is consistent with the 

requirements of the Act and in 

particular Section 6(b)(5) 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. 

V. Solicitation of Comments on 

Amendment No. 2 to the Proposed Rule 

Change 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether Amendment No. 2 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– 

NYSE–2020–95 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–NYSE–2020–95. 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 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices 40893 

39See Notice, supra note 3. 

40 15 U.S.C. 78s(b)(2). 

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

42 17 CFR 200.30–3(a)(12). 

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–NYSE–2020–95 and should 

be submitted on or before August 19, 

2021. 

VI. Accelerated Approval of 

Amendment No. 2 

As noted above, in Amendment No. 2, 

as compared to the original proposal,39

the Exchange proposes to: (i) Amend 

Rule 7.35A(c)(1)(H) to provide a 5% 

price parameter and eliminate the 

volume restrictions for DMM-facilitated 

Trading Halt Auctions; and (ii) amend 

Rule 7.35A(d)(3)(B) to provide that the 

Applicable Price Range for determining 

whether to publish a pre-opening 

indication for a Trading Halt Auction 

would be 5% for securities with an 

Indication Reference Price over $3.00 

and $0.15 for securities with an 

Indication Reference Price equal to or 

lower than $3.00. The Commission 

believes that the proposed 5% price 

parameter for DMM-facilitated Trading 

Halt Auctions is consistent with the Act 

because this percentage parameter 

would be aligned with the initial collars 

applicable to electronic reopening 

auctions following a MWCB Halt or 

trading pause on the automated primary 

listing exchanges that do not have 

trading floors. The Commission believes 

it is reasonable to also align the price 

parameter for DMM-facilitated Trading 

Halt Auctions with the parameter for 

publishing a pre-opening indication 

because Rule 7.35A(c)(1)(A) prohibits a 

DMM from effecting a Core Open or 

Trading Halt Auction electronically if a 

pre-opening indication has been 

published for the Core Open Auction. 

Therefore, the Commission finds that 

Amendment No. 2 to the proposal raises 

no novel regulatory issues, that it is 

reasonably designed to protect investors 

and the public interest, and that it is 

consistent with the requirements of the 

Act. Accordingly, the Commission finds 

good cause, pursuant to Section 19(b)(2) 

of the Act,40 to approve the proposed 

rule change, as modified by Amendment 

No. 2, on an accelerated basis. 

VII. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–NYSE–2020– 

95), as modified by Amendment No. 2, 

be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16122 Filed 7–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #17050 and #17051; 

ALABAMA Disaster Number AL–00122] 

Administrative Declaration of a 

Disaster for the State of ALABAMA 

AGENCY: Small Business Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of ALABAMA dated 07/22/ 

2021. 

Incident: Tropical Storm Claudette. 

Incident Period: 06/19/2021. 

DATES: Issued on 07/22/2021. 

Physical Loan Application Deadline 

Date: 09/20/2021. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 04/22/2022. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

Administrator’s disaster declaration, 

applications for disaster loans may be 

filed at the address listed above or other 

locally announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Escambia, 

Tuscaloosa. 

Contiguous Counties: 

Alabama: Baldwin, Bibb, Conecuh, 

Covington, Fayette, Greene, Hale, 

Jefferson, Monroe, Pickens, Walker. 

Florida: Escambia, Okaloosa, Santa 

Rosa. 

The Interest Rates are: 

Percent 

For Physical Damage: 

Homeowners with Credit Available Elsewhere ...................... 3.250 

Homeowners without Credit 

Available Elsewhere .............. 1.625 

Businesses with Credit Available Elsewhere ...................... 5.760 

Businesses without Credit 

Available Elsewhere .............. 2.880 

Non-Profit Organizations with 

Credit Available Elsewhere ... 2.000 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.000 

For Economic Injury: 

Businesses & Small Agricultural 

Cooperatives without Credit 

Available Elsewhere .............. 2.880 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.000 

The number assigned to this disaster 

for physical damage is 17050 8 and for 

economic injury is 17051 0. 

The States which received an EIDL 

Declaration # are Alabama, Florida. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

Isabella Guzman, 

Administrator. 

[FR Doc. 2021–16203 Filed 7–28–21; 8:45 am] 

BILLING CODE 8026–03–P 

SMALL BUSINESS ADMINISTRATION 

Data Collection Available for Public 

Comments 

AGENCY: Small Business Administration. 

ACTION: 60-Day notice; request for 

comments. 

SUMMARY: The Small Business 

Administration (SBA) is publishing this 

notice in compliance with the 

Paperwork Reduction Act (PRA) of 

1995, as amended, to solicit public 

comments on the information collection 

described below. The PRA requires 


jbell on DSKJLSW7X2PROD with NOTICES