Document ID: SEC-2019-0581-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Chicago, Inc.
Posted Date: 2019-05-01T04:00Z

[Federal Register Volume 84, Number 84 (Wednesday, May 1, 2019)]
[Notices]
[Pages 18623-18625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08781]

[[Page 18623]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85716; File No. SR-NYSECHX-2019-07]

Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Regarding 
New Rules on Hours of Business, Holidays and Trading Halts and 
Suspensions, and Amendment of Article 20, Rule 1

April 25, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on April 23, 2019, NYSE Chicago, Inc. (``NYSE Chicago'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes new rules on hours of business, holidays and 
trading halts and suspensions, and amend Article 20, Rule 1. 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 new rules on hours of business, holidays and 
trading suspensions, and amend Article 20, Rule 1.
    In July 2018, the Exchange and its direct parent company were 
acquired by NYSE Group, Inc.\4\ As a result, the Exchange became part 
of a corporate family that now includes five separate registered 
national securities exchanges.\5\
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    \4\ See Exchange Act Release No. 83635 (July 13, 2018), 83 FR 
34182 (July 19, 2018) (SR-CHX-2018-004); see also Exchange Act 
Release No. 83303 (May 22, 2018), 83 FR 24517 (May 29, 2018) (SR-
CHX-2018-004).
    \5\ The Exchange has four registered national securities 
exchange affiliates: New York Stock Exchange LLC (``NYSE''), NYSE 
American LLC (``NYSE American''), NYSE Arca, Inc. (``NYSE Arca''), 
and NYSE National, Inc. (``NYSE National'' and collectively, the 
``Affiliate SROs'').
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    To simplify operations and allow for consistent action across the 
Exchange and its Affiliate SROs, the Exchange believes it is important 
that its rules regarding hours of business, holidays and trading halts 
and suspensions be consistent with those of its Affiliate SROs.\6\ 
Accordingly, the Exchange proposes to harmonize its rules with respect 
to those matters with those of the Affiliate SROs by adopting new Rules 
7.1 (Hours of Business), 7.2 (Holidays) and 7.13 (Trading Suspensions) 
and amend Article 20, Rule 1 (Trading Sessions).
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    \6\ See 83 FR 34182, 34187.
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Proposed Rules 7.1, 7.2 and 7.13
    The Exchange recently adopted a rule numbering framework in 
connection with the migration of the Exchange to the NYSE Pillar 
platform (``Pillar'').\7\ Proposed Rules 7.1, 7.2 and 7.13 would fall 
within that framework.\8\
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    \7\ See Exchange Act Release No. 85297 (March 12, 2019), 84 FR 
9854 (March 18, 2019) (SR-CHX-2018-03).
    \8\ Because there would be a gap in the numbering between 
proposed Rules 7.2 and 7.13, the Exchange proposes to add new Rules 
7.3-7.12, which would be marked ``Reserved.''
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    Proposed Rule 7.1: The proposed rule is substantially the same as 
NYSE Rule 7.1, NYSE American Rule 7.1E, NYSE Arca Rule 7.1-E and NYSE 
National Rule 7.1, with the exception of certain defined terms.\9\
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    \9\ NYSE Arca Rule 7.1-E and NYSE National Rule 7.1 use 
``President'' instead of ``CEO.'' Proposed Rule 7.1(b) would use 
``Participant'' instead of ``member organization'' or ``ETP 
Holder.'' See Article 1, Rule 1(s) (definition of ``Participant'').
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    Proposed Rule 7.1(a) and (b) would specify that the Exchange would 
be open for the transaction of business on every business day, and the 
hours at which trading sessions open and close would be specified by 
Exchange rule or established by its Board of Directors (``Board'').
    Proposed Rule 7.1(c) would provide that, except as may be otherwise 
determined by the Board, the Chief Executive Officer (``CEO'') or his 
or her designee may halt or suspend trading in some or all securities; 
extend the hours for the transaction of business; close some or all 
Exchange facilities; determine the duration of any such halt, 
suspension or closing; or determine to trade securities on the 
Exchange's disaster recovery facility.\10\ Proposed Rule 7.1(d) would 
provide that the CEO or his or her designee shall take such actions 
only when they deem it to be necessary or appropriate for the 
maintenance of a fair and orderly market, or the protection of 
investors or otherwise in the public interest, due to extraordinary 
circumstances.
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    \10\ As part of its business continuity and disaster recovery 
plans, NYSE Chicago maintains disaster recovery facilities in 
geographically diverse locations, as required by Regulation SCI. 
More specifically, currently NYSE Chicago maintains two 
geographically diverse data centers. For each symbol, one of the 
data centers is the primary site and the other the disaster recovery 
site. Which data center serves as the primary site, and which as the 
disaster recovery site, depends on the symbol. See 17 CFR 
242.1001(a)(2)(v) (requiring policies and procedures for business 
continuity and disaster recovery plans that include maintaining 
backup and recovery capabilities sufficiently resilient and 
geographically diverse and that are reasonably designed to achieve 
next business day resumption of trading and two-hour resumption of 
critical SCI systems following a wide-scale disruption).
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    Finally, proposed Rule 7.1(e) would require that the CEO or his or 
her designee notify the Board of actions taken pursuant to the rule, 
except for a period of mourning or recognition for a person or event, 
as soon thereafter as is feasible.
    Proposed Rule 7.2: Proposed Rule 7.2, which would establish the 
list of Exchange holidays, is substantially the same as NYSE Rule 7.2, 
NYSE American Rule 7.2E, and NYSE National Rule 7.2.\11\ It is also 
similar to NYSE Arca Rule 7.2-E, with the exception that the NYSE Arca 
rule does not include language regarding when that Affiliate SRO would 
be open for business if a holiday falls on a Sunday.\12\
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    \11\ The proposed rule would use ``Washington's Birthday'' 
instead of ``President's Day.'' See 5 U.S.C. 6103(a).
    \12\ NYSE Arca Rule 7.2-E also uses ``President's Day.''
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    Proposed Rule 7.13: Proposed Rule 7.13 is the same as NYSE American 
Rule 7.13E and substantially similar to NYSE Arca Rule 7.13-E and NYSE

[[Page 18624]]

National Rule 7.13.\13\ Proposed Rule 7.13 would authorize the Chair of 
the Board or the CEO (or their officer designee) to suspend trading in 
any and all securities if such suspension would be in the public 
interest. The suspension may not continue longer than two days, or as 
soon thereafter as a quorum of directors can be assembled, unless the 
Board approves the continuation.
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    \13\ NYSE Arca Rule 7.13-E and NYSE National Rule 7.13 include 
cross references to other rules and use the term ``President'' 
instead of ``CEO.''
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Proposed Amendments to Article 20, Rule 1
    Consistent with the proposed rules, the Exchange proposes to amend 
Article 20, Rule 1(a), (c) and (d).\14\
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    \14\ The remaining paragraphs would be reordered in accordance 
with the proposed changes.
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    Rule 1(a): Current paragraph (a) provides that, unless otherwise 
determined by the Board, the Exchange shall be open for trading daily, 
except on Saturdays and Sundays, and that the Board shall determine the 
hours during which the Exchange is open for the transaction of 
business. The Exchange proposes to delete current paragraph (a) of Rule 
1, as it would be redundant of proposed Rule 7.1(a). Under proposed 
Rule 7.1(a), the hours could also be specified by Exchange rule.
    Rule 1(c): Current paragraph (c) limits trading on the Exchange to 
the days and hours during which it is open for the transaction of 
business. It further states that no Participant shall make any bid, 
offer or transaction on the Exchange before or after these hours, 
except that loans of money or securities may be made outside of those 
hours. The Exchange proposes to delete current paragraph (c) of Rule 1, 
as it would be redundant of proposed Rule 7.1(b). Proposed Rule 7.1(b) 
would not make an exception for loans of money or securities, however, 
as such loans are not dealings upon the Exchange and therefore not 
covered by the rule.
    Rule 1(d): The first two sentences of Rule 1(d) provide that two 
officers appointed by the CEO may suspend or halt trading in one or 
more securities if they believe it in the public interest, but that the 
Board must approve halts or suspensions that extend past the trading 
day. The Exchange proposes to delete the first two sentences of Rule 
1(d), as they would be covered by proposed Rule 7.13, which addresses 
suspensions in trading, and 7.1(c)-(e), which covers suspensions, 
trading halts, and other events.\15\
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    \15\ The final sentence of current paragraph (d) states that 
``[t]rading may also be halted, paused or suspended on the Exchange, 
and resumed thereafter, pursuant to other Rules.'' Because the 
revised Rule 1 would no longer address halts, pauses or suspensions, 
the Exchange proposes to delete ``also.''
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    Proposed Rule 7.13 would allow the CEO, or their officer designee, 
to act, rather than requiring two officers appointed by the CEO, and 
would extend the authority to the Chair of the Board or his or her 
officer designee, as well. No suspension would continue longer than a 
period of two days, or as soon thereafter as a quorum of Directors can 
be assembled, unless the Board approved it.
    Proposed Rule 7.1(c) and (e) would, unless otherwise determined by 
the Board, provide the CEO or his or her designee the authority to act. 
The requirements would be more comprehensive than in current Rule 1(d): 
The CEO or his or her designee would only take the described actions, 
including suspensions and halts,

    when he or she deems such action to be necessary or appropriate 
for the maintenance of a fair and orderly market, or the protection 
of investors or otherwise in the public interest, due to 
extraordinary circumstances such as (i) actual or threatened 
physical danger, severe climatic conditions, civil unrest, 
terrorism, acts of war, or loss or interruption of facilities 
utilized by the Exchange, (ii) a request by a governmental agency or 
official, or (iii) a period of mourning or recognition for a person 
or event.\16\
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    \16\ Proposed Rule 7.1(d).

    The proposed Rule 7.1(e) would require the CEO or his or her 
designee to notify the Board of suspensions or halts, as well as other 
actions, as soon thereafter as feasible.
    The Exchange notes that the trading rules of Cboe BZX Exchange, 
Inc., Cboe BYX Exchange, Inc., Cboe EDGX Exchange, Inc., and Cboe EDGA 
Exchange, Inc. also provide that the CEO of the relevant exchange may 
halt, suspend trading in any and all securities traded on the exchange, 
close some or all exchange facilities, and determine the duration of 
any such halt, suspension, or closing, when they deem such action 
necessary for the maintenance of fair and orderly markets, the 
protection of investors, or otherwise in the public interest.\17\ Such 
rules also provide that no such action shall continue longer than two 
days, or as soon thereafter as a quorum of directors can be assembled, 
unless the relevant board of directors approves the continuation.\18\
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    \17\ See Cboe BZX Exchange, Inc. Rule 11.1(c) (Hours of Trading 
and Trading Days); Cboe BYX Exchange, Inc. Rule 11.1(c) (Hours of 
Trading and Trading Days); Cboe EDGX Exchange, Inc. Rule 11.1(c) 
(Hours of Trading and Trading Days); and Cboe EDGA Exchange, Inc. 
Rule 11.1(c) (Hours of Trading and Trading Days).
    \18\ Id.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act \19\ in general, and with Section 
6(b)(5) in particular,\20\ because the proposed rule change would be 
consistent with and facilitate a governance and regulatory structure 
that it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system and, in general, protect investors and the 
public interest because it would allow the Exchange and its Affiliate 
SROs to follow consistent rules regarding hours of business, holidays 
and trading halts and suspensions and to take similar actions in case 
of extraordinary circumstances. The changes would thereby reduce 
complexity and promote consistency and predictability. The proposed 
change does not raise any new or novel issues.
    The Exchange believes that proposed Rules 7.1, 7.2 and 7.13 would 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system because they would establish rules 
relating to trading on the Exchange that would support the re-launch of 
trading on the Exchange on the Pillar trading platform. By basing its 
rules on those of its affiliated exchanges, the Exchange will provide 
its Participants that are also members on one or more Affiliate SRO 
with consistency across affiliated exchanges, thereby enabling the 
Exchange to compete with unaffiliated exchange competitors that 
similarly operate multiple exchanges on the same trading platforms. The 
Exchange further believes that the proposed amendments to Article 20, 
Rule 1 would remove impediments to and perfect the mechanism of a free 
and open market and a national market system because proposed Rules 
7.1, 7.2 and 7.13 would provide for the same Exchange

[[Page 18625]]

authority, with differences described above that are designed to 
harmonize the Exchange's operations with those of its Affiliate SROs.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act. The proposed rule 
change is not designed to address any competitive issue but rather to 
establish Exchange rules regarding hours of business, holidays and 
trading halts and suspensions that are consistent with the rules of the 
Affiliate SROs. By basing its rules on those of its affiliated 
exchanges, the Exchange will provide Participants with consistency 
across affiliated exchanges and will allow the Exchange and its 
Affiliate SROs to take similar actions in case of an issue, thus 
promoting consistency.

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 \21\ and Rule 19b-4(f)(6) thereunder.\22\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\23\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6).
    \23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \24\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\25\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because it would allow 
Participants that are also members of one or more Affiliate SROs to 
have the immediate benefit of harmonized rules regarding hours of 
business, holidays and trading halts and suspensions being with the 
rules of the Affiliate SROs. Accordingly, the Commission waives the 30-
day operative delay and designates the proposed rule change operative 
upon filing.\26\
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    \24\ 17 CFR 240.19b-4(f)(6).
    \25\ 17 CFR 240.19b-4(f)(6)(iii).
    \26\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \27\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \27\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSECHX-2019-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSECHX-2019-07. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSECHX-2019-07 and should be submitted 
on or before May 22, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-08781 Filed 4-30-19; 8:45 am]
BILLING CODE 8011-01-P