Document ID: SEC-2022-0602-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2022-04-26T04:00Z

[Federal Register Volume 87, Number 80 (Tuesday, April 26, 2022)]
[Notices]
[Pages 24594-24595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08801]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94764; File No. SR-NYSEArca-2022-22]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 
6.37AP-O

April 20, 2022.
    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 8, 2022, NYSE Arca, Inc. (``NYSE Arca'' 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Rule 6.37AP-O (Market Maker 
Quotations). The proposed rule change is available on the Exchange's 
website at www.nyse.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to modify Rule 6.37AP-O to clarify the 
Exchange's handling of certain Market Maker quotations on Pillar as set 
forth below.\4\
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    \4\ Rule 6.37AP-O describes Market Maker quoting obligations, 
including defining ``quotation,'' describing the treatment of each 
such quotation, and specifying Market Maker and LMM quoting 
obligations. The Exchange notes that because it has not yet migrated 
to the Pillar platform, Rule 6.37A-O continues to apply to the 
Market Maker quotations, which rule is not being modified by this 
filing. At the time of this filing, the Exchange has not announced 
the planned migration date(s) for Pillar but will do so via Trader 
Update.
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    Rule 6.37AP-O(a)(1) provides that the term ``quote'' or 
``quotation'' means ``a bid or offer sent by a Market Maker that is not 
sent as an order,'' \5\ and that ``[a] quotation sent by a Market Maker 
will replace a previously displayed same-side quotation that was sent 
from the same order/quote entry port of that Market Maker.'' Thus, 
under the current rule, any Market Maker quotations in a given option 
series would be replaced, i.e., ``updated,'' when that Market Maker 
sends a subsequent same-side quote in the same series from the same 
quote entry port.
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    \5\ Rule 6.37AP-O(a)(2) provides that a Market Maker may 
designate either a Non-Routable Limit Order or an ALO Order as a 
quote and such quotes would be processed as described in Rule 6.62P-
O(e).
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    The Exchange proposes to modify Rule 6.37AP-O(a)(1) to make clear 
that ``[i]f multiple same-side quotations are submitted via the same 
quote entry port, the Exchange will display the Market Maker's most 
recent same-side quotation.'' \6\ This proposed additional detail is 
designed to clarify the Exchange's handling of successive Market Maker 
quotations (from the same quote entry port in the same side and series) 
should a Market Maker's quotations queue during a period of excessive 
message traffic. No system, including Pillar, has unlimited capacity. 
As such, the Exchange seeks to clarify that, should the Exchange be in 
receipt of multiple same-side quotations in the same series from the 
same Market Maker, the Exchange would display only the most recent 
quotation to ensure accurate representation of that Market Maker's 
quoting interest.
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    \6\ See proposed Rule 6.37AP-O(a)(1).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\7\ in general, and 
furthers the objectives of Section 6(b)(5),\8\ 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 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change to specify the 
Exchange handling of successive quotations in the same option series 
would promote just and equitable principles of trade and remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system and protect investors. This proposed

[[Page 24595]]

additional detail would clarify the Exchange's handling of multiple 
Market Maker quotations (from the same quote entry port in the same 
side and series) should a Market Maker's quotations queue during a 
period of excessive message traffic. No system, including Pillar, has 
unlimited capacity. The Exchange therefore believes that displaying 
only the most recent Market Maker quote when it is in receipt of 
multiple same-side quotations in the same series from such Market 
Maker, would protect investors and the public interest by ensuring 
accurate representation of that Market Maker's quoting interest. The 
Exchange also believes that the proposed change would add clarity and 
transparency to Exchange rules making them easier to navigate and 
comprehend.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
intended to address competition, but rather to clarify the Exchange's 
handling of certain Market Maker quotations. The proposed change would 
apply to all similarly-situated Market Makers and would inure to the 
benefit of all market participants because the proposed rule change is 
designed to ensure accurate representation of a Market Maker's quoting 
interest, particularly at times of excessive quote message traffic.

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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
Because the foregoing 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 \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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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    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) of the Act \13\ to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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 [email protected]. Please include 
File Number SR-NYSEArca-2022-22 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2022-22. 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-NYSEArca-2022-22 and 
should be submitted on or before May 17, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-08801 Filed 4-25-22; 8:45 am]
BILLING CODE 8011-01-P