Document ID: SEC-2019-0594-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American LLC
Posted Date: 2019-05-02T04:00Z

[Federal Register Volume 84, Number 85 (Thursday, May 2, 2019)]
[Notices]
[Pages 18911-18913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08918]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85731; File No. SR-NYSEAMER-2019-16]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 7.11E, Limit Up-Limit Down Plan and Trading Pauses in Individual 
Securities Due to Extraordinary Market Volatility

April 26, 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 18, 2019, NYSE American LLC (``NYSE American'' 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 to amend Rule 7.11E, Limit Up-Limit Down Plan 
and Trading Pauses in Individual Securities Due to Extraordinary Market 
Volatility. 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 Participants filed the Plan to Address Extraordinary Market 
Volatility (the ``Limit Up-Limit Down Plan'' or the ``Plan'') with the 
Commission on April 5, 2011 to create a market-wide limit up-limit down 
mechanism intended to address extraordinary market volatility in NMS 
Stocks,\4\ as defined in Rule 600(b)(47) of Regulation NMS under the 
Exchange Act.\5\ The Plan sets forth procedures that provide for 
market-wide limit up-limit down requirements to prevent trades in 
individual NMS Stocks from occurring outside of the specified Price 
Bands. These limit up-limit down requirements are coupled with Trading 
Pauses, as defined in Section I(Y) of the Plan, to accommodate more 
fundamental price moves. In particular, the Participants adopted this 
Plan to address extraordinary volatility in the securities markets, 
i.e., significant fluctuations in individual securities' prices over a 
short period of time, such as those experienced during the ``Flash 
Crash'' on the afternoon of May 6, 2010.
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    \4\ On May 31, 2012, the Commission approved the Plan, as 
modified by Amendment No. 1. See Securities Exchange Act Release No. 
67091, 77 FR 33498 (June 6, 2012) (File No. 4-631) (``Approval 
Order'').
    \5\ 17 CFR 242.600(b)(47).
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    The Plan was originally approved on a pilot basis to allow the 
public, the Participants, and the Commission to assess the operation of 
the Plan and whether the Plan should be modified prior to consideration 
of approval on a permanent basis.\6\ The Commission recently approved 
an amendment to the Plan to allow the Plan to operate on a permanent 
basis.\7\
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    \6\ See supra note 4.
    \7\ See Securities Exchange Act Release No. 85623 (April 11, 
2019), 84 FR 16086 (April 17, 2019) (File No. 4-631).
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    Rule 7.11E is designed to comply with the Plan's requirement that 
exchanges establish, maintain, and enforce written policies and 
procedures that are reasonably designed to comply with the limit up-
limit down and trading pause requirements specified in the Plan.\8\ In 
sum, Rule 7.11E provides that the Exchange will not display or execute 
trading interest outside the Price Bands as required by the limit up-
limit down and trading pause requirements specified in the Plan. Rule 
7.11E is designed to ensure that trading interest

[[Page 18912]]

on the Exchange is either repriced or canceled in a manner consistent 
with the Plan.
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    \8\ See Securities Exchange Act Release No. 68875 (February 8, 
2013), 78 FR 10678 (February 14, 2013) (SR-NYSEMKT-2013-05).
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    Rule 7.11E currently includes a provision that ties the Rule's 
effectiveness to the pilot period for the Plan, including any 
extensions to the pilot period for the Plan. The Exchange proposes to 
amend Rule 7.11E to delete this provision because the Plan has been 
made permanent and is no longer operating as a pilot program. The 
Exchange does not propose any additional changes to Rule 7.11E. The 
proposed rule change would continue to align the effectiveness of Rule 
7.11E to the Plan and ensure that the Exchange maintains written 
policies and procedures that are reasonably designed to comply with the 
limit up-limit down and trading pause requirements specified in the 
Plan.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b) of the Act,\9\ in general, and Section 
6(b)(5) of the Act,\10\ in particular, in that it is designed to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, to promote just and equitable principles of 
trade, and, in general, to protect investors and the public interest 
and not to permit unfair discrimination between customers, issuers, 
brokers, or dealers. Rule 7.11E complies with the Plan's requirement 
that exchanges establish, maintain, and enforce written policies and 
procedures that are reasonably designed to comply with the limit up-
limit down and trading pause requirements specified in the Plan. The 
Exchange believes that the proposed rule change promotes just and 
equitable principles of trade because it would continue to align the 
effectiveness of Rule 7.11E to the Plan, without any changes. The 
proposed rule change would also ensure that the Exchange continues to 
maintain transparent written policies and procedures reasonably 
designed to comply with the limit up-limit down and trading pause 
requirements specified in the Plan.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposal would remove a 
provision from Rule 7.11E that ties its effectiveness to the pilot 
period for the Plan that was recently approved on a permanent basis. 
The proposal would continue to ensure that the Exchange continues to 
maintain written policies and procedures reasonably designed to comply 
with the Plan without implicating any competitive issues.

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 \11\ and Rule 19b-4(f)(6) thereunder.\12\ 
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.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\14\ 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 the Commission 
approved making the Plan pilot permanent on April 11, 2019, and 
therefore the Exchange's proposed changes to its rules reflecting that 
the Plan is now permanent should go into effect immediately. Therefore, 
the Commission hereby waives the 30-day operative delay and designates 
the proposed rule change to be operative upon filing with the 
Commission.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 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-NYSEAMER-2019-16 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAMER-2019-16. 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

[[Page 18913]]

printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEAMER-2019-16 and should 
be submitted on or before May 23, 2019.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-08918 Filed 5-1-19; 8:45 am]
 BILLING CODE 8011-01-P