Document ID: SEC-2020-1183-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2020-07-27T04:00Z

[Federal Register Volume 85, Number 144 (Monday, July 27, 2020)]
[Notices]
[Pages 45272-45274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16162]

[[Page 45272]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89368; File No. SR-NYSE-2020-61]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Delete Supplementary Material .20 to Rule 76

July 21, 2020.
    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 July 20, 2020, New York Stock Exchange LLC (``NYSE'' 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 delete Supplementary Material .20 to Rule 
76 and lift the temporary suspension on ``crossing'' orders pursuant to 
Rule 76. 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 delete Supplementary Material .20 to Rule 
76 and lift the temporary suspension on ``crossing'' orders pursuant to 
Rule 76.
Background
    To slow the spread of COVID-19 through social-distancing measures, 
on March 18, 2020, the CEO of the Exchange made a determination under 
Rule 7.1(c)(3) that, beginning March 23, 2020, the Trading Floor 
facilities located at 11 Wall Street in New York City would close and 
the Exchange would move, on a temporary basis, to fully electronic 
trading.\4\ On May 14, 2020, the CEO of the Exchange made a 
determination under Rule 7.1(c)(3) to reopen the Trading Floor on a 
limited basis on May 26, 2020 to a subset of Floor brokers, subject to 
safety measures designed to prevent the spread of COVID-19.\5\ On June 
15, 2020, the CEO of the Exchange made a determination under Rule 
7.1(c)(3) to begin the second phase of the Trading Floor reopening by 
allowing DMMs to return on June 17, 2020, subject to safety measures 
designed to prevent the spread of COVID-19.\6\
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    \4\ See Press Release, dated March 18, 2020, available here: 
https://ir.theice.com/press/press-releases/all-categories/2020/03-18-2020-204202110.
    \5\ See 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).
    \6\ See Securities Exchange Act Release No. 89086 (June 17, 
2020) (SR-NYSE-2020-52) (Notice of filing and immediate 
effectiveness of proposed rule change).
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    The Exchange has modified its rules to add Commentaries to Rules 
7.35, 7.35A, 7.35B, and 7.35C; Supplementary Material .20 to Rule 76; 
and rule relief in Rule 36.30 \7\ that are in effect until the earlier 
of a full reopening of the Trading Floor facilities to DMMs or after 
the Exchange closes on July 31, 2020.\8\
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    \7\ See Securities Exchange Act Release Nos. 88413 (March 18, 
2020), 85 FR 16713 (March 24, 2020) (SR-NYSE-2020-19) (amending Rule 
7.35C to add Commentary .01); 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); 88488 (March 26, 2020), 85 FR 18286 (April 1, 2020) 
(SR-NYSE-2020-23) (amending Rule 7.35A to add Commentary .02); 88546 
(April 2, 2020), 85 FR 19782 (April 8, 2020) (SR-NYSE-2020-28) 
(amending Rule 7.35A to add Commentary .03); 88562 (April 3, 2020), 
85 FR 20002 (April 9, 2020) (SR-NYSE-2020-29) (amending Rule 7.35C 
to add Commentary .03); 88705 (April 21, 2020), 85 FR 23413 (April 
27, 2020) (SR-NYSE-2020-35) (amending Rule 7.35A to add Commentary 
.04); 88725 (April 22, 2020), 85 FR 23583 (April 28, 2020) (SR-NYSE-
2020-37) (amending Rule 7.35 to add Commentary .01); 88950 (May 26, 
2020), 85 FR 33252 (June 1, 2020) (SR-NYSE-2020-48) (amending Rule 
7.35A to add Commentary .05); 89059 (June 12, 2020), 85 FR 36911 
(June 18, 2020) (SR-NYSE-2020-50) (amending Rule 7.35C to add 
Commentary .04); and 89086 (June 17, 2020) (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).
    \8\ See Securities Exchange Act Release No. 89199 (June 30, 
2020), 85 FR 40718 (July 7, 2020) (SR-NYSE-2020-56) (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, Supplementary Material .20 to Rule 76, and temporary rule 
relief to Rules 36.30 to end on the earlier of a full reopening of 
the Trading Floor facilities to DMMs or after the Exchange closes on 
July 31, 2020).
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Proposed Rule Change
    The Exchange has determined that, during this phase of the partial 
reopening of the Trading Floor when both DMMs and Floor brokers have 
returned to the Trading Floor with reduced staff, Floor brokers can 
resume ``crossing'' transactions pursuant to Rule 76, including the 
Cross Function specified in Supplementary Material .10 to Rule 76, in a 
manner consistent with the safety measures designed to prevent the 
spread of COVID-19.
    Crossing transactions, which require a verbal representation of the 
proposed crossing transaction, involve face-to-face interactions on the 
Trading Floor. Because such proposed transactions do not happen at set 
times during the trading day, they generally do not result in large 
numbers of individuals congregating on the Trading Floor. The Exchange 
has discussed the resumption of crossing orders with member 
organizations that operate DMM units and Floor broker firms that have 
returned to the Trading Floor. Based on these discussions, the Exchange 
believes that crossing transactions can be resumed in a manner 
consistent with both the safety measures required on the Trading Floor, 
including the use of cloth face masks or coverings and maintaining at 
least six-foot physical distancing from other individuals,\9\ and the 
Rule 76 requirement that such proposed transactions be clearly 
announced to the trading crowd.
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    \9\ See NYSE IM-20-03, ``Standards of Conduct for the Safety and 
Welfare of Persons on the Trading Floor Relating to COVID-19,'' 
dated May 14, 2020, available here: https://www.nyse.com/publicdocs/nyse/markets/nyse/rule-interpretations/2020/NYSE%20IM%20(5-14-
20)%20-%20Final%20-%20Republished.pdf.
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    To effect this change, the Exchange proposes to lift the temporary 
suspension of Rule 76 by deleting Supplementary Material .20 to Rule 
76.
    The Exchange would be able to implement the proposed rule change 
immediately upon effectiveness of this proposed rule change.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the

[[Page 45273]]

Act,\10\ in general, and furthers the objectives of Section 6(b)(5) of 
the Act,\11\ in particular, in 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    To reduce the spread of COVID-19, the CEO of the Exchange made a 
determination under Rule 7.1(c)(3) that beginning March 23, 2020, the 
Trading Floor facilities located at 11 Wall Street in New York City 
would close and the Exchange would move, on a temporary basis, to fully 
electronic trading. On May 14, 2020, the CEO of the Exchange made a 
determination under Rule 7.1(c)(3) that, beginning May 26, 2020, the 
Trading Floor would be partially reopened to allow a subset of Floor 
brokers to return to the Trading Floor. And on June 15, 2020, the CEO 
of the Exchange made a determination under Rule 7.1(c)(3) that, 
beginning June 17, 2020, the Trading Floor would be partially reopened 
to allow a subset of DMMs to return to the Trading Floor.
    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because it would permit the resumption of 
crossing transactions pursuant to Rule 76, and therefore restore 
functionality to Floor brokers. The Exchange believes that crossing 
transactions can be resumed on the Trading Floor in a manner consistent 
with both the requirements of Rule 76 and the safety measures required 
on the Trading Floor, including the use of cloth face masks or 
coverings and maintaining at least six-foot physical distancing from 
other individuals. The Exchange therefore proposes to lift this 
temporary suspension by deleting Supplementary Material .20 to Rule 76.

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. This proposed rule change is 
not designed to address any competitive issues but rather to restore 
functionality to Floor brokers by lifting the temporary suspension on 
crossing transactions pursuant to Rule 76.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
Because the 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 for 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, it has become effective pursuant to 
Section 19(b)(3)(A)(iii) of the Act \14\ and subparagraph (f)(6) of 
Rule 19b-4 thereunder.\15\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 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 fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\17\ 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 take effect immediately. The Exchange believes that waiver of the 
operative delay is consistent with the protection of investors and the 
public interest because it will lift a temporary rule suspension and 
restore functionality to Floor brokers without any further delay. 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposal operative upon filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 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) \19\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \19\ 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-NYSE-2020-61 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-2020-61. 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

[[Page 45274]]

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-2020-61 
and should be submitted on or before August 17, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-16162 Filed 7-24-20; 8:45 am]
BILLING CODE 8011-01-P