Document ID: SEC-2022-0971-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American LLC
Posted Date: 2022-07-21T04:00Z

[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Notices]
[Pages 43590-43592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15542]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95296; File No. SR-NYSEAMER-2022-29]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 952NY

July 15, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on July 7, 2022, 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 proposal to amend Rule 952NY (Opening Process) 
regarding the option for ATP Holders to instruct the Exchange to cancel 
Marketable orders if a series is not opened within a specified time 
period. 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 amend Rule 952NY (Opening Process) 
regarding the option for ATP Holders to instruct the Exchange to cancel 
Marketable \4\ orders if a series is not opened within a specified time 
period. Specifically, the Exchange proposes to exclude Good-Til-
Cancelled (GTC) Orders.\5\
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    \4\ The term ``Marketable'' is defined in Rule 900.2NY(39) to 
mean, for a Limit Order, the price matches or crosses the NBBO on 
the other side of the market and that market orders are always 
considered marketable.
    \5\ See Rule 900.3NY(n) (defining GTC Orders as ``[a]n order to 
buy or sell that remains in force until the order is filled, 
cancelled or the option contract expires; provided, however, that 
GTC Orders will be cancelled in the event of a corporate action that 
results in an adjustment to the terms of an option contract'').
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    Rule 952NY sets forth the Exchange's process for opening and 
reopening a series for trading. Rule 952NY(d) provides ATP Holders with 
an option to instruct the Exchange to cancel their Marketable orders if 
an option series has not been opened within a specified time period.\6\ 
Per subparagraph (d) to Rule 952NY, an ATP Holder has the option to 
instruct the Exchange to cancel all Marketable orders in a series, 
including GTC Orders, if that series has not opened within a designated 
time period after the Exchange receives notification that the primary 
market for the underlying security has disseminated a quote and a trade 
that is at or within the quote. Because the current rule explicitly 
includes GTC Orders, once an ATP Holder opts to utilize the ``bulk'' 
cancellation feature provided by Rule 952NY(d), this feature also 
applies to its GTC Orders. The Exchange specifically included GTC 
Orders when it adopted the ``bulk'' cancellation feature in Rule 
952NY(d) to make clear to market participants that such order would be 
included in that functionality.
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    \6\ The Exchange announced on February 17, 2022, that the 
applicable time period utilized during the Opening Process would be 
two seconds, as announced here: https://www.nyse.com/trader-update/history#110000412424.
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    The Exchange now proposes to modify paragraph (d) to Rule 952NY to 
explicitly exclude GTC Orders on the basis that such orders are 
designed to remain in force until executed or specifically cancelled by 
the order sender. The Exchange believes this proposal would take into 
account that GTC Order senders tend to be more focused on obtaining an 
execution thus are willing to wait for the opening of a series rather 
than cancelling their order. As such, the proposed change would allow 
the GTC instructions to persist rather than be included in the ``bulk 
cancel'' under this paragraph (i.e., persist until executed or 
specifically cancelled by the GTC order sender). The Exchange believes 
this proposed treatment is consistent with the properties of the order 
type and the intentions of market participants who utilize GTC Orders, 
which intent is for an (eventual) execution unless cancelled. This does 
not mean, however, that such orders cannot be cancelled if a series has 
not opened per Rule 952NY(d). Rather, ATP Holders (whether they utilize 
this optional ``bulk'' cancel functionality or not) would still have 
the option to submit specific requests to cancel certain (or all) of 
its GTC Orders themselves if a series has not opened on the Exchange 
per Rule 952NY(d).
    The Exchange will announce via Trader Update when this proposed 
rule change would be implemented, which, subject to effectiveness of 
this proposed rule change, the Exchange anticipates will be in early 
August 2022, but no later than September 2022.
2. Statutory Basis
    For the reasons set forth above, the Exchange believes the proposed 
rule change is consistent with Section 6(b) of

[[Page 43591]]

the Act \7\ in general, and furthers the objectives of Section 6(b)(5) 
of the Act,\8\ in that it is designed to promote just and equitable 
principles of trade, 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 would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because it is designed to exclude GTC Orders 
from the bulk cancel operation of Rule 952NY(d), which would allow the 
GTC instructions to persist rather than be included in the ``bulk 
cancel'' under this paragraph (i.e., persist until executed or 
specifically cancelled by the GTC order sender). The Exchange believes 
this proposal would take into account that GTC Order senders tend to be 
more focused on obtaining an execution thus are willing to wait for the 
opening of a series rather than cancelling their order. As such, the 
Exchange believes this proposed treatment is consistent with the 
properties of the order type and the intentions of market participants 
who utilize GTC Orders, which intent is for an (eventual) execution 
unless cancelled. This does not mean, however, that such orders cannot 
be cancelled if a series has not opened per Rule 952NY(d). Rather, ATP 
Holders (whether they utilize this optional ``bulk'' cancel 
functionality or not) would still have the option to submit specific 
requests to cancel certain (or all) of its GTC Orders themselves if a 
series has not opened on the Exchange per Rule 952NY(d).

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 Exchange does not 
believe the proposed rule change would impose any burden on intermarket 
competition, as the proposed rule change is designed to exclude GTC 
Orders from the bulk cancel operation of Rule 952NY(d), which would 
allow the GTC instructions to persist rather than be included in the 
``bulk cancel'' under this paragraph (i.e., persist until (eventually) 
executed or specifically cancelled by the GTC order sender). ATP 
Holders would still have the option to submit specific requests to 
cancel certain (or all) of its GTC Orders themselves if a series has 
not opened on the Exchange per Rule 952NY(d).
    The Exchange does not believe that the proposed rule change would 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed rule change relates to the exclusion of GTC Orders from 
optional functionality, which functionality ATP Holders are not 
required to utilize.

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 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 \11\ and subparagraph (f)(6) of 
Rule 19b-4 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)(iii).
    \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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    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 19b-4(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 asked 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. The Exchange 
states that such waiver would be consistent with the protection of 
investors and the public interest because the proposed rule change 
would allow GTC Orders to be treated in a manner that is consistent 
with the properties of the order type and the intentions of market 
participants who utilize GTC Orders. Market participants continue to be 
able to decide when their GTC Orders should be canceled. For these 
reasons, the Commission believes that waiver of the 30-day operative 
delay is consistent with the protection of investors and the public 
interest. Therefore, the Commission hereby waives the 30-day operative 
delay and designates the proposed rule change as operative upon 
filing.\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 30-day operative delay, 
the Commission has also 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 the 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 to 
determine whether the proposed rule should be approved or disapproved.

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-NYSEAMER-2022-29 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-2022-29. 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

[[Page 43592]]

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-NYSEAMER-2022-29 and should be submitted 
on or before August 11, 2022.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-15542 Filed 7-20-22; 8:45 am]
BILLING CODE 8011-01-P