Document ID: SEC-2018-1426-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American LLC
Posted Date: 2018-09-14T04:00Z

[Federal Register Volume 83, Number 179 (Friday, September 14, 2018)]
[Notices]
[Pages 46766-46768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19970]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84069; File No. SR-NYSEAMER-2018-43]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 7.23E, Obligations of Market Makers

September 10, 2018.
    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 August 28, 2018, NYSE American LLC (the ``Exchange'' or 
``NYSE American'') 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 7.23E, Obligations of Market 
Makers. 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 codify existing practice by harmonizing 
Rule 7.23E, Obligations of Market Makers, with similar rules of its 
affiliates, the New York Stock Exchange, Inc. (``NYSE''),\4\ NYSE Arca, 
Inc. (``NYSE Arca''),\5\ and NYSE National LLC (``NYSE National'') \6\. 
Specifically, the Exchange proposes to add language to paragraphs 
(a)(1)(B)(iii) and (iv) of Exchange Rule 7.23E to state that for 
purposes of each paragraph, rights and warrants will be considered Tier 
2 NMS Stocks. This text was inadvertently not included in each 
paragraph when Exchange Rule 7.23E was first adopted.\7\
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    \4\ See NYSE Rule 104(a)(1)(B)(iii) and (iv).
    \5\ See NYSE Arca Rule 7.23-E(a)(1)(B)(iii) and (iv).
    \6\ See NYSE National Rule 7.23(a)(1)(B)(iii) and (iv).
    \7\ See Securities Exchange Act Release No. 80577 (May 2, 2017), 
82 FR 21446 (May 8, 2017) (SR-NYSEMKT-2017-04).
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    In sum, Exchange Rule 7.23E(a)(1) sets forth the two-side quoting 
obligations of market makers and requires that the price of the bid 
(offer) interest shall be not more than the Designated Percentage away 
from the then current National Best Bid (Offer), or if no National Best 
Bid (Offer), not more than the Designated Percentage away from the last 
reported sale from the responsible single plan processor. In the event 
that the National Best Bid (Offer) (or if no National Best Bid (Offer), 
the last reported sale) increases (decreases) to a level that would 
cause the bid (offer) interest of the Two-Sided Obligation to be more 
than the Defined Limit away from the National Best Bid (Offer) (or if 
no National Best Bid (Offer), the last reported sale) or if the bid 
(offer) is executed or cancelled, the Market Maker shall enter new bid 
(offer) interest at a price not more than the Designated Percentage 
away from the then current National Best Bid (Offer) (or if no National 
Best Bid (Offer), the last reported sale), or identify to the Exchange 
current resting interest that satisfies the Two-Sided Obligation.
    Exchange Rules 7.23E(a)(1)(B)(iii) and (iv) include definitions for 
the terms ``Designated Percentage'' and ``Defined Limit.'' Pursuant to 
paragraph (a)(1)(B)(iii) of Exchange Rule 7.23E, the ``Designated 
Percentage'' shall be 8% for Tier 1 NMS Stocks under the Limit Up-Limit 
Down Plan (``Tier 1 NMS Stocks''), 28% for Tier 2 NMS Stocks under the 
Limit Up-Limit Down Plan (``Tier 2 NMS Stocks'') with a price equal to 
or greater than $1.00, and 30% for Tier 2 NMS Stocks with a price lower 
than $1.00, except that between 9:30 a.m. and 9:45 a.m. Eastern Time 
and between 3:35 p.m. Eastern Time and the close of Core Trading Hours, 
the Designated Percentage shall be 20% for Tier 1 NMS Stocks, 28% for 
Tier 2 NMS Stocks with a price equal to or greater than $1.00, and 30% 
for Tier 2 NMS Stocks with a price lower than $1.00.
    Pursuant to paragraph (a)(1)(B)(iv) of Exchange Rule 7.23E, the 
``Defined Limit'' shall be 9.5% for Tier 1 NMS Stocks, 29.5% for Tier 2 
NMS Stocks with a price equal to or greater than $1.00, and 31.5% for 
Tier 2 NMS Stocks with a price lower than $1.00, except that between 
9:30 a.m. and 9:45 a.m. Eastern Time and between 3:35 p.m. Eastern Time 
and the close of Core Trading Hours, the Defined Limit shall be 21.5% 
for Tier 1 NMS Stocks, 29.5% for Tier 2 NMS Stocks with a price equal 
to or greater than $1.00, and 31.5% for Tier 2 NMS Stocks with a price 
lower than $1.00.

[[Page 46767]]

    The Exchange proposes to add the following sentence to the end of 
subparagraphs (a)(1)(B)(iii) and (iv) of Exchange Rule 7.23E: For 
purposes of this paragraph, rights and warrants will be considered Tier 
2 NMS Stocks. Because rights and warrants are not subject to the Limit 
Up-Limit Down Plan, but are subject to market maker quoting 
requirements, the Exchange proposes to provide that for purposes of 
Rule 7.23E(a)(1)(B)(iii) and (iv), rights and warrants would be 
considered Tier 2 NMS Stocks. This sentence is included in similar 
rules of the Exchange's affiliates, NYSE,\8\ NYSE Arca,\9\ and NYSE 
National \10\ and was inadvertently not included when Exchange Rule 
7.23E was first adopted.\11\
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    \8\ See NYSE Rule 104(a)(1)(B)(iii) and (iv).
    \9\ See NYSE Arca Rule 7.23-E(a)(1)(B)(iii) and (iv).
    \10\ See NYSE National Rule 7.23(a)(1)(B)(iii) and (iv).
    \11\ See supra note 7.
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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''),\12\ in general, and 
furthers the objectives of Section 6(b)(5),\13\ 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. The proposed 
rule change would further harmonize the definition of the terms 
``Designated Percentage'' and ``Defined Limit'' under Exchange Rule 
7.23E(a)(1)(B) with the definition of those same terms under the rules 
of its affiliates \14\ by inserting language that was inadvertently 
excluded when Exchange Rule 7.23E was adopted. The proposed rule change 
should, therefore, provide for consistency among similar rules of the 
Exchange and its affiliates, thereby removing impediments to, and 
perfecting the mechanism of, a free and open market and a national 
market system and, in general, protecting investors and the public 
interest.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ See supra notes 4, 5, and 6.
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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 believes that 
the proposed rule change would not have any impact on competition since 
it simply seeks to further harmonize the text of Exchange Rule 
7.23E(a)(1)(B) with the rules of its affiliates \15\ by inserting 
language that was inadvertently excluded when Exchange Rule 7.23E was 
adopted.
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    \15\ Id.
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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 \16\ and Rule 19b-4(f)(6) thereunder.\17\ 
Because the foregoing proposed rule 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 if consistent with the protection of investors 
and the public interest, provided that the self-regulatory organization 
has given the Commission written notice of its intent to file 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,\18\ the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \19\ and Rule 19b-4(f)(6) 
thereunder.\20\
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    \16\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ The Exchange has satisfied this requirement.
    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6).
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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) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 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-NYSEAMER-2018-43 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAMER-2018-43. 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-NYSEAMER-2018-43 and should be submitted 
on or before October 5, 2018.

[[Page 46768]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-19970 Filed 9-13-18; 8:45 am]
 BILLING CODE 8011-01-P