Document ID: SEC-2022-1320-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2022-10-05T04:00Z

[Federal Register Volume 87, Number 192 (Wednesday, October 5, 2022)]
[Notices]
[Pages 60428-60430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21561]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95945; File No. SR-NYSEAMER-2022-44]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Permit 
the Exchange To Declare a Regulatory Halt

September 29, 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 September 23, 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 proposes to permit the Exchange to declare a 
regulatory halt in a security that has not been listed on a national 
securities exchange immediately prior to the initial pricing based on 
the rules of its affiliate New York Stock Exchange LLC. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to permit the Exchange to declare a 
regulatory halt in a security that has not been listed on a national 
securities exchange immediately prior to the initial pricing based on 
the rules of its affiliate New York Stock Exchange LLC (``NYSE''). More 
specifically, the Exchange proposes to add a new subsection (e) to Rule 
7.18E (Halts) that would, except for a non-substantive conforming 
change, be identical to subsection (d) of NYSE Rule 123D (Halts in 
Trading).
Overview
    Rule 7.18E governs halts in trading on the Pillar trading platform, 
and how orders are processed during halts, suspensions, or pauses. Rule 
7.18E was adopted in connection with the Exchange's transition from a 
floor-based market to a fully automated market on the Pillar trading 
platform. At the time, halts were governed by Rule 123D--Equities 
(Openings and Halts in Trading), which was in turn based on NYSE Rule 
123D.\4\ In 2017, Rule 123D--Equities was designated as inapplicable to 
trading on Pillar and deleted in its entirety.\5\
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    \4\ See Securities Exchange Act Release Nos. 80590 (May 4, 
2017), 82 FR 21843 (May 10, 2017) and 79993 (February 9, 2017), 82 
FR 10814 (February 15, 2017) (SR-NYSEMKT-2017-01).
    \5\ See Securities Exchange Act Release No. 82212 (December 4, 
2017), 82 FR 58036 (December 8, 2017) (SR-NYSEAmer-2017-34).

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[[Page 60429]]

    The NYSE adopted its version of Rule 7.18 governing halts on the 
Pillar trading platform in 2015. In 2017, NYSE Rule 123D was designated 
as inapplicable to trading in Pillar. Following completion of the 
transition to Pillar in August 2019, the NYSE deleted NYSE Rule 123D as 
obsolete, but retained subsection (d), among others, governing initial 
listing regulatory halts.\6\ As described below, the Exchange now 
proposes to adopt subsection (d) of NYSE Rule 123D.
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    \6\ See Securities Exchange Act Release Nos. 85962 (May 29, 
2019), 84 FR 26188 (June 5, 2019) and 81225 (July 27, 2017), 82 FR 
36033 (August 2, 2017) (SR-NYSE-2017-35); Securities Exchange Act 
Release No. 90750 (December 21, 2020), 85 FR 85769 (December 29, 
2020) (SR-NYSE-2020-101). Rule 123D was also renamed ``Halts in 
Trading'' in 2020. See id.
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Proposed Rule Change
    The Exchange proposes to amend Rule 7.18E to adopt a regulatory 
halt condition for initial Exchange listings based on NYSE Rule 
123D(d).
    As proposed, new Rule 7.18E(d) would be titled ``Initial Listing 
Regulatory Halt.'' The proposed rule would provide that Exchange may 
declare a regulatory halt in a security that is the subject of an 
initial pricing on the Exchange of a security that has not been listed 
on a national securities exchange immediately prior to the initial 
pricing, and that the regulatory halt will be terminated when the 
security opens. The rule is identical to NYSE Rule 123D(d) except for 
the removal of the reference to the Designated Market Maker (``DMM'') 
opening the security since NYSE American DMMs are not responsible for 
opening or closing individual securities on the Exchange. The Exchange 
believes that it would be consistent with the protection of investors 
and the public interest for the Exchange, as a primary listing 
exchange, to have to the limited authority to declare a regulatory halt 
for security that is the subject of an initial pricing on the Exchange 
of a security that has not been listed on a national securities 
exchange immediately prior to the initial pricing.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of 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. Specifically, the Exchange believes that proposed 
Rule 7.18E(e) would remove impediments to and perfect the mechanism of 
a free and open market and a national market system because it would 
provide the Exchange with the authority to declare a regulatory halt in 
a security that the subject of an initial pricing on the Exchange of a 
security that has not previously been listed on a national securities 
exchange immediately prior to the initial pricing. The Exchange 
believes that permitting the Exchange to declare a regulatory halt in 
such securities before trading on the Exchange begins would promote 
fair and orderly markets and, in the case of securities where the 
initial listing is not a transfer from another national securities 
exchange, avoid potential price disparities or anomalies that may occur 
during any trading before the first transaction on the primary listing 
exchange. The Exchange therefore believes that having the proposed 
authority to declare a regulatory halt is consistent with the 
protection of investors and the public interest and would promote fair 
and orderly markets by helping to protect against volatility in pricing 
before the initial transaction on the primary listing exchange.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 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 benefit to investors to halt trading in a security before the 
initial listing on the primary listing exchange outweighs any burden on 
competition that may result from a regulatory halt in such security.

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 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) 
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 has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing.
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiver of the operative delay is 
consistent with the protection of investors and the public interest 
because it will, without delay, permit the Exchange to initiate a 
regulatory halt in a security that is the subject of an initial pricing 
on the exchange in order to promote fair and orderly markets and avoid 
potential price disparities or anomalies. Accordingly, the Commission 
hereby waives the 30-day operative delay and designates the proposal 
operative upon filing.\15\
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    \15\ 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

[[Page 60430]]

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 [email protected]. Please include 
File Number SR-NYSEAMER-2022-44 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-2022-44. 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-2022-44, and should be 
submitted on or before October 26, 2022.
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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\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21561 Filed 10-4-22; 8:45 am]
BILLING CODE 8011-01-P