Document ID: SEC-2023-0371-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2023-04-03T04:00Z

[Federal Register Volume 88, Number 63 (Monday, April 3, 2023)]
[Notices]
[Pages 19685-19687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06781]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97214; File No. SR-NYSEAMER-2023-23]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Amend Rule 
7.25E

March 28, 2023.
    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 March 22, 2023, 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, II, 
and III 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 7.25E, which governs the 
allocation of securities to Designated 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 amend Rule 7.25E, which governs the 
allocation of securities to Designated Market Makers (``DMMs''). 
Specifically, the Exchange proposes to require issuers to select all 
DMM units to interview. The Exchange also proposes to correct a 
typographical error.
Background and Proposed Rule Change
    Rule 7.25E currently provides two options for the allocation of 
securities to DMMs: (1) the issuer selects the DMM unit; or (2) the 
issuer delegates selection of the DMM unit to the Exchange.
    If the issuer proceeds under the first option, Rule 7.25E(b)(1)(A) 
provides that the listing company will select a minimum of four DMMs to 
interview from the pool of DMMs eligible to participate in the 
allocation process.\4\ The Exchange proposes amending Rule 
7.25E(b)(1)(A) to require that issuers select all DMM units to 
interview. To effectuate this change, the Exchange would delete ``a 
minimum of four'' and add ``all'' after ``select'' and before ``DMM 
units to interview.''
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    \4\ See Rule 7.25E(b)(1)(A). As of the date of this filing, 
there are currently three active DMMs on the Exchange.
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    The proposed change would conform Rule 7.25E(b)(1)(A) with Rule 
103B(III)(A)(1) of the Exchange's affiliate New York Stock Exchange LLC 
(``NYSE''), which does not specify a minimum number of DMMs to be 
interviewed. The Exchange believes that not specifying a number of DMMs 
to be interviewed would ensure that all eligible DMM units would have 
an opportunity to participate in the allocation process at all times 
irrespective of the number of DMMs operating on the Exchange.
    In addition, the Exchange proposes a non-substantive change to Rule 
7.25E(b)(1)(A) to replace ``shall'' with ``must'' before ``select.'' 
Finally, the Exchange also proposes to correct the heading in Rule 
7.25E(b)(1), which should read ``Issuer Selection.'' These proposed 
changes would further align the Exchange's Rule with NYSE Rule 103B.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\5\ in general, and furthers the objectives of

[[Page 19686]]

Section 6(b)(5),\6\ 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that the proposed amendments to 
Rule 7.25E(b)(1)(A) to provide that issuers interview all DMMs would 
promote just and equitable principles of trade because no eligible DMM 
unit would be excluded from the issuer interview. For the same reason, 
the Exchange believes the proposal is designed to remove impediments 
to, and perfect the mechanism of a free and open market and a national 
market system. The Exchange believes that requiring all DMM units to 
participate in issuer interviews would also continue to foster 
competition and optimal performance among DMMs. In addition, the 
Exchange believes that harmonizing the Exchange's rule with that of its 
NYSE affiliate would provide greater harmonization among affiliated 
exchanges that have adopted substantially similar requirements for DMM 
interviews, thereby resulting in similarly efficient administration of 
listing interviews across exchanges.
    Finally, the Exchange's proposed technical, non-substantive 
changes--correcting a typographical error and replacing ``will'' with 
``must''--adds clarity and transparency to the Exchange's Rules and 
reduces potential investor confusion, which would remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system.

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 changes would continue to foster competition and optimal 
performance among DMMs, thereby enhancing the quality of the services 
DMMs provide to issuers. Further, the Exchange believes that the 
proposed changes would not be burdensome to issuers since issuers are 
currently interviewing all DMMs. Even assuming an increase in the 
burden on issuers during the allocation process if the number of DMMs 
on the Exchange should increase, the Exchange believes that any such 
increased burden would be small relative to the benefits that 
additional competition among DMM units may provide. Issuers could, 
moreover, permit the Exchange to select the DMM unit pursuant to the 
process found in Rule 7.25E(b)(2).

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 \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
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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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\10\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 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-2023-23 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-2023-23. 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-2023-23 and should be submitted 
on or before April 24, 2023.

[[Page 19687]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06781 Filed 3-31-23; 8:45 am]
BILLING CODE 8011-01-P