the Consolidated Last Sale Price as the Imbalance Reference Price for
the Core Open and Trading Halt Auctions. The Exchange believes that if
there is no Consolidated Last Sale Price in a security, the Exchange
would not have sufficient information to provide to a DMM for opening a
security electronically. Accordingly, the Exchange proposes that in
such scenario, the DMM must open the security manually.
     If the Core Open or Trading Halt Auction Price would be
more than 4% away from the Consolidated Last Sale Price (see proposed
Rule 7.35A(c)(1)(G)). This proposed rule text is based on Rule
123D(a)(1)(B)(i)(a) and (b), with the substantive difference, described
above, that the Exchange would use the Consolidated Last Sale Price as
the reference price for this calculation rather than the Official
Closing Price (for openings) or last price on the Exchange (for
reopenings). As noted above, the Exchange believes that using the
Consolidated Last Sale Price, as defined in proposed Rule
7.35(a)(11)(1), would likely reflect a more recent valuation in a
security with which to measure whether the opening or reopening would
be at a price disparity. The Exchange proposes to use the same
percentage parameter as under the current rule.
     If the paired volume for the Core Open or Trading Halt
Auction would be more than (i) 1,500 round lots for securities with an
average opening volume of 1,000 round lots or fewer in the previous
calendar quarter or (ii) 5,000 round lots for securities with an
average opening volume of over 1,000 round lots in the previous
calendar quarter (see proposed Rule 7.35A(c)(1)(H) and subparagraphs
(i) and (ii)). This proposed rule text is based on Rule
123D(a)(1)(B)(i)(c) with a non-substantive difference to use the term
``paired volume'' instead of ``matched volume'' and use Pillar
terminology. The Exchange also proposes a difference to reflect volumes
in round lots rather than in number of shares. For securities that
trade with a round lot of 100 shares, the proposed rule would be
unchanged from the current rule, which expresses the volume
requirements in terms of 150,000 shares, 100,000 shares, and 500,000
shares, respectively. The Exchange believes, however, that if a
security trades in a round lot less than 100 shares, expressing the
volume in number of shares would result in higher relative requirements
for such securities to be opened manually. The Exchange believes that
describing volume requirements in round lots would better reflect the
level of volumes of securities with lower-sized round lot units that
would warrant an opening to be effected manually.
    Proposed Rule 7.35A(c)(2) would provide that if as of 9:00 a.m.,
the E-mini S&P 500 Futures are +/-2% from the prior day's closing price
of the E-mini S&P 500 Futures, or if the

Exchange determines that it is necessary or appropriate for the
maintenance of a fair and orderly market, a DMM may effect an opening
or reopening electronically if the Auction Price would be up to 8% away
from Consolidated Last Sale Price, without any volume limitations. This
proposed rule text is based on Rule 123D(a)(1)(B)(ii) with non-
substantive differences to use Pillar terminology. The Exchange
proposes a similar substantive difference, as described above, to use
the Consolidated Last Sale Price as the reference price for determining
the percentage parameter. Otherwise, this rule text is unchanged from
the Current Auction Rules.
    Proposed Rule 7.35A(c)(3) would provide that when reopening a
security following a trading pause under Rule 7.11 or a market-wide
halt under Rule 7.12, if a pre-opening indication has been published in
a security under paragraph (b) of this Rule, a DMM may not reopen such
security electronically if the reopening transaction would be at a
price outside of the last-published pre-opening indication. This
proposed rule text is based on Rule 123D(a)(1)(B)(iii) with non-
substantive differences to cross-reference Pillar rules and use Pillar
terminology. Otherwise, this rule text is unchanged from Current
Auction Rules.
    Pre-Opening Indications. Proposed Rule 7.35A(d) and its
subparagraphs are based on Rule 15(a)-(f) relating to pre-opening
indications. Except for the few substantive differences described
below, the Exchange does not propose any differences from the Current
Auction Rules of when a pre-opening indication would be required.
    Proposed Rule 7.35A(d) would provide that a pre-opening indication
would include the security and the price range within which the Auction
Price is anticipated to occur and that a pre-opening indication would
be published via the securities information processor and proprietary
data feeds. This proposed rule text is based on Rule 15(a) with a non-
substantive difference to use the term ``Auction Price'' instead of
``opening price.''
    Proposed Rule 7.35A(d)(1) would specify the conditions for
publishing a pre-opening indication and is based on Rule 15(b).
     Proposed Rule 7.35A(d)(1)(A) would provide that a DMM
would publish a pre-opening indication, as described in paragraph
(d)(4) of this Rule, before a security opens or reopens if (i) the Core
Open or Trading Halt Auction Price is anticipated to be a change of
more than the ``Applicable Price Range,'' as specified in proposed Rule
7.35A(d)(3), from a specified ``Indication Reference Price,'' as
specified in proposed Rule 7.35A(d)(2), or (ii) it is a Delayed
Opening. This proposed rule text is based on Rule 15(b)(1) with non-
substantive differences to use Pillar terminology, including reference
to a Core Open or Trading Halt Auction Price, use of the new defined
term ``Delayed Opening,'' and use of the term ``Indication Reference
Price'' instead of ``Reference Price.'' The Exchange also proposes to
reference reopens in addition to opens.\61\
---------------------------------------------------------------------------

    \61\ Supplementary Material .10 to Rule 15 provides that unless
otherwise specified in Rule 15, references to an opening transaction
include a reopening transaction following a trading halt or pause in
a security. Rather than include that commentary in Rule 7.35A, the
Exchange proposes that proposed rule text based on Rule 15 would be
modified to reflect when such rule would be applicable to a
reopening transaction.
---------------------------------------------------------------------------

     Proposed Rule 7.35A(d)(1)(B) would provide that when
making the determination of what the Auction Price will be, the DMM
will take into consideration all interest eligible to participate in
the Core Open or Trading Halt Auction, including electronically-entered
orders, and DMM Interest. This proposed rule text is based on Rule
15(b)(2) with non-substantive differences to use Pillar terminology. On
Pillar, the Exchange will not publish a pre-opening indication if the
DMM is unable to do so because of systems or a technical issue.
Accordingly, the Exchange does not propose to include in the Pillar
Auction Rules rule text based on Rule 15(b)(3), which provides that if
a DMM is unable to publish a pre-opening indication for one or more
securities due to a systems or technical issue, the Exchange may
publish a pre-opening indication for that security(ies).
    Proposed Rule 7.35A(d)(2) would address Indication Reference
Prices, and is based on Rule 15(c), which refers to ``Reference
Price.'' In the Pillar Auction Rules, the Exchange proposes to use the
term ``Indication Reference Price'' in connection with pre-opening
indications to distinguish it from the use of the term ``Imbalance
Reference Price,'' described above.\62\
---------------------------------------------------------------------------

    \62\ The Indication Reference Price is not a publicly
disseminated value, but rather a reference price used by the DMM to
determine whether to publish a pre-opening indication. The actual
pre-opening indication price range is based on the buy and sell
orders in the Exchange Book, not on the Indication Reference Price.
---------------------------------------------------------------------------

    Proposed Rule 7.35A(d)(2)(A) would provide that the Indication
Reference Price for a security, other than an American Depository
Receipt (``ADR''), would be:
     The security's last Official Closing Price on the
Exchange, adjusted as applicable based on the publicly disclosed terms
of a corporate action (see proposed Rule 7.35A(d)(2)(A)(i)). This
proposed rule text is based on Rule 15(c)(1)(A) without any
differences.\63\
---------------------------------------------------------------------------

    \63\ The Exchange recently amended Rule 15(c)(1). See Securities
Exchange Act Release No. 84755 (December 7, 2018), 83 FR 64168
(December 13, 2018) (SR-NYSE-2018-60) (Notice of filing and
immediate effectiveness of proposed rule change).
---------------------------------------------------------------------------

     The security's offering price in the case of an IPO (see
proposed Rule 7.35A(d)(2)(A)(ii)). This proposed rule text is based on
Rule 15(c)(1)(B) with non-substantive difference to use the defined
term of IPO.
     The security's last reported sale price on the securities
market from which the security is being transferred to the Exchange, on
the security's first day of trading on the Exchange (``transferred
security'') (see proposed Rule 7.35A(d)(2)(A)(iii)). This proposed rule
text is based on Rule 15(c)(1)(C) without any differences.
     For a security that is a Direct Listing that has had
recent sustained trading in a Private Placement Market prior to
listing, the most recent transaction price in that market or, if none,
a price determined by the Exchange in consultation with a financial
advisor to the issuer of such security (see proposed Rule
7.35A(d)(2)(A)(iv). This proposed rule text is based on Rule
15(c)(1)(D) with non-substantive difference to use Pillar terminology,
including the proposed defined term ``Direct Listing.''
     For a security that does not fall under proposed Rule
7.35A(d)(2)(A)(i)-(iv) or (d)(2)(B) and for which there is limited
publicly-available pricing available, a price as determined pursuant to
proposed Rule 1.1(s)(1)(F). This proposed method of determining a
derived last sale price is based in part on current Rule 123C(e)(i)(C),
which specifies that when determining the Official Closing Price for a
new listing that does not have any last-sale eligible trades on the
Exchange on its first trading day, the Official Closing Price will be
based on a derived last sale associated with the price of such security
before it begins trading on the Exchange. For purposes of determining
the Indication Reference Price for a pre-opening indication, proposed
Rules 7.35A(d)(2)(A)(i)-(iv) and (B) identify known prices that can be
used. However, there are circumstances when there is limited publicly-
available information about how a security should be priced, such as
for a new listing that is a when-issued security or emerging from
bankruptcy. In such case, the Exchange believes that the Indication
Reference Price should be based on the price that is already

determined pursuant to proposed Rule 1.1(s)(1)(F).
    Proposed Rule 7.35A(d)(2)(B) would provide that the Indication
Reference Price for an ADR would be:
     The closing price of the security underlying the ADR in
the primary foreign market for such security when the trading day of
the primary foreign market concludes after trading on the Exchange for
the previous day has ended (see proposed Rule 7.35A(d)(2)(B)(i)). This
proposed rule text is based on Rule 15(c)(2)(A) without any
differences.
     Based on parity with the last sale price of the security
underlying the ADR in the primary foreign market for such security when
the trading day of the primary foreign market is open for trading at
the time of the opening on the Exchange (see proposed Rule
7.35A(d)(2)(B)(ii)). This proposed rule text is based on Rule
15(c)(2)(B) without any differences.
    Proposed Rule 7.35A(d)(2)(C) would provide that the Indication
Reference Price for reopening a security following a halt would be the
Exchange Last Sale Price. This proposed rule text is based on Rule
15(c)(2)(C) with a difference to use the Pillar term ``Exchange Last
Sale Price'' rather than the term ``last reported sale price on the
Exchange.'' In most circumstances, use of the term ``Exchange Last Sale
Price'' would be the same as under the current rule's use of the term
``last reported sale price.'' Where there could be divergence if the
Official Closing Price is based on the last consolidated last-sale
eligible price in a security, as proposed to be defined in Rule 1.1,
described above. For the reasons discussed above of why the Exchange
believes that this is an appropriate price to use for the Official
Closing Price if there is no closing auction, the Exchange similarly
believes that such price would be appropriate for using as the
Indication Reference Price.
    Proposed Rule 7.35A(d)(3) would concern the Applicable Price Range,
and is based on Rule 15(d) without any differences. Proposed Rule
7.35A(d)(3)(A) would provide that except under the conditions set forth
in proposed Rule 7.35A(d)(3)(B), the Applicable Price Range for
determining whether to publish a pre-opening indication would be 5% for
securities with an Indication Reference Price over $3.00 and $0.15 for
securities with an Indication Reference Price equal to or lower than
$3.00. This proposed rule text is based on Rule 15(d)(1) with non-
substantive differences to use Pillar terminology and to update the
rule cross references.
    Proposed Rule 7.35A(d)(3)(B) would provide that if as of 9:00 a.m.,
the E-mini S&P 500 Futures are +/-2% from the prior day's closing price
of the E-mini S&P 500 Futures, when reopening trading following a
market-wide trading halt under Rule 7.12, or if the Exchange determines
that it is necessary or appropriate for the maintenance of a fair and
order market, the Applicable Price Range for determining whether to
publish a pre-opening indication would be 10% for securities with an
Indication Reference Price over $3.00 and $0.30 for securities with an
Indication Reference Price equal to or lower than $3.00. This proposed
rule text is based on Rule 15(d)(2) with non-substantive differences to
use Pillar terminology and update the rule cross-reference.\64\
---------------------------------------------------------------------------

    \64\ As discussed below, the Exchange proposes to amend Rule
7.12 to include rule text based on Rule 80B.
---------------------------------------------------------------------------

    Proposed Rule 7.35A(d)(4) would specify the procedures for
publishing a pre-opening indication and that the DMM would use the
procedures specified in subparagraphs (A)-(G) of that rule when
publishing a pre-opening indication. This proposed rule text is based
on Rule 15(e) without any differences.
     Proposed Rule 7.35A(d)(4)(A) would provide that
publication of a pre-opening indication would require the supervision
and approval of a Floor Governor. This proposed rule text is based on
Rule 15(e)(1) without any differences.
     Proposed Rule 7.35A(d)(4)(B) would provide that a pre-
opening indication must be updated if the Core Open or Trading Halt
Auction Price would be outside of a published pre-opening indication.
This proposed rule text is based on Rule 15(e)(2) with a non-
substantive difference to use Pillar terminology.
     Proposed Rule 7.35A(d)(4)(C) would provide that if the
pre-opening indication is a spread wider than $1.00, the DMM should
undertake best efforts to publish an updated pre-opening indication of
$1.00 or less before opening or reopening the security, as may be
appropriate for the specific security. This proposed rule text is based
on Rule 15(e)(3) with a non-substantive difference to reference
reopenings in addition to openings.
     Proposed Rule 7.35A(d)(4)(D) would provide that after
publishing a pre-opening indication, the DMM must wait for the
following minimum specified periods before opening a security. This
proposed rule text is based on Rule 15(e)(4) without any differences.
    [cir] Proposed Rule 7.35A(d)(4)(D)(i) would provide that when using
the Applicable Price Range specified in Rule 7.35A(d)(3)(A), a minimum
of three minutes must elapse between publication of the first
indication and a security's opening or reopening. If more than one
indication has been published, a security may be opened or reopened one
minute after the last published indication provided that at least three
minutes have elapsed from the dissemination of the first indication.
However, the DMM may open or reopen a security less than the required
minimum times after the publication of a pre-opening indication if the
Auction Price would be at a price within the Applicable Price Range.
This proposed rule text is based on Rule 15(e)(4)(A) with non-
substantive differences to update the rule cross reference, to include
references to reopenings, and to use Pillar terminology.
    [cir] Proposed Rule 7.35A(d)(4)(D)(ii) would provide that when
using the Applicable Price Range specified in Rule 7.35A(d)(3)(B), a
minimum of one minute must elapse between publication of the first
indication and a security's opening or reopening. If more than one
indication has been published, a security may be opened or reopened
without waiting any additional time. This proposed rule text is based
on Rule 15(e)(4)(B) with non-substantive differences to update the rule
cross reference and to include references to reopenings.
     Proposed Rule 7.35A(d)(4)(E) would provide that if trading
is halted for a non-regulatory order imbalance, a pre-opening
indication must be published as soon as practicable after the security
is halted. This proposed rule text is based on Rule 15(e)(5) without
any differences.
     Proposed Rule 7.35A(d)(4)(F) and subparagraphs (i)-(iii)
would provide that when reopening a security following a trading pause
under Rule 7.11: (i) A pre-opening indication may be published without
prior Floor Governor approval; (ii) a pre-opening indication does not
need to be updated before reopening the security, and the security may
be reopened outside of any prior indication; and (iii) the reopening is
not subject to the minimum waiting time requirements in Rule
7.35A(d)(4)(D). This proposed rule text is based on Rule 15(e)(6) and
subparagraphs (A)-(C) with a non-substantive difference to update the
rule cross references.
     Proposed Rule 7.35A(d)(4)(G) would provide that except as
provided in proposed Rule 7.35A(d)(4)(F)(ii), if a pre-opening
indication has been

published, the Exchange would not permit the DMM to open or reopen the
security outside of the last-published pre-opening indication range.
This proposed rule text would be new for the Pillar Auction Rules and
reflects that Exchange systems will enforce the requirement for a DMM
to open or reopen a security within the price range of a pre-opening
indication, except when reopening following a trading pause.
    As discussed below, the Exchange proposes to set forth the process
for temporary rule suspensions in paragraph (j) to proposed Rule 7.35A.
Accordingly, the Exchange does not propose to include rule text based
on Rule 15(f) in paragraph (d) in Rule 7.35A.
    Auction Imbalance Information. Proposed Rule 7.35A(e) would specify
Auction Imbalance Information for the Core Open and Trading Halt
Auctions. Proposed Rule 7.35A(e)(1) would specify the time of
publication of such Auction Imbalance Information as follows:
     Proposed Rule 7.35A(e)(1)(A) would provide that for the
Core Open Auction, unless a security is halted, the Exchange would
begin disseminating Auction Imbalance Information at 8:00 a.m. This
proposed rule text is new and the Exchange proposes a substantive
difference in the Pillar Auction Rules to begin disseminating Auction
Imbalance Information at 8:00 a.m. rather than at 8:30 a.m., as
specified in current Rule 15(g)(3)(A). The format of this rule text is
based in part on NYSE Arca Rule 7.35-E(c)(1) and NYSE American Rule
7.35E(c)(1).
     Proposed Rule 7.35A(e)(1)(B) would provide that for a
Trading Halt Auction, the Exchange would begin disseminating Auction
Imbalance Information at the beginning of a halt or pause. This
proposed rule text represents current functionality and is based in
part on Rule 80C(b), which provides that the Exchange will begin
disseminating Order Imbalance Information after a Trading Pause has
commenced. The format of this rule text is based in part on NYSE Arca
Rule 7.35-E(e)(1) and NYSE American Rule 7.35E(e)(1).
     Proposed Rule 7.35A(e)(1)(C) would provide that if a
security is in a halt condition before or at the beginning of Core
Trading Hours, the Exchange would disseminate Auction Imbalance
Information for a Trading Halt Auction. This proposed rule text would
be new for the Pillar Auction Rules and is based on NYSE Arca Rule
7.35-E(c)(1) and NYSE American Rule 7.35E(c)(1).
     Proposed Rule 7 .35A(e)(1)(D) would provide that the
Exchange would not disseminate Auction Imbalance Information for the
Core Open Auction or Trading Halt Auction if there is no Consolidated
Last Sale Price. This proposed rule text would be new for the Pillar
Auction Rules. Because, as described below, the Exchange would use the
Consolidated Last Sale Price as the basis for determining the Imbalance
Reference Price, if there is no Consolidated Last Sale Price, there
would not be any information for the Exchange to determine Auction
Imbalance Information.
    Proposed Rule 7.35A(e)(2) would specify the content of Auction
Imbalance Information. As proposed, for the Core Open and Trading Halt
Auctions, the Exchange would disseminate Total Imbalance, Side of Total
Imbalance, Paired Quantity, and Continuous Book Clearing Price.
    Proposed Rule 7.35A(e)(3) would specify how the Imbalance Reference
Price would be determined. As proposed, the Imbalance Reference Price
for the Auction Imbalance Information would be the Consolidated Last
Sale Price unless a pre-opening indication has been published. This
proposed rule text would be new for Pillar Auction Rules and represents
the proposed substantive difference that the Exchange would use the
Consolidated Last Sale Price rather than last reported sale price on
the Exchange, as provided for in Rule 15(g)(2)(B), for determining the
Imbalance Reference Price for the Core Open and Trading Halt Auctions.
The Exchange believes that use of the Consolidated Last Sale Price
rather than the last reported sale price on the Exchange would allow
for a more recent price in a security to be used as the Imbalance
Reference Price, thereby representing a more recent valuation of such
security.
    With the exception of using the Consolidated Last Sale Price rather
than the last reported sale price on the Exchange, if a pre-opening
indication has been published, the Exchange proposes to use the same
method for determining the Imbalance Reference Price as under the
Current Auction Rules. However, the Exchange proposes to use Pillar
terminology to provide that in such case, the Imbalance Reference Price
would be:
     The pre-opening indication bid price if the Consolidated
Last Sale Price is lower than the bid price of the pre-opening
indication (see proposed Rule 7.35A(e)(3)(A)). This is based in part on
Rule 15(g)(2)(B)(i), which provides that if the bid price of the pre-
opening indication of interest is higher than the last reported sale
price for the security on the Exchange, the pre-opening indication bid
price will serve as the reference price.
     The pre-opening indication offer price if the Consolidated
Last Sale Price is higher than the offer price of the pre-opening
indication (see proposed Rule 7.35A(e)(3)(B)). This is based in part on
Rule 15(g)(2)(B)(ii), which provides that if the offer price of the
pre-opening indication of interest is lower than the last reported sale
price for the security on the Exchange, the pre-opening indication
offer price will serve as the reference price.
     The Consolidated Last Sale Price if it is at or between
the pre-opening indication bid and offer price (see proposed Rule
7.35A(e)(3)(C)). This is based in part on Rule 15(g)(2)(B)(iii), which
provides that if the last reported sale price on the Exchange falls
within the bid and offer of the pre-opening indication of interest for
a security, the last sale price shall serve as the reference price.
Because the term Consolidated Last Sale Price would incorporate how
that price would be derived for a transferred security, the Exchange
does not propose to include rule text based on Rule 15(g)(2)(B)(iv) in
the Pillar Auction Rules.
    Auction Imbalance Freeze. Proposed Rule 7.35A(f) would provide that
there is no Auction Imbalance Freeze for a Core Open Auction or Trading
Halt Auction and no restrictions on entry or cancellation of Auction-
Only Orders before a Core Open Auction or Trading Halt Auction. This
proposed rule text would be new for the Pillar Auction Rules and is
based on current functionality as there are no restrictions on order
entry or cancellation before the opening or reopening of trading under
the Current Auction Rules. The Exchange believes that including this
rule text in the Pillar Auction Rules would provide clarity and
transparency to Exchange rules, particularly when comparing how
auctions function on the Exchange as compared to NYSE Arca and NYSE
American, which function differently.
    Determining an Auction Price. Proposed Rule 7.35A(g) would provide
that the DMM would be responsible for determining the Auction Price for
a Core Open Auction or a Trading Halt Auction. This proposed rule text
would be new for the Pillar Auction rules and is based on current
functionality that as part of the DMM's role in facilitating auctions,
the DMM determines the Auction Price based on buy and sell orders
represented in the Exchange Book. The Exchange believes that including
this detail in Exchange rules

provides clarity and transparency to the Exchange's auction process.
    The rule would further provide that if there is an Imbalance of any
size, the DMM must select an Auction Price at which all better-priced
orders on the Side of the Imbalance can be satisfied. This proposed
rule text is based in part on Rule 115A(a)(1), which specifies that
market interest is guaranteed to participate in the opening or
reopening transaction.\65\ Otherwise, this proposed rule text would be
new for the Pillar Auction Rules, and is designed to promote clarity
and transparency in Exchange rules relating to the Exchange's auction
process.
---------------------------------------------------------------------------

    \65\ Under Rule 115A(a)(1)(A), market interest is defined as (i)
Market and MOO Orders, (ii) limit interest to buy (sell) that is
priced higher (lower) than the opening or reopening price, and (iii)
Floor broker interest entered manually by the DMM. The first two of
these categories are described above in the definition of better-
priced orders. The Exchange proposes that the DMM would not manually
enter Floor broker interest for the Core Open or Trading Halt
Auction; Floor brokers must represent their interest electronically.
---------------------------------------------------------------------------

    Proposed Rule 7.35A(g)(1) would further provide that when
facilitating the opening on the first day of trading of a Direct
Listing that has not had recent sustained history of trading in a
Private Placement prior to listing, the DMM will consult with a
financial advisor to the issuer of such security in order to effect a
fair and orderly opening of such security. This proposed rule text is
from the last sentence of Rule 104(a)(2) with a non-substantive
difference to use the defined term of ``Direct Listing.'' The Exchange
proposes to move this rule text from Rule 104 to proposed Rule
7.35A(g)(1) because the responsibility described in the current rule
relates to how an Auction Price is determined for a Direct Listing
Auction, and the Exchange believes that including this text in proposed
Rule 7.35A would consolidate requirements relating to the Exchange's
auction process, thereby making the rules easier to navigate.\66\
---------------------------------------------------------------------------

    \66\ The Exchange proposes a related rule change to delete the
last sentence of Rule 104(a)(2).
---------------------------------------------------------------------------

    Auction Allocation. Proposed Rule 7.35A(h) would specify how orders
would be allocated in an Auction. As proposed, once an Auction Price
has been determined, orders would be allocated in a Core Open Auction
or Trading Halt Auction as follows:
     Better-priced orders, including the reserve interest of
Reserve Orders, entered by the Book Participant or a Floor Broker
Participant would be guaranteed to participate in the Auction at the
Auction Price (see proposed Rule 7.35A(h)(1)). The Exchange proposes to
use Pillar terminology in proposed Rule 7.35A(h)(1) to describe the
same functionality as set forth in Rule 115A(a)(1) and Rule
115A(a)(1)(A), which provides that market interest is guaranteed to
participate in the opening or reopening transaction. Under Rule
115A(a)(1), market interest includes the same types of orders defined
in proposed Rules 7.35(a)(5)(A) and 7.35A(h)(1) as being guaranteed to
participate in a Core Open or Trading Halt Auction.\67\
---------------------------------------------------------------------------

    \67\ Id.
---------------------------------------------------------------------------

     At-priced orders and DMM Interest of any price would not
be guaranteed to participate in the Auction (see proposed Rule
7.35A(h)(2)). The Exchange proposes to use Pillar terminology in
proposed Rule 7.35A(h)(2) to describe the same functionality as set
forth in Rules 115A(a)(1) and (a)(1)(B)-(C), including that DMM
Interest is not guaranteed to participate in such Auctions. Proposed
Rule 7.35A(h)(2) would further provide how at-priced orders would be
allocated in an Auction as follows:
     First, orders ranked Priority 2--Display Orders, Opening D
Orders, and LOO Orders would be allocated on parity by Participant
pursuant to Rule 7.37(b)(2)--(7) (see proposed Rule 7.35A(h)(2)(A)). By
cross-referencing Rule 7.37(b)(2)-(7), this proposed rule text makes
clear that the allocation process for the Core Open Auction and Trading
Halt Auction would follow the established Pillar parity allocation
process.\68\ The Exchange believes that if at-priced Opening D Orders
or LOO Orders are participating in the Core Open or Trading Halt
Auction at the Auction Price, such orders should be allocated together
with displayed orders, which is how such orders are allocated under the
Current Auction Rules. In addition, by cross referencing Rules
7.37(b)(5), (6), and (7), the proposed Rule provides specificity that
allocations to each Participant, including the DMM, would be allocated
consistent with those rules.
---------------------------------------------------------------------------

    \68\ See Securities Exchange Act Release No. 82945 (March 26,
2018), 83 FR 13553, 13560-13561 (March 29, 2018) (SR-NYSE-2018-36)
(Approval Order and discussion of how the Rule 7.37 Pillar parity
allocation process differs from the current Rule 72 parity
allocation process).
---------------------------------------------------------------------------

     Next, orders ranked Priority 3--Non-Display Orders would
be allocated on parity by Participant pursuant to Rule 7.37(b)(2)-(7)
(see proposed Rule 7.35A(h)(2)(B)). This proposed rule text would be
applicable to the reserve interest of Reserve Orders, which are the
only orders ranked Priority 3--Non-Display Orders eligible to
participate in an Auction. By cross-referencing Rule 7.37(b)(2)--(7),
this proposed rule text makes clear that the allocation process for the
Core Open Auction and Trading Halt Auction will follow the established
Pillar parity allocation process.
     Proposed Rule 7.35A(h)(3) would address the DMM
Participant Allocation of at-priced orders in the Core Open and Trading
Halt Auction. The Exchange proposes that the manner by which DMMs would
participate in an Auction would differ from how they participate in
allocations during continuous trading, described above. As proposed:
    [cir] At-priced DMM Orders would be placed on the allocation wheel
for an Auction based on the time of entry and any other orders or
interest from such DMM would join that position on the allocation wheel
(see proposed Rule 7.35A(h)(3)(A)). In such case, the DMM Order with
the earliest entry time would establish that DMM Participant's position
on the allocation wheel, consistent with Rule 7.37(b)(2)(B).\69\
However, if the only DMM Interest available to participate in an
Auction would be DMM Auction Liquidity or better-priced DMM Orders or
both, such DMM Interest would be placed last on the allocation wheel.
The Exchange proposes that in these scenarios, the DMM Interest would
go last on the allocation wheel because such orders would either be
repriced for the Auction (in the case of a better-priced DMM Order,
which would be considered an at-priced order for the Auction
Allocation) or entered right before the Auction (in the case of DMM
Auction Liquidity). Because such DMM Interest is intended to be
offsetting interest for an Auction, the Exchange does not believe that
such DMM Interest should have time priority in how they are included in
an allocation wheel over other orders that are eligible to participate
in an Auction. This proposed functionality would be new on Pillar and
is designed so that DMMs, who have the ability to enter buy and sell
interest last in an Auction, would not receive any time priority for
such interest.
---------------------------------------------------------------------------

    \69\ Rule 7.37(b)(2)(B) provides that additional Participants
are added to an allocation wheel based on time of entry of the first
order entered by a Participant.
---------------------------------------------------------------------------

    [cir] A parity allocation to the DMM Participant would be allocated
in price-time priority (see proposed Rule 7.35A(h)(3)(B)). As discussed
above, a parity allocation to the DMM Participant would be based on the
working time. However, in an Auction Allocation, DMM Interest may have
more than one limit price, and the Exchange proposes that the parity
allocation to the DMM Participant would be allocated among

such DMM Interest in price-time priority, even though they all would
participate in the Auction at a single price.
    [cir] Both at-priced DMM Orders that do not receive an allocation
and that lock other unexecuted orders and buy and sell better-priced
DMM Orders would be cancelled after the Auction Processing Period
concludes (see proposed Rule 7.35A(h)(3)(C)). As noted above, DMM
Auction Liquidity that does not participate in an Auction cancels after
the Auction. To provide for continuity in the market after the Auction,
the Exchange also proposes to cancel DMM Orders with a limit price that
either lock the Auction Price, i.e., did not participate in the parity
allocation, or are priced through the Auction Price, i.e., a buy (sell)
DMM Order priced higher (lower) than the Auction Price. The Exchange
believes that cancelling such DMM Interest would ensure that there will
not be orders that transition to continuous trading that lock or cross
other orders in the Exchange Book.
    SIP Modifier. Proposed Rule 7.35A(i) would provide that the Core
Open Auction would be designated with a modifier to identify the
opening quote, and if there is an opening trade, a modifier to identify
the opening trade. The rule would further provide that the Trading Halt
Auction would be designated with a modifier to identify it as a
reopening trade. These SIP modifiers are consistent with how the
Exchange functions under the Current Auction Rules and would be new
rule text for the Pillar Auction Rules that is based on NYSE Arca Rule
7.35-E(c)(5) and (e)(11) and NYSE American Rule 7.35E(c)(5) and
(e)(11).
    Temporary Rule Suspensions. Current Rule 15(f) provides that the
Exchange can temporarily suspend the requirement of pre-opening
indications and current Rule 123D(c) provides that the Exchange can
temporarily suspend DMM automated opening limitations or Floor Official
approval requirements. In the Pillar Auction Rules, the Exchange
proposes to consolidate these existing temporary suspension
requirements in proposed Rule 7.35A(j).
    Proposed Rule 7.35A(j)(1) would provide that if the CEO of the
Exchange, or his or her designee, determines that a Floor-wide event is
likely to have an impact on the ability of DMMs to arrange for a fair
and orderly Core Open or Trading Halt Auction at the Exchange and that,
absent relief, the operation of the Exchange is likely to be impaired,
the CEO of the Exchange, or his or her designees, may temporarily
suspend the rules specified in proposed subparagraphs (A) and (B) of
that Rule. This proposed rule text is based on Rule 15(f)(1) and Rule
123D(c)(1) with non-substantive differences to use Pillar
terminology.\70\
---------------------------------------------------------------------------

    \70\ Rule 123D(c)(1) currently provides that the temporary
relief is available for a reopening following a market-wide circuit
breaker. In harmonizing this rule text with current Rule 15(f)(1),
the Exchange proposes that under the Pillar Auction Rules, the
temporary rule suspension would be available for any scenario where
a Floor-wide event would impact the fair and orderly reopening of
securities, which include reopenings after a market-wide circuit
breaker, plus other potential market-wide events.
---------------------------------------------------------------------------

    Proposed Rule 7.35A(j)(1)(A) would specify the first set of rules
that could be suspended. As proposed, under the circumstances described
above, the Exchange could suspend the prohibition on a DMM opening a
security electronically if the Core Open or Trading Halt Auction Price
would be more than the price or volume parameters specified in proposed
Rule 7.35A(c)(1)(G) and (H) of this Rule. This proposed rule text is
based on Rule 123D(c)(1)(A) with non-substantive differences to use
Pillar terminology and update the cross references.\71\
---------------------------------------------------------------------------

    \71\ The Exchange does not propose to include in the Pillar
Auction Rules a temporary suspension as described in Rule
123D(c)(1)(B) because the Exchange no longer requires Floor Official
approval before a security can be halted.
---------------------------------------------------------------------------

    Proposed Rule 7.35A(j)(1)(B) would specify the second set of rules
that could be suspended. As proposed, under the circumstances described
above, the Exchange could suspend the requirement to publish pre-
opening indications in a security under proposed Rule 7.35A(d) of this
Rule prior to opening or reopening a security following a market-wide
trading halt. This proposed rule text is based on Rule 15(f)(1) with
non-substantive differences to update the cross reference.
    Proposed Rule 7.35A(j)(2) would provide that when determining
whether to temporarily suspend the specified paragraphs of this Rule,
the CEO of the Exchange would:
     Consider the facts and circumstances that are likely to
have Floor-wide impact for a particular trading session, including
volatility in the previous day's trading session, trading in foreign
markets before the open, substantial activity in the futures market
before the open, the volume of pre-opening indications of interest,
evidence of pre-opening significant order imbalances across the market,
government announcements, news and corporate events, and such other
market conditions that could impact Floor-wide trading conditions (see
proposed Rule 7.35A(j)(2)(A)). This proposed rule text is based on Rule
15(f)(2)(A) and Rule 123D(c)(2)(A) without any substantive differences.
     Notify the Chief Regulatory Officer of the Exchange (see
proposed Rule 7.35A(j)(2)(B)). This proposed rule text is based on Rule
15(f)(2)(B) and Rule 123D(c)(2)(B) without any substantive differences.
     Inform the Securities and Exchange Commission staff as
promptly as practicable of the temporary suspension (see proposed Rule
7.35A(j)(2)(C)). This proposed rule text is based on Rule 15(f)(2)(C)
and Rule 123D(c)(2)(C) without any substantive differences.
    Proposed Rule 7.35A(j)(3) would provide that a temporary suspension
under this Rule would be in effect for the trading day on which it was
declared only. This proposed rule text is based on Rule 15(f)(3)
without any differences.
    Proposed Rule 7.35A(j)(4) would provide that notwithstanding a
temporary suspension of the requirement to publish pre-opening
indications in a security under this Rule, a DMM may publish a pre-
opening indication for one or more securities. This proposed rule text
is based on Rule 15(f)(4) with a difference not to reference that the
Exchange would publish a pre-opening indication. This proposed
difference is based on the difference under the Pillar Auction Rules,
described above, that the Exchange would not publish a pre-opening
indication if a DMM is unable to do so.
Proposed Rule 7.35B (DMM-Facilitated Closing Auctions)
    Proposed Rule 7.35B would set forth the process for DMM-facilitated
Closing Auctions. As described in greater detail below, to promote
consistency and transparency in the Pillar Auction Rules, if the
functionality described in proposed Rule 7.35B is the same as the
functionality described in proposed Rule 7.35A, the Exchange proposes
to use the same subparagraph numbering for the two rules. For example,
Auction Imbalance Information for the Opening and Trading Halt Auctions
will be described in proposed Rule 7.35A(e) and the Auction Imbalance
Information for the Closing Auction will be described in proposed Rule
7.35B(e). The Exchange believes that keeping these two rules as
parallel as feasible would promote clarity, consistency, and
transparency in Exchange rules.
    DMM and Floor Broker Responsibilities. Proposed Rule 7.35B(a) would
set forth both the DMM and Floor broker responsibilities for the
closing of securities. Similar to the DMM and Floor broker
responsibilities as

described in proposed Rule 7.35A(a) above, DMMs and Floor brokers also
have Floor-based roles in connection with the Closing Auction and the
Exchange proposes to specify these requirements in proposed Rule
7.35B(a).
    Proposed Rule 7.35B(a) would provide that it is the responsibility
of each DMM to ensure that registered securities close as soon after
the end of Core Trading Hours as possible, while at the same time not
unduly hasty, particularly when at a price disparity from the Exchange
Last Sale Price. This proposed rule would be new for the Pillar Auction
Rules and reflects current DMM responsibilities, as specified in Rule
104(a)(3), but with greater detail about how the DMM should facilitate
the close of trading.
    The proposed rule text is based in part on the Rule 123D(a)(1) text
relating to the opening of trading, which is proposed to be included in
proposed Rule 7.35A(a) for the Pillar Auction Rules. The Exchange
believes that because the DMM responsibilities for the Closing Auction
are similar to the DMM responsibilities for the Core Open and Trading
Halt Auctions, the Closing Auction Rule should have parallel rule text.
A proposed difference for the Closing Auction version would be that the
DMM should look at price disparity from the Exchange Last Sale Price
when determining when to close the security. The proposed rule also
makes clear the current functionality that the Closing Auction would
occur after the end of Core Trading Hours, but that the DMM has a
responsibility to ensure that registered securities close as soon after
the end of Core Trading Hours as possible, but that it does not need to
be unduly hasty if there is a price disparity.
    Proposed Rule 7.35B(a)(1) would specify how Floor Broker Interest
would be entered for the Closing Auction. The functionality described
in this proposed rule would be new for the Exchange. Currently, if a
Floor broker orally represents a bid or offer at the point of sale
before the close of trading, for such interest to be included in the
closing transaction, the DMM must manually enter the details of the
order on behalf of the Floor broker, including the security, side,
size, limit price or if it is at market, and Floor broker badge number.
The Exchange believes that in today's trading environment, this process
introduces risk to the closing process because the DMM is responsible
for both manually entering orders on behalf of potentially multiple
Floor brokers in multiple securities and also facilitating the closing
process for multiple securities. To reduce the burden on the DMM, the
Exchange proposes that on Pillar, the Floor broker would be responsible
for electronically entering interest that has been properly represented
orally by the end of Core Trading Hours. While the DMM would still be
responsible for validating such Floor broker-entered interest, the
burden on the DMM would be minimized, which the Exchange believes would
lead to a more efficient closing process.
    As proposed, Floor Broker Interest would be eligible to participate
in the Closing Auction provided that the Floor broker has
electronically entered such interest before the Auction Processing
Period for the Closing Auction begins. Proposed Rule 7.35B(a)(1)(A)
would provide that for such interest to be eligible to participate in
the Closing Auction, a Floor broker must:
     First, by the end of, but not after, Core Trading Hours,
orally represent Floor Broker Interest at the point of sale, including
symbol, side, size, and limit price (see proposed Rule
7.35B(a)(1)(A)(i)). This proposed rule text specifies the details of an
order that a Floor broker must represent at the point of sale by the
end of Core Trading Hours, e.g., not after 4:00 p.m. This rule text
proposes a substantive difference from how Floor brokers can currently
represent orders at the close because such orders would be required to
include a limit price. Today, a Floor broker can represent an order at
the close ``at market,'' which would not be supported on Pillar.
     Then, electronically enter such interest after the end of
Core Trading Hours, and such electronic entry of Floor Broker Interest
would not be subject to Limit Order Price Protection (see proposed Rule
7.35B(a)(1)(A)(ii)). This proposed text would be new functionality for
the Pillar Auction Rules and represents the proposed new method to
electronically enter orally-represented Floor Broker Interest into
Exchange systems for participation in the Closing Auction. To
distinguish this interest from orders entered by a Floor broker during
Core Trading Hours, the Exchange proposes that such interest could be
entered only after the end of Core Trading Hours. In addition, because
such interest would be eligible to participate in the Closing Auction
only, the Exchange proposes that it would not be subject to Limit Order
Price Protection, as described in Rule 7.31(a)(2)(B).
    Proposed Rule 7.35B(a)(1)(B) would provide that before Floor Broker
Interest would be ranked for the Closing Auction, it must be
electronically accepted by the DMM and that once accepted, Floor Broker
Interest would be processed as an order ranked Priority 2--Display
Orders from a Floor Broker Participant for purposes of inclusion in
Closing Auction Imbalance Information and ranking and allocation in the
Closing Auction. This proposed rule text would be new functionality for
the Pillar Auction Rules and represents the more limited role that DMMs
would have in processing Floor Broker Interest. The Exchange proposes
that the DMM's electronic acceptance would serve to validate that the
Floor broker had represented the Floor Broker Interest consistent with
proposed Rule 7.35B(a)(1)(A).
    In addition, as described above, the Exchange proposes to continue
disseminating Closing Auction Imbalance Information until the Auction
begins. Pursuant to proposed Rule 7.35B(a)(1)(B), Floor Broker Interest
would be included in such Closing Auction Imbalance Information after
it has been accepted by the DMM. Because such Floor Broker Interest
must include a limit price, the Exchange proposes to process it as an
order ranked Priority 2--Display Orders for purposes of Auction
Imbalance Information.
    In addition to the new functionality of including this interest in
the Closing Auction Imbalance Information after 4:00 p.m., this
proposed rule would represent new functionality of how Floor Broker
Interest would be allocated in an Auction. Pursuant to Rule
123C(7)(a)(iii), Floor broker interest entered manually by the DMM is
considered ``has-to-go'' interest and is currently guaranteed to
participate in the closing transaction. In Pillar, the Exchange
proposes a difference that Floor Broker Interest would be ranked as
Priority 2--Display Orders. Whether such Floor Broker Interest would be
guaranteed to participate in the Closing Auction would be based on its
limit price, which is consistent with how other orders ranked Priority
2--Display Orders would be processed in the Closing Auction.\72\
---------------------------------------------------------------------------

    \72\ See discussion infra regarding proposed Rule 7.35B(h).
---------------------------------------------------------------------------

    Proposed Rule 7.35B(a)(1)(C) would provide that, after the end of
Core Trading Hours, electronically-entered Floor Broker Interest could
not be reduced in size or replaced, provided that, subject to Floor
Official approval, a DMM can accept a full cancellation of
electronically-entered Floor Broker Interest to correct a Legitimate
Error. This proposed rule text would be new for the Pillar Auction
Rules and represents current functionality that a Floor broker cannot
change the terms of

an order after the close of Core Trading Hours. The Exchange believes,
however, that if there is a Legitimate Error with the electronically-
entered order, the Floor broker should be able to cancel such order,
but not replace it with a new order.\73\
---------------------------------------------------------------------------

    \73\ For example, if a Floor broker orally represents Floor
Broker Interest to buy with a limit price of 10.02, but
electronically enters it with a limit price of 100.2, the Floor
broker should be able to fully cancel that order, but not replace
it.
---------------------------------------------------------------------------

    Proposed Rule 7.35B(a)(2) would address DMM Interest and would
provide that a DMM may enter or cancel DMM Interest after the end of
Core Trading Hours in order to supply liquidity as needed to meet the
DMM's obligation to facilitate the Closing Auction in a fair and
orderly manner. This proposed rule text would be new for the Pillar
Auction Rules and is based on the current Rule 104(a)(3) obligation for
a DMM to supply liquidity as needed to facilitate the close of trading
on the Exchange. Currently, the DMM can meet that obligation by
entering or cancelling their own interest after 4:00 p.m. This proposed
rule text would specify this functionality in the Pillar Auction Rules.
Similar to Floor Broker Interest for the Closing Auction, the Exchange
proposes that the entry of DMM Interest after the end of Core Trading
Hours would not be subject to Limit Order Price Protection.
    Closing Without a Trade. Proposed Rule 7.35B(b) would provide that
if there is no interest to conduct a Closing Auction, a DMM may close a
registered security without a trade and that in such case, the Official
Closing Price for the security would be determined as provided for in
Rule 1.1. As noted above, if there is no interest to conduct a closing
transaction, the DMM is not required to conduct a closing transaction
or publish a new quote. However, even if there is no closing
transaction, there would be an Official Closing Price disseminated for
such security. This proposed rule text would be new for the Pillar
Auction Rules and is designed to promote clarity and transparency
regarding the Closing Auction process in Exchange rules.
    DMM Closing Process. Proposed Rule 7.35B(c) would provide that the
DMM may effectuate a Closing Auction manually or electronically (see
Rule 104(b)(ii)). This proposed rule text is based on Supplementary
Material .10 to Rule 123C, which provides that closings may be
effectuated manually or electronically (see Rule 104(b)). The Exchange
proposes non-substantive differences to use Pillar terminology that
mirrors proposed Rule 7.35A(c) relating to the DMM Opening Process.
    Supplementary Material to Rule 123C further provides that Exchange
systems will not permit a DMM to close a security electronically if a
DMM has manually-entered Floor interest. The Exchange believes that
specifying the following circumstances when a DMM would not be
permitted to effect a Closing Auction electronically to the Pillar
Auction Rules will promote transparency regarding the circumstances of
when a DMM must close a security manually:
     The DMM has begun the process to close a security
manually, including by manually entering DMM Auction Liquidity (see
proposed Rule 7.35B(c)(1)(A)). This proposed rule text is based in part
on the second sentence of Supplementary Material .10 to Rule 123C,
which provides that Exchange systems will not permit a DMM to close a
security electronically if a DMM has manually-entered Floor interest,
which includes manual DMM interest. The proposed rule text is also
consistent with proposed Rule 7.35A(c)(1)(B), described above.
Specifically, the DMM uses a graphical user interface to manage the
closing process. From that template, the DMM can validate Floor Broker
Interest or enter DMM Auction Liquidity. The Exchange believes that if
a DMM is in the process of using such graphical user interface,
including to manually enter DMM Auction Liquidity, the DMM is taking an
action to indicate that the closing process will be effectuated
manually. Accordingly, if a DMM engages in such process, the Exchange
would not permit the DMM to close the security electronically.
     Floor Broker Interest for the Closing Auction that has
been electronically entered or requested to be cancelled has not yet
been accepted by the DMM (see proposed Rule 7.35B(c)(1)(B)). This
proposed rule text would be new for Pillar Auction Rules and is related
to the proposed new functionality relating to Floor Broker Interest for
the Closing Auction pursuant to proposed Rule 7.35B(a)(1). The Exchange
proposes that if a DMM has accepted all Floor Broker Interest that has
been entered, the DMM can effectuate the closing electronically.
However, if a Floor broker has entered Floor Broker Interest or
requested to cancel such interest, but the DMM has not yet accepted the
instruction, the Exchange would not permit the DMM to effectuate the
closing electronically.
     It is the first day of trading of a security that is the
subject of an IPO or a Direct Listing and the security never opened
(see proposed Rule 7.35B(c)(1)(C)). This proposed rule text would be
new for Pillar Auction Rules and would specify how the DMM should
process a security that is the subject of an IPO or a Direct Listing
and never opened. In such case, the Exchange does not believe that the
closing should be effectuated electronically.\74\
---------------------------------------------------------------------------

    \74\ Because the Exchange accepts Auction-Only Orders intended
for the Closing Auction beginning at 6:30 a.m., it is possible for a
security to never open, and yet have interest that is eligible for a
Closing Auction and that could trade. The Exchange does not believe
that the DMM should electronically effect such a closing. Rather, in
such rare circumstances, the Exchange believes that the DMM should
manage such closing process manually.
---------------------------------------------------------------------------

     The security is suspended or halted at the end of Core
Trading Hours (see proposed Rule 7.35B(c)(1)(D)). This proposed rule
text would be new for Pillar Auction Rules and is based on current
functionality. The Exchange believes that if a security is halted or
suspended at the end of Core Trading Hours, a DMM should not be
permitted to effectuate a closing electronically because such security
may still be suspended or halted when the DMM attempts to conduct such
closing electronically. If the suspension or halt state is lifted
shortly after 4:00 p.m., the Exchange believes that if there is
interest to conduct a Closing Auction, the DMM should facilitate that
closing process manually.
     There is no Exchange Last Sale Price (see proposed Rule
7.35B(c)(1)(E)). This proposed rule text would be new for Pillar
Auction Rules and is based on current functionality. As described
below, the Exchange proposes to use the Exchange Last Sale Price as the
Imbalance Reference Price for the Closing Auction. The Exchange
believes that if there is no Exchange Last Sale Price in a security,
the Exchange would not have sufficient information to provide to a DMM
for closing a security electronically. Accordingly, the Exchange
proposes that in such scenario, the DMM must close the security
manually.
     A temporary suspension under proposed Rule 7.35B(j)(2)(A)
of this Rule has been invoked (see proposed Rule 7.35B(c)(1)(F)). This
proposed rule text would be new for the Pillar Auction Rules and
reflects that if Rule 7.34(a)(2)(B) has been suspended pursuant to
proposed Rule 7.35B(j)(2)(A) to permit the solicitation and entry of
orders after the end of Core Trading Hours because of extreme order
imbalances at or near the close, the Exchange believes that such
closing should be effectuated manually.
     The Closing Auction Price would be more than a designated
percentage away from the Exchange Last Sale Price (see proposed Rule
7.35B(c)(1)(G)). This

proposed rule text would be new for the Pillar Auction Rules and
represents current functionality of when the DMM is not permitted to
effectuate a closing electronically. Similar to how current Rule
123D(a)(1)(B)(i)(a) and (b) function for the open, today, the Exchange
does not permit the DMM to effectuate a closing electronically if the
DMM were to close a security a designated percentage away from the last
sale price on the Exchange. In the Pillar Auction Rules, the Exchange
proposes to specify this limitation.
    As proposed, the Exchange would use the Exchange Last Sale Price as
the reference price for determining whether the Closing Auction Price
would be at a price disparity requiring a manual closing process. The
Exchange further proposes that if the Exchange Last Sale Price were
$25.00 and below, the designated percentage would be 5%, if the
Exchange Last Sale Price were $25.01 to $50.00, the designated
percentage would be 4%, and if the Exchange Last Sale Price were above
$50.00, the designated percentage would be 2%. These are the current
designated percentages that the Exchange uses to determine whether to
permit a DMM to effectuate a closing electronically. The Exchange
believes that if a Closing Auction Price were to be outside these
proposed designated percentages, the closing process should be effected
manually.
     The paired volume for the Closing Auction would be more
than 1,000 round lots for such security (see proposed Rule
7.35B(c)(1)(H)). This proposed rule text would be new for the Pillar
Auction Rules and represents current functionality of when the DMM is
not permitted to effectuate a closing electronically. Similar to
current Rule 123D(a)(1)(B)(i)(c) and proposed Rule 7.35A(c)(1)(H) for
the opens and reopens, the Exchange proposes that the close should not
be effectuated electronically if the volume would exceed specified
parameters. Today, the Exchange does not permit a closing transaction
if it would be over 100,000 shares in size. In the Pillar Auction
Rules, the Exchange proposes to specify this requirement in round lots.
    Closing Imbalance. Proposed Rule 7.35B(d) would specify the
requirements relating to Closing Imbalances, and is based on Rules
123C(1)(b), (1)(d), (4) and (5).
    Proposed Rule 7.35B(d) would specify that a Closing Imbalance
publication would include the Imbalance and the Side of the Imbalance.
This proposed rule text is based in part on Rule 123C(4), which
describes how the buy or sell side imbalance is determined. The
proposed rule would also provide that the Imbalance Reference Price for
a Closing Imbalance would be the Exchange Last Sale Price. This
proposed rule text is based in part on Rule 123C(4)(a)(i) and (ii),
which specifies that the last sale in a security, as reported to the
Consolidated Tape, would be the reference price. The Exchange proposes
a substantive difference on Pillar to use the Exchange Last Sale Price,
as defined in proposed Rule 7.35(a)(11)(B) above. As noted above, and
as described below, the Exchange proposes to use the Exchange Last Sale
Price for any scenario relating to the Closing Auction that would need
a reference price, including as the reference price for determining
price disparity to permit a DMM to close a security electronically or
as the Imbalance Reference Price for Auction Imbalance Information. The
Exchange believes it would promote consistency in Exchange rules to use
the same price for all of these purposes.
    As a corollary, the Exchange proposes that it would not disseminate
a Closing Imbalance if there is no Exchange Last Sale Price. This would
be new rule text for the Pillar Auction Rules and reflects that if
there is no sale information for a security, the Exchange would not be
able to calculate an imbalance, and therefore would not be able to
assess whether to publish a Closing Imbalance. Finally, proposed Rule
7.35B(d) would provide that a Closing Imbalance would be disseminated
to the securities information processor and that a Regulatory Closing
Imbalance would also be disseminated to proprietary data feeds. This
proposed rule text represents current functionality and is based in
part on Rules 123C(5)(a) and (b), which provides that both the
Mandatory MOC/LOC Imbalance Publication and Informational Imbalance
Publication are published on the Consolidated Tape. This proposed rule
text is also based in part on Rule 123C(6)(a)(vi), which references the
Mandatory MOC/LOC Imbalance Publication as part of the Order Imbalance
Information.
    Proposed Rule 7.35B(d)(1) would specify the requirements for
publication of a Regulatory Closing Imbalance. As proposed, at the
Closing Auction Imbalance Freeze Time (as defined above in proposed
Rule 7.35(a)(7)), if the Closing Imbalance is 500 round lots or more,
the Exchange would disseminate a Regulatory Closing Imbalance. This
proposed rule text is based on Rule 123C(1)(d)(i) and the first
sentence of Rule 123C(5)(a) with non-substantive difference to use
Pillar terminology and a substantive difference to use round lots
rather than the current rule, which requires the imbalance amount to be
50,000 shares. The Exchange believes that using round lots would better
reflect the significance of the imbalance, particularly for securities
with a round-lot size under 100 shares.
    Proposed Rule 7.35B(d)(1)(A) would provide that if, at the Closing
Auction Imbalance Freeze Time, the Closing Imbalance is less than 500
round lots, but is otherwise significant in relation to the average
daily trading volume in the security, a DMM may disseminate a
Regulatory Closing Imbalance only with prior Floor Official approval.
This proposed rule text is based on the second sentence of Rule
123C(5)(a) with non-substantive differences to use Pillar terminology
and a substantive difference to use round lots rather than refer to the
imbalance size in shares.
    Proposed Rule 7.35B(d)(1)(B) would provide that a Regulatory
Closing Imbalance would be a one-time publication that should not be
updated. This proposed rule text is based on Rule 123C(5)(A), which
states that the Regulatory Closing Imbalance is published as soon as
practicable after 3:50 p.m. This proposed rule text distinguishes the
Regulatory Closing Imbalance from the Auction Imbalance Information,
which would be updated every second.
    Proposed Rule 7.35B(d)(1)(C) would provide that a Regulatory
Closing Imbalance would be disseminated at the Closing Auction
Imbalance Freeze Time regardless of whether the security has not opened
or is halted or paused at that time. This proposed rule text is based
in part on Rule 123C(5)(c) with non-substantive differences to use
Pillar terminology. The Exchange also proposes a substantive difference
because under Current Auction Rules, when a trading halt in a security
is in effect at 3:50 p.m. but is lifted prior to the close of trading
in the security, a Mandatory MOC/LOC Imbalance Publication should be
published as close to the resumption of trading as practicable. By
contrast, under the Pillar Auction Rules, the Exchange proposes to
publish a Regulatory Closing Imbalance at the Closing Auction Imbalance
Freeze Time regardless of whether a security has not opened or is
halted or paused at that time.
    Proposed Rule 7.35B(d)(2) would specify the requirements for
publication of a Manual Closing Imbalance. As proposed, beginning one
hour before the scheduled end of Core Trading Hours up to the Closing
Auction Imbalance Freeze Time, a DMM may disseminate a Manual Closing
Imbalance only with prior Floor Official approval and only a

DMM can update a Manual Closing Imbalance publication. This proposed
rule text is based in part on current Rule 123C(1)(b) that an
Informational Imbalance Publication can only be between 3:00 p.m. and
3:50 p.m., and on Rule 123C(5)(b), which provides that an Informational
Imbalance Publication may be published between 3:00 and 3:50 p.m. with
the prior approval of a Floor Official, with non-substantive
differences to use Pillar terminology.\75\
---------------------------------------------------------------------------

    \75\ Rule 123C(5)(b) also refers to a qualified ICE employee as
defined in NYSE Rule 46.10. Rule 46(b)(v) provides that qualified
ICE employees may be designated as a Floor Governor, and pursuant to
Rule 46(b)(ii), a Floor Governor is also deemed to be a Floor
Official. Accordingly, the Exchange believes that separately
referencing qualified ICE employees would be redundant of simply
referring to Floor Officials and therefore does not propose to
reference qualified ICE employees as defined in NYSE Rule 46.10 in
proposed Rule 7.35B(d)(2).
---------------------------------------------------------------------------

    Proposed Rule 7.35B(d)(2)(A) would provide that if a DMM
disseminates a Manual Closing Imbalance before the Closing Auction
Imbalance Freeze Time, such publication must be updated at the Closing
Auction Imbalance Freeze Time with either: (i) A Regulatory Closing
Imbalance, if the conditions specified in proposed Rule 7.35B(d)(1) are
met; or (ii) a ``No Imbalance'' publication if the conditions specified
in proposed Rule 7.35B(d)(1) are not met. This proposed rule text is
based on Rule 123C(5)(b)(i) and (ii) with non-substantive differences
to use Pillar terminology.
    Auction Imbalance Information. Proposed Rule 7.35B(e) would specify
Auction Imbalance Information for the Closing Auction. Proposed Rule
7.35B(e)(1) would specify the time of publication of such Auction
Imbalance Information as follows:
     Proposed Rule 7.35B(e)(1)(A) would provide that for the
Closing Auction, the Exchange would begin disseminating Auction
Imbalance Information at the Closing Auction Imbalance Freeze Time even
if such security is in a halt condition or has not yet opened. This
proposed rule text is based in part on Rule 123C(1)(f), which defines
the time when the Exchange begins publishing Order Imbalance
Information, and Rule 123C(6)(a) with non-substantive differences to
use Pillar terminology.
     Proposed Rule 7.35B(e)(1)(B) would provide that beginning
two hours before the end of Core Trading Hours up to the Closing
Auction Imbalance Freeze Time, the Exchange would make available Total
Imbalance, Side of Total Imbalance, Paired Quantity, Unpaired Quantity,
Side of Unpaired Quantity, and if published, Manual Closing Imbalance,
to Floor brokers for any security (i) in which a Floor broker has
entered an order or (ii) as specifically requested by a Floor broker
and that this Auction Imbalance Information would be provided in a
manner that does not permit electronic redistribution. The rule would
further provide that beginning at the Closing Auction Imbalance Freeze
Time, all Closing Auction Imbalance Information would be made available
to Floor brokers. This proposed rule text is based on Rule 123C(6)(b)
with non-substantive differences to use Pillar terminology.
     Proposed Rule 7.35B(e)(1)(C) would provide that the
Exchange would not disseminate Auction Imbalance Information for the
Closing Auction if there is no Exchange Last Sale Price. This proposed
rule text would be new for the Pillar Auction Rules based on current
functionality. Because, as described below, the Exchange would use the
Exchange Last Sale Price as the basis for determining the Imbalance
Reference Price, if there is no Exchange Last Sale Price, there would
not be any information for the Exchange to determine Auction Imbalance
Information.
    Proposed Rule 7.35B(e)(2) would specify the content of Auction
Imbalance Information. As proposed, the Closing Auction Imbalance
Information would include Total Imbalance, Side of Total Imbalance,
Paired Quantity, Unpaired Quantity, Side of Unpaired Quantity,
Continuous Book Clearing Price, Closing Interest Only Clearing Price,
and Regulatory Closing Imbalance. This proposed rule text is based on
Rule 123C(6)(a)(i), which describes the Order Imbalance Information
disseminated under the Current Auction Rules, with non-substantive
differences to use Pillar terminology. In addition, as described above,
including Unpaired Quantity and Side of Unpaired Quantity would be new
information included under the Pillar Auction Rules.
    Proposed Rule 7.35A(e)(3) would specify how the Imbalance Reference
Price for the Closing Auction would be determined. As proposed, the
Imbalance Reference Price for the Auction Imbalance Information would
be:
     The BB if the Exchange Last Sale Price is lower than the
BB (see proposed Rule 7.35B(e)(3)(A)).
     The BO if the Exchange Last Sale Price is higher than the
BO (see proposed Rule 7.35B(e)(3)(B)).
     The Exchange Last Sale Price if it is at or between the
BBO or if the security was halted or not opened by the Closing Auction
Imbalance Freeze Time (see proposed Rule 7.35B(e)(3)(C)).\76\
---------------------------------------------------------------------------

    \76\ The terms BB, BO, and BBO are defined in Rule 1.1 to mean
the best bid on the Exchange, the best offer on the Exchange, and
the best bid or offer on the Exchange, respectively.
---------------------------------------------------------------------------

    This proposed rule text is based on Rule 123C(6)(a)(iii) and
subparagraphs (A)-(C) with non-substantive differences to use Pillar
terminology and a substantive difference to use Exchange Last Sale
Price rather than the last sale price of such security on the Exchange.
If a security has traded that day on the Exchange, use of the term
``Exchange Last Sale Price'' would have the same meaning as the current
rule. However, if there were no trades that day in a security on the
Exchange and the prior day's Official Closing Price were based on a
consolidated last-sale eligible trade from another exchange, then use
of the term Exchange Last Sale Price would have a substantive
difference from use of the term ``last sale price'' under current Rule
123C(6)(a)(iii). The Exchange believes that in such scenario, the term
Exchange Last Sale Price may have a more recent valuation than use of
the term last sale price on the Exchange.
    Auction Imbalance Freeze. Proposed Rule 7.35B(f) would provide that
the Auction Imbalance Freeze for the Closing Auction would begin at the
Closing Auction Imbalance Freeze Time. This proposed rule text is based
on Rules 123C(2), (3), (4), (5) and (6), which each reference the 3:50
p.m. time as the beginning of order entry and cancellation restrictions
and when the Exchange will begin disseminating information about the
close. The Exchange proposes non-substantive differences to use Pillar
terminology.
    Proposed Rule 7.35B(f) would further provide that order entry and
cancellation would be processed during the Closing Auction Imbalance
Freeze as follows:
     Entry of MOC and LOC Orders (proposed Rule 7.35B(f)(1)).
    [cir] Proposed Rule 7.35B(f)(1)(A) would provide that if a
Regulatory Closing Imbalance has not been published, the Exchange would
reject all MOC and LOC Orders and requests to cancel and replace MOC
and LOC Orders that would result in a new MOC or LOC Order. This
proposed rule text is based on Rule 123C(2)(b)(ii) with non-substantive
differences to use Pillar terminology.
    [cir] Proposed Rule 7.35B(f)(1)(B) would provide that if a
Regulatory Closing Imbalance has been published, the Exchange would
accept MOC and LOC Orders opposite to the Side of the Regulatory
Closing Imbalance and would reject MOC and LOC Orders on the Side of
the Imbalance and requests to cancel and replace MOC and LOC

Orders that would result in a new MOC or LOC Order on the Side of the
Imbalance. This proposed rule text is based on Rule 123C(2)(b)(i) with
non-substantive differences to use Pillar terminology.\77\
---------------------------------------------------------------------------

    \77\ The Exchange does not propose rule text in the Pillar
Auction Rules based on Rule 123C(2)(a), which describes MOC and LOC
Order entry before 3:50 p.m., or 123C(2)(b)(3), which describes CO
Order entry after 3:50 p.m. Under the Pillar Auction Rules, the
Exchange proposes to describe only when order entry is restricted.
The Exchange also does not propose rule text based on Rule
123C(2)(c), which describes order entry in the event of a Trading
Halt. As described above, the Exchange would disseminate a
Regulatory Closing Imbalance at the Closing Auction Imbalance Freeze
Time even if a security were halted or paused at that time.
Accordingly, order entry of MOC and LOC Orders during such period
would need to comply with proposed Rule 7.35B(f)(1)(A) and (B)
regardless of whether a security is halted or paused.
---------------------------------------------------------------------------

     Cancellation of MOC, LOC, and Closing IO Orders (see
proposed Rule 7.35B(f)(2)).
    [cir] Proposed Rule 7.35B(f)(2)(A) would provide that from the
beginning of the Auction Imbalance Freeze Time until two minutes before
the scheduled end of Core Trading Hours, MOC, LOC, and Closing IO
Orders may be cancelled or reduced in size only to correct a Legitimate
Error. This proposed rule text is based on Rule 123C(3)(b) with non-
substantive differences to use Pillar terminology.\78\
---------------------------------------------------------------------------

    \78\ The Exchange does not propose rule text based on Rule
123C(3)(a), which provides that MOC, LOC and CO orders may be
cancelled or reduced in size for any reason up to 3:50 p.m. Under
the Pillar Auction Rules, the Exchange proposes to describe only
when order cancellation would be restricted.
---------------------------------------------------------------------------

    [cir] Proposed Rule 7.35B(f)(2)(B) would provide that except as
provided for in proposed Rule 7.35B(j)(2)(B) of this Rule, a request to
cancel, cancel and replace, or reduce in size a MOC, LOC, or Closing IO
Order entered two minutes or less before the scheduled end of Core
Trading Hours would be rejected. This proposed rule text is based on
Rule 123C(3)(c) with non-substantive differences to use Pillar
terminology and update the rule cross-references.
     Proposed Rule 7.35B(f)(3) would provide that beginning 10
seconds before the scheduled close of trading, a request to enter a
Closing D Order in any security, cancel and replace a Closing D Order
in any security that would result in a new Closing D Order, or cancel,
cancel and replace, or modify a Closing D Order in an Auction-Eligible
Security would be rejected. The proposed rule text relating to
restrictions on the entry of Closing D Orders in any security is based
in part on the operation of d-Quotes for Exchange-listed securities
described in the second sentence of current Rule 70.25(a)(ii), which
prohibits the entry of d-Quotes 10 seconds or less before the close of
trading. Similarly, the Exchange proposes that a request to cancel and
replace a Closing D Order that would result in a new Closing D Order
would similarly be rejected because it would result in the entry of a
new Closing D Order. Because the Exchange would accept a Closing D
Order in a UTP Security, even though such order would be routed to the
primary market, as proposed, such orders would also be rejected if
entered 10 seconds or less before the scheduled close of trading.
    The Exchange further proposes that requests to cancel, cancel and
replace, or modify Closing D Orders during this same period should also
be rejected, which would be new functionality on Pillar. Because this
is new functionality, it would be applicable only to Closing D Orders
in Auction-Eligible Securities. The Exchange does not propose the same
restriction for Closing D Orders in UTP Securities because such
securities are routed to the applicable primary listing market as
either a MOC or LOC Order, and would be processed by the primary
listing market under its applicable rules.
     Proposed Rule 7.35B(f)(4) would provide that all other
order instructions would be accepted, subject to the terms of such
orders. This proposed rule text is based in part on NYSE Arca Rule
7.35-E(d)(2)(C) and NYSE American Rule 7.35E(d)(2)(C) and reflects the
Pillar terminology to specify only restrictions on entry and
cancellation of orders.
    Determining an Auction Price. Proposed Rule 7.35B(g) would provide
that the DMM would be responsible for determining the Auction Price for
a Closing Auction under this Rule. This proposed rule text would be new
for the Pillar Auction rules and is based on current functionality that
as part of the DMM's role in facilitating auctions, the DMM determines
the Auction Price based on buy and sell orders represented in the
Exchange Book. The Exchange believes that including this detail in
Exchange rules provides clarity and transparency to the Exchange's
auction process.
    The rule would further provide that if there is an Imbalance of any
size, the DMM must select an Auction Price at which all better-priced
orders on the Side of the Imbalance can be satisfied. This proposed
rule text is based in part on Rule 123C(8)(a)(i)(A), which specifies
that Market Orders and Limit Orders better priced than the closing
price trading against the imbalance amount are guaranteed to
participate in the closing transaction.\79\ Otherwise, this proposed
rule text would be new for the Pillar Auction Rules, and is designed to
promote clarity and transparency in Exchange rules relating to the
Exchange's auction process.
---------------------------------------------------------------------------

    \79\ In the Pillar Auction Rules, a Market Order that is held
unexecuted pursuant to Rule 7.31(a)(1)(A) would be considered
better-priced interest when it is included for allocation in an
Auction.
---------------------------------------------------------------------------

    Auction Allocation. Proposed Rule 7.35B(h) would specify how orders
would be allocated in an Auction. As proposed, once an Auction Price
has been determined, orders would be allocated in a Closing Auction as
follows:
     Better-priced orders, including the reserve interest of
Reserve Orders, entered by the Book Participant or a Floor Broker
Participant would be guaranteed to participate in the Closing Auction
at the Auction Price (see proposed Rule 7.35B(h)(1)). The Exchange
proposes to use Pillar terminology in proposed Rule 7.35B(h)(1) to
describe the same functionality as set forth in Rule 123C(7), which
specifies the orders that must be executed in whole or in part in the
closing transaction, i.e., are better-priced orders.
     At-priced orders and DMM Interest of any price would not
be guaranteed to participate in the Closing Auction (see proposed Rule
7.35B(h)(2)). The Exchange proposes to use Pillar terminology in
proposed Rule 7.35B(h)(2) to describe the functionality as set forth in
Rule 123C(7)(b), including that DMM Interest is not guaranteed to
participate in such Auctions. Proposed Rule 7.35B(h)(2) would further
provide how at-priced orders would be allocated in an Auction as
follows:
    [cir] First, orders ranked Priority 2--Display Orders and Closing D
Orders would be allocated on parity by Participant pursuant to Rule
7.37(b)(2)-(7) (see proposed Rule 7.35B(h)(2)(A)). By cross-referencing
Rule 7.37(b)(2)-(7), this proposed rule text makes clear that the
allocation process for the Closing Auction would follow the established
Pillar parity allocation process. The Exchange believes that if at-
priced Closing D Orders are participating in the Closing Auction at the
Auction Price, such orders should be allocated together with displayed
orders. In addition, by cross referencing Rules 7.37(b)(5), (6), and
(7), the proposed Rule provides specificity that allocations to each
Participant, including DMMs, would be allocated consistent with those
rules.
    [cir] Next, orders ranked Priority 3--Non-Display Orders would be
allocated on parity by Participant pursuant to

Rule 7.37(b)(2)-(7) (see proposed Rule 7.35B(h)(2)(B)). This proposed
rule text would be applicable to the reserve interest of Reserve
Orders, which are the only orders ranked Priority 3--Non-Display Orders
eligible to participate in an Auction. By cross-referencing Rule
7.37(b)(2)-(7), this proposed rule text makes clear that the allocation
process for the Closing Auction would follow the established Pillar
parity allocation process.
    [cir] Next, LOC Orders would be allocated on time (see proposed
Rule 7.35B(h)(2)(C)). This proposed allocation would be new under the
Pillar Auction Rules. Unlike LOO Orders, which are displayed at their
limit price prior to the Core Open or Trading Halt Auction, LOC Orders
are not displayed at their limit price. LOC Orders are included in the
aggregate in Auction Imbalance Information only to determine the
Imbalance. Because they are not displayed, the Exchange does not
believe that they should be ranked together with orders ranked Priority
2--Display Orders. The Exchange further believes that orders ranked
Priority 3--Non-Displayed Orders should have priority over LOC Orders
because such orders were eligible to trade before the Closing Auction,
and therefore were at risk of trading before the Auction.
    [cir] Next, Closing IO Orders opposite to the Side of the Unpaired
Quantity would be allocated on time (see proposed Rule 7.35B(h)(2)(D)).
This proposed rule text is based on Rule 13(c)(1), which describes how
CO Orders are allocated. The Exchange proposes non-substantive
differences to use Pillar terminology to describe the same
functionality. Proposed Rule 7.35B(h)(2)(D)(i) would further provide
that Closing IO Orders would not participate in the Closing Auction if
there is no Unpaired Quantity at the Auction Price. This proposed rule
text is similarly based on Rule 13(c)(1), but with non-substantive
differences to use Pillar terminology.
     Proposed Rule 7.35B(h)(3) would address the DMM
Participant Allocation of at-priced orders in the Closing Auction,
which would be all of the DMM Participant's orders, regardless of limit
price. The Exchange proposes that the manner by which DMMs would
participate in an Auction would differ from how they participate in
allocations during continuous trading, described above. As proposed:
    [cir] At-priced DMM Orders would be placed on the allocation wheel
for the Closing Auction based on the time of entry and any other orders
or interest from such DMM would join that position on the allocation
wheel (see proposed Rule 7.35B(h)(3)(A)). In such case, the DMM Order
with the earliest entry time would establish that DMM Participant's
position on the allocation wheel, consistent with Rule
7.37(b)(2)(B).\80\ However, if the only DMM Interest available to
participate in a Closing Auction would be DMM Auction Liquidity or
better-priced DMM Orders or both, such DMM Interest would be placed
last on the allocation wheel. Similar to proposed Rule 7.35A(h)(3)(A)
regarding allocation of DMM Interest in the Core Open or Trading Halt
Auction, the Exchange proposes that in these scenarios, the DMM
Interest would go last on the allocation wheel because such orders
would either be repriced for the Auction (in the case of a better-
priced DMM Order, which would be considered an at-priced order for the
Auction Allocation) or entered right before the Auction (in the case of
DMM Auction Liquidity). Because such DMM Interest is intended to be
offsetting interest for an Auction, the Exchange does not believe that
such DMM Interest should have time priority in how they are included in
an allocation wheel over other orders that are eligible to participate
in an Auction. This proposed functionality would be new on Pillar and
is designed so that DMMs, who have the ability to enter buy and sell
interest last in an Auction, would not receive any time priority for
such interest.
---------------------------------------------------------------------------

    \80\ Rule 7.37(b)(2)(B) provides that additional Participants
are added to an allocation wheel based on time of entry of the first
order entered by a Participant.
---------------------------------------------------------------------------

    [cir] A parity allocation to the DMM Participant would be allocated
in price-time priority (see proposed Rule 7.35B(h)(3)(B)). As discussed
above, a parity allocation to the DMM Participant would be based on the
working time. However, in an Auction Allocation, DMM Interest may have
more than one limit price, and the Exchange proposes that the parity
allocation to the DMM Participant would be allocated among such DMM
Interest in price-time priority, even though they all would participate
in the Auction at a single price.
    SIP Modifier. Proposed Rule 7.35B(i) would provide that the Closing
Auction would be designated with a modifier to identify it as a Closing
Auction Trade and that the Exchange would report an Official Closing
Price, as defined in Rule 1.1, for all Auction-Eligible Securities that
trade on the Exchange, provided that an Official Closing Price would
not be reported for a security if there was no Exchange Last Sale Price
in such security on a trading day. These SIP modifiers are consistent
with how the Exchange functions under the Current Auction Rules and
would be new rule text for the Pillar Auction Rules that is based on
NYSE Arca Rule 7.35E(d)(4) and NYSE American Rule 7.35E(d)(4).
    Temporary Rule Suspensions. Current Rule 123C(9) provides that in
order to address extreme order imbalances at or near the close, the
Exchange can temporarily suspend either the hours of the Exchange or
the prohibition on cancelling or reducing in size MOC, LOC, or CO
Orders after 3:58 p.m. In the Pillar Auction Rules, the Exchange
proposes to move these two temporary rule suspension requirements to
proposed Rule 7.35B(j). The Exchange also proposes a new temporary rule
suspension for the close that is based on the current Rule 123D(c)
temporary rule suspension for the open or reopen.
    Proposed Rule 7.35B(j)(1) would set forth the temporary suspension
of DMM automated closing limitations, which would be new under the
Pillar Auction Rules. As described above, pursuant to proposed Rule
7.35B(c)(1)(G), the Exchange proposes to specify designated percentages
for when a DMM may not close a security electronically. Because this
proposed rule text is based in part on Rule 123D(a), the Exchange
similarly proposes a temporary suspension of these automated
limitations for the close similar to the temporary suspension of
automated limitations for the open or reopen as set forth in Rule
123D(c).
    Proposed Rule 7.35B(j)(1)(A) would provide that if the CEO of the
Exchange, or his or her designee, determines that a Floor-wide event is
likely to have an impact on the ability of DMMs to arrange for a fair
and orderly Closing Auction and that, absent relief, the operation of
the Exchange is likely to be impaired, the CEO of the Exchange may
temporarily suspend the prohibition on a DMM closing a security
electronically if the Closing Auction Price would be more than the
price or volume parameters specified in proposed Rule 7.35B(c)(1)(F)
and (G). This proposed rule text is based on Rule 123D(c)(1)(A) with
modifications to apply it to the Closing Auction.
    Proposed Rule 7.35B(j)(1)(B) would provide that in determining
whether to temporarily suspend proposed Rule 7.35B(c)(1)(F) or (G), the
CEO of the Exchange would:
     Consider the facts and circumstances that are likely to
have Floor-wide impact for a particular trading session, including
volatility in the day's trading session, trading in foreign markets,
substantial activity in

the futures market, evidence of pre-closing significant order
imbalances across the market, government announcements, news and
corporate events, and such other market conditions that could impact
Floor-wide trading conditions (see proposed Rule 7.35B(j)(1)(B)(i)).
This proposed rule text is based on Rule 123D(c)(2)(A) with
modifications to apply it to the Closing Auction.
     Notify the Chief Regulatory Officer of the Exchange (see
proposed Rule 7.35B(j)(1)(B)(ii)). This proposed rule text is based on
Rule 123D(c)(2)(B) with modifications to apply it to the Closing
Auction.
     Inform the Securities and Exchange Commission staff as
promptly as practicable of the temporary suspension (see proposed Rule
7.35B(j)(1)(B)(iii)). This proposed rule text is based on Rule
123D(c)(2)(C) with modifications to apply it to the Closing Auction.
    Proposed Rule 7.35B(j)(1)(C) would provide that a temporary
suspension under this Rule will be in effect for the trading day on
which it was declared only. This proposed rule text is based on Rule
123D(c)(3) with modifications to apply it to the Closing Auction.
    Proposed Rule 7.35B(j)(2) would set forth in the Pillar Auction
Rules the temporary suspensions currently available under Rule
123C(9)(a), with non-substantive differences to use Pillar terminology.
As proposed, to avoid closing price dislocation that may result from an
order entered into Exchange systems or represented to a DMM orally at
or near the end of Core Trading Hours, the Exchange may temporarily
suspend one of two rules.
    First, pursuant to proposed Rule 7.35B(j)(2)(A), the Exchange may
temporarily suspend the requirement to enter all order instructions by
the end of Core Trading Hours (Rule 7.34(a)(2)(B)) \81\ to permit the
solicitation and entry of orders into Exchange systems. This proposed
rule text is based on Rule 123C(9)(a)(1) as follows:
---------------------------------------------------------------------------

    \81\ See discussion infra regarding proposed Rule 7.34(a)(2)(B),
which is based on Rule 52. Currently, Rule 123C(9)(a)(1) permits a
temporary suspension of the hours of operation, as described in Rule
52. The Exchange believes that proposed Rule 7.35B(j)(2)(A) achieves
the same result using Pillar terminology to describe the temporary
rule suspension.
---------------------------------------------------------------------------

     Such orders would be solicited solely to offset any
Imbalance in a security that may exist as of the scheduled end of Core
Trading Hours (see proposed Rule 7.35B(j)(2)(A)(i)). This proposed rule
text is based on Rule 123C(9)(a)(1)(i) with non-substantive differences
to use Pillar terminology. Specifically, Rule 123C(9)(a)(1)(i) refers
to offsetting ``any imbalance'' in a security. Because, as described
above, the term ``Imbalance'' for the Closing Auction refers to the
imbalance of Auction-Only Orders, to ensure that the Imbalance used for
entry of orders during this proposed temporary suspension would reflect
all orders eligible to trade in the Closing Auction, the Exchange
proposes to specify that for purposes of proposed Rule 7.35B(j)(2)(A),
the Imbalance would include all interest eligible to participate in the
Closing Auction. This proposed rule text makes clear that if this
temporary rule suspension were triggered, the Imbalance included in the
Auction Imbalance Information, which would continue to be calculated
until the Closing Auction begins, would begin to include all orders
eligible to trade in the Closing Auction.
     The Exchange would disseminate a notice via its
proprietary data feed and such other methods of communication, as
determined by the Exchange, that notifies both on-Floor and off-Floor
participants that the Exchange would be accepting offsetting orders
after the end of Core Trading Hours up to an order acceptance cut-off
time designated by the Exchange (the ``Solicitation Period'') (see
proposed Rule 7.35B(j)(2)(A)(ii)). This proposed rule text is based on
Rule 123C(9)(a)(1)(ii) with a substantive difference to specify that
the solicitation would be disseminated both on the Exchange's
proprietary data feed, which would be new under Pillar Auction Rules,
and such other methods of communication. For example, the Exchange
currently notifies member organizations of such solicitations via
Trader Update. The Exchange proposes to continue using Trader Updates
and believes that also including this information in its proprietary
data feed will enable automated systems of Exchange member
organizations to be able to respond on a more timely basis to such
solicitation requests. The Exchange also proposes non-substantive
differences to use Pillar terminology, including a new defined term of
``Solicitation Period.''
    The proposed rule would further provide that such notification
would include, at a minimum: (A) The security symbol; (B) the Total
Imbalance; (C) the Side of the Total Imbalance; and (D) the Exchange
Last Sale Price. This proposed rule text is also based on Rule
123C(9)(a)(1)(ii) and uses Pillar terminology to describe the
information that would be included in the solicitation request.
     If the Side of the Imbalance is buy (sell), during the
Solicitation Period, the Exchange will accept only sell (buy) Limit
Orders and Floor Broker Interest with a limit price equal to or higher
(lower) than the Exchange Last Sale Price. Such orders would not be
subject to the Limit Order Price Check and would not be routed to an
Away Market (see proposed Rule 7.35B(j)(2)(A)(iii)). This proposed rule
text is based on Rule 123C(9)(a)(1)(iii) with non-substantive
differences to use Pillar terminology. The Exchange proposes new
functionality under the Pillar Auction Rules. First, because Limit
Orders are subject to Limit Order Price Protection, the Exchange
proposes to specify that Limit Orders entered in response to a
Solicitation Request would not be subject to such price check. Because
such orders are by their terms, restricted in the limit price
applicable to such orders, the Exchange does not believe that Limit
Order Price Protection would be necessary for such orders.
    Second, the Exchange proposes to systemically enforce these order
entry requirements. Currently, while Rule 123C(9)(a)(1)(iii) requires
only specified interest to be entered, Exchange systems do not enforce
this requirement. Under the Pillar Auction Rules, the Exchange proposes
to enforce these requirements by rejecting orders outside of these
specified parameters. To specify this new functionality, proposed Rule
7.35B(j)(2)(A)(iii) would further provide that the Exchange would
reject all other orders and requests to cancel any orders, regardless
of the time of entry of the original order. For example, if an order
was represented before the end of Core Trading Hours, the Exchange
would not accept a cancellation of such previously-entered order during
the Solicitation Period. Finally, because Auction Imbalance Information
would continue to be published up to the beginning of the Auction
Processing Period for the Closing Auction, the Exchange further
proposes to provide that orders entered during the Solicitation Period
would be included in the calculation of the Continuous Book Clearing
Price.
     The DMM would close the security the earlier of the order
acceptance cut-off time or if the Imbalance is paired off at or
reasonably contiguous to the Exchange Last Sale Price (see proposed
Rule 7.35B(j)(2)(A)(iv)). This proposed rule would further provide that
for purposes of proposed Rule 7.35B(j)(2)(A), a price reasonably
contiguous to the Exchange Last Sale Price is within cents of the
Exchange Last Sale Price and would be a price point that during a
regular closing auction would not be considered a dislocating closing
price as compared to

the Exchange Last Sale Price and that all offsetting interest solicited
pursuant to proposed Rule 7.35B(j)(2)(A) would be executed consistent
with proposed Rule 7.35B(h). This proposed rule text is based on Rule
123C(9)(a)(1)(iv) with non-substantive differences to use Pillar
terminology and update the rule cross references.
     Finally, if the Exchange solicits orders after the close
of Core Trading Hours pursuant to proposed Rule 7.35B(j)(2)(A), the
Total Imbalance information that would be disseminated pursuant to
proposed Rule 7.35B(e) would begin including all orders eligible to
participate in the Closing Auction. This proposed rule text would be
new for the Pillar Auction Rules and reflects that not only would the
Imbalance be calculated based on all orders eligible to trade in the
Closing Auction, but the Total Imbalance published during this period
would also be based on all orders eligible to participate in the
Closing Auction.
    Second, pursuant to proposed Rule 7.35B(j)(2)(B), the Exchange may
temporarily suspend the prohibition on canceling an MOC or LOC Order
after two minutes before the scheduled end of Core Trading Hours
(proposed Rule 7.35B(f)(2)(B)). This proposed rule text is based on
Rule 123C(9)(a)(2) with one substantive difference that in Pillar, the
Exchange would not support being able to reduce the size of a MOC or
LOC Order if this temporary suspension were invoked. Instead, as
proposed, if this temporary suspension were invoked, the Exchange would
be able to fully cancel a MOC or LOC Order only. Based on the Current
Auction Rules, the Exchange proposes certain qualifications for such
temporary suspension, provided that:
     The cancellation is necessary to correct a Legitimate
Error (see proposed Rule 7.35B(j)(2)(B)(i)). This proposed rule text is
based on Rule 123C(9)(2)(A) with non-substantive differences to use
Pillar terminology.
     Execution of such an MOC or LOC Order would cause
significant price dislocation at the close (see proposed Rule
7.35B(j)(2)(B)(ii)). This proposed rule text is based on Rule
123C(9)(2)(B) with non-substantive differences to use Pillar
terminology.
    Proposed Rule 7.35B(j)(3) would provide that only the DMM assigned
to a particular security may request a temporary suspension under
proposed Rule 7.35B(j)(2) and that a determination to declare such a
temporary suspension may be made after the scheduled end of Core
Trading Hours and would be made on a security-by-security basis. This
proposed rule text is based on Rule 123C(9)(b) with non-substantive
differences to use Pillar terminology. Proposed Rule 7.35B(j)(3) would
further provide that such determination, as well as any entry or
cancellation of orders or closing of a security under proposed Rule
7.35B(j)(2) must be supervised and approved by an Executive Floor
Governor and supervised by an Exchange Officer and that factors that
may be considered when making such a determination include, but would
not be limited to, when the order(s) that impacted the Imbalance were
entered into Exchange systems or orally represented to the DMM, the
impact of such order(s) on the closing price of the security, the
volatility of the security during the trading session, and the ability
of the DMM to commit capital to dampen the price dislocation. This
proposed rule text is also based on Rule 123C(9)(b) with non-
substantive differences to use Pillar terminology.\82\
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    \82\ The Exchange also proposes a non-substantive difference to
reference only the term ``Exchange Floor Governor,'' and not
reference qualified ICE employees, as such text is redundant. See
discussion supra note 75. In addition, because the Exchange no
longer has Rule 48, the Exchange proposes to simply reference an
Exchange Officer, which is a term used in other Exchange rules, such
as Rule 7.10.
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    Finally, proposed Rule 7.35B(j)(4) would provide that a temporary
suspension under proposed Rule 7.35B(j)(2) would be in effect only for
the particular security for which such suspension has been granted and
for that trading day. This proposed rule text is based on Rule
123C(9)(c) with non-substantive differences to update the rule cross
references.
Proposed Rule 7.35C (Exchange-Facilitated Auctions)
    As discussed above, DMMs have an obligation to facilitate Auctions
and therefore both the Current Auction Rules and proposed Pillar
Auction Rules, described above, contemplate that the DMM will
facilitate Auctions. The Current Auction Rules also provide for how the
Exchange would facilitate an Auction if a DMM cannot facilitate the
opening or closing of trading. In such circumstances, Rule 123D(a)(2)-
(6) sets forth how the Exchange would facilitate the opening or
reopening of securities and Supplementary Material .10 to Rule 123C
sets forth how the Exchange would facilitate the closing of
securities.\83\
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    \83\ See Securities Exchange Act Release No. 76290 (October 28,
2015), 80 FR 67822 (November 3, 2015) (SR-NYSE-2015-49) (Notice of
filing and immediate effectiveness of proposed rule change to Rule
123D) and Securities Exchange Act Release No. 74006 (January 6,
2015), 80 FR 1567 (January, 12, 2015) (SR-NYSE-2014-73) (Notice of
filing and immediate effectiveness of proposed rule change to Rule
123C). The Exchange has never facilitated either an opening or
closing of any security on the Exchange.
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    When Exchange-listed securities transition to Pillar, the Exchange
proposes that new Rule 7.35C (Exchange-Facilitated Auctions) would
describe how the Exchange would facilitate an Auction in one or more
securities if the DMM cannot. Similar to how the Current Auction Rules
function, because the Exchange would not supply any liquidity when
facilitating an Auction, under proposed Rule 7.35C, the Exchange would
not open, reopen, or close a security at a price outside of defined
numerical parameters. In addition, similar to the Current Auction
Rules, orders that would have otherwise participated in an Auction
under Rule 7.35A, but which may not participate in an Exchange-
facilitated Auction because of such numerical parameters, will be
cancelled.
    While the basic premise of how Exchange-facilitated Auctions on
Pillar would not change, with the availability of Pillar technology,
the Exchange proposes enhancements to this process that are based on
how NYSE Arca and NYSE American operate electronic auctions, including
using an Indicative Match Price to determine how to price the Auction,
use of Auction Collars, and extension logic for reopenings following a
trading pause.
    Proposed Rule 7.35C(a) would provide that if a DMM cannot
facilitate an Auction for one or more securities in which the DMM is
registered under proposed Rules 7.35A or 7.35B, the Exchange would
conduct the Auction for such security or securities electronically as
provided for in proposed Rule 7.35C. This proposed rule text is based
in part on the first sentence of Rule 123D(a)(2) and the first sentence
of the second paragraph of Supplementary Material .10 to Rule 123C. The
Exchange proposes non-substantive differences to use Pillar technology
and cross reference Pillar Auction Rules.
    Proposed Rule 7.35C(a)(1) would provide that before the Exchange
facilitates an Auction, previously-entered DMM Interest would be
cancelled, the Exchange would not accept new DMM Interest, and Floor
Broker Interest that has not been electronically accepted by the DMM
would not participate in an Exchange-facilitated Closing Auction. This
proposed rule text is based in part on the second sentence of Rule
123D(a)(2) and the second sentence of the second paragraph of
Supplementary Material .10 to Rule 123, which each provide that

``[m]anually-entered Floor interest will not participate in any
[opening/closing] effectuated electronically by the Exchange and if
previously entered, will be ignored.'' The Exchange proposes non-
substantive differences to use Pillar terminology. The Exchange also
proposes a substantive difference that all DMM Interest would be
cancelled--not just DMM Interest entered on the Trading Floor by a DMM.
In addition, to reflect the new Floor Broker Interest functionality,
described above in proposed Rule 7.35B(a)(1), the Exchange proposes
that if a DMM has already accepted such interest, and then the Exchange
facilitates a Closing Auction, such interest would be eligible to
participate in that Closing Auction. However, if the DMM has not
accepted such interest, and therefore that interest has not yet been
validated, it would not be eligible to participate in an Exchange-
facilitated Closing Auction.
    Proposed Rule 7.35C(a)(2) would provide that a security subject to
an Exchange-facilitated Core Open Auction, IPO Auction, Direct Listing
Auction, or Trading Halt Auction may open or reopen with a trade or a
quote. This proposed rule text is based in part on Rule 123D(a)(3) and
(a)(4), which describe how an opening or reopening can be on a trade or
a quote.
    Proposed Rule 7.35C(b) would set forth definitions that would be
used for purposes of proposed Rule 7.35C only. Proposed Rule
7.35C(b)(1) would define the term ``Auction Reference Price,'' which is
a term defined in NYSE Arca Rule 7.35-E(a)(8)(A) and NYSE American Rule
7.35E(a)(8)(A). As described below, the Auction Reference Price would
be used by the Exchange, and is used by NYSE Arca and NYSE American,
for purposes of calculating the Indicative Match Price and Auction
Collars.
    The Exchange proposes a difference from NYSE Arca and NYSE American
because the Auction Reference Price that would be used for a particular
Auction would be based on the Imbalance Reference Price, described
above, for such Auctions. As proposed, the Auction Reference Price for
the Core Open Auction would be the Imbalance Reference Price as
determined under proposed Rule 7.35A(e)(3), described above. And,
except as provided for in proposed Rule 7.35C(e), described below, the
Auction Reference Price for a Trading Halt Auction would also be the
Imbalance Reference Price as determined under proposed Rule
7.35A(e)(3), described above. The proposed Auction Reference Price for
the Closing Auction would be the Imbalance Reference Price as
determined under proposed Rule 7.35B(e)(3).
    Finally, because the Exchange proposes to have functionality
available to facilitate an IPO or Direct Listing Auction, the Exchange
proposes that the Auction Reference Price for such Auctions would be a
price determined under proposed Rule 1.1(s)(1)(F). Pursuant to that
rule, the Exchange determines the Official Closing Price for a security
that is a new listing and does not have any consolidated last-sale
eligible trades on its first trading day based on a derived last sale
associated with the price of such security before it begins trading on
the Exchange. As noted above, pursuant to Rule 123C(1)(e)(i)(C), the
Exchange already determines the Official Closing Price in this manner
for new listings. As proposed, this price would be used as the Auction
Reference Price if the Exchange were to facilitate an IPO or Direct
Listing Auction.
    Proposed Rule 7.35C(b)(2) would define the term ``Indicative Match
Price'' to mean the best price at which the maximum volume of shares,
including the non-displayed quantity of Reserve Orders, would be
tradable in the applicable Auction, subject to the Auction Collars.
This proposed definition is based on NYSE Arca Rule 7.35-E(a)(8) and
NYSE American Rule 7.35E(a)(8) without any differences. With the
exception of which Auction Reference Price would be used by the
Exchange when it facilitates an Auction, the manner by which the
Exchange would determine the Indicative Match Price would be based on
NYSE Arca and NYSE American rules without any differences, as follows:
     Proposed Rule 7.35C(b)(2)(A) would provide that if there
are two or more prices at which the maximum volume of shares would be
tradable, the Indicative Match Price would be the price closest to the
Auction Reference Price, provided that the Indicative Match Price would
not be lower (higher) than the price of an order to buy (sell) ranked
Priority 2--Display Orders that was eligible to participate in the
applicable Auction. This proposed rule is based on NYSE Arca Rule 7.35-
E(a)(8)(A) and NYSE American Rule 7.35E(a)(8)(A) without any
differences.
     Proposed Rule 7.35C(b)(2)(B) would provide that if there
are two prices at which the maximum volume of shares would be tradable
and both prices are equidistant to the Auction Reference Price, the
Indicative Match Price would be the Auction Reference Price. This
proposed rule is based on NYSE Arca Rule 7.35-E(a)(8)(B) and NYSE
American Rule 7.35E(a)(8)(B) without any differences.
     Proposed Rule 7.35C(b)(2)(C) would provide that if the
Paired Quantity for an auction consists of buy and sell Market Orders
only, the Indicative Match Price would be the Auction Reference Price.
This proposed rule is based on NYSE Arca Rule 7.35-E(a)(8)(C) and NYSE
American Rule 7.35E(a)(8)(C) with a difference that the Auction
Reference Price would be used for all Auctions, whereas the NYSE Arca
and NYSE American rules use a different reference price for the Closing
Auction.
     Proposed Rule 7.35C(b)(2)(D) would provide that if there
is a BBO, but no Paired Quantity, the Indicative Match Price for the
Auction Imbalance Information would be (i) the side of the BBO that has
the higher volume, or (ii) if the volume of the BB equals the volume of
the BO, the BB. This proposed rule text is based on NYSE Arca Rule
7.35-E(a)(8)(D) and NYSE American Rule 7.35E(a)(8)(D) with a non-
substantive difference to use the term ``Paired Quantity,'' which is
defined in proposed Rule 7.35(a) above, instead of the term ``Matched
Volume,'' which is a defined term on NYSE Arca and NYSE American that
has the same meaning as the term ``Paired Quantity.''
     Proposed Rule 7.35C(b)(2)(E) would provide that if there
is no Paired Quantity and Market Orders on only one side of the market,
the Indicative Match Price for the Auction Imbalance Information would
be zero. This proposed rule text is based on NYSE Arca Rule 7.35-
E(a)(8)(E) and NYSE American Rule 7.35E(a)(8)(E) with a non-substantive
difference to use the term ``Paired Quantity'' instead of the term
``Matched Volume.''
     Proposed Rule 7.35C(b)(2)(F) would provide that if the
Indicative Match Price is not in the MPV for the security, it would be
rounded to the nearest price at the applicable MPV. This proposed rule
text is based on NYSE American Rule 7.35E(a)(8)(F) with a non-
substantive difference not to include rule text referring to an
Indicative Match Price based on the midpoint of the ``Auction NBBO,''
as this is a feature that the Exchange does not propose to include in
Rule 7.35C.
    Proposed Rule 7.35C(b)(3) would define the term ``Auction Collar''
to mean the price collar thresholds for the Indicative Match Price for
an Auction. This proposed rule text is based on NYSE Arca Rule 7.35-
E(a)(10) and NYSE American Rule 7.35E(a)(10) without any substantive
differences. The Exchange further proposes that there would be no
Auction Collars for

an IPO Auction or Direct Listing Auction. This proposed rule text is
based in part on NYSE Arca Rule 7.35-E(f)(2) and NYSE American Rule
7.35E(f)(2), which provide than an IPO Auction on those exchanges would
not be subject to Auction Collars. Because the Exchange proposes to
process Direct Listing Auctions similarly to an IPO Auction, the
Exchange proposes that if it facilitates a Direct Listing Auction, it
would similarly not be subject to Auction Collars.
    Proposed Rule 7.35C(b)(3)(A) would provide that the upper (lower)
boundary of the Auction Collar would the Auction Reference Price
increased (decreased) by either a specified amount or specified
percentage, as applicable, rounded to the nearest MPV, provided that
the lowest Auction Collar would be one MPV above $0.00. This proposed
method of calculating the Auction Collar is identical to how NYSE Arca
and NYSE American calculate an Auction Collar.\84\
---------------------------------------------------------------------------

    \84\ See NYSE Arca Rule 7.35-E(a)(10)(A) (third sentence) and
NYSE American Rule 7.35E(a)(10)(A) (third sentence).
---------------------------------------------------------------------------

     Proposed Rule 7.35C(b)(3)(A)(i) would provide that except
as provided for in proposed Rule 7.35C(e)(4), described below, the
Auction Collar for the Core Open Auction and the Closing Auction will
be based on a price that is the greater of $0.15 or 10% away from the
Auction Reference Price for the applicable Auction. This proposed
Auction Collar is based in part on NYSE American Rule 7.35E(a)(10)(A),
which also uses an Auction Collar for its Core Open Auction and Closing
Auction that is $0.50 or 10% away from the Auction Reference Price. The
Exchange proposes a substantive difference to use $0.15 as the
breakpoint rather than $0.50. The Exchange believes this would simplify
the operation of this functionality as it would use the same breakpoint
as the proposed specified price for Auction Collars for Trading Halt
Auctions.
     Proposed Rule 7.35C(b)(3)(A)(ii) would provide that except
as provided for in proposed Rule 7.35C(e), described below, the Auction
Collar for the Trading Halt Auction would be based on a price that is
the greater of $0.15 or 5% away from the Auction Reference Price for
the Trading Halt Auction. This proposed rule is based on NYSE Arca Rule
7.35-E(e)(7) and NYSE American Rule 7.35E(e)(7), which also has a price
collar threshold of the greater of $0.15 or 5% away from the Auction
Reference price.\85\
---------------------------------------------------------------------------

    \85\ In the NYSE Arca and NYSE American rules, this specified
amount is described as ``[f]or securities with an Auction Reference
Price above $3.00, the Price Collar Threshold for Auction Collars
will be the Auction Reference Price multiplied by 5 percent. For
securities with an Auction Reference Price $3.00 and below, the
Price Collar Threshold for Auction Collars will be $0.15.''
Mathematically, using the phrase ``the greater of $0.15 or 5%''
leads to the same result. Therefore, even though the Exchange
proposes to use different text, it is substantively the same as the
Auction Collar on NYSE Arca and NYSE American.
---------------------------------------------------------------------------

    Proposed Rule 7.35C(b)(3)(B) would provide that an Indicative Match
Price that is higher (lower) than the upper (lower) boundary of the
Auction Collar would be adjusted to the upper (lower) boundary of the
Auction Collar and orders eligible to participate in the applicable
auction would trade at the collared Indicative Match Price. This
proposed rule text is based on NYSE Arca Rule 7.35-E(a)(10)(B) and NYSE
American Rule 7.35E(a)(10)(B) without any differences.
    Proposed Rule 7.35C(c) would describe Auction Imbalance Information
for Exchange-facilitated Auctions. As proposed, if it is determined
that the Exchange will facilitate an Auction:
     The Exchange would disseminate Auction Imbalance
Information as provided for in proposed Rule 7.35A(e) for an Exchange-
facilitated Core Open, IPO, Direct Listing, or Trading Halt Auction
(see proposed Rule 7.35C(c)(1)). Proposed Rule 7.35C(c)(1)(A) would
further provide that a pre-opening indication, as described in proposed
Rule 7.35A(d), would not be required for an Exchange-facilitated
Auction. This proposed rule text is based in part on Rule 123D(a)(5),
which provides that when the Exchange facilitates the opening or
reopening of a security, it will publish Order Imbalance Information
described in Rule 15(g), but will not issue pre-opening indications
pursuant to Rule 15(a). Rule 123D(a)(5) further provides that the
Exchange will publish a pre-opening indication pursuant to Rule 15(a)
for a re-opening following a regulatory halt. However, as described
above, on Pillar, the Exchange would never publish a pre-opening
indication, and therefore, the Exchange proposes a difference on Pillar
that when facilitating a reopening following a regulatory halt, the
Exchange would not publish a pre-opening indication.
    This proposed rule text also makes it explicit that if the Exchange
facilitates an IPO or Direct Listing Auction, the Exchange would
publish Auction Imbalance Information. As described above, the Exchange
would not publish Auction Imbalance Information when a DMM facilitates
such an Auction. The Exchange believes it is appropriate to disseminate
Auction Imbalance Information if the Exchange facilitates such an
Auction because there would be no Floor-based trading relating to that
security.
     The Exchange would disseminate Closing Imbalance and
Auction Imbalance Information as provided for in proposed Rules
7.35B(d) and (e) for an Exchange-facilitated Closing Auction (see
proposed Rule 7.35C(c)(2)). Proposed Rule 7.35C(c)(2)(A) would further
provide that entry and cancellation of orders for the Closing Auction
would be subject to the Auction Imbalance Freeze as provided for in
proposed Rule 7.35B(f), described above. This proposed rule text is
based on Rule 123C generally because if the Exchange were to facilitate
a closing transaction pursuant to Supplementary Material .10 to Rule
123C, there is nothing in that rule that suspends the requirements
specified in Rule 123C(1)-(6) for such scenario.\86\
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    \86\ For example, Rule 123C.10(b) specifies that the provisions
of Rules 123C(9)(a)(1) and 123C(9)(b) would be suspended if the
Exchange facilitates the closing transaction. The absence of a
reference that Rules 123C(1)-(6) would not be suspended means that
those rules would still be applicable.
---------------------------------------------------------------------------

     The Auction Imbalance Information would begin including
the Indicative Match Price, the Auction Collars, and, for a Trading
Halt Auction pursuant to proposed Rule 7.35C(e), described below, an
indicator of whether an Auction could be conducted, based on the
applicable Auction Collar, and the number of extensions (see proposed
Rule 7.35C(c)(3)). This proposed rule text would be new and is based on
the information included in the Auction Imbalance Information
disseminated by NYSE Arca and NYSE American.\87\ The Exchange believes
that if it facilitates an Auction, including this information in the
Auction Imbalance Information would promote transparency regarding the
price at which such Auction could or could not occur.
---------------------------------------------------------------------------

    \87\ See NYSE Arca Rule 7.35-E(a)(4) and NYSE American Rule
7.35E(a)(4).
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    Proposed Rule 7.35C(d) would describe the DMM's role in an
Exchange-facilitated Auction. A DMM may be unable to facilitate an
Auction for a myriad of reasons, ranging from the unavailability of the
Trading Floor to a technology issue with a single DMM's graphical user
interface on the Trading Floor. Because in these scenarios, it could be
feasible for the DMM to facilitate an Auction electronically (which
does not require a Floor presence), the Exchange proposes that before
the Exchange facilitates an Auction, if feasible, the DMM should first
be provided an opportunity to facilitate an Auction electronically.\88\
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    \88\ For example, if a security is not open by 9:30 a.m. and
then it is determined that the Exchange would need to facilitate the
Core Open Auction for such security, it would not be feasible to
request the DMM to electronically facilitate such Auction.

---------------------------------------------------------------------------

    Proposed Rule 7.35C(d) would provide that before facilitating an
Auction under this Rule, the Exchange may provide the DMM with the
opportunity to electronically facilitate an Auction pursuant to Rules
7.35A or 7.35B. Providing the DMM with an opportunity to facilitate an
Auction pursuant to Rule 7.35A and 7.35B would allow for the DMM to
supply liquidity as needed pursuant to Rule 104(a)(2) or (3) so that
all better-priced orders on the Side of the Imbalance could be
satisfied at a price at or within the Auction Collars. However, the
Exchange recognizes that there would need to be differences if a DMM
were to electronically facilitate an Auction in such circumstances.
     Proposed Rule 7.35C(d)(1) would provide that the
limitations on a DMM facilitating an Auction electronically specified
in Rules 7.35A(c)(1)(E) (reopening following a regulatory halt),
7.35A(c)(1)(G) and (H) (price and paired volume limitations for the
Core Open and Trading Halt Auctions), and 7.35B(c)(1)(G) and (H) (price
and paired volume limitations for the Closing Auction) would not be
applicable. With these proposed exceptions, a DMM would be able to
facilitate a Trading Halt Auction following a regulatory halt
electronically, which would otherwise not be permitted (under normal
operating conditions, the Exchange expects the DMM to facilitate such
Auction manually). In addition, the Exchange would no longer require
the paired volume and price limitations for such Auctions.
     Proposed Rule 7.35C(d)(2) would provide that a pre-opening
indication pursuant to Rule 7.35A(d) would not be required. Because a
pre-opening indication is published by a DMM on the Trading Floor, a
DMM that is facilitating an Auction electronically would not be able to
publish such indication. Accordingly, the Exchange proposes it would
not be applicable in such circumstances.
     Proposed Rule 7.35C(d)(3) would provide that if the DMM
does not select an Auction Price consistent with Rule 7.35A(g) or
7.35B(g) that is at or within the specified Auction Collar, the
Exchange would facilitate the Auction pursuant to this Rule. As noted
above, DMMs would not be subject to the price limitations specified in
Rules 7.35A(c)(1)(G) or 7.35B(c)(1)(G). However, the Exchange also
believes that in such circumstances, the price of such an Auction
should be bound by the Auction Collars, described above. Accordingly,
the DMM would need to select an Auction Price that is at or within the
Auction Collars. If the DMM does not select such an Auction Price, the
Exchange would proceed with facilitating the Auction. If the Exchange
were to facilitate an Auction, as described below, this would allow for
a process to cancel specified orders that were not included in such an
Auction.
    Proposed Rule 7.35C(e) would set forth the extension logic for a
Trading Halt Auction following a trading pause, which the Exchange
would define as an ``LULD Auction.'' As noted above, the Exchange
proposes to apply extension logic that is currently available on NYSE
Arca and NYSE American for all Trading Halt Auctions to LULD Auctions
only. The Exchange believes that making such extension logic available
to LULD Auctions only would be consistent with the Regulation NMS Plan
to Address Extraordinary Market Volatility (``LULD Plan'') while at the
same time streamlining the operation of Exchange-facilitated Auctions,
which are not the primary method of conducting Auctions at the
Exchange.\89\
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    \89\ See Securities Exchange Act Release No. 83044 (April 12,
2018), 83 FR 17205 (April 18, 2018) (File No. 4-631) (Order
approving seventeenth amendment to LULD Plan to extend pilot period
of LULD Plan to April 15, 2018). The LULD Plan Participants have
filed to make the LULD Plan permanent. See Securities Exchange Act
Release No. 84843 (December 18, 2018), 83 FR 66464 (December 26,
2018) (File No. 4-631) (Notice of filing of eighteenth amendment to
LULD Plan).
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