[Federal Register Volume 87, Number 176 (Tuesday, September 13, 2022)]
[Notices]
[Pages 56099-56103]
[FR Doc No: 2022-19682]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95691; File No. SR-NYSE-2022-32]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving a Proposed Rule Change To Amend NYSE Rule 7.35B Relating to
the Closing Auction and Make Certain Conforming and Non-Substantive
Changes to NYSE Rules 7.31, 7.35, 7.35B and 104

September 7, 2022.

I. Introduction

    On July 13, 2022, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend NYSE Rule 7.35B (DMM-Facilitated Closing
Auctions) relating to the Closing Auction, and make certain conforming
and non-substantive changes to NYSE Rules 7.31 (Orders and Modifiers),
7.35 (General), 7.35B, and NYSE Rule 104 (Dealings and Responsibilities
of DMMs). The proposed rule change was published for comment in the
Federal Register on July 28, 2022.\3\ The Commission has received no
comment letters on the proposed rule change. This order approves the
proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 95354 (July 22,
2022), 87 FR 45382 (July 28, 2022) (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to amend NYSE Rule 7.35B to add price
parameters within which Designated Market Makers (``DMMs'') must select
a Closing Auction Price when facilitation the Closing Auctions in their
assigned securities. As described below, the Closing Auction Price
determined by the DMM must be at a price that is at or between the
last-published Imbalance Reference Price and the last-published
Continuous Book Clearing Price. Further, the Exchange proposes to
modify how the DMM would participate in the Closing Auction by
canceling any resting DMM Orders at the end of Core Trading Hours. The
Exchange also proposes to make conforming changes to other affected
rules.
    The Exchange states that the proposed changes would make the
Closing Auction more transparent and deterministic while retaining the

DMMs' unique obligation to facilitate the Closing Auction.

Overview of Current Closing Auction Process \4\
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    \4\ The following NYSE rules describe the Closing Auction
process on the Exchange: NYSE Rule 7.31 (identifying the order types
eligible to participate in an Auction); NYSE Rule 7.35 (general
rules and definitions applicable to Auctions); NYSE Rule 7.35B
(describing the process for DMM-facilitated Closing Auctions); NYSE
Rule 7.35C (describing the process for Exchange-facilitated
Auctions); and NYSE Rule 104 (establishing DMM obligations with
respect to Closing Auctions and trading leading into the Closing
Auction).
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    Pursuant to NYSE Rule 104(a)(3), DMMs have the responsibility to
facilitate the close of trading for each of the securities in which the
DMM is registered, which may include supplying liquidity as needed.\5\
NYSE Rule 104(a)(3) further provides that DMMs and DMM unit algorithms
will have access to aggregate order information in order to comply with
their requirement to facilitate the close of trading for each of the
securities in which the DMM is registered. Accordingly, aggregate order
information about all orders eligible to participate in the Closing
Auction, including the full quantity of Reserve Orders \6\ and Market-
on-Close and Limit-on-Close Order quantities, is available to DMMs at
each price point. This information is available at the point of sale to
DMMs, and is also made available to DMM unit algorithms in connection
with the electronic message sent to a DMM unit algorithm to close an
assigned security electronically, which is sent shortly after the end
of Core Trading Hours.
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    \5\ The Exchange does not propose to change the DMMs' NYSE Rule
104 obligation to facilitate the Closing Auction, including the
obligation to supply liquidity as needed.
    \6\ Reserve Orders, including the non-displayed reserve interest
of such orders, are eligible to participate in the Closing Auction.
See NYSE Rule 7.35B(h)(2)(B) (describing the allocation ranking of
at-priced orders ranked Priority 3--Non-Displayed Orders, which
refers to the reserve interest of Reserve Orders).
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    NYSE Rule 7.35B specifies the process for DMM-facilitated Closing
Auctions. Pursuant to NYSE Rule 7.35B(a), 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.\7\ As provided for in NYSE Rule 7.35B(a)(2), 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, and entry
of DMM Interest after the end of Core Trading Hours is not subject to
Limit Order Price Protection. Pursuant to NYSE Rule 7.35B(c), the DMM
may effectuate a Closing Auction manually or electronically. NYSE Rule
7.35B(g) provides that the DMM is responsible for determining the
Auction Price for a Closing Auction and 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.\8\
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    \7\ The term ``Exchange Last Sale Price'' is defined in NYSE
Rule 7.35(a)(12)(B) to mean the most recent trade on the Exchange of
a round lot or more in a security during Core Trading Hours on that
trading day, and if none, the Official Closing Price from the prior
trading day for that security.
    \8\ NYSE Rule 7.35C specifies the process for Exchange-
facilitated Auctions if a DMM cannot facilitate an Auction in one or
more securities in which the DMM is registered. DMM Interest does
not participate in an Exchange-facilitated Closing Auction trade.
See NYSE Rule 7.35C(a)(1) (``If the Exchange facilitates an Auction,
DMM Interest will not be eligible to participate if such Auction
results in a trade, and will be eligible to participate if such
Auction results in a quote.'').
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    The following interest is eligible to participate in a Closing
Auction: unexecuted buy and sell orders resting on the Exchange Book at
the end of Core Trading Hours (including DMM Orders); \9\ Auction-Only
Orders; \10\ and DMM Auction Liquidity entered by the DMM in connection
with facilitating the Closing Auction.\11\
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    \9\ NYSE Rule 7.35(a)(9) defines ``DMM Interest'' for purposes
of Auctions to mean all buy and sell interest entered by a DMM unit
in its assigned securities and includes the following: (i) ``DMM
Auction Liquidity,'' which is non-displayed buy and sell interest
that is designated for an Auction only (see NYSE Rule
7.35(a)(9)(A)); (ii) ``DMM Orders,'' which are orders, as defined
under NYSE Rule 7.31, entered by a DMM unit (see NYSE Rule
7.35(a)(9)(B)); and (iii) ``DMM After-Auction Orders,'' which are
orders entered by a DMM unit before either the Core Open Auction or
Trading Halt Auction that do not participate in an Auction and are
intended instead to maintain price continuity with reasonable depth
following an Auction (see NYSE Rule 7.35(a)(9)(C)).
    \10\ Auction-Only Orders available for the Closing Auction are
defined in NYSE Rule 7.31(c)(2)(A)-(D) as the Limit-on-Close Order
(``LOC Order''), Market-on-Close Order (``MOC Order''), Closing D
Order, and Closing Imbalance Offset Order (``Closing IO Order'').
    \11\ In 2021, NYSE Rule 7.35B was amended to provide that Floor
Broker Interest is no longer eligible to participate in the Closing
Auction. See Securities Exchange Act Release No. 92480 (July 23,
2021), 86 FR 40886 (July 29, 2021) (SR-NYSE-2020-95) (``Floor Broker
Interest Approval Order''). The term ``Floor Broker Interest'' is
defined in NYSE Rule 7.35(a)(10) to mean orders represented orally
by a Floor broker at the point of sale. The Exchange states that, in
light of the Floor Broker Interest Approval Order, it proposes
conforming changes to Rules 7.35B(c)(1)(B), NYSE Rule 7.35B(j)(2),
and NYSE Rule 7.35B(j)(2)(A)(iii). NYSE Rule 7.35B(c)(1)(B) provides
that a DMM may not effect a Closing Auction electronically if, among
other things, Floor Broker Interest for the Closing Auction that has
been electronically entered or requested to be canceled has not yet
been accepted by the DMM. NYSE Rule 7.35B(j)(2) provides that, 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 the requirement to enter all order instructions by the end
of Core Trading Hours. The Exchange states that, because it has
eliminated Floor Broker Interest at the close, it proposes to delete
NYSE Rule 7.35B(c)(1)(B) in its entirety. The remaining subsections
of NYSE Rule 7.35B(c)(1) would be renumbered accordingly, and the
Exchange proposes conforming changes to NYSE Rule 7.35B(j)(1)(A) and
(B) to update the cross references from NYSE Rule 7.35B(c)(1)(G) to
NYSE Rule 7.35B(c)(1)(F). The Exchange also proposes, for the same
reasons, to delete the phrase ``or represented to a DMM orally'' in
NYSE Rule 7.35B(j)(2) and the phrase ``and Floor Broker Interest''
in NYSE Rule 7.35B(j)(2)(A)(iii).
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    Beginning 10 minutes before the scheduled end of Core Trading
Hours, the Exchange begins disseminating through its proprietary data
feed Closing Auction Imbalance Information that is calculated based on
the interest eligible to participate in the Closing Auction.\12\ The
Closing Auction Imbalance Information includes the Continuous Book
Clearing Price, which is the price at which all better-priced orders
eligible to trade in the Closing Auction on the Side of the Imbalance
can be traded.\13\ The Closing Auction Imbalance Information also
includes an Imbalance Reference Price, which is the Exchange Last Sale
Price bounded by the Exchange Best Bid and Offer.\14\ Beginning five
minutes before the end of Core Trading Hours, Closing D Orders are
included in the Closing Auction Imbalance Information at their
undisplayed discretionary price.\15\ The Closing Auction Imbalance
Information is updated at least every second (unless there is no change
to the information) and is disseminated until the Closing Auction
begins.\16\ In addition, if at the Closing Auction Imbalance Freeze
Time \17\ the Closing Imbalance \18\ is 500 round lots or more, the
Exchange will

disseminate a Regulatory Closing Imbalance to both the securities
information processor and proprietary data feeds.\19\
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    \12\ See NYSE Rule 7.35B(e)(1)(A). DMM Orders, as defined in
NYSE Rule 7.35(d)(9)(B), that have been entered by the DMM in
advance of a Closing Auction are currently included in the Closing
Auction Imbalance Information.
    \13\ See NYSE Rule 7.35(a)(4)(C). In the case of a buy
Imbalance, the Continuous Book Clearing Price would be the highest
potential Closing Auction Price and in the case of a sell Imbalance,
the Continuous Book Clearing Price would be the lowest potential
Closing Auction Price.
    \14\ See NYSE Rule 7.35B(e)(3).
    \15\ See NYSE Rule 7.35(b)(1)(C)(ii).
    \16\ See NYSE Rule 7.35(c)(1) and (2).
    \17\ See NYSE Rule 7.35(a)(8) (defining the ``Closing Auction
Imbalance Freeze Time'' to be 10 minutes before the scheduled end of
Core Trading Hours).
    \18\ As defined in NYSE Rule 7.35(a)(4)(A)(ii), a ``Closing
Imbalance'' means the Imbalance of MOC and LOC Orders to buy and MOC
and LOC Orders to sell. That Rule further defines a ``Regulatory
Closing Imbalance'' as a Closing Imbalance disseminated at or after
the Closing Auction Imbalance Freeze Time.
    \19\ See NYSE Rule 7.35B(d)(1).
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Proposed Changes to the Closing Auction Price

    The Exchange proposes to amend NYSE Rule 7.35B(g) to add explicit
price parameters to the Closing Auction Price.\20\ The Exchange
proposes that the Closing Auction Price determined by the DMM must be
at a price that is at or between the last-published Imbalance Reference
Price and the last-published Continuous Book Clearing Price.\21\ The
Exchange also proposes related clarifying and conforming changes.\22\
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    \20\ The DMM is responsible for determining a Closing Auction
Price that is able to satisfy all better-priced orders on the Side
of the Imbalance. This requirement would not change.
    \21\ See Proposed NYSE Rule 7.35B(g).
    \22\ Specifically, the Exchange proposes to amend NYSE Rule
7.35(a)(4) (which provides that if there is no Imbalance of all
orders eligible to trade in the Auction, the Continuous Book
Clearing Price will be the Imbalance Reference Price) to clarify
that if the Imbalance Reference Price is in an increment smaller
than the minimum price variation (``MPV'') for the security (e.g.,
the Exchange Last Sale Price reflects a midpoint execution in a
penny-spread security), it will be rounded to the MPV for the
security. The Exchange would also make a conforming change to NYSE
Rule 7.35B(c)(1)(G) (to be renumbered F), which provides that a DMM
may not effect a Closing Auction electronically if the Closing
Auction Price will be more than 10% away from Exchange Last Sale
Price. The Exchange would replace Exchange Last Sale Price with
last-published Imbalance Reference Price.
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    The Exchange states that the proposed Closing Auction Price
parameter would be consistent with how the Closing Auction Price has
been determined for the vast majority of Closing Auctions. For example,
the Exchange states, during the period of January 1, 2021, to June 17,
2022, 95.6% of all Closing Auctions were priced at or between the last-
published Imbalance Reference Price and the Continuous Book Clearing
Price. Similarly, the Exchange states that, during the same period,
94.6% of closing auction volume priced within these parameters.
Moreover, according to the Exchange, of the 4.4% of Closing Auctions
that did not price within those parameters, 73.6% closed at prices that
were only one or two cents away from those boundaries.\23\ The Exchange
states that more recent Closing Auction data also shows that auctions
executing within the proposed range resulted in more representative
prices for market participants.\24\ The Exchange states that that this
proposed change would eliminate any potential for a Closing Auction
Price to be lower (higher) than the last-published Imbalance Reference
Price in the case of a Buy (Sell) Imbalance. The Exchange believes this
this proposed change would promote transparency and determinism with
respect to the Closing Auction because the Closing Auction Price would
be required to be within a pre-determined range of prices that have
been disseminated via the Closing Auction Imbalance Information and
that cannot be changed after the end of Core Trading Hours.\25\
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    \23\ More specifically, the Exchanges states that 59.6% were one
cent away and 14.0% were two cents away.
    \24\ The Exchange states that, during the last quarter of 2021
and year to date, 95.0% of Closing Auctions occurred within the
proposed pricing parameters and that these numbers did not
materially change for volatile trading days. For example, the
Exchange states that in the December 2021 quarterly rebalance, 96.5%
of Closing Auctions occurred within this range, and in the March
2022 quarterly rebalance, 95.6% of Closing Auctions occurred within
the range. According to the Exchange, Closing Auctions pricing
outside the range were mostly within 2 cents of the range; only 1%
of all auctions occurred more than 2 cents outside the range. The
Exchange states that, for instance, in the December 2021 quarterly
rebalance, just 0.6% of all Closing Auctions occurred more than 2
cents outside the range, and in the more volatile March 2022
rebalance, just 1.2% of Closing Auctions occurred more than 2 cents
outside the range. The Exchange states that Closing Auctions
executing within the proposed range during the same period
(excluding rebalance days) were 11.3% closer to the consolidated
two-minute VWAP price benchmark than Closing Auctions that priced
outside of the proposed range, i.e., Closing Auctions executing
within the proposed range were more in line with the range of
continuous trading leading into the close. The Exchange states that
this was true for rebalance days as well: During the December 2021
rebalance, Closing Auctions executing within the proposed range were
14% closer to the VWAP benchmark, and during the March 2022
rebalance, Closing Auctions executing within the proposed range were
40% closer to the VWAP benchmark.
    \25\ The only circumstance when the Continuous Book Clearing
Price could change after the end of Core Trading Hours would be if
NYSE Rule 7.35B(j)(2)(A), described below, were invoked and the
requirement to enter all order instructions by the end of Core
Trading Hours were temporarily suspended for a security.
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Proposed Changes to How DMMs Would Participate in the Closing Auction

    The Exchange proposes to change how DMMs would be able to enter buy
and sell interest to participate in the Closing Auction by modifying
how a DMM could enter or cancel interest after the end of Core Trading
Hours.\26\ Specifically, the Exchange proposes to amend NYSE Rule
7.35B(a)(2) to provide that, after the end of Core Trading Hours, a DMM
may enter DMM Auction Liquidity only in order to supply liquidity as
needed to meet the DMM's obligation to facilitate the Closing Auction
in a fair and orderly manner.\27\ As proposed, a DMM could enter DMM
Auction Liquidity after the end of Core Trading Hours only to close a
security within the proposed new price parameters, described above.\28\
The Exchanges states that, because only DMM Auction Liquidity could be
entered after the end of Core Trading Hours, such interest could be
either entered electronically in response to the electronic message
sent to a DMM unit algorithm to close an assigned security or entered
manually.
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    \26\ Currently, NYSE Rule 7.35B(a)(2) provides 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. The
Exchange states that, consistent with this current Rule, the
Exchange does not systematically block a DMM from entering or
canceling DMM Interest after the end of Core Trading Hours. Instead,
the Exchange states that the DMM's determination of whether to enter
or cancel DMM Interest after the end of Core Trading Hours is
subject to the DMM's obligation to maintain a fair and orderly
market, as specified in NYSE Rule 104.
    \27\ See Proposed NYSE Rule 7.35B(a)(2).
    \28\ For example, the Exchange states that, if there is an
Imbalance to buy, the Imbalance Reference Price is $10.00, and the
Continuous Book Clearing Price is $10.10, the DMM could enter DMM
Auction Liquidity to sell only at prices ranging from $10.00 to
$10.10. The Exchange states it does not propose to systematically
prescribe whether such interest must be offsetting to the last-
published Imbalance because DMM same-side interest could result in
more orders participating in the Closing Auction. For example, the
Exchange states that DMM Auction Liquidity entered on the same side
of the Imbalance could result in greater liquidity being supplied by
the DMM to trade with at-priced orders, which are not included in
the calculation of the Imbalance. The Exchange states that, in such
a scenario, even though the DMM may be participating on the same-
side of the imbalance, such interest would not move the Closing
Price outside the Continuous Book Clearing Price.
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    The Exchange proposes that DMM Orders (i.e., DMM buy and sell
orders resting on the Exchange Book) would not be eligible to
participate in the Closing Auction.\29\ Because DMM Orders would not
participate in the Closing Auction, the Exchange further proposes that
this interest would not be included in the calculation of the
Continuous Book Clearing Price.\30\ The Exchange states that, with this
proposed change, the Continuous Book Clearing Price would be based on
non-DMM interest eligible to participate in the Closing Auction.
Finally, the Exchange states that because, as proposed, resting DMM
Orders would not participate in the Closing Auction, the Exchange also
proposes to cancel DMM Orders at the end of Core Trading Hours.\31\
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    \29\ See Proposed NYSE Rule 7.35B(a)(2). The Exchange also
proposes to amend NYSE Rule 7.35B(j)(2)(A)(iii) to provide that DMM
Orders would be rejected if entered after the end of Core Trading
Hours (i.e., during the ``Solicitation Period'') to offset an
extreme order imbalance at or near the close.
    \30\ See Proposed NYSE Rule 7.35B(a)(2).
    \31\ See Proposed NYSE Rule 7.35B(a)(2).The Exchange states
that, as it understands, it is current practice for DMMs to cancel
their DMM Orders at the end of Core Trading Hours. The Exchange also
proposes a related amendment to delete as moot the phrase ``or
cancel'' in the first sentence of NYSE Rule 7.35B(a)(2).

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    The Exchange states that, in connection with the Closing Auction,
with this proposed change to NYSE Rule 7.35B(a)(2), DMMs would still be
required, consistent with their obligations under NYSE Rule 104, to
contribute their own capital to supply liquidity as needed to assist in
the maintenance of a fair and orderly market. DMMs would also continue
to have an obligation with respect to determining a Closing Auction
Price that satisfies all better-priced orders on the Side of the
Imbalance.

Proposed Conforming and Non-Substantive Amendments

    The Exchange proposes to amend NYSE Rule 104 to eliminate obsolete
rule text and update rule references, and to make other conforming
changes to NYSE Rules 7.31 and 104 as follows.
     The Exchange proposes to amend NYSE Rule 104(a)(2) to
update the cross reference from NYSE Rule 123D to NYSE Rule 7.35A and
to use the Pillar terms of ``Core Open Auctions and Trading Halt
Auctions'' instead of referring to ``openings.'' The Exchange also
proposes to delete, as obsolete, the reference to NYSE Rule 13 and
Reserve Order interest procedures at the opening. Finally, the Exchange
proposes to delete the reference to Supplementary Material .05 to NYSE
Rule 104 with respect to odd-lot order information to the DMM unit
algorithm, as the Exchange states this is also obsolete now that the
Exchange trades on Pillar.
     The Exchange proposes to amend NYSE Rule 104(a)(3) to
update the cross reference from NYSE Rule 123C to NYSE Rule 7.35B and
to use the Pillar term of ``Closing Auctions'' instead of ``closes.''
The Exchange also proposes to delete, as obsolete, the reference to
NYSE Rule 13 and Reserve Order interest procedures at the close.
     The Exchange proposes to amend NYSE Rule 104(b) by
deleting subparagraphs (2) and (6) and replacing the text for NYSE Rule
104(b)(2) with the following: ``Unless otherwise specified in NYSE Rule
7.31, DMM unit algorithms may use the orders and modifiers set forth in
NYSE Rule 7.31.'' \32\
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    \32\ NYSE Rule 104(b)(2) currently provides that ``Exchange
systems shall enforce the proper sequencing of incoming orders and
algorithmically-generated messages and will prevent incoming DMM
interest from trading with resting DMM interest. If the incoming DMM
interest would trade with resting DMM interest only, the incoming
DMM interest will be cancelled. If the incoming DMM interest would
trade with interest other than DMM interest, the resting DMM
interest will be cancelled.'' The Exchange states that, since the
Exchange transitioned to Pillar, the Exchange no longer enforces
self-trade prevention on behalf of DMMs. Instead, DMMs may use one
of the Self-Trade Prevention Modifiers (``STP'') described in NYSE
Rule 7.31(i)(2). In addition, NYSE Rule 104(b)(6) currently provides
that ``DMM Units may not enter the following orders and modifiers:
Market Orders, Inside Limit Orders, MOO Orders, CO Orders, MOC
Orders, LOC Orders, or Last Sale Peg Orders.'' The Exchange states
that because in the Pillar rules NYSE Rule 7.31 sets forth which
orders and modifiers are not available to DMMs, NYSE Rule 104(b)(6)
is therefore obsolete.
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     The Exchange proposes to amend NYSE Rule 7.31(a)(3) to
reflect that Inside Limit Orders are not available to DMMs,\33\ because
all of the orders and modifiers set forth in NYSE Rule 104(b)(6) that
are unavailable to DMMs are reflected in NYSE Rule 7.31 except for
Inside Limit Orders, which limitation was added only to NYSE Rule
104(b)(6).\34\
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    \33\ The Exchange states that the proposed new text for NYSE
Rule 104(b)(2) would provide transparency that NYSE Rule 7.31 would
describe which orders and modifiers would be available to DMMs,
including STP modifiers.
    \34\ See Securities Exchange Act Release No. 94030 (January 24,
2022), 87 FR 4695, 4696 (Jan. 28, 2022) (SR-NYSE-2022-05) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
NYSE Rule 7.31 To Provide for Inside Limit Orders and Make Other
Conforming Changes).
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     The Exchange proposes to amend NYSE Rule 104(b)(3) to
delete references to ``Floor broker agency interest files or reserve
interest,'' as the Exchange states that these references are now
obsolete.\35\
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    \35\ The Exchange states that it no longer uses ``Floor broker
agency interest files'' and no longer provides Floor brokers with
reserve interest functionality that differs from the Reserve Orders
available to all member organizations, as described in NYSE Rule
7.31.
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     The Exchange proposes to amend NYSE Rule 104(b) by
deleting subparagraph (4).\36\ The Exchanges states that, with the
transition to Pillar, the Exchange has replaced the ``Capital
Commitment Schedule'' with Capital Commitment Orders, as described in
NYSE Rule 7.31(d)(5), and has deleted NYSE Rule 1000. The Exchange
states that, accordingly, this current rule is obsolete. The Exchange
proposes a non-substantive amendment to renumber NYSE Rule 104(b)(5) as
NYSE Rule 104(b)(4).
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    \36\ NYSE Rule 104(b)(4) currently provides that ``[t]he DMM
unit's algorithm may place within Exchange systems trading interest
to be known as a `Capital Commitment Schedule'. (See NYSE Rule 1000
concerning the operation of the Capital Commitment Schedule).''
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     The Exchange proposes to delete the text accompanying
current Rules 104(c), (d), and (e) as obsolete now that the Exchange
trades on Pillar.\37\ With these proposed deletions, the Exchange
proposes non-substantive amendments to renumber Rules 104(f), (g), (h),
(i), and (j) as Rules 104(c), (d), (e), (f), and (g) and to update
cross-references in proposed NYSE Rule 104(e)(iii) from subparagraph
(h)(ii) and (iii) to (e)(ii) and (iii).
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    \37\ NYSE Rule 104(c) currently provides: ``A DMM unit may
maintain reserve interest consistent with Exchange rules governing
Reserve Orders. Such reserve interest is eligible for execution in
manual transactions.'' The Exchange states that NYSE Rule 7.31 now
describes how Reserve Orders function. NYSE Rule 104(d) currently
provides: ``A DMM unit may provide algorithmically-generated price
improvement to all or part of an incoming order that can be executed
at or within the Exchange BBO through the use of Capital Commitment
Schedule interest (see [NYSE] Rule 1000).'' The Exchange states that
any orders eligible for execution in Exchange systems at the price
of the DMM unit's interest will trade on parity with such interest,
as will any displayed interest representing a d-Quote enabling such
interest to trade at the same price as the DMM unit's interest. The
Exchange states that, as described above, with Pillar, the Exchange
has deleted NYSE Rule 1000 and no longer offers the Capital
Commitment Schedule to DMMs. NYSE Rule 104(e) currently provides:
``DMM units shall provide contra side liquidity as needed for the
execution of odd-lot quantities that are eligible to be executed as
part of the opening, re-opening and closing transactions but remain
unpaired after the DMM has paired all other eligible round lot sized
interest.'' The Exchange states that this requirement is obsolete.
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     The Exchange proposes to amend current NYSE Rule
104(h)(ii) (proposed NYSE Rule 104(e)(ii)) to delete reference to
information that is no longer available to a DMM at the post.\38\
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    \38\ Specifically, the Exchange states that it no longer
provides DMMs at the post with the following information: ``the
price and size of any individual order or Floor broker agency
interest file and the entering and clearing firm information for
such order, except that the display shall exclude any order or
portion thereof that a market participant has elected not to display
to a DMM.'' Accordingly, the Exchange proposes to amend NYSE Rule
104(e)(ii) to delete this rule text.
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    The Exchange proposes that the non-substantive amendments to NYSE
Rule 104 would be operative immediately upon approval of this proposed
rule change. The Exchange states, that, because of the technology
changes associated with the proposed changes to NYSE Rule 7.35B, it
proposes that, subject to approval of the proposed rule change, the
Exchange will announce the implementation date of the remaining
proposed rule changes by Trader Update.\39\
---------------------------------------------------------------------------

    \39\ Subject to approval of this proposed rule change, the
Exchange states that it anticipates that these changes will be
implemented in the fourth quarter of 2022. See Notice, supra note 3,
87 FR at 45386.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national

securities exchange.\40\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\41\
which requires, among other things, that the rules of a national
securities exchange be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest; and that the rules of a national
securities exchange are not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \40\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \41\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As described above, the DMM is responsible for determining the
Auction Price for the Closing Auctions in its assigned securities, and
if there is an Imbalance of any size, the DMM must select an Auction
Price that is able to satisfy all better-priced orders on the Side of
the Imbalance. The Exchange proposes to add that the Closing Auction
Price determined by the DMM must also be at a price that is at or
between the last-published Imbalance Reference Price and the last-
published Continuous Book Clearing Price. The Exchange has included
statistics in its proposal showing that the proposed Closing Auction
Price parameters are, for the vast majority of Closing Auctions,
consistent with how the Closing Auction Price has been determined under
the current rules.\42\ The Exchange has also included statistics in its
proposal showing that, as to more recent Closing Auction data, auctions
executing within the proposed range resulted in more representative
prices for market participants.\43\
---------------------------------------------------------------------------

    \42\ See Section II supra.
    \43\ The Exchange also included statistics in its proposal
showing that during the last quarter of 2021 and year to date, 95.0%
of Closing Auctions occurred within the proposed pricing parameters,
and that these numbers did not materially change for volatile
trading days.
---------------------------------------------------------------------------

    The Exchange also proposes that DMM Orders would not participate in
the Closing Auction or factor into the calculation of the Continuous
Book Clearing Price and that, after the end of Core Trading Hours, a
DMM would be able to enter DMM Auction Liquidity only in order to
supply liquidity as needed to meet the DMM's obligation to facilitate
the Closing Auction in a fair and orderly manner within the proposed
pricing parameters.
    The Commission finds that the proposed pricing parameters for
determining the Closing Auction Price, as well as the proposed
limitation on the entry of DMM interest (specifically, DMM Auction
Liquidity) after the close of regular trading, are reasonably designed
to (1) limit the price range within which a DMM can facilitate the
Closing Auction in its assigned securities to a price range that
reflects the natural forces of supply and demand for a security in the
Closing Auction; and (2) enhance transparency and certainty for market
participants with respect to the Closing Auction. The proposed price
parameters and limitation on DMM Auction Liquidity are therefore
reasonably designed to remove impediments to and perfect the mechanism
of a free and open market and a national market system. Moreover, by
providing that DMM Orders will neither participate in the Closing
Auction nor figure into the calculation of the Continuous Book Clearing
Price--one of the proposed pricing parameters for the Closing Auction--
the Exchange's proposal would limit the extent to which a DMM could
influence the price parameters for the Closing Auction Price, which is
reasonably designed to prevent fraudulent and manipulative acts and
practices. The Commission further finds that the other conforming and
non-substantive changes proposed by the Exchange are consistent with
the substantive changes discussed above and do not raise any regulatory
issues.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\44\ that the proposed rule change (SR-NYSE-2022-32) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \44\ Id.
    \45\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\45\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-19682 Filed 9-12-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 43 (Monday, March 6, 2023)]
[Notices]
[Page 13861]
[FR Doc No: 2023-04615]

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SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meetings

TIME AND DATE: 2:00 p.m. on Thursday, March 9, 2023.

PLACE: The meeting will be held via remote means and/or at the
Commission's headquarters, 100 F Street NE, Washington, DC 20549.

STATUS: This meeting will be closed to the public.

MATTERS TO BE CONSIDERED: Commissioners, Counsel to the Commissioners,
the Secretary to the Commission, and recording secretaries will attend
the closed meeting. Certain staff members who have an interest in the
matters also may be present.
    In the event that the time, date, or location of this meeting
changes, an announcement of the change, along with the new time, date,
and/or place of the meeting will be posted on the Commission's website
at https://www.sec.gov.
    The General Counsel of the Commission, or his designee, has
certified that, in his opinion, one or more of the exemptions set forth
in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR
200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10),
permit consideration of the scheduled matters at the closed meeting.
    The subject matter of the closed meeting will consist of the
following topics:
    Institution and settlement of injunctive actions;
    Institution and settlement of administrative proceedings;
    Resolution of litigation claims; and
    Other matters relating to examinations and enforcement proceedings.
    At times, changes in Commission priorities require alterations in
the scheduling of meeting agenda items that may consist of
adjudicatory, examination, litigation, or regulatory matters.

CONTACT PERSON FOR MORE INFORMATION: For further information; please
contact Vanessa A. Countryman from the Office of the Secretary at (202)
551-5400.
    Authority: 5 U.S.C. 552b.

    Dated: March 2, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023-04615 Filed 3-2-23; 4:15 pm]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 128 (Wednesday, July 3, 2019)]
[Notices]
[Pages 31980-31982]
[FR Doc No: 2019-14228]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2019-0101]

Agency Information Collection Activities; Information Collection
Renewal: 391.41 CMV Driver Medication Form, OMB Control Number: 2126-
0064

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice and request for comments.

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

SUMMARY: In accordance with the Paperwork Reduction Act of 1995, FMCSA
announces its plan to submit the renewal Information Collection Request
(ICR) described below to the Office of Management and Budget (OMB) for
its review and approval and invites public comment. This Information
Collection (IC) is voluntary and may be utilized by Medical Examiners
(MEs) responsible for issuing Medical Examiner's Certificates (MECs) to
commercial motor vehicle (CMV) drivers. MEs that choose to use this IC
do so in an effort to communicate with treating healthcare
professionals who are responsible for prescribing certain medications,
so that the ME fully understands the reasons the medications have been
prescribed. The information obtained by the ME when utilizing this IC
assists the ME in determining if the driver is medically qualified
under 49 CFR 391.41 and ensures that there are no disqualifying medical
conditions or underlying medical conditions and prescribed medications
that could adversely affect their safe driving ability or cause
incapacitation constituting a risk to the public. FMCSA requests
approval to renew an ICR titled, ``391.41 CMV Driver Medication Form.''

DATES: We must receive your comments on or before September 3, 2019.

ADDRESSES: You may submit comments identified by Federal Docket
Management System (FDMS) Docket Number FMCSA-2019-0101 using any of the
following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: Docket Operations; U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor,
Room W12-140, Washington, DC 20590-0001 between 9 a.m. and 5 p.m. ET,
Monday through Friday, except Federal holidays.
    Instructions: All submissions must include the Agency name and
docket number. For detailed instructions on submitting comments, see
the Public Participation heading below. Note that all comments received
will be posted without change to http://www.regulations.gov, including
any personal information provided. Please see the Privacy Act heading
below.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov, and follow the
online instructions for accessing the dockets, or go to the street
address listed above.
    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, including any personal information
the commenter provides, to www.regulations.gov, as described in the
system of records notice (DOT/ALL 14--FDMS), which can be reviewed at
www.transportation.gov/privacy.

    Public Participation: The Federal eRulemaking Portal is available
24 hours each day, 365 days each year. You can obtain electronic
submission and retrieval help and guidelines under the ``help'' section
of the Federal eRulemaking Portal website. If you want us to notify you
that we received your comments, please include a self-addressed,
stamped envelope or postcard, or print the acknowledgement page that
appears after submitting comments online. Comments received after the
comment closing date will be included in the docket and will be
considered to the extent practicable.

FOR FURTHER INFORMATION CONTACT: Mr. Charles A. Horan III, Director,
Office of Carrier, Driver, and Vehicle, Safety Standards, U.S.
Department of Transportation, Federal Motor Carrier Safety
Administration, West Building 6th Floor, 1200 New Jersey Avenue SE,
Washington, DC 20590. Telephone:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    Background: The primary mission of the Federal Motor Carrier Safety
Administration (FMCSA) is to reduce crashes, injuries, and fatalities
involving large trucks and buses. The Secretary of Transportation has
delegated to FMCSA its responsibility under 49 U.S.C. 31136 and 31502
to prescribe regulations that ensure CMVs are operated safely. As part
of this mission, the Agency's Medical Programs Division works to ensure
that CMV drivers engaged in interstate commerce are physically
qualified and able to safely perform their work.
    Information used to determine and certify that a driver meets the
physical qualification standards must be collected in order for our
highways to be safe. FMCSA is the Federal government agency authorized
to require the collection of this information and the authorizing
regulations are located at 49 CFR 390-399. FMCSA is required by statute
to establish standards for the physical qualifications of drivers who
operate CMVs in interstate commerce for non-excepted industries [49
U.S.C. 31136(a)(3) and 31502(b)]. The regulations discussing this
collection are outlined in the Federal Motor Carrier Safety Regulations
(FMCSRs) at 49 CFR 390-399. The FMCSRs at 49 CFR 391.41 set forth the
physical qualification standards that interstate CMV drivers who are
subject to part 391 must meet, with the exception of commercial
driver's license/commercial learner's permit holders transporting
migrant workers (who must meet the physical qualification standards set
forth in 49 CFR 398.3). The FMCSRs covering driver physical
qualification records are found at 49 CFR 391.43, which specify that a
medical examination be performed on CMV drivers subject to part 391 who
operate in interstate commerce. The results of the examination must be
recorded in accordance with the requirements set forth in that section.
    The physical qualification standard regarding the use of drugs and
substances in 49 CFR 391.41(b)(12) states that a person is physically
qualified to drive a CMV if that person does not use any drug or
substance identified in 21 CFR 1308.11 Schedule I, an amphetamine, a
narcotic, or other habit-forming drug; and does not use any non-
Schedule I drug or substance that is identified in the other Schedules
in 21 part 1308 except when the use is prescribed by a licensed medical
practitioner, as defined in 49 CFR 382.107, who is familiar with the
driver's medical history and has advised the driver that the substance
will not adversely affect the driver's ability to safely operate a CMV.
    In 2006, FMCSA's Medical Review Board (MRB) deliberated on the
topic of the use of Schedule II medications. The MRB considered
information provided in a 2006 FMCSA sponsored Evidence Report and a
subsequent Medical Expert Panel (MEP) to examine the relationship
between the licit use of a Schedule II drug and the risk for a motor
vehicle crash. In 2013, FMCSA tasked the MRB with updating the opinions
and recommendations of the 2006 Evidence Report and MEP.
    On September 10, 2013, the MRB and Motor Carrier Safety Advisory
Committee (MCSAC) met jointly to hear presentations on the licit use of
Schedule II medications and their regulation, and on U.S. Department of
Transportation drug and alcohol testing protocols. Subsequently, the
committees engaged in a discussion on the issue as it applies to CMV
drivers. On September 11, 2013, the MRB discussed the issue in greater
detail as its task to present a letter report to the Agency relating to
CMV drivers and Schedule II medication use and to develop a form for
MEs on the National Registry of Certified Medical Examiners (National
Registry) to send to treating clinicians of CMV drivers to expound on
the use of these medications by driver applicants. On October 22, 2013,
the MRB submitted their recommendations to FMCSA.
    A MEP convened to provide an updated opinion on ``Schedule II
Opioids and Stimulants & CMV Crash Risk and Driver Performance.'' The
FMCSA revised the task of the MRB instructing them to review an updated
evidence report and the MEP opinion that was furnished subsequent to
its deliberations on ``Schedule II Opioids and Stimulants & CMV Crash
Risk and Driver Performance: Evidence Report and Systematic Review.''
FMCSA directed the MRB to consider this report's findings and confer
with the MCSAC on this topic during a joint meeting in October 2014.
The MRB met in public meetings on July 29-30, 2014, and developed
Schedule II medication recommendations. The MRB presented these
recommendations to the MCSAC in a joint public meeting on October 27,
2014, where they were deliberated by both committees. As a result,
FMCSA's MRB and MCSAC provided joint recommendations related to the use
of Schedule II medications by CMV drivers.
    Because there is moderate evidence to support the contention that
the licit use of opioids increases the risk of motor vehicle crashes
and impacts indirect measures of driver performance negatively,\1\
included was the recommendation that FMCSA develop a standardized
medication questionnaire to assist the certified ME when reviewing
prescription medications that have been disclosed during the history
and physical examination for CMV driver certification. The two advisory
groups recommended to FMCSA that the standardized CMV driver medication
questionnaire be voluntary and include the following information and
questions:
---------------------------------------------------------------------------

    \1\ Schedule II Opioids and Stimulants & CMV Crash Risk and
Driver Performance: Evidence Report and Systematic Review.
---------------------------------------------------------------------------

    1. Questionnaire should be titled, ``391.41 CMV Driver Medication
Questionnaire.''
    2. Questionnaire should request the following information:
    a. Identifying name and date of birth of the CMV driver.
    b. Introductory paragraph stating purpose of the CMV Driver
Medication Report.
    c. Statements of 391.41(b)(12) (Physical Qualifications of Drivers
relating to driver use of scheduled substances) and The Driver's Role,
as found in the Medical Examination Report form found at the end of 49
CFR 391.43 (Medical Examination; Certificate of Physical Examination).
    d. Name, state of licensure, signature, address, and contact
information of the prescribing healthcare provider, as well as the date
the form was completed.
    e. Name, signature, date, address, and contact information of the
certified ME.

    3. Report should include the following questions:
    a. Question 1--List all medications and dosages that you have
prescribed to the above named individual.
    b. Question 2--List any other medications and dosages that you are
aware have been prescribed to the above named individual by another
treating healthcare provider.
    c. Question 3--What medical conditions are being treated with these
medications?
    d. Question 4--It is my medical opinion that, considering the
mental and physical requirements of operating a CMV and with awareness
of a CMV driver's role (consistent with The Driver's Role statement on
page 2 of the form), I believe my patient: (a) Has no medication side
effects from medication(s) that I prescribe that would adversely affect
the ability to operate a CMV safely; and (2) has no medical
condition(s) that I am treating with the above medication(s) that would
adversely affect the ability to operate a CMV safely.
    The public interest in, and right to have, safe highways requires
the assurance that drivers of CMVs can safely perform the increased
physical and mental demands of their duties. FMCSA's physical
qualification standards provide this assurance by requiring drivers to
be examined and medically certified as physically and mentally
qualified to drive.
    The purpose for this voluntary collection of information is to
assist the ME in determining if the driver is medically qualified under
49 CFR 391.41 and to ensure that there are no disqualifying medical
conditions that could adversely affect their safe driving ability or
cause incapacitation constituting a risk to the public. 49 CFR
391.41(b)(12) states that a person is physically qualified to drive a
CMV if that person does not use any drug or substance identified in 21
CFR 1308.11 Schedule I, an amphetamine, a narcotic, or other habit-
forming drug; and does not use any non-Schedule I drug or substance
that is identified in the other Schedules in 21 part 1308 except when
the use is prescribed by a licensed medical practitioner, as defined in
49 CFR 382.107, who is familiar with the driver's medical history and
has advised the driver that the substance will not adversely affect the
driver's ability to safely operate a CMV.
    The use of this IC is at the discretion of the ME and facilitates
communication with treating healthcare professionals who are
responsible for prescribing certain medications so that the ME fully
understands the reasons the medications have been prescribed. This
information assists the ME in determining whether the underlying
medical condition and the prescribed medication will impact the
driver's safe operation of a CMV. Therefore, there is no required
collection frequency.
    The ``391.41 CMV Driver Medication Form, MCSA-5895'' may be
downloaded from the FMCSA website. Prescribing healthcare providers are
also able to fax or scan and email the report to the certified ME.
Consistent with the OMB's commitment to minimizing respondents'
recordkeeping and paperwork burdens and the increased use of secure
electronic modes of communication, the Agency believes that
approximately 50 percent of the ``391.41 CMV Driver Medication Forms,
MCSA-5895'' are transmitted electronically.
    The information collected from the ``391.41 CMV Driver Medication
Form, MCSA-5895'' is used by the certified ME that requested the
completion of the form and is attached to the ``Medical Examination
Report Form, MCSA-5875'' which becomes part of the CMV driver's record
maintained by the certified ME. Therefore, the information is not
available to the public. The FMCSRs covering driver physical
qualification records are found at 49 CFR 391.43, which specify that a
medical examination be performed on CMV drivers subject to part 391 who
operate in interstate commerce. The results of the examination must be
recorded in accordance with the requirements set forth in that section.
MEs are required to maintain records of the CMV driver medical
examinations they conduct.
    Title: 391.41 CMV Driver Medication Form.
    OMB Control Number: 2126-0064.
    Type of Request: Renewal of a currently approved collection.
    Respondents: Prescribing healthcare professionals.
    Estimated Number of Respondents: Up to 1,223,470 (total number of
prescribing healthcare providers in the U.S.)
    Estimated Number of Responses: Up to 1,967,006 (total number of CMV
drivers that may be asked by a certified ME to have the ``391.41 CMV
Driver Medication Form, MCSA-5895'' completed by a prescribing
healthcare provider).
    Estimated Time per Response: 8 minutes.
    Expiration Date: January 31, 2020.
    Frequency of Response: Voluntary.
    Estimated Total Annual Burden: 262,267 hours.
    Public Comments Invited: You are asked to comment on any aspect of
this information collection, including: (1) Whether the proposed
collection is necessary for the performance of FMCSA's functions; (2)
the accuracy of the estimated burden; (3) ways for FMCSA to enhance the
quality, usefulness, and clarity of the collected information; and (4)
ways that the burden could be minimized without reducing the quality of
the collected information. The Agency will summarize or include your
comments in the request for OMB's clearance of this information
collection.

    Issued under the authority of 49 CFR 1.87 on: June 25, 2019.
Kelly Regal,
Associate Administrator for Office of Research and Information
Technology.
[FR Doc. 2019-14228 Filed 7-2-19; 8:45 am]
 BILLING CODE 4910-EX-P


[Federal Register: February 15, 2006 (Volume 71, Number 31)]
[Notices]
[Page 8007-8008]
[DOCID:fr15fe06-136]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53250; File No. S7-24-89]

Joint Industry Plan; Order Granting Approval of Category 1
Changes From Amendment No. 13 of the Reporting Plan for Nasdaq-Listed
Securities Traded on Exchanges on an Unlisted Trading Privilege Basis,
Submitted by the Pacific Exchange, Inc., the National Association of
Securities Dealers, Inc., the American Stock Exchange LLC, the Boston
Stock Exchange, Inc., the Chicago Stock Exchange, Inc., the National
Stock Exchange, Inc., and the Philadelphia Stock Exchange, Inc.

February 7, 2006.

I. Introduction and Description

    On May 31, 2002, the National Stock Exchange, Inc. (``NSX''),\1\ on
behalf of itself and the National Association of Securities Dealers,
Inc. (``NASD''), the American Stock Exchange LLC (``Amex''), the Boston
Stock Exchange, Inc. (``BSE''), the Chicago Stock Exchange, Inc.
(``CHX''), the Pacific Exchange, Inc. (``PCX''), and the Philadelphia
Stock Exchange, Inc. (``Phlx'') (hereinafter referred to collectively
as ``Participants''),\2\ as members of the Operating Committee of the
Plan submitted to the Securities and Exchange Commission
(``Commission'') a proposal to amend the Plan, pursuant to Rule 608 \3\
under the Securities Exchange Act of 1934 (``Act'' or ``Exchange
Act''). The proposal represents the 13th amendment (``13th Amendment'')
made to the Plan. Notice of the proposed 13th Amendment was published
in the Federal Register on July 5, 2002.\4\
---------------------------------------------------------------------------

    \1\ At the time Amendment No. 13 was submitted, the NSX was
known as the Cincinnati Stock Exchange, Inc (``CSE''). The
Commission notes that the CSE changed its name to the National Stock
Exchange, Inc. See Securities Exchange Act Release No. 48774
(November 12, 2003), 68 FR 65332 (November 19, 2003) (File No. SR-
CSE-2003-12).
    \2\ At the time of submission, NSX was the chair of the
operating committee (``Operating Committee'' or ``Committee'') for
the Joint Self-Regulatory Organization Plan Governing the
Collection, Consolidation and Dissemination of Quotation and
Transaction Information for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading Privilege Basis (``Nasdaq UTP
Plan'' or ``Plan'') by the Participants. PCX is the current chair of
the Operating Committee.
    \3\ 17 CFR 202.608.
    \4\ See Securities Exchange Act Release No. 46139 (June 28, 2001
[sic]), 67 FR 44888 (``13th Amendment Notice'').
---------------------------------------------------------------------------

    The Nasdaq UTP Plan governs the collection, processing, and
dissemination on a consolidated basis of quotation and last sale
information for each of its Participants. This consolidated information
informs investors of the current quotation and recent trade prices of
The Nasdaq Stock Market, Inc. (``Nasdaq'') securities. It enables
investors to ascertain from one data source the current prices in all
the markets trading Nasdaq securities. The Plan serves as the required
transaction reporting plan for its Participants, which is a
prerequisite for their trading Nasdaq securities.
    As discussed in the 13th Amendment Notice, proposed amendments to
the Plan have been segregated into four categories: (1) Category 1,
``Effective Upon Nasdaq's Exchange Registration;'' (2) Category 2,
``Effective Upon Launch of the Internal SIP;'' (3) Category 3,
``Effective Upon End of Parallel Period--Elimination of the Legacy
SIP;'' and (4) Category 4, ``Timing Not An Issue.'' The amendments
detailed in Category 2 were granted summary effectiveness through the
13th Amendment Notice so as to allow the target launch date for the new
Internal Securities Information Processor (``SIP'') data feeds to be
met.\5\ In addition, the Commission granted partial temporary approval
to the 13th Amendment with respect to extension of the expiration date
of the Plan itself. The partial temporary approval extended the
expiration date of the Plan through August 19, 2003.\6\ The Commission
then granted approval to the amendments detailed in Categories 2, 3,
and 4 on a pilot basis.\7\ However, the order approving parts 2, 3, and
4 of Amendment 13 noted specifically that it did not approve those
amendments detailed in Category 1 because the Commission intended to
address those amendments detailed in Category 1 through separate action
when the Commission acted on the Nasdaq exchange registration
application.\8\
---------------------------------------------------------------------------

    \5\ The summary effectiveness expired on October 26, 2002.
    \6\ See Securities Exchange Act Release No. 46381 (August 19,
2002), 67 FR 54687 (August 23, 2002) (``Date Extension Approval
Order'').
    \7\ See Securities Exchange Act Release No. 46729 (October 25,
2002), 67 FR 66685 (November 1, 2002).
    \8\ Pursuant to Rule 608(b)(2), 17 CFR 242.608(b)(2), the
Commission must take action within 120 days of the date of
publication of notice of filing of amendment in the Federal Register
unless the sponsors of such amendment consent to an extension. The
sponsors of the 13th Amendment consented to final action on the
Category 1 amendments being contingent upon a subsequent trigger
event. See letter from Jeffrey T. Brown, Chairman, Operating
Committee, to Jonathan G. Katz, Secretary, Commission, dated May 30,
2002 (``13th Amendment Filing'').

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

    Now that the Nasdaq exchange registration application has been
approved,\9\ the Commission is approving the amendments detailed in
Category 1 of Amendment 13, as published in the Federal Register.\10\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 53128 (January 13,
2006), 71 FR 3550 (January 23, 2006).
    \10\ See supra note 4, 13th Amendment Notice.
---------------------------------------------------------------------------

    The Commission received one comment letter on the 13th Amendment
from BrokerageAmerica (``BA'').\11\ However, this comment letter
discussed changes proposed in Categories 2, 3, and 4 of Amendment 13,
and the comment letter was discussed fully in the Partial Temporary
Approval of Amendment No. 13.\12\
---------------------------------------------------------------------------

    \11\ See letter from Sam Guidetti, Senior Vice President & Chief
Compliance Officer, BrokerageAmerica, to Jonathan Katz, Secretary,
Commission, dated September 17, 2002.
    \12\ See supra note 7.
---------------------------------------------------------------------------

    The Commission finds that the Category 1 changes included in the
13th Amendment are consistent with the requirements of the Act and the
rules and regulations thereunder, and, in particular, Section 12(f)
\13\ and Section 11A(a)(1) \14\ of the Act and Rules 601 and 608
thereunder.\15\ Section 11A of the Act directs the Commission to
facilitate the development of a national market system for securities,
``having due regard for the public interest, the protection of
investors, and the maintenance of fair and orderly markets,'' and cites
as an objective of that system ``fair competition * * * between
exchange markets and markets other than exchange markets.'' \16\ When
the Commission first approved the Plan on a pilot basis, it found that
the Plan ``should enhance market efficiency and fair competition, avoid
investor confusion, and facilitate surveillance of concurrent exchange
and OTC trading.'' \17\ The Commission believes that amending the Plan
to incorporate the amendments detailed in Category 1 of Amendment 13
furthers these goals.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78l(f). The Commission finds that extending the
Plan is consistent with fair and orderly markets, the protection of
investors and the public interest, and otherwise in furtherance of
the purposes of the Act. The Commission has taken into account the
public trading activity in securities traded pursuant to the Plan,
the character of the trading, the impact of the trading of such
securities on existing markets, and the desirability of removing
impediments to, and the progress that has been made toward the
development of a national market system.
    \14\ 15 U.S.C. 78k-1(a)(1).
    \15\ 17 CFR 242.601 and 17 CFR 242.608.
    \16\ 15 U.S.C. 78k-1(a).
    \17\ See Securities Exchange Act Release No. 28146 (June 26,
1990), 55 FR 27917 (July 6, 1990).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Sections 12(f) and 11A of the
Act \18\ and paragraph (b)(4) of Rule 608 thereunder,\19\ that the
operation of the Plan, as modified by the amendments detailed in
Category 1 of Amendment 13 be, and hereby is, approved.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78(f) and 15 U.S.C. 78k-1.
    \19\ 17 CFR 242.608(b)(4).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(27).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-2108 Filed 2-14-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 84, Number 107 (Tuesday, June 4, 2019)]
[Notices]
[Pages 25887-25891]
[FR Doc No: 2019-11563]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85959; File No. SR-NYSENAT-2019-13]

Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its
Schedule of Fees and Rebates Related to Co-location Services

May 29, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on May 21, 2019, NYSE National, Inc. (``NYSE National'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Schedule of Fees and Rebates
(the ``Price List'') related to co-location services to update the
description of the access to trading and execution systems provided
with the purchase of access to the co-location local area networks. The
proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Price List related to co-
location \4\ services offered by the Exchange to update the description
of the access to trading and execution services and connectivity to
data provided to Users \5\ with connections to the Liquidity Center
Network (``LCN'') and internet protocol (``IP'') network, local area
networks available in the data center.
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    \4\ The Exchange initially filed rule changes relating to its
co-location services with the Securities and Exchange Commission
(``Commission'') on May 18, 2018. See Securities Exchange Act
Release No. 83351 (May 31, 2018), 83 FR 26314 (June 6, 2018) (SR-
NYSENAT-2018-07). The Exchange operates a data center in Mahwah, New
Jersey (the ``data center'') from which it provides co-location
services to Users.
    \5\ For purposes of the Exchange's co-location services, a
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See id. at note 9. As
specified in the Price List, a User that incurs co-location fees for
a particular co-location service pursuant thereto would not be
subject to co-location fees for the same co-location service charged
by the Exchange's affiliates the New York Stock Exchange (``NYSE''),
NYSE American LLC (``NYSE American''), and NYSE Arca, Inc. (``NYSE
Arca'' and together with NYSE, NYSE American, and NYSE Chicago,
Inc., the ``Affiliate SROs''). See id. at note 11.
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    To implement the changes, the Exchange proposes to amend paragraph
one of General Note 4, which describes the access to trading and
execution systems which a User receives when it purchases access to the
LCN or IP network.\6\
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    \6\ See id. at 26315-26316.
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    The Exchange will announce the implementation date through a
customer notice.
    As set forth in the first paragraph of General Note 4, when a User
purchases access to the LCN or IP network, it receives the ability to
access the trading and execution systems of the Exchange and the SRO
Affiliates (together, the ``Exchange Systems''), provided the User has
authorization from the Exchange or relevant Affiliate SRO.\7\ The
Exchange proposes to revise such paragraph to reflect that a User that
purchases access to the LCN or IP network also receives the ability to
access the trading and execution systems of Global OTC (``Global OTC
System''), subject to authorization by Global OTC.
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    \7\ See id.
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    In order to obtain access to the Global OTC System, the User would
enter into an agreement with Global OTC, pursuant to which Global OTC
would charge the User any applicable fees charged to its subscribers by
Global OTC. Once the Exchange receives authorization from Global OTC,
the Exchange would establish a connection between the User and the
Global OTC System.
    The Exchange provides Users access to the Global OTC System and the
Exchange Systems (``Access'') as a convenience to Users. Use of Access
is completely voluntary. The Exchange is not aware of any impediment to
third parties offering Access. As alternatives to using the Access to
the Global OTC System provided by the Exchange, a User may access such
services through the Secure Financial Transaction Infrastructure
(``SFTI'') network, a third party telecommunication network, third
party wireless network, a cross connect, or a combination thereof to
access such services and products through a connection to an access
center outside the data center (which could be a SFTI access center, a
third-party access center, or both), another User, or a third party
vendor.
Global OTC
    Global OTC is an affiliate of the Exchange, which has an indirect
interest in Global OTC because it is owned by the Exchange's ultimate
parent, Intercontinental Exchange, Inc.\8\
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    \8\ See id. at 26322. Global OTC is operated by Archipelago
Trading Services, Inc., which is a broker-dealer subsidiary of NYSE
Group, Inc. (``NYSE Group''). NYSE Group is also the parent company
of the Exchange.
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    Unlike the NYSE Exchanges, Global OTC is not a national securities
exchange registered with the Securities and Exchange Commission
(``Commission'') under Section 6 of the

Act.\9\ Rather, Global OTC is an alternative trading system (``ATS'')
\10\ operated by a broker-dealer, a member of the Financial Industry
Regulatory Authority. It facilitates transactions in over-the-counter
(``OTC'') equity securities, providing publicly displayed, firm, auto-
executable prices in the OTC securities marketplace. There is no
overlap in the securities traded on the NYSE Exchanges and Global OTC:
members trade National Market System (``NMS'') securities on the NYSE
Exchanges,\11\ but Global OTC subscribers cannot trade NMS securities
on Global OTC.
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    \9\ 15 U.S.C. 78f. Global OTC is not required to register as a
national securities exchange because it operates under an exemption
from the requirement to register as an exchange. See 17 CFR 240.3a1-
1(a) and 17 CFR 240.300 through 304.
    \10\ See 17 CFR 242.300(a). An ATS is a trading system that
meets the definition of ``exchange'' under federal securities laws
but is not required to register as a national securities exchange if
the ATS operates under an exemption provided under the Act.
    \11\ See 17 CFR 242.600.
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    The Exchange charges fees for connectivity to the execution systems
of third party markets and other content service providers, including
two ATSs.\12\ Of those, the Exchange believes the OTC Markets ATS is
the most comparable to Global OTC.\13\ Both are inter-dealer quotation
systems for OTC securities.\14\ Global OTC and the OTC Markets' ATS are
not fungible, however. The OTC Markets' ATS is a trade messaging system
that displays market makers quotes and does not offer automatic
executions. While Global OTC provides a limit order book, displays
participants' orders, and executes orders pursuant to price/time
priority, OTC Markets' ATS displays market makers' quotes by price
priority, not time priority. In sum, OTC Markets' ATS is a market maker
intermediary, whereas Global OTC is a trading platform.
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    \12\ See 83 FR 26314, supra note 5, at 26322. Credit Suisse and
OTC Markets have ATSs. See Commission list of ATSs at https://www.sec.gov/foia/docs/atslist.htm.
    \13\ The OTC Markets' ATS is OTC Link. Global OTC is
substantially smaller than OTC Markets' ATS: Global OTC's market
share is approximately 10% of average daily volume of trades of
over-the-counter equities, compared to OTC Markets' ATS market share
of approximately 90% of average daily volume of trades. See https://www.globalotc.com/brokers/market-share.
    \14\ The third inter-dealer quotation system is the OTC Bulletin
Board, a facility of the Financial Industry Regulatory Authority.
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The Proposed Amendments
    To implement the change, the Exchange proposes to revise the first
paragraph of General Note 4 as follows:
     Amend the first sentence to state that when a User
purchases access to the LCN or IP network, it receives the ability to
access the Global OTC System as well as the Exchange Systems, subject
to authorization by Global OTC, the Exchange or Affiliate Exchange, as
applicable;
     Amend the third sentence to note that a User can change
the access to the Global OTC System that it receives at any time,
subject to authorization by Global OTC; and
     Add a new fifth sentence stating that ``Global OTC offers
access to the Global OTC System to its subscribers, such that a User
does not have to purchase access to the LCN or IP network to obtain
access to the Global OTC System.''
General
    As is the case with all Exchange co-location arrangements, (i)
neither a User nor any of the User's customers would be permitted to
submit orders directly to the Exchange unless such User or customer is
a member organization, a Sponsored Participant or an agent thereof
(e.g., a service bureau providing order entry services); (ii) use of
the co-location services proposed herein would be completely voluntary
and available to all Users on a non-discriminatory basis; \15\ and
(iii) a User would only incur one charge for the particular co-location
service described herein, regardless of whether the User connects only
to the Exchange or to the Exchange and one or more of the Affiliate
SROs.\16\
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    \15\ As is currently the case, Users that receive co-location
services from the Exchange will not receive any means of access to
the Exchange's trading and execution systems that is separate from,
or superior to, that of other Users. In this regard, all orders sent
to the Exchange enter the Exchange's trading and execution systems
through the same order gateway, regardless of whether the sender is
co-located in the data center or not. In addition, co-located Users
do not receive any market data or data service product that is not
available to all Users, although Users that receive co-location
services normally would expect reduced latencies, as compared to
Users that are not co-located, in sending orders to, and receiving
market data from, the Exchange.
    \16\ See 83 FR 26314, supra note 5, at 26315. NYSE, NYSE
American, and NYSE Arca have submitted substantially the same
proposed rule change to propose the changes described herein. See
SR-NYSE-2019-31, SR-NYSEAmer-2019-21, and SR-NYSEArca-2019-40.
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    The proposed change is not otherwise intended to address any other
issues relating to co-location services and/or related fees, and the
Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\17\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\18\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to, and
perfect the mechanisms of, a free and open market and a national market
system and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change would remove
impediments to, and perfect the mechanisms of, a free and open market
and a national market system and, in general, protect investors and the
public interest because it would allow Users to connect to the Global
OTC System, thereby increasing Users' ability to tailor their data
center operations to the requirements of their business operations by
allowing them to select the form and latency of access that best suits
their needs. Global OTC provides publicly displayed, firm, auto-
executable prices in the OTC securities marketplace, and the Exchange
believes that allowing Users to connect to the Global OTC System would
promote price discovery and transparency in the OTC market, benefiting
participants in such market. At the same time, Users are not required
to use any of their bandwidth to access the Global OTC System unless
they wish to do so. Rather, a User only receives the Access that it
selects, and a User can change what Access it receives at any time,
subject to authorization from the Exchange, Affiliate SRO or Global
OTC, as applicable.
    The Exchange provides Access as a convenience to Users. Use of
Access is completely voluntary, and each User has several other access
options available to it. As alternatives to using the Access to the
Global OTC System provided by the Exchange, a User may access the
Global OTC System through the SFTI network, a third party
telecommunication network, third party wireless network, a cross
connect, or a combination thereof to access the Global OTC System
through a connection to an access center outside the data center (which
could be a SFTI access center, a third-party access center, or both),
another User, or a third party vendor.

    The Exchange believes that the proposed revisions to General Note 4
would remove impediments to, and perfect the mechanisms of, a free and
open market and a national market system and, in general, protect
investors and the public interest because they would make the
description of Access more accessible and transparent by including
Global OTC, thereby providing market participants with clarity as to
what connectivity is included in the purchase of access to the LCN and
IP network, avoiding any potential investor confusion. The proposed
revisions to General Note 4 would provide a more detailed and accurate
description of the Access Users receive with their purchase of access
to the LCN or IP network. The proposed rule change would also make
clear that Access to each of the Exchange Systems and the Global OTC
System is provided on the same terms. All Users that voluntarily select
to access the LCN or IP network receive Access to the Exchange Systems
and the Global OTC System, and are not subject to a charge for such
Access above and beyond the fee paid for the relevant LCN or IP network
access.
    The Exchange also believes that the proposed rule changes are
consistent with Section 6(b)(4) of the Act,\19\ in particular, because
it provides for the equitable allocation of reasonable dues, fees, and
other charges among its members, issuers and other persons using its
facilities and does not unfairly discriminate between customers,
issuers, brokers or dealers. The Exchange believes that the proposed
changes are consistent with Section 6(b)(4) of the Act for multiple
reasons.
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    \19\ 15 U.S.C. 78f(b)(4).
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    The proposed rule change is reasonable and equitable because, as
stated above, it would also make clear that Access to each of the
Exchange Systems and Global OTC System is provided on the same terms.
The Exchange further believes that the Access to the Global OTC System
described herein is equitably allocated and not unfairly discriminatory
because all Users that voluntarily select to access the LCN or IP
network receive the same Access, and are not subject to a charge for
Access to Global OTC above and beyond the fee paid for the relevant LCN
or IP network access. Users are not required to use any of their
bandwidth to access the Global OTC System unless they wish to do so.
Rather, a User only receives the Access that it selects, and a User can
change what Access it receives at any time, subject to authorization
from the Exchange, Affiliate SRO or Global OTC, as applicable. In
addition to the service being completely voluntary, it is available to
all Users on an equal basis. Users that opted to Access the Global OTC
System would not receive access that is not available to all Users.
    The Exchange believes that the proposed rule change does not
unfairly discriminate between customers, issuers, brokers or dealers in
not charging Users an additional fee to access Global OTC while
charging a connectivity fee to access OTC Markets, because Global OTC
and the OTC Markets ATS are not fungible. A User that opted to access
Global OTC or OTC Markets would choose between them based on a variety
of factors, including not just the reasonableness of fees charged, but
also the extent to which it wished to have publicly displayed, firm,
auto-executable prices. In addition, the Exchange is not the sole
method a User can use to access the OTC Markets ATS. A User may use the
SFTI network, a third party telecommunication network, a cross connect,
or a combination thereof to access the OTC Markets ATS through a
connection to an access center outside the data center (which could be
a SFTI access center, a third-party access center, or both), another
User, or a third party vendor.
    The Exchange operates in a highly competitive market in which
exchanges offer co-location services as a means to facilitate the
trading and other market activities of those market participants who
believe that co-location enhances the efficiency of their operations.
Accordingly, fees charged for co-location services are constrained by
the active competition for the order flow of, and other business from,
such market participants. If a particular exchange charges excessive
fees for co-location services, affected market participants will opt to
terminate their co-location arrangements with that exchange, and adopt
a possible range of alternative strategies, including placing their
servers in a physically proximate location outside the exchange's data
center (which could be a competing exchange), or pursuing strategies
less dependent upon the lower exchange-to-participant latency
associated with co-location. Accordingly, the exchange charging
excessive fees would stand to lose not only co-location revenues but
also the liquidity of the formerly co-located trading firms, which
could have additional follow-on effects on the market share and revenue
of the affected exchange.
    For the reasons above, the proposed changes do not unfairly
discriminate between or among market participants that are otherwise
capable of satisfying any applicable co-location fees, requirements,
terms and conditions established from time to time by the Exchange.
    For these reasons, the Exchange believes that the proposal is
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\20\ the Exchange
believes that the proposed rule change will not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because, in addition to the proposed services being
completely voluntary, they are available to all Users on an equal basis
(i.e. the same products and services are available to all Users). The
Exchange believes that the proposed changes are reasonable and designed
to be fair and equitable, and therefore, will not unduly burden any
particular group of Users.
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    \20\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that providing Users that purchase access to
the LCN or IP network with Access to the Global OTC System does not
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act because, by offering Access
to the Global OTC System, the Exchange gives each User additional
options for addressing its access needs, responding to User demand for
access options. The Exchange provides Access as a convenience to Users.
Use of Access is completely voluntary, and each User has several other
access options available to it. As alternatives to using the Access to
the Global OTC System provided by the Exchange, a User may access the
Global OTC System through the SFTI network, a third party
telecommunication network, third party wireless network, a cross
connect, or a combination thereof to access the Global OTC System
through a connection to an access center outside the data center (which
could be a SFTI access center, a third-party access center, or both),
another User, or a third party vendor. Users that opt to Access the
Global OTC System would not receive access that is not available to all
Users, as all market participants that contract with Global OTC may
receive access. In this way, the proposed changes would enhance
competition by helping Users tailor their Access to the needs of their
business operations by allowing them to select the form and latency of
access and connectivity that best suits their needs.

    The Exchange believes that the proposed rule change does not
unfairly discriminate between customers, issuers, brokers or dealers in
not charging Users an additional fee to access Global OTC while
charging a connectivity fee to access OTC Markets, because Global OTC
and the OTC Markets ATS are not fungible. A User that opted to access
Global OTC or OTC Markets would choose between them based on a variety
of factors, including not just the reasonableness of fees charged, but
also the extent to which it wished to have publicly displayed, firm,
auto-executable prices. In addition, the Exchange is not the sole
method a User can use to access the OTC Markets ATS. A User may use the
SFTI network, a third party telecommunication network, a cross connect,
or a combination thereof to access the OTC Markets ATS through a
connection to an access center outside the data center (which could be
a SFTI access center, a third-party access center, or both), another
User, or a third party vendor.
    The Exchange believes that the proposed revisions to General Note 4
would provide a more detailed and accurate description of the Access
Users receive with their purchase of access to the LCN or IP network,
thereby enhancing competition by ensuring that all Users have access to
the same information regarding Access.
    The Exchange operates in a highly competitive market in which
exchanges offer co-location services as a means to facilitate the
trading and other market activities of those market participants who
believe that co-location enhances the efficiency of their operations.
Accordingly, fees charged for co-location services are constrained by
the active competition for the order flow of, and other business from,
such market participants. If a particular exchange charges excessive
fees for co-location services, affected market participants will opt to
terminate their co-location arrangements with that exchange, and adopt
a possible range of alternative strategies, including placing their
servers in a physically proximate location outside the exchange's data
center (which could be a competing exchange), or pursuing strategies
less dependent upon the lower exchange-to-participant latency
associated with co-location. Accordingly, the exchange charging
excessive fees would stand to lose not only co-location revenues but
also the liquidity of the formerly co-located trading firms, which
could have additional follow-on effects on the market share and revenue
of the affected exchange.
    For the reasons described above, the Exchange believes that the
proposed rule change reflects this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \21\ and Rule 19b-4(f)(6) thereunder.\22\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\23\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6).
    \23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \24\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\25\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requests
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Exchange
believes that waiver of the operative delay would allow Users to have
access to the Global OTC System during the operative delay period and
would provide Users with options for connectivity to trading and
execution services and the availability of products and services. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission waives the 30-day operative delay and
designates the proposed rule change operative upon filing.\26\
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    \24\ 17 CFR 240.19b-4(f)(6).
    \25\ 17 CFR 240.19b-4(f)(6)(iii).
    \26\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \27\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \27\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSENAT-2019-13 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSENAT-2019-13. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public

Reference Room, 100 F Street NE, Washington, DC 20549 on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSENAT-2019-13 and should be submitted on or before June 25, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11563 Filed 6-3-19; 8:45 am]
 BILLING CODE 8011-01-P