[Federal Register Volume 85, Number 151 (Wednesday, August 5, 2020)]
[Notices]
[Pages 47446-47448]
[FR Doc No: 2020-16993]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89425; File No. SR-NYSE-2020-63]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Extend the Temporary Period for Specified Commentaries to Rules 7.35,
7.35A, 7.35B, and 7.35C and Temporary Rule Relief in Rule 36.30

July 30, 2020.
    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 July 28, 2020, the New York Stock Exchange LLC (``NYSE''
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 extend the temporary period for specified
Commentaries to Rules 7.35, 7.35A, 7.35B, and 7.35C and temporary rule
relief in Rule 36.30, to end on the earlier of a full reopening of the
Trading Floor facilities to DMMs or after the Exchange closes on
September 30, 2020. 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 extend the temporary period for specified
Commentaries to Rules 7.35, 7.35A, 7.35B, and 7.35C and temporary rule
relief to Rule 36.30, to end on the earlier of a full reopening of the
Trading Floor facilities to DMMs or after the Exchange closes on
September 30, 2020. The current temporary period that these Rules are
in effect ends on the earlier of a full reopening of the Trading Floor
facilities to DMMs or after the Exchange closes on July 31, 2020.
Background
    To slow the spread of COVID-19 through social-distancing measures,
on

March 18, 2020, the CEO of the Exchange made a determination under Rule
7.1(c)(3) that, beginning March 23, 2020, the Trading Floor facilities
located at 11 Wall Street in New York City would close and the Exchange
would move, on a temporary basis, to fully electronic trading.\4\ On
May 14, 2020, the CEO of the Exchange made a determination under Rule
7.1(c)(3) to reopen the Trading Floor on a limited basis on May 26,
2020 to a subset of Floor brokers, subject to safety measures designed
to prevent the spread of COVID-19.\5\ On June 15, 2020, the CEO of the
Exchange made a determination under Rule 7.1(c)(3) to begin the second
phase of the Trading Floor reopening by allowing DMMs to return on June
17, 2020, subject to safety measures designed to prevent the spread of
COVID-19.\6\
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    \4\ Pursuant to Rule 7.1(e), the CEO notified the Board of
Directors of the Exchange of this determination. The Exchange's
current rules establish how the Exchange will function fully-
electronically. The CEO also closed the NYSE American Options
Trading Floor, which is located at the same 11 Wall Street
facilities, and the NYSE Arca Options Trading Floor, which is
located in San Francisco, CA. See Press Release, dated March 18,
2020, available here: https://ir.theice.com/press/press-releases/all-categories/2020/03-18-2020-204202110.
    \5\ See Securities Exchange Act Release No. 88933 (May 22,
2020), 85 FR 32059 (May 28, 2020) (SR-NYSE-2020-47) (Notice of
filing and immediate effectiveness of proposed rule change).
    \6\ See Securities Exchange Act Release No. 89086 (June 17,
2020) (SR-NYSE-2020-52) (Notice of filing and immediate
effectiveness of proposed rule change).
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Proposed Rule Change
    The Exchange has modified its rules to add Commentaries to Rules
7.35, 7.35A, 7.35B, and 7.35C and rule relief in Rule 36.30 \7\ that
are in effect until the earlier of a full reopening of the Trading
Floor facilities to DMMs or after the Exchange closes on July 31,
2020.\8\
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    \7\ See Securities Exchange Act Release Nos. 88413 (March 18,
2020), 85 FR 16713 (March 24, 2020) (SR-NYSE-2020-19) (amending Rule
7.35C to add Commentary .01); 88444 (March 20, 2020), 85 FR 17141
(March 26, 2020) (SR-NYSE-2020-22) (amending Rules 7.35A to add
Commentary .01, 7.35B to add Commentary .01, and 7.35C to add
Commentary .02); 88488 (March 26, 2020), 85 FR 18286 (April 1, 2020)
(SR-NYSE-2020-23) (amending Rule 7.35A to add Commentary .02); 88546
(April 2, 2020), 85 FR 19782 (April 8, 2020) (SR-NYSE-2020-28)
(amending Rule 7.35A to add Commentary .03); 88562 (April 3, 2020),
85 FR 20002 (April 9, 2020) (SR-NYSE-2020-29) (amending Rule 7.35C
to add Commentary .03); 88705 (April 21, 2020), 85 FR 23413 (April
27, 2020) (SR-NYSE-2020-35) (amending Rule 7.35A to add Commentary
.04); 88725 (April 22, 2020), 85 FR 23583 (April 28, 2020) (SR-NYSE-
2020-37) (amending Rule 7.35 to add Commentary .01); 88950 (May 26,
2020), 85 FR 33252 (June 1, 2020) (SR-NYSE-2020-48) (amending Rule
7.35A to add Commentary .05); 89059 (June 12, 2020), 85 FR 36911
(June 18, 2020) (SR-NYSE-2020-50) (amending Rule 7.35C to add
Commentary .04); and 89086 (June 17, 2020) (SR-NYSE-2020-52)
(amending Rules 7.35A to add Commentary .06, 7.35B to add Commentary
.03, 76 to add Supplementary Material 20, and Supplementary Material
.30 to Rule 36).
    \8\ See Securities Exchange Act Release No. 89199 (June 30,
2020), 85 FR 40718 (July 7, 2020) (SR-NYSE-2020-56) (Notice of
filing and immediate effectiveness of proposed rule change to extend
the temporary period for Commentaries to Rules 7.35, 7.35A, 7.35B,
and 7.35C; Supplementary Material .20 to Rule 76; and temporary rule
relief in Rule 36.30 to end on the earlier of a full reopening of
the Trading Floor facilities to DMMs or after the Exchange closes on
July 31, 2020). See also Securities Exchange Act Release No. 89368
(July 21, 2020), 85 FR 45272 (July 27, 2020) (SR-NYSE-2020-61)
(Notice of filing and immediate effectiveness of proposed rule
change to lift the temporary suspension to Rule 76 and delete
Supplementary Material .20 to Rule 76).
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    The first and second phases of the reopening of the Trading Floor
are subject to safety measures designed to prevent the spread of COVID-
19. To meet these safety measures, Floor brokers and DMM units that
have chosen to return to the Trading Floor are operating with reduced
staff. The Exchange is therefore proposing to extend the following
temporary rules until such time that there is a full reopening of the
Trading Floor facilities to DMMs:
     Commentary .01 to Rule 7.35; \9\
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    \9\ Because DMMs are not obligated to return to a Floor, an IPO
Auction may still be conducted by a DMM remotely as provided for in
Commentary .04 to Rule 7.35A. If a DMM chooses to conduct an IPO
Auction remotely, Floor brokers on the Trading Floor will not have
access to IPO Auction imbalance information.
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     Commentaries .01, .02, .03, .04, .05, and .06 to Rule
7.35A;
     Commentaries .01 and .03 to Rule 7.35B;
     Commentaries .01, .02, .03, and .04 to Rule 7.35C; and
     Amendments to Rule 36.30.
    The Exchange is not proposing any substantive changes to these
Rules.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Act,\10\ in general, and furthers the objectives of Section 6(b)(5) of
the Act,\11\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    To reduce the spread of COVID-19, the CEO of the Exchange made a
determination under Rule 7.1(c)(3) that beginning March 23, 2020, the
Trading Floor facilities located at 11 Wall Street in New York City
would close and the Exchange would move, on a temporary basis, to fully
electronic trading. On May 14, 2020, the CEO made a determination under
Rule 7.1(c)(3) that, beginning May 26, 2020, the Trading Floor would be
partially reopened to allow a subset of Floor brokers to return to the
Trading Floor. On June 15, 2020, the CEO made a determination under
Rule 7.1(c)(3) that, beginning June 17, 2020, DMM units may choose to
return a subset of staff to the Trading Floor.
    The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because the Trading Floor has not yet reopened
in full to DMMs or Floor brokers. Accordingly, the Exchange believes
that the temporary rule changes in effect pursuant to the Commentaries
to Rules 7.35, 7.35A, 7.35B, and 7.35C and amendments to Rule 36.30,
which are intended to be in effect during the temporary period while
the Trading Floor has not yet opened in full to DMMs, should be
extended until such time that there is a full reopening of the Trading
Floor facilities to DMMs. The Exchange is not proposing any substantive
changes to these Rules.
    The Exchange believes that, by clearly stating that this relief
will be in effect through the earlier of a full reopening of the
Trading Floor facilities to DMMs or the close of the Exchange on
September 30, 2020, market participants will have advance notice of the
temporary period during which the Commentaries to Rules 7.35, 7.35A,
7.35B, and 7.35C and amendments to Rule 36.30 will be in effect.

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

    The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not designed to address any competitive issues but rather would extend
the period during which Commentary .01 to Rule 7.35; Commentaries .01,
.02, .03, .04, 05, and .06 to Rule 7.35A; Commentaries .01 and .03 to
Rule 7.35B; Commentaries .01, .02, .03, and .04 to Rule 7.35C; and
amendments to Rule 36.30 will be in effect. These Commentaries are
intended to be in effect during the temporary period while the Trading
Floor has not yet been opened in full to DMMs and Floor brokers and
currently expire on July 31, 2020. Because the Trading Floor has not
been opened in full to DMMs, the Exchange proposes to

extend the temporary period for these temporary rules to end on the
earlier of a full reopening of the Trading Floor facilities to DMMs or
after the Exchange closes on September 30, 2020.

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 \12\ and Rule 19b-4(f)(6) thereunder.\13\
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; or (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)(iii) of the Act \14\ and Rule
19b-4(f)(6)(iii) thereunder.\15\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may take effect immediately. The Exchange believes that waiver of the
operative delay is consistent with the protection of investors and the
public interest because it will allow the rules discussed above to
remain in effect during the temporary period during which the Trading
Floor has not yet been reopened in full to DMMs. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \19\ 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-NYSE-2020-63 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-NYSE-2020-63. 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-NYSE-2020-63 and should be submitted on
or before August 26, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-16993 Filed 8-4-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 143 (Thursday, July 29, 2021)]
[Notices]
[Pages 40885-40893]
[FR Doc No: 2021-16122]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92480; File No. SR-NYSE-2020-95]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 2 and Order Granting Accelerated
Approval of Proposed Rule Change, as Modified by Amendment No. 2, To
Make Permanent Commentaries to Rule 7.35A and Commentaries to Rule
7.35B and To Make Related Changes to Rules 7.32, 7.35C, 46B, and 47

July 23, 2021.

I. Introduction

    On November 30, 2020, New York Stock Exchange, Inc. (``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 make permanent Commentaries .01(a) and (b) and
.06 to Rule 7.35A (DMM-Facilitated Core Open and Trading Halt Auctions)
and Commentaries .01 and .03 to Rule 7.35B (DMM-Facilitated Closing
Auctions) and to make related changes to NYSE Rules 7.32 (Order Entry),
7.35C (Exchange-Facilitated Closing Auctions), 46B (Regulatory Trading
Official), and 47 (Floor Officials--Unusual Situations). The proposed
rule change was published for comment in the Federal Register on
December 1, 2020.\3\
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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. 90495 (Nov. 24,
2020), 85 FR 77304 (Dec. 1, 2020) (SR-NYSE-2020-95) (``Notice'').
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    On January 13, 2021, the Commission extended to March 1, 2021, the
time period in which to approve the

proposal, disapprove the proposal, or institute proceedings to
determine whether to approve or disapprove the proposal.\4\ On March 1,
2021, the Commission instituted proceedings under Section 19(b)(2)(B)
of the Act \5\ to determine whether to approve or disapprove the
proposed rule change.\6\ On April 12, 2021, the Exchange filed
Amendment No. 1 to the proposed rule change with the Commission and
submitted Amendment No. 1 for inclusion in the public comment file.\7\
On May 17, 2021, the Exchange filed Amendment No. 2 to the proposed
rule change with the Commission, which superseded the original filing,
as amended by Amendment No. 1, in its entirety, and submitted Amendment
No. 2 for inclusion in the public comment file.\8\ On May 24, 2021, the
Commission extended to July 29, 2021, the time period in which to
approve or disapprove the proposal.\9\ The Commission has received no
comment letters on the proposed rule change.
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    \4\ See Securities Exchange Act Release No. 90917 (Jan. 13,
2021), 86 FR 6403 (Jan. 21, 2021).
    \5\ 15 U.S.C. 78s(b)(2)(B).
    \6\ See Securities Exchange Act Release No. 91227, (Mar. 1,
2021), 86 FR 12991 (Mar. 5, 2021) (``Order Instituting
Proceedings'').
    \7\ See Letter from Martha Redding, Associate General Counsel,
NYSE LLC, to Secretary, Commission (April 12, 2021). Amendment No. 1
is available at https://www.sec.gov/comments/sr-nyse-2020-95/srnyse202095-8662901-235314.pdf.
    \8\ In Amendment No. 2, the Exchange proposes to: (i) Amend Rule
7.35A(c)(1)(H) to provide a 5% price parameter and eliminate the
volume restrictions for DMM-facilitated Trading Halt Auctions; and
(ii) amend Rule 7.35A(d)(3)(B) to provide that the Applicable Price
Range for determining whether to publish a pre-opening indication
for a Trading Halt Auction would be 5% for securities with an
Indication Reference Price over $3.00 and $0.15 for securities with
an Indication Reference Price equal to or lower than $3.00. See
Letter from Martha Redding, Associate General Counsel, NYSE LLC, to
Secretary, Commission (May 17, 2021). Amendment No. 2 is available
at https://www.sec.gov/comments/sr-nyse-2020-95/srnyse202095-8807418-237986.pdf.
    \9\ See Securities Exchange Act Release No. 91975 (May 24,
2021), 86 FR 28921 (May 28, 2021).
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    The Commission is publishing notice of the filing of Amendment No.
2 to solicit comment from interested persons, and is approving the
proposed rule change, as modified by Amendment No. 2, on an accelerated
basis.

II. Self-Regulatory Organization's Description of the Proposal, as
Modified by Amendment No. 2

    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 make permanent Commentaries .01(a) and (b)
and .06 to Rule 7.35A (DMM-Facilitated Core Open and Trading Halt
Auctions) and Commentaries .01 and .03 to Rule 7.35B (DMM-Facilitated
Closing Auctions) and make related changes to Rules 7.32 (Order Entry),
7.35C (Exchange-Facilitated Closing Auctions), 46B (Regulatory Trading
Official), and 47 (Floor Officials--Unusual Situations).\10\
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    \10\ In this Amendment No. 2, the Exchange proposes that the
percentage parameter that would be applicable to when a DMM may
electronically facilitate a Trading Halt Auction or would be
required to publish a pre-opening indication would be 5% instead of
10%.
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Background
    In connection with the closing of the Trading Floor facilities
located at 11 Wall Street in New York City as of March 23, 2020 and
moving the Exchange, on a temporary basis, to fully electronic
trading,\11\ and subsequent reopening of the Trading Floor on a limited
basis first to Floor Brokers on May 26, 2020 \12\ and then to DMMs on
June 15, 2020,\13\ the Exchange added Commentaries .01 and .06 to Rule
7.35A and Commentaries .01 and .03 to 7.35B.\14\ Currently, these
Commentaries are in effect until the earlier of a full reopening of the
Trading Floor facilities to DMMs or after the Exchange closes on April
30, 2021.\15\
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    \11\ Pursuant to Rule 7.1(e), the CEO notified the Board of
Directors of the Exchange of her determination under Rule 7.1(c)(3).
The Exchange's rules establish how the Exchange will function fully-
electronically. See Press Release, dated March 18, 2020, available
here: https://ir.theice.com/press/press-releases/all-categories/2020/03-18-2020-204202110.
    \12\ See Securities Exchange Act Release No. 88933 (May 22,
2020), 85 FR 32059 (May 28, 2020) (SR-NYSE-2020-47) (Notice of
filing and immediate effectiveness of proposed rule change).
    \13\ See Securities Exchange Act Release No. 89086 (June 17,
2020) (SR-NYSE-2020-52) (Notice of filing and immediate
effectiveness of proposed rule change).
    \14\ See Securities Exchange Act Release Nos. 88444 (March 20,
2020), 85 FR 17141 (March 26, 2020) (SR-NYSE-2020-22) (amending
Rules 7.35A to add Commentary .01, 7.35B to add Commentary .01, and
7.35C to add Commentary .02) and 89086 (June 17, 2020), 85 FR 37712
(SR-NYSE-2020-52) (amending Rules 7.35A to add Commentary .06, 7.35B
to add Commentary .03, 76 to add Supplementary Material 20, and
Supplementary Material .30 to Rule 36).
    \15\ See Securities Exchange Act Release No. 90795 (December 23,
2020), 85 FR 86608 (December 30, 2020) (SR-NYSE-2020-106) (Notice of
filing and immediate effectiveness of proposed rule change to extend
the temporary period for Commentaries to Rules 7.35, 7.35A, 7.35B,
and 7.35C; and temporary rule relief in Rule 36.30 to end on the
earlier of a full reopening of the Trading Floor facilities to DMMs
or after the Exchange closes on April 30, 2021). [The Commission
notes that, after Amendment No. 2 was filed, the Exchange extended
the outside date for effectiveness of the temporary relief from
April 30, 2021, to August 31, 2021. See Securities Exchange Act
Release No. 91778 (May 5, 2021), 85 FR 25902 (May 11, 2021).]
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    Specifically, Commentary .01 to Rule 7.35A provides:

    For a temporary period that begins March 23, 2020, when the
Trading Floor facilities have been closed pursuant to Rule
7.1(c)(3), and ends on the earlier of a full reopening of the
Trading Floor facilities to DMMs or after the Exchange closes on
December 31, 2020:
    (a) The percentage price parameters in paragraph (c)(1)(G) and
(c)(2) of this Rule are suspended and a DMM may not effect a Core
Open or Trading Halt Auction electronically if the Core Open or
Trading Halt Auction Price will be more than 10% away from the
Consolidated Last Sale Price.
    (b) The volume parameters in paragraph (c)(1)(H) of this Rule
are suspended.
    (c) The requirement to publish a pre-opening indication pursuant
to paragraph (d) of this Rule before either a Core Open or Trading
Halt Auction is suspended.

    Commentary .06 to Rule 7.35A provides:

    For a temporary period that begins on June 17, 2020 and ends on
the earlier of a full reopening of the Trading Floor facilities to
DMMs or after the Exchange closes on December 31, 2020, the
Applicable Price Range specified in paragraphs (d)(3)(A) and (B) of
this Rule is suspended and the Applicable Price Range will be 10%
for securities with an Indication Reference Price higher than $3.00
and $0.30 for securities with an Indication Reference Price equal to
or lower than $3.00.

    Commentary .01 to Rule 7.35B provides:

    For a temporary period that begins March 23, 2020, when the
Trading Floor facilities have been closed pursuant to Rule
7.1(c)(3), and ends on the earlier of a full reopening of the
Trading Floor facilities to DMMs or after the Exchange closes on
December 31, 2020:
    (a) The percentage price parameters in paragraph (c)(1)(G) of
this Rule are suspended and a DMM may not effect a Closing Auction
electronically if the Closing Auction Price will be more than 10%
away from the Exchange Last Sale Price.
    (b) The volume parameters in paragraph (c)(1)(H) of this Rule
are suspended

    Finally, Commentary .03 to Rule 7.35B provides:

    For a temporary period that begins on June 17, 2020 and ends on
the earlier of a full reopening of the Trading Floor facilities to
DMMs or after the Exchange closes on December 31, 2020, Floor Broker
Interest will not be eligible to participate in the Closing Auction.
Proposed Rule Changes
Proposed Changes to Parameters for DMM-Facilitated Electronic Auctions
    The Exchange proposes to make permanent the parameters for DMM-
facilitated electronic auctions that are currently in effect on a
temporary basis as set forth in Commentaries .01(a) and (b) to Rule
7.35A and Commentary .01 to Rule 7.35B, with one proposed change for
Trading Halt Auctions.
    Current Rules 7.35A(c)(1)(G) and (H) provide that a DMM may not
effect a Core Open or Trading Halt Auction electronically if (i) the
Auction Price will be more than 4% away from the Consolidated Last Sale
Price,\16\ or (ii) the paired volume for the Auction will be more than
1,500 round lots for securities with an average opening volume of 1,000
round lots or fewer in the previous calendar quarter, or 5,000 round
lots for securities with an average opening volume of over 1,000 round
lots in the previous calendar quarter. Rule 7.35A(c)(2) further
provides that if as of 9:00 a.m., the E-mini S&P 500 Futures are +/-2%
from the prior day's closing price of the E-mini S&P 500 Futures, or if
the Exchange determines that it is necessary or appropriate for the
maintenance of a fair and orderly market, a DMM may effect an opening
or reopening electronically if the Auction Price will be up to 8% away
from Consolidated Last Sale Price, without any volume limitations.
---------------------------------------------------------------------------

    \16\ The term ``Consolidated Last Sale Price'' is defined in
Rule 7.35 to mean the most recent consolidated last-sale eligible
trade in a security on any market during Core Trading Hours on that
trading day, and if none, the Official Closing Price from the prior
trading day for that security.
---------------------------------------------------------------------------

    Current Rule 7.35B(c)(1)(G) and (H) provide that a DMM may not
effect a Closing Auction electronically if (i) the Auction Price will
be more than a designated percentage away from the Exchange Last Sale
Price,\17\ or (ii) the paired volume for the Closing Auction will be
more than 1,000 round lots for such security. The designated
percentages are currently as follows:
---------------------------------------------------------------------------

    \17\ The term ``Exchange Last Sale Price'' is defined in Rule
7.35 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.

------------------------------------------------------------------------
                                                              Designated
                  Exchange last sale price                    percentage
------------------------------------------------------------------------
$25.00 and below...........................................            5
$25.01 to $50.00...........................................            4
Above $50.00...............................................            2
------------------------------------------------------------------------

    The Exchange proposes to make the price percentage parameter 10%
and eliminate the volume restrictions for DMM-facilitated Core Open
Auctions and Closing Auctions. These parameters are currently in effect
on a temporary basis pursuant to Commentaries .01(a) and (b) to Rule
7.35A and Commentary .01 to Rule 7.35B not only for Core Open Auctions
and Closing Auctions, but also for Trading Halt Auctions. The Exchange
believes that making these temporary Commentaries permanent would
promote fair and orderly DMM-facilitated Core Open Auctions and Closing
Auctions. For DMM-facilitated Trading Halt Auctions, the Exchange
proposes to make the price parameter 5% (instead of 10%) and eliminate
the volume restrictions.
    In particular, DMMs have been operating with the temporary
parameters for Core Open, Trading Halt Auctions, and Closing Auctions
since March 23, 2020. Accordingly, these temporary parameters have been
in effect not only during the period when the Trading Floor was closed
in full, but also for the period when the Trading Floor has partially
reopened to reduced staff of DMM and Floor brokers firms. In addition,
these temporary parameters have been in effect during periods of both
extreme volatility and high trading volumes. Accordingly, DMMs have had
over six months' of experience of electronically facilitating Auctions
within these temporary parameters and apply them during varying market
conditions.
    The Exchange has observed that during the period when these
temporary parameters have been in effect, DMMs have facilitated more
Core Open Auctions electronically, resulting in a higher percentage of
Core Open Auctions occurring within two seconds of 9:30 a.m. Eastern
Time. For example, in February 2020, which was before the Trading Floor
closed, DMMs effected electronically 85.9% of all Core Open Auctions
and 75.9% of Core Open Auctions in S&P 500 securities. By contrast, for
the period July 2020 through October 2020, after when DMMs had returned
to the Trading Floor, DMMs effected electronically 96% of all Core Open
Auctions and 89.6% of Core Open Auctions in S&P 500 securities. The
increased number of DMM electronically-facilitated Core Open Auctions
has resulted in more Core Open Auctions occurring close to the
beginning of Core Trading Hours. For example, in February 2020, 85.9%
of all Core Open Auctions, and 75.9% of Core Open Auctions in S&P 500
securities, occurred within two seconds of 9:30 a.m. Eastern Time. By
contrast, for the period July 2020 through October 2020, 95.9% of all
Core Open Auctions, and 89.6% of Core Open Auctions in S&P 500
securities, occurred within two seconds of 9:30 a.m. Eastern Time.
    The Exchange has observed similar trends for Closing Auctions, with
DMMs facilitating more Closing Auctions electronically, which means
more Closing Auctions occurring closer to 4:00 p.m. Eastern Time. In
February 2020, DMMs effected electronically 57% of all Closing Auctions
and 5.5% of Closing Auctions in S&P 500 securities. By contrast, for
the period July 2020 through October 2020, DMMs effected electronically
90.9% of all Closing Auctions, and 53.6% of Closing Auctions in S&P 500
securities. Currently, DMM electronically-facilitated Closing Auctions
occur shortly after 4:00 p.m. Eastern Time.\18\ Accordingly, the
increased number of DMM electronically-facilitated Closing Auctions
translates to an increase in the number of Closing Auctions that occur
close to 4:00 p.m. Eastern Time. Because the temporary wider percentage
parameters and eliminated volume parameters have resulted in more Core
Open Auctions and Closing Auctions occurring at 9:30 a.m. Eastern Time
or 4:00 p.m. Eastern Time, respectively, the Exchange believes that
making these temporary parameters permanent would support the continued
fair and orderly operation of Auctions on the Exchange.
---------------------------------------------------------------------------

    \18\ When Floor Broker Interest was eligible to participate in
the Closing Auction, DMM electronically-facilitated Closing Auctions
occurred at 4:02 p.m. Eastern Time. Because there has been no Floor
Broker Interest for the Closing Auction during the period while the
Trading Floor has been temporarily closed, the Exchange moved the
time for DMM electronically-facilitated Closing Auctions to closer
to 4:00 p.m. With the proposed change, described below, to
permanently eliminate Floor Broker Interest for the Closing Auction,
the Exchange would continue to conduct DMM electronically-
facilitated Closing Auctions shortly after 4:00 p.m., rather than
revert to the 4:02 p.m. time for such auctions.
---------------------------------------------------------------------------

    The Exchange also notes that during the period when the temporary
parameters have been in place, the Exchange has not observed greater
auction price dislocation compared to the period immediately preceding
implementation of these temporary parameters, and has even observed
modest improvement. The Exchange defines auction price dislocation as
the difference between the Core Open Auction price and the consolidated

volume-weighted average price (``VWAP'') over the subsequent five-
minute period, or the difference between the Closing Auction price and
the consolidated VWAP over the two minutes preceding the Closing
Auction; the lower the difference, the lower the auction price
dislocation. In February 2020, the Exchange's average Core Open Auction
dislocation was 3.27x a security's average spread; for the period July
2020 through October 2020 the average was 3.22x a security's average
spread.\19\ Similarly, the median Core Open Auction dislocation fell
from 1.84x a security's average spread to 1.78x a security's average
spread.
---------------------------------------------------------------------------

    \19\ Market volatility was, on average, lower in February 2020
as compared to July 2020-October 2020. Calculating the price
dislocation metric in terms of a security's average spread
incorporates the wider spreads in the latter period and allows for a
better comparison between the two periods.
---------------------------------------------------------------------------

    The Exchange also observed similar trends in the Closing Auction
price dislocation statistics. In February 2020, the Exchange's average
Closing Auction Price Dislocation was 0.82x a security's average
spread; for the period July 2020 through October 2020, the average was
0.69x a security's average spread.\20\ Median Closing Auction
dislocation also dropped from 0.5x to 0.43x a security's average spread
in the respective periods. Because the temporary wider percentage
parameters have not resulted in greater auction price dislocation, the
Exchange believes that making these parameters permanent would continue
to support fair and orderly Auctions on the Exchange.
---------------------------------------------------------------------------

    \20\ Closing Auction price dislocation is generally lower than
Core Open Auction price dislocation, due to the relatively lower
levels of volatility around the Closing Auction compared to the Core
Open Auction.
---------------------------------------------------------------------------

    To effect these changes, the Exchange proposes to:
     Amend Rule 7.35A(c)(1)(G) to replace the current 4% price
parameter for Core Open Auctions with a 10% price parameter and amend
Rule 7.35A(c)(1)(H) to replace the current 4% price parameter for
Trading Halt Auctions with a 5% price parameter. Because the proposed
price parameter would be 10% for Core Open Auctions, the Exchange
believes that the need for the double-wide parameters set forth in Rule
7.35A(c)(2) for Core Open Auctions would no longer be necessary and the
Exchange proposes to delete that text.
     Delete the volume parameters specified in Rule
7.35A(c)(1)(H).
     Amend Rule 7.35A(j)(1)(A) to delete reference to volume
parameters.
     Amend Rule 7.35B(c)(1)(G) to replace the reference to
``designated percentage'' parameter for the Closing Auction with a 10%
price parameter. The Exchange further proposes to delete the chart
specifying the designated percentages for the Closing Auction.
     Delete Rule 7.35B(c)(1)(H).
     Delete Commentaries .01(a) and (b) to Rule 7.35A.
     Delete the entirety of Commentary .01 to Rule 7.35B.
    The Exchange proposes to maintain Commentary .01(c) to Rule 7.35A,
which provides that for a temporary period that begins March 23, 2020,
when the Trading Floor facilities have been closed pursuant to Rule
7.1(c)(3), and ends on the earlier of a full reopening of the Trading
Floor facilities to DMMs or after the Exchange closes on December 31,
2020, the requirement to publish a pre-opening indication pursuant to
Rule 7.35A(d) before either a Core Open Auction or Trading Halt Auction
is suspended. The Exchange proposes non-substantive amendments to
delete subparagraph (c) numbering and move the text of that
subparagraph into the body of Commentary .01.\21\
---------------------------------------------------------------------------

    \21\ The Exchange notes that even though the requirement for
pre-opening indications has been suspended, since June 17, 2020,
when DMMs returned staff to the Trading Floor, DMMs have published
pre-opening indications for IPO Auctions and the two Direct Listing
Auctions on September 30, 2020.
---------------------------------------------------------------------------

Proposed Changes to Applicable Price Range for Pre-Opening Indications
    The Exchange proposes to make permanent that the Applicable Price
Range for determining whether to publish a pre-opening indication for a
Core Open Auction would be 10% for securities with an Indication
Reference Price higher than $3.00 and $0.30 for securities with an
Indication Reference Price equal to or lower than $3.00, which is
currently in effect on a temporary basis, as set forth in Commentary
.06 to Rule 7.35A. The Exchange further proposes that the Applicable
Price Range for determining whether to publish a pre-opening indication
for a Trading Halt Auction would be 5% for securities with an
Indication Reference Price over $3.00 and $0.15 for securities with an
Indication Reference Price equal to or lower than $3.00.
    Rule 7.35A(d)(1)(A) currently provides that a DMM will publish a
pre-opening indication before a security opens or reopens if the Core
Open or Trading Halt Auction is anticipated to be a change of more than
the ``Applicable Price Range,'' as specified in Rule 7.35A(d)(3), from
a specified ``Indication Reference Price,'' as specified in Rule
7.35A(d)(2).
    Rule 7.35A(d)(3)(A) provides that the Applicable Price Range will
be 5% for securities with an Indication Reference Price over $3.00 and
$0.15 for securities with an Indication Reference Price equal to or
lower than $3.00. Rule 7.35A(d)(3)(B) further provides that,

    If as of 9:00 a.m., the E-mini S&P 500 Futures are +/-2% from
the prior day's closing price of the E-mini S&P 500 Futures, when
reopening trading following a market-wide trading halt under Rule
7.12, or if the Exchange determines that it is necessary or
appropriate for the maintenance of a fair and order market, the
Applicable Price Range for determining whether to publish a pre-
opening indication will be 10% for securities with an Indication
Reference Price over $3.00 and $0.30 for securities with an
Indication Reference Price equal to or lower than $3.00.

    Current Rule 7.35A(1)(A) further provides that a DMM may not effect
a Core Open or Trading Halt Auction electronically if a pre-opening
indication has been published for the Core Open Auction. Accordingly,
Exchange Rules already provide for a correlation between pre-opening
indications and whether a DMM may effect a Core Open or Trading Halt
Auction electronically. Currently, that is achieved through similar,
though not identical, percentage parameters: The price parameter for
DMM-facilitated electronic Core Open and Trading Halt Auctions is 4%
and the Applicable Price Range for pre-opening indications is 5%. When
there is market-wide volatility, both are doubled.
    The Exchange believes that because of this existing correlation, in
connection with permanently widening the price parameters for DMM-
facilitated electronic Core Open Auctions to 10%, the Applicable Price
Range for determining whether to publish a pre-opening indication
should similarly not only be widened, but also be aligned to 10%.
Similarly, because the price parameters for DMM-facilitated electronic
Trading Halt Auctions would be 5%, the Applicable Price Range for
determining whether to publish a pre-opening indication should be
aligned to be 5%. With these proposed changes, if there is a
significant enough price movement to require a DMM to effect a Core
Open or Trading Halt Auction manually, the DMM would be required to
publish a pre-opening indication for such Core Open or Trading Halt
Auction. The Exchange notes that if a DMM chooses to facilitate a Core
Open Auction or Trading Halt Auction manually (i.e., if there is less
than a 10% price movement for a Core Open Auction or 5% price movement
for a Trading Halt Auction), a DMM could still choose to publish a pre-
opening indication in connection with such Auction, even if the
Applicable Price

Range has not been triggered. For example, DMMs generally publish pre-
opening indications for IPO Auctions and Direct Listing Auctions
regardless of whether the Applicable Price Range has been triggered.
    The Exchange does not believe that permanently widening the
Applicable Price Range for when a DMM is required to publish a pre-
opening indication would reduce transparency in connection with Core
Open Auctions. The Exchange currently disseminates Auction Imbalance
Information for all Core Open Auctions.\22\ Since August 2019, when the
Exchange transitioned Exchange-listed securities to the Pillar trading
platform, all Floor broker orders for the Core Open Auctions must be
entered electronically. Accordingly, all such interest is reflected in
the Auction Imbalance Information, which was not the case before the
Exchange transitioned to Pillar. Accordingly, the Auction Imbalance
Information includes information about all buy and sell orders entered
in advance of such Auctions.\23\
---------------------------------------------------------------------------

    \22\ Pursuant to Commentaries .01 and .02 to Rule 7.35, for the
temporary period that ends on the earlier of a full reopening of the
Trading Floor facilities to DMMs or after the Exchange closes on
December 31, 2020, the Exchange includes IPOs and Direct Listings in
the Auction Imbalance Information. The Exchange has filed a separate
proposed rule change to include IPOs and Direct Listings in the
Auction Imbalance Information on a permanent basis. See Securities
Exchange Act Release No. 90387 (November 10, 2020) (SR-NYSE-2020-93)
(Notice of Filing).
    \23\ Rule 7.35(a)(4) provides that DMM Auction Liquidity is
never included in Auction Imbalance Information. By its terms, DMM
Auction Liquidity, as defined in Rule 7.35(d)(8)(A), is entered by
the DMM either manually or electronically as part of the DMM unit's
electronic message to conduct an Auction. For an Auction effected
electronically by the DMM, DMM Auction Liquidity is entered
simultaneously with the DMM facilitating the Auction, which is why
it is not included in the Auction Imbalance Information leading up
to such Auction. For an Auction effected manually by the DMM, the
DMM can factor such interest into the pre-opening indication price
range. DMM Orders, as defined in Rule 7.35(d)(8)(B), that may be
entered by the DMM in advance of such Auctions would be included in
the Auction Imbalance Information.
---------------------------------------------------------------------------

    To effect this change, the Exchange proposes to combine and amend
current Rule 7.35A(d)(3)(A) and (B) to make it a single subparagraph
(A) that would provide that the Applicable Price Range for determining
whether to publish a pre-opening indication for a Core Open Auction
would be 10% for securities with an Indication Reference Price over
$3.00 and $0.30 for securities with an Indication Reference Price equal
to or lower than $3.00. The Exchange proposes to delete the
introductory text to Rule 7.35A(d)(3)(B) regarding circumstances when
the Exchange could widen the Applicable Price Range under the current
Rule. The Exchange further proposes new text for Rule 7.35A(d)(3)(B)
that would provide that the Applicable Price Range for determining
whether to publish a pre-opening indication for a Trading Halt Auction
would be 5% for securities with an Indication Reference Price over
$3.00 and $0.15 for securities with an Indication Reference Price equal
to or lower than $3.00. The Exchange further proposes to delete
Commentary .06 to Rule 7.35A.
Proposed Changes to Floor Broker Interest for the Closing Auction
    The Exchange proposes to make permanent that Floor Broker Interest
would not be eligible to participate in the Closing Auction, as set
forth in Commentary .03 to Rule 7.35B. The term ``Floor Broker
Interest'' is defined in Rule 7.35(a)(9) to mean orders represented
orally by a Floor broker at the point of sale.
    Rule 7.35B(a)(1) currently provides that Floor Broker Interest is
eligible to participate in the Closing Auction provided that the Floor
broker has electronically entered such interest before the Auction
Processing Period for the Closing Auction begins. The Rule further
provides that for such interest to be eligible to participate in the
Closing Auction, a Floor broker must first, by the end of, but not
after, Core Trading Hours, orally represent Floor Broker Interest at
the point of sale, including symbol, side, size, and limit price, and
then second, electronically enter such interest after the end of Core
Trading Hours. Current Rules 7.35B(a)(1)(B) and (C) set forth
additional requirements relating to electronic acceptance of such
interest by the DMM and circumstances when such interest can be
cancelled.
    On June 17, 2020, when the Exchange reopened the Trading Floor to
limited numbers of DMMs, the Exchange added Commentary .03 to Rule
7.35B. Accordingly, from June 17, 2020 to the present, even though
reduced numbers of DMMs and Floor brokers are present on the Trading
Floor, Floor Broker Interest has not been eligible to participate in
the Closing Auction.
    During this period, the Exchange has observed that even in the
absence of Floor Broker Interest, Floor broker participation in Closing
Auctions has returned to similar levels of Floor broker participation
in the Closing Auction for the period before March 23, 2020. For
example, in February 2020, 34.5% of Auction-Only Orders for the Closing
Auction were entered as Closing D Orders, which are available only to
Floor brokers.\24\ In October 2020, 38.8% of the Auction-Only Orders
for the Closing Auction were Closing D Orders, which demonstrates that
Floor broker participation in the Closing Auction has not only returned
since the Trading Floor reopened, but has actually increased as
compared to February 2020. Moreover, in February 2020, only 0.1% of
total Floor broker orders for the Closing Auction was represented as
Floor Broker Interest, and that Floor Broker Interest represented less
than 0.01% of the total interest that participated in the Closing
Auction. Based on both the relatively small levels of Floor Broker
Interest that was participating in the Closing Auction before the
Trading Floor closed and the ongoing availability of Closing D Orders
for Floor brokers, the Exchange does not believe that eliminating Floor
Broker Interest for the Closing Auction would materially impact the
ability of Floor brokers to represent customer orders for the Closing
Auction.
---------------------------------------------------------------------------

    \24\ For Exchange-listed securities, Auction-Only Orders are
defined in Rule 7.31 to mean a Limit or Market Order that is to be
traded only in an auction pursuant to the Rule 7.35 Series. The
Exchange accepts the following Auction-Only Orders for the Closing
Auction: Limit-on-Close Order (``LOC Order''), Market-on-Close Order
(``MOC Order''), Closing D Order, and Closing Imbalance Offset
Orders. All four types of Auction-Only Orders are available to Floor
brokers.
---------------------------------------------------------------------------

    Based on this experience, the Exchange proposes to make permanent
Commentary .03 to Rule 7.35B. To effect this change, the Exchange
proposes to amend Rule 7.35B(a)(1) to provide that Floor Broker
Interest would not be eligible to participate in the Closing Auction.
To provide clarity that a Floor broker would not be permitted to
represent verbal interest intended for the Closing Auction, the
Exchange further proposes to provide that Floor brokers must enter any
orders for the Closing Auction, as defined in Rule 7.31, electronically
during Core Trading Hours. The Exchange believes that the cross-
reference to Rule 7.31 in the Rule would provide notice to Floor
brokers and their customers of which order types are available for
electronic entry by Floor brokers for the Closing Auction, which
include both Auction-Only Orders described in Rule 7.31(c) and other
orders that may be resting on the Exchange Book that are eligible to
participate in the Closing Auction. The Exchange also proposes to
delete Commentary .03 to Rule 7.35B.
    The Exchange proposes to make related changes by deleting the
clause ``and Floor Broker Interest intended for the Closing Auction as
defined in Rule 7.35B(a)(1)'' from Rule 7.32. Similarly, the Exchange
proposes to delete the text

set forth in Rule 7.35C(a)(2) relating to Floor Broker Interest that
provides that ``Floor Broker Interest that has been electronically
accepted by the DMM and that has not been cancelled as provided for in
Rule 7.35B(a)(1)(C) will be eligible to participate in an Exchange-
facilitated Closing Auction.'' The Exchange proposes to designate that
sub-paragraph as ``Reserved.'' \25\
---------------------------------------------------------------------------

    \25\ The Exchange has a pending proposed rule change to amend
Rule 7.35C(a). See (SR-NYSE-2020-89).
---------------------------------------------------------------------------

    In addition, the Exchange proposes to delete Rule 46B and amend
Rule 47(b). Under Rule 47, Floor Officials have the authority to
``supervise and regulate active openings and unusual situations that
may arise in connection with the making of bids, offers or transactions
on the Floor.'' The Exchange recently amended its rules to add
Regulatory Trading Officials (``RTO''), which are defined in Rule
46B.\26\ As described in the RTO Approval Order, unusual situations
that may arise in connection with Floor Broker Interest for the Closing
Auction could be ``if the Floor broker hand-held device malfunctions or
ceases to work or if a Floor broker is physically impeded, as a result
of a crowd condition beyond that of normal traffic flow on the
Exchange's trading Floor or some other circumstance beyond the Floor
broker's control, in his or her ability to be present at a post before
the DMM closes the security.'' \27\ The Exchange amended Rule 47 to add
subparagraph (b), which provides that RTOs, instead of Floor Officials,
would be responsible for supervising and regulating situations
regarding whether a verbal bid or verbal offer is eligible for
inclusion in the Closing Auction by the DMM.
---------------------------------------------------------------------------

    \26\ See Securities Exchange Act Release No. 88765 (April 29,
2020), 85 FR 26771 (May 5, 2020) (SR-NYSE-2020-03) (``RTO Approval
Order'').
    \27\ Id. at 26772.
---------------------------------------------------------------------------

    Because the Exchange proposes to eliminate verbal bids or verbal
offers for the Closing Auction, the Exchange proposes to delete the
last clause of Rule 47(a) and subparagraph (b) to Rule 47.\28\ As
proposed, Rule 47 would revert to the rule text in effect prior to the
RTO Approval Order and would provide that ``Floor Officials shall have
power to supervise and regulate active openings and unusual situations
that may arise in connection with the making of bids, offers or
transactions on the Floor.'' With this proposed change, RTOs would no
longer have a role under Exchange rules. Therefore, the Exchange
proposes to delete Rule 46B.
---------------------------------------------------------------------------

    \28\ RTOs were approved when the Trading Floor was temporarily
closed. Id. Because Commentary .03 to Rule 7.35B was implemented
when DMMs returned to the Trading Floor, there has not been any
Floor Broker Interest for Closing Auctions since RTOs were created
and therefore RTOs have not had to perform the functions as
described in Rule 46(b).
---------------------------------------------------------------------------

    The Exchange also proposes to delete Commentary .02 to Rule 7.35B.
This Commentary is obsolete because it has not been in effect since May
22, 2020.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section
6(b) of the Act,\29\ in general, and furthers the objectives of
Sections 6(b)(5) of the Act,\30\ 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.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78f(b).
    \30\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Proposed Changes to Parameters for DMM-Facilitated Electronic Auctions
    The Exchange believes that the proposed change to make permanent
the parameters for DMM-facilitated electronic Core Open Auctions and
Closing Auctions that are currently in effect on a temporary basis as
set forth in Commentaries .01(a) and (b) to Rule 7.35A and Commentary
.01 to Rule 7.35B would remove impediments to and perfect the mechanism
of a free and open market and a national market system because the
Exchange believes that these updated parameters would promote fair and
orderly Auctions on the Exchange. These temporary parameters have been
in effect not only during the period when the Trading Floor was closed
in full, but also for the period when the Trading Floor has partially
reopened to reduced staff of DMM and Floor brokers firms. In addition,
these temporary parameters have been in effect during periods of both
extreme volatility and high trading volumes. Accordingly, DMMs have had
over six months' of experience of electronically facilitating Auctions
within these temporary parameters and applying them during varying
market conditions.
    During this period, the Exchange has observed that with these
temporary parameters, a higher number of Core Open Auctions and Closing
Auctions have been electronically facilitated by the DMM, which has
resulted in a greater number of Core Open Auctions and Closing Auctions
occurring shortly after 9:30 a.m. or 4:00 p.m., respectively. The
Exchange has further observed that there have been modest improvements
in auction price dislocation during the period when these temporary
parameters have been in place. Accordingly, the Exchange believes that
making these parameters permanent would promote the continued fair and
orderly operation of Auctions for Exchange-listed securities.
    In addition, the Exchange further believes that the proposed 5%
percentage parameter for DMM-facilitated electronic Trading Halt
Auctions would remove impediments to and perfect the mechanism of a
free and open market and a national market system because this
percentage parameter would be aligned with the initial collars
applicable to electronic reopening auctions following a MWCB Halt or
trading pause on the automated primary listing exchanges that do not
have trading floors.\31\ On the Exchange, DMMs are required to
facilitate manually a Trading Halt Auction following a regulatory halt
issued under Section 2 of the Listed Company Manual. Accordingly, the
proposed 5% percentage parameter would be applicable only to DMM-
facilitated electronic Trading Halt Auctions following a trading pause
or MWCB Halt. This proposed 5% percentage parameter would not require
such Trading Halt Auctions to be priced within that range. Rather, if
the Trading Halt Auction were to occur outside of that percentage
parameter, the DMM would be required to facilitate such Trading Halt
Auction manually. Regardless of whether a Trading Halt is facilitated
by a DMM manually or electronically, the DMM would be required to
determine the Auction Price as provided for in Rule 7.35A(g) and orders
would be allocated as provided for in Rule 7.35A(h).
---------------------------------------------------------------------------

    \31\ See, e.g., NYSE Arca, Inc. Rule 7.35-E(e)(7) (specifying
initial Auction Collars for Trading Halt Auctions).
---------------------------------------------------------------------------

Proposed Changes to Applicable Price Range for Pre-Opening Indications
    The Exchange believes that the proposed change to make permanent
that the Applicable Price Range for determining whether to publish a
pre-opening indication for a Core Open Auction would be 10% for
securities with an Indication Reference Price

higher than $3.00 and $0.30 for securities with an Indication Reference
Price equal to or lower than $3.00, which are currently in effect on a
temporary basis, and to provide for an Applicable Price Range for
Trading Halt Auctions of 5% for securities with an Indication Reference
Price higher than $3.00 and $0.15 for securities with an Indication
Reference Price equal to or lower than $3.00 would remove impediments
to and perfect the mechanism of a free and open market and a national
market system because the Exchange believes that these updated
Applicable Price Ranges would promote fair and orderly Auctions on the
Exchange.
    Exchange rules already provide for a correlation between the
parameters for when a DMM may facilitate an Auction electronically and
the Applicable Price Range for determining whether to disseminate a
pre-opening indication. The Exchange believes that the proposed
Applicable Price Ranges should be aligned with the Exchange's proposed
parameters for when a DMM may facilitate an Auction electronically.
Specifically, with this proposed change, if there is a significant
enough price movement to require a DMM to effect a Core Open or Trading
Halt Auction manually, the DMM would be required to publish a pre-
opening indication for such Core Open or Trading Halt Auction. The
Exchange notes that if a DMM chooses to facilitate a Core Open Auction
or Trading Halt Auction manually (i.e., if there is less than a 10%
price movement for a Core Open Auction or 5% for a Trading Halt
Auction), a DMM could still choose to publish a pre-opening indication
in connection with such Auction, even if the Applicable Price Range has
not been triggered.
    The Exchange does not believe that permanently widening the
Applicable Price Range for when a DMM is required to publish a pre-
opening indication would reduce transparency in connection with Core
Open Auctions. The Exchange currently disseminates Auction Imbalance
Information for Core Open Auctions and Trading Halt Auctions. Since
August 2019, when the Exchange transitioned Exchange-listed securities
to the Pillar trading platform, all Floor broker orders for the Core
Open and Trading Halt Auctions must be entered electronically.
Accordingly, all such interest is reflected in the Auction Imbalance
Information, which was not the case before the Exchange transitioned to
Pillar. Accordingly, the Auction Imbalance Information includes
information about all buy and sell orders entered in advance of such
Auctions.
Proposed Changes to Floor Broker Interest for the Closing Auction
    The Exchange believes that the proposed change to make permanent
that Floor Broker Interest would not be eligible to participate in the
Closing Auction, which is currently in effect on a temporary basis as
set forth in Commentary .03 to Rule 7.35B, would remove impediments to
and perfect the mechanism of a free and open market because it would
promote fair and orderly Closing Auctions on the Exchange.
    The Exchange has observed that even in the absence of Floor Broker
Interest, Floor broker participation in the Closing Auction has
returned, and indeed increased, as compared to the level of Floor
broker participation in the Closing Auction for February 2020.
Moreover, even when Floor Broker Interest was available to participate
in Closing Auctions, such interest represented only 0.1% of total Floor
broker orders that participated in Closing Auctions. Accordingly, the
Exchange does not believe that the proposed change would materially
alter Floor brokers' ability to meaningfully participate in the Closing
Auction. Moreover, in the absence of Floor Broker Interest, the
Exchange was able to move the time for DMM-facilitated electronic
Closing Auctions from 4:02 p.m. to shortly after 4:00. By making this
change permanent, DMM-facilitated electronic Closing Auctions would
continue to occur shortly after 4:00.
    The Exchange further believes that the proposed amendments to Rules
7.32, 7.35, 46B, and 47(b) would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because such rules would no longer be necessary in the absence of Floor
Broker Interest for the Closing Auction. Accordingly, these proposed
rule changes would promote transparency and clarity by removing
references that would be obsolete.

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

    In accordance with Section 6(b)(8) of the Act,\32\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The proposed change is not designed to address any
competitive issues. Instead, the proposed rule changes are designed to
make permanent changes that have been implemented on a temporary basis
relating to the functions of Auctions on the Exchange and that have
contributed to the fair and orderly Auction process during the period
that they have been in effect. The proposed rule change does not have
any effect on intermarket competition because these proposed changes
relate to Auctions in Exchange-listed securities for which the Exchange
is the primary listing exchange.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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. Order Instituting Proceedings

    In the Order Instituting Proceedings, the Commission requested
comment on, among other things: (1) Whether the primary listing
exchanges should harmonize their respective processes for reopening
trading by fully automated auction after a limit-up/limit-down
(``LULD'') pause or a Level 1 or Level 2 market-wide circuit breaker
(``MWCB'') halt; \33\ (2) whether the NYSE should further harmonize its
proposed Trading Halt Auction process for fully automated auctions
facilitated electronically by DMMs to align with Nasdaq, NYSE Arca, and
Cboe BZX regarding the establishment of permitted price bands, and/or
the limit (or lack thereof) on price band adjustments; (3) whether the
Exchange should permit a DMM to reopen a security up to 10% away from
the reference price immediately after an LULD pause or MWCB halt
without human intervention; (4) whether there are characteristics of
the NYSE market structure that warrant divergence from the price
parameters in place for other exchanges' fully automated reopening
auctions immediately following an LULD pause or MWCB halt; and (5)
whether the price parameters within which DMMs are permitted to
electronically facilitate auctions should be the same for Core Open
Auctions, Trading Halt Auctions, and Closing

Auctions.\34\ In response to the questions raised in the Order
Instituting Proceedings, the Exchange submitted Amendment No. 2, which
changed the percentage parameter that would be applicable to when a DMM
may electronically facilitate a Trading Halt Auction or would be
required to publish a pre-opening indication from 10%, as originally
proposed, to 5%.
---------------------------------------------------------------------------

    \33\ As originally proposed by the Exchange, Trading Halt
Auctions facilitated electronically by DMMs would differ from other
primary listing markets' reopening processes after LULD pauses and
MWCB halts in that they would permit a fully automated reopening of
trading at prices up to 10% away from the auction reference price
immediately after trading pauses or halts, whereas Nasdaq, NYSE
Arca, and Cboe BZX establish 5% price bands for reopening and then
widen those price bands in increments of 5%, with additional auction
extension messages associated with each widening, until market
interest can be satisfied.
    \34\ See Order Instituting Proceedings, supra note 6, 86 FR at
12993.
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IV. Discussion and Commission Findings

    After careful review, the Commission is approving the proposed rule
change, as modified by Amendment No. 2, for the reasons discussed
below.\35\ The Commission finds that the proposed rule change, as
modified, is consistent with the requirements of the Act and the rules
and regulations thereunder applicable to a national securities
exchange, including Section 6(b)(5) of the Exchange Act,\36\ 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 are not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
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    \35\ In approving this proposed rule change, the Commission has
considered the proposed rule change's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
    \36\ 15 U.S.C. 78f(b)(5).
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Parameters for DMM-Facilitated Electronic Auctions

    The Commission finds that the proposed change to establish wider
permanent parameters for DMM-facilitated electronic Core Open Auctions
and Closing Auctions is reasonably designed to promote fair and orderly
Auctions on the Exchange. The Commission notes that DMMs have had over
six months of experience of electronically facilitating Auctions within
these parameters under temporary rules of the Exchange and that the
Exchange's proposal includes statistics indicating that, during this
six-month period, a higher percentage of Core Open Auctions and Closing
Auctions have occurred shortly after 9:30 a.m. or 4:00 p.m.,
respectively, and that this increase has not been accompanied by an
increase in auction price dislocation, but has instead been accompanied
by a modest improvement.
    The Commission also finds that the proposed 5% percentage parameter
for DMM-facilitated electronic Trading Halt Auctions is reasonably
designed to remove impediments to and perfect the mechanism of a free
and open market and a national market system because this change would
align the percentage parameters for immediate electronic reopening
auctions after a MWCB halt or trading pause with the initial collars
applicable to electronic reopening auctions on the other primary
listing exchanges.\37\
---------------------------------------------------------------------------

    \37\ See, e.g., NYSE Arca, Inc. Rule 7.35-E(e)(7) (specifying
initial Auction Collars for Trading Halt Auctions).
---------------------------------------------------------------------------

Applicable Price Range for Pre-Opening Indications

    The Exchange proposes to make permanent that the Applicable Price
Range for determining whether to publish a pre-opening indication for a
Core Open Auction would be 10% for securities with an Indication
Reference Price higher than $3.00 and $0.30 for securities with an
Indication Reference Price equal to or lower than $3.00. The Exchange
also proposes to change its rules to provide for an Applicable Price
Range for Trading Halt Auctions of 5% for securities with an Indication
Reference Price higher than $3.00 and $0.15 for securities with an
Indication Reference Price equal to or lower than $3.00. The Commission
finds that these changes are reasonably designed to remove impediments
to and perfect the mechanism of a free and open market and a national
market system by promoting fair and orderly Auctions on the Exchange
because they would align the parameters within which a DMM may
facilitate an Auction electronically and the Applicable Price Range for
determining whether to disseminate a pre-opening indication (which,
under the Exchange's rules, prevents a DMM from facilitating an auction
electronically). Additionally, the Commission does not believe that
widening the Applicable Price Range that governs when a DMM is required
to publish a pre-opening indication would reduce transparency in the
market because all buy and sell orders entered in advance of Core Open
and Trading Halt Auctions are already reflected in Auction Imbalance
Information.

Proposed Changes to Floor Broker Interest for the Closing Auction

    The Commission finds that the proposal to make permanent that Floor
Broker Interest--orders represented orally by a Floor broker at the
point of sale--would not be eligible to participate in the Closing
Auction is reasonably designed to remove impediments to and perfect the
mechanism of a free and open market by promoting fair and orderly
Closing Auctions on the Exchange, because precluding participation by
Floor Broker Interest has enabled the exchange to hold DMM-facilitated
electronic Closing Auctions more quickly after the 4:00 p.m. scheduled
close of trading and because Floor brokers will remain able to
participate in the Closing Auction through the use of Closing D
Orders.\38\
---------------------------------------------------------------------------

    \38\ In fact, the Exchange represents that Floor broker
participation in the Closing Auction has increased despite the
absence of Floor Broker Interest, as compared to the level of Floor
broker participation in the Closing Auction for February 2020.
---------------------------------------------------------------------------

    For the reasons discussed above, the Commission finds that the
proposed rule change, as modified by Amendment No. 2, is consistent
with the requirements of the Act and in particular Section 6(b)(5)
because it is reasonably designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.

V. Solicitation of Comments on Amendment No. 2 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 2
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-NYSE-2020-95 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-NYSE-2020-95. 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-NYSE-2020-95 and should be submitted on
or before August 19, 2021.

VI. Accelerated Approval of Amendment No. 2

    As noted above, in Amendment No. 2, as compared to the original
proposal,\39\ the Exchange proposes to: (i) Amend Rule 7.35A(c)(1)(H)
to provide a 5% price parameter and eliminate the volume restrictions
for DMM-facilitated Trading Halt Auctions; and (ii) amend Rule
7.35A(d)(3)(B) to provide that the Applicable Price Range for
determining whether to publish a pre-opening indication for a Trading
Halt Auction would be 5% for securities with an Indication Reference
Price over $3.00 and $0.15 for securities with an Indication Reference
Price equal to or lower than $3.00. The Commission believes that the
proposed 5% price parameter for DMM-facilitated Trading Halt Auctions
is consistent with the Act because this percentage parameter would be
aligned with the initial collars applicable to electronic reopening
auctions following a MWCB Halt or trading pause on the automated
primary listing exchanges that do not have trading floors. The
Commission believes it is reasonable to also align the price parameter
for DMM-facilitated Trading Halt Auctions with the parameter for
publishing a pre-opening indication because Rule 7.35A(c)(1)(A)
prohibits a DMM from effecting a Core Open or Trading Halt Auction
electronically if a pre-opening indication has been published for the
Core Open Auction.
---------------------------------------------------------------------------

    \39\ See Notice, supra note 3.
---------------------------------------------------------------------------

    Therefore, the Commission finds that Amendment No. 2 to the
proposal raises no novel regulatory issues, that it is reasonably
designed to protect investors and the public interest, and that it is
consistent with the requirements of the Act. Accordingly, the
Commission finds good cause, pursuant to Section 19(b)(2) of the
Act,\40\ to approve the proposed rule change, as modified by Amendment
No. 2, on an accelerated basis.
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\41\ that the proposed rule change (SR-NYSE-2020-95), as modified
by Amendment No. 2, be, and hereby is, approved on an accelerated
basis.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\42\
---------------------------------------------------------------------------

    \42\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-16122 Filed 7-28-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 10, 2008 (Volume 73, Number 133)]
[Notices]
[Page 39738]
[DOCID:fr10jy08-101]

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SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request

Upon written request, copies available from: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension:
    Rule 17Ab2-1, Form CA-1; SEC File No. 270-203; OMB Control No.
3235-0195.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information summarized below. The Commission plans to submit this
existing collection of information to the Office of Management and
Budget for extension and approval.
     Rule 17Ab2-1 and Form CA-1: Registration of Clearing
Agencies (17 CFR 240.17Ab2-1).
    Rule 17Ab2-1 and Form CA-1 require clearing agencies to register
with the Commission and to meet certain requirements with regard to,
among other things, a clearing agency's organization, capacities, and
rules. The information is collected from the clearing agency upon the
initial application for registration on Form CA-1. Thereafter,
information is collected by amendment to the initial Form CA-1 when
material changes in circumstances necessitate modification of the
information previously provided to the Commission.
    The Commission uses the information disclosed on Form CA-1 to (i)
Determine whether an applicant meets the standards for registration set
forth in Section 17A of the Securities Exchange Act of 1934 (``Exchange
Act''), (ii) enforce compliance with the Exchange Act's registration
requirement, and (iii) provide information about specific registered
clearing agencies for compliance and investigatory purposes. Without
Rule 17Ab2-1, the Commission could not perform these duties as
statutorily required.
    There are currently approximately six operational clearing agencies
and five clearing agencies that have been granted an exemption from
registration. The Commission staff estimates that each initial Form CA-
1 requires approximately 130 hours to complete and submit for approval.
Hours required for amendments to Form CA-1 that must be submitted to
the Commission in connection with material changes to the initial CA-1
can vary, depending upon the nature and extent of the amendment. Since
the Commission only receives an average of one submission per year, the
aggregate annual burden associated with compliance with Rule 17Ab2-1
and Form CA-1 is 130 hours. Based upon the staff's experience, the
average cost to clearing agencies of preparing and filing the initial
Form CA-1 is estimated to be $18,000.
    Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given to comments and suggestions submitted in writing within 60
days of this publication.
    Please direct your written comments to Lewis W. Walker, Acting
Director/Chief Information Officer, Securities and Exchange Commission,
C/O Shirley Martinson, 6432 General Green Way, Alexandria, Virginia,
22312; or send an e-mail to<EMAIL_ADDRESS>
    Dated: July 2, 2008.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-15641 Filed 7-9-08; 8:45 am]

BILLING CODE 8010-01-P