[Federal Register Volume 85, Number 144 (Monday, July 27, 2020)]
[Notices]
[Pages 45272-45274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16162]
[[Page 45272]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89368; File No. SR-NYSE-2020-61]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Delete Supplementary Material .20 to Rule 76
July 21, 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 20, 2020, 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 delete Supplementary Material .20 to Rule
76 and lift the temporary suspension on ``crossing'' orders pursuant to
Rule 76. 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 delete Supplementary Material .20 to Rule
76 and lift the temporary suspension on ``crossing'' orders pursuant to
Rule 76.
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\ 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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The Exchange has modified its rules to add Commentaries to Rules
7.35, 7.35A, 7.35B, and 7.35C; Supplementary Material .20 to Rule 76;
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 to Rules 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).
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Proposed Rule Change
The Exchange has determined that, during this phase of the partial
reopening of the Trading Floor when both DMMs and Floor brokers have
returned to the Trading Floor with reduced staff, Floor brokers can
resume ``crossing'' transactions pursuant to Rule 76, including the
Cross Function specified in Supplementary Material .10 to Rule 76, in a
manner consistent with the safety measures designed to prevent the
spread of COVID-19.
Crossing transactions, which require a verbal representation of the
proposed crossing transaction, involve face-to-face interactions on the
Trading Floor. Because such proposed transactions do not happen at set
times during the trading day, they generally do not result in large
numbers of individuals congregating on the Trading Floor. The Exchange
has discussed the resumption of crossing orders with member
organizations that operate DMM units and Floor broker firms that have
returned to the Trading Floor. Based on these discussions, the Exchange
believes that crossing transactions can be resumed in a manner
consistent with both the safety measures required on the Trading Floor,
including the use of cloth face masks or coverings and maintaining at
least six-foot physical distancing from other individuals,\9\ and the
Rule 76 requirement that such proposed transactions be clearly
announced to the trading crowd.
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\9\ See NYSE IM-20-03, ``Standards of Conduct for the Safety and
Welfare of Persons on the Trading Floor Relating to COVID-19,''
dated May 14, 2020, available here: https://www.nyse.com/publicdocs/nyse/markets/nyse/rule-interpretations/2020/NYSE%20IM%20(5-14-
20)%20-%20Final%20-%20Republished.pdf.
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To effect this change, the Exchange proposes to lift the temporary
suspension of Rule 76 by deleting Supplementary Material .20 to Rule
76.
The Exchange would be able to implement the proposed rule change
immediately upon effectiveness of this proposed rule change.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
[[Page 45273]]
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 of the Exchange 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. And on June 15, 2020, the CEO
of the Exchange made a determination under Rule 7.1(c)(3) that,
beginning June 17, 2020, the Trading Floor would be partially reopened
to allow a subset of DMMs to return 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 it would permit the resumption of
crossing transactions pursuant to Rule 76, and therefore restore
functionality to Floor brokers. The Exchange believes that crossing
transactions can be resumed on the Trading Floor in a manner consistent
with both the requirements of Rule 76 and the safety measures required
on the Trading Floor, including the use of cloth face masks or
coverings and maintaining at least six-foot physical distancing from
other individuals. The Exchange therefore proposes to lift this
temporary suspension by deleting Supplementary Material .20 to Rule 76.
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. This proposed rule change is
not designed to address any competitive issues but rather to restore
functionality to Floor brokers by lifting the temporary suspension on
crossing transactions pursuant to Rule 76.
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 foregoing 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 for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \14\ and subparagraph (f)(6) of
Rule 19b-4 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 lift a temporary rule suspension and
restore functionality to Floor brokers without any further delay.
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 protected]. Please include
File Number SR-NYSE-2020-61 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-2020-61. 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
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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-2020-61
and should be submitted on or before August 17, 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. 2020-16162 Filed 7-24-20; 8:45 am]
BILLING CODE 8011-01-P