[Federal Register Volume 84, Number 85 (Thursday, May 2, 2019)]
[Notices]
[Pages 18911-18913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08918]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85731; File No. SR-NYSEAMER-2019-16]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 7.11E, Limit Up-Limit Down Plan and Trading Pauses in Individual
Securities Due to Extraordinary Market Volatility
April 26, 2019.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on April 18, 2019, NYSE American LLC (``NYSE American'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7.11E, Limit Up-Limit Down Plan
and Trading Pauses in Individual Securities Due to Extraordinary Market
Volatility. 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 Participants filed the Plan to Address Extraordinary Market
Volatility (the ``Limit Up-Limit Down Plan'' or the ``Plan'') with the
Commission on April 5, 2011 to create a market-wide limit up-limit down
mechanism intended to address extraordinary market volatility in NMS
Stocks,\4\ as defined in Rule 600(b)(47) of Regulation NMS under the
Exchange Act.\5\ The Plan sets forth procedures that provide for
market-wide limit up-limit down requirements to prevent trades in
individual NMS Stocks from occurring outside of the specified Price
Bands. These limit up-limit down requirements are coupled with Trading
Pauses, as defined in Section I(Y) of the Plan, to accommodate more
fundamental price moves. In particular, the Participants adopted this
Plan to address extraordinary volatility in the securities markets,
i.e., significant fluctuations in individual securities' prices over a
short period of time, such as those experienced during the ``Flash
Crash'' on the afternoon of May 6, 2010.
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\4\ On May 31, 2012, the Commission approved the Plan, as
modified by Amendment No. 1. See Securities Exchange Act Release No.
67091, 77 FR 33498 (June 6, 2012) (File No. 4-631) (``Approval
Order'').
\5\ 17 CFR 242.600(b)(47).
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The Plan was originally approved on a pilot basis to allow the
public, the Participants, and the Commission to assess the operation of
the Plan and whether the Plan should be modified prior to consideration
of approval on a permanent basis.\6\ The Commission recently approved
an amendment to the Plan to allow the Plan to operate on a permanent
basis.\7\
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\6\ See supra note 4.
\7\ See Securities Exchange Act Release No. 85623 (April 11,
2019), 84 FR 16086 (April 17, 2019) (File No. 4-631).
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Rule 7.11E is designed to comply with the Plan's requirement that
exchanges establish, maintain, and enforce written policies and
procedures that are reasonably designed to comply with the limit up-
limit down and trading pause requirements specified in the Plan.\8\ In
sum, Rule 7.11E provides that the Exchange will not display or execute
trading interest outside the Price Bands as required by the limit up-
limit down and trading pause requirements specified in the Plan. Rule
7.11E is designed to ensure that trading interest
[[Page 18912]]
on the Exchange is either repriced or canceled in a manner consistent
with the Plan.
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\8\ See Securities Exchange Act Release No. 68875 (February 8,
2013), 78 FR 10678 (February 14, 2013) (SR-NYSEMKT-2013-05).
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Rule 7.11E currently includes a provision that ties the Rule's
effectiveness to the pilot period for the Plan, including any
extensions to the pilot period for the Plan. The Exchange proposes to
amend Rule 7.11E to delete this provision because the Plan has been
made permanent and is no longer operating as a pilot program. The
Exchange does not propose any additional changes to Rule 7.11E. The
proposed rule change would continue to align the effectiveness of Rule
7.11E to the Plan and ensure that the Exchange maintains written
policies and procedures that are reasonably designed to comply with the
limit up-limit down and trading pause requirements specified in the
Plan.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\9\ in general, and Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, to promote just and equitable principles of
trade, and, in general, to protect investors and the public interest
and not to permit unfair discrimination between customers, issuers,
brokers, or dealers. Rule 7.11E complies with the Plan's requirement
that exchanges establish, maintain, and enforce written policies and
procedures that are reasonably designed to comply with the limit up-
limit down and trading pause requirements specified in the Plan. The
Exchange believes that the proposed rule change promotes just and
equitable principles of trade because it would continue to align the
effectiveness of Rule 7.11E to the Plan, without any changes. The
proposed rule change would also ensure that the Exchange continues to
maintain transparent written policies and procedures reasonably
designed to comply with the limit up-limit down and trading pause
requirements specified in the Plan.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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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 proposal would remove a
provision from Rule 7.11E that ties its effectiveness to the pilot
period for the Plan that was recently approved on a permanent basis.
The proposal would continue to ensure that the Exchange continues to
maintain written policies and procedures reasonably designed to comply
with the Plan without implicating any competitive issues.
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\14\ 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 become operative immediately upon filing. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because the Commission
approved making the Plan pilot permanent on April 11, 2019, and
therefore the Exchange's proposed changes to its rules reflecting that
the Plan is now permanent should go into effect immediately. Therefore,
the Commission hereby waives the 30-day operative delay and designates
the proposed rule change to be operative upon filing with the
Commission.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2019-16 on the subject line.
Paper Comments
Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number SR-NYSEAMER-2019-16. 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
[[Page 18913]]
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEAMER-2019-16 and should
be submitted on or before May 23, 2019.
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\17\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-08918 Filed 5-1-19; 8:45 am]
BILLING CODE 8011-01-P