[Federal Register Volume 86, Number 230 (Friday, December 3, 2021)]
[Notices]
[Pages 68711-68714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26240]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93674; File No. SR-Phlx-2021-69]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Establish
Juneteenth National Independence Day as an Exchange Holiday and Give
the Exchange the Authority To Halt or Suspend Trading or Close Exchange
Facilities for Certain Unanticipated Closures
November 29, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on November 17, 2021, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. 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\ 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 adopt a new Rule 1030, within General 3,
titled ``Member Access to the Exchange,'' to make Juneteenth National
Independence Day a holiday of the Exchange memorialize all current
Exchange holidays within General 3, Rule 1030, and to add a provision
to permit the Exchange the authority to halt or suspend trading or
close Exchange facilities for certain unanticipated closures.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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 Exchange 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 these 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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to adopt a new Rule 1030, within General 3,
titled ``Member Access to the Exchange,'' to make Juneteenth National
Independence Day a holiday. The Exchange also proposes to memorialize
all current holidays within General 3, Rule 1030, as well as add a
provision to permit the Exchange authority to halt or suspend trading
or close Exchange facilities for certain unanticipated closures.
Today, the Exchange observes the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.\3\ Equity 2, Section 8 (Normal Business Hours) provides,
``The System operates from 8:00 a.m. to 5:00 p.m. Eastern. Time on each
business day, unless modified by the Exchange.'' \4\
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\3\ See https://www.nasdaq.com/market-activity/stock-market-holiday-calendar.
\4\ Additionally, Phlx Options 3, Section 1 (Hours of Business)
provides, ``The Board of Directors shall determine by resolution the
hours during which business may be transacted on the Exchange.''
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At this time, the Exchange also proposes to observe Juneteenth
National Independence Day, which was designated a legal public holiday
on June 17, 2021.\5\ Consistent with broad industry sentiment \6\ and
the approach recommended by the Securities Industry and Financial
Markets Association (``SIFMA''),\7\ the Exchange proposes to
[[Page 68712]]
add ``Juneteenth National Independence Day'' to the proposed list of
holidays within General 3, Rule 1030(a). As a result, the Exchange will
not be open for business on Juneteenth National Independence Day, which
falls on June 19 of each year, in addition to the other annual holidays
noted within proposed General 3, Rule 1030(a).
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\5\ Public Law 117-17.
\6\ See, e.g. https://www.wsj.com/articles/wall-street-moves-to-
close-markets-for-juneteenth-in-2022-
11626376243#:~:text=Stock%20and%20bond%20markets%20are,on%20a%20Sunda
y%20next%20year.
\7\ SIFMA recommends a full market close in observance of
Juneteenth National Independence Day. See https://www.sifma.org/resources/general/holiday-schedule/#US.
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As is the case today for those annual holidays currently observed,
when a holiday observed by the Exchange falls on a Saturday, the
Exchange will not be open for business on the preceding Friday and when
any holiday observed by the Exchange falls on a Sunday, the Exchange
will not be open for business on the succeeding Monday, unless unusual
business conditions exist at the time.\8\ Proposed General 3, Rule
1030(a) would provide,
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\8\ For example, New Year's Day 2022 would not be observed
because January 1, 2022 falls on a Saturday and typically the last
day of the preceding year remains a full business day.
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The Exchange will be open for the transaction of business on
business days. The Exchange will not be open for business on New
Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Juneteenth National Independence Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
When a holiday observed by the Exchange falls on a Saturday, the
Exchange will not be open for business on the preceding Friday and
when any holiday observed by the Exchange falls on a Sunday, the
Exchange will not be open for business on the succeeding Monday,
unless unusual business conditions exist at the time.
When determining whether unusual business conditions exist in
connection with the observance of a holiday on the preceding Friday or
following Monday, or not observing the holiday, the Exchange would
coordinate with the securities industry. Proposed General 3, Rule
1030(a) is similar to Cboe BYX Exchange, Inc. (``CBOE BYX'') Rule
11.1(b) and Cboe Exchange, Inc. (``Cboe'') Rules 5.1(d) and 5.23(d).
The Exchange believes memorializing these annual holidays within its
rules will bring additional clarity to those observed holidays.
Next, the Exchange proposes to add rule text within proposed
General 3, Rule 1030(b), similar to CBOE BYX Rule 11.1(c), which
states, ``The Chief Executive Officer of the Exchange shall have the
power to halt, suspend trading in any and all securities traded on the
Exchange, to close some or all Exchange facilities, and to determine
the duration of any such halt, suspension, or closing, when he or she
deems such action necessary for the maintenance of fair and orderly
markets, the protection of investors, or otherwise in the public
interest including special circumstances such as (1) actual or
threatened physical danger, severe climatic conditions, civil unrest,
terrorism, acts of war, or loss or interruption of facilities utilized
by the Exchange, (2) a request by a governmental agency or official, or
(3) a period of mourning or recognition for a person or event. No such
action shall continue longer than a period of two days, or as soon
thereafter as a quorum of the Board of Directors can be assembled,
unless the Board approves the continuation of such suspension.'' While
the Exchange would continue to submit a proposed rule change to the
Commission to amend the annual holidays within General 3, Rule 1030(a),
the Exchange proposes to give the Exchange the authority to halt or
suspend trading or close Exchange facilities for certain unanticipated
closures. Unanticipated closures are typically the result of natural
disasters, ad hoc National Holidays, disruptions of infrastructure, and
other unpredictable events that would cause the Exchange to close for
business. The Exchange would not utilize this authority routinely,
rather the authority is reserved for extraordinary circumstances where
there would not be sufficient time for the Exchange to file to amend
its rules. The Exchange notes that it would coordinate with the
industry in determining closures for these events.\9\ The Exchange
believes that it is necessary to have such authority in the
aforementioned cases as there may not be sufficient time to file a
proposed rule change. Additionally, these unanticipated closures would
not be recognized on an annual basis, rather these types of closures
would be ad hoc closures. The Exchange would provide notice to members
and member organizations of these unanticipated closures in addition to
continuing to post its annual holiday schedule on its website.
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\9\ The Options Clearing Corporation (``OCC'') has issued a
guide for such events. See OCC's Market Closing Guide (https://www.theocc.com/getmedia/8d6a36c6-1aa4-4984-9333-d7b0a6a09be7/unscheduled-market-closings-guide.pdf). See also DTCC Reference
Guide: Unscheduled Closing of Exchanges and Markets for Clearing
Agencies (https://www.dtcc.com/~/media/Files/Downloads/%20issues/
Unscheduled_Close.pdf).
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Finally, the Exchange proposes to add rule text at the end of
General 3, Section 1030(b) which states, ``The powers granted to the
Chief Executive Officer within paragraph (b) do not apply to paragraph
(a) or any other rule within the Exchange's Rulebook.'' The power of
the Chief Executive Officer to halt, suspend or close facilities of the
Exchange within paragraph (b) applies only to the circumstances noted
within that paragraph. The powers of the Chief Executive Officer do not
extend to paragraph (a) of General 3, Section 1030 or to any other
provision in the Rulebook, including but not limited to Options 3,
Section 1 or Equity 2, Section 8.
2. Statutory Basis
The Exchange believes that its proposal 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
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 by memorializing its current holidays within General 3, Rule
1030(a) and also providing the manner in which the Exchange would
handle holidays that fell on a Saturday or Sunday, unless unusual
business conditions exist. Today, the Exchange coordinates with the
securities industry with respect to annual holidays.
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\10\ 15 U.S.C. 78f(b)
\11\ 15 U.S.C. 78f(b)(5).
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Further, the Exchange's proposal to observe the Juneteenth National
Independence Day as an annual holiday is consistent with the Act.
Similar to other holidays listed within proposed General 3, Rule
1030(a), the rule text addresses what day would be taken off if June 19
fell on a Saturday or Sunday. The proposed rule also accounts for
unusual business conditions that may alter the observance of an annual
holiday or affect the day the holiday is observed. The Exchange notes
that when determining whether to utilize the unusual business
conditions provision, the Exchange would continue to coordinate with
the securities industry.
The proposed rule promotes clarity and transparency by providing
the list of current annual holidays, as well as the proposed new
Juneteenth National Independence Day holiday, within its Rules. The
proposed changes do not raise any new or novel issues. For these
reasons, the Exchange believes that these aspects of the proposal are
consistent with the Act.
Further, the Exchange's proposal to permit the Chief Executive
Officer to halt, suspend trading in any and all securities traded on
the Exchange, to close some or all Exchange facilities, and to
determine the duration of any such halt, suspension, or closing, when
he or she deems such action necessary for the maintenance of fair and
orderly
[[Page 68713]]
markets, the protection of investors, or otherwise in the public
interest including certain specified special circumstances is
consistent with the Act as the provision would permit the Exchange to
act in coordination with other exchanges within the securities industry
to close, as necessary, for natural disasters, ad hoc National
Holidays, disruptions of infrastructure, and other unpredictable
events. The Exchange would not utilize this authority routinely, rather
the authority is reserved for extraordinary circumstances \12\ where
there would not be sufficient time for the Exchange to file to amend
its rules. With this proposal, the Exchange's process of filing a
proposed rule change for any new annual holidays it determines to add
to the list of holidays within General 3, Rule 1030(a) would remain
unchanged. The proposed authority would permit the Exchange to close
the market on an ad hoc basis for an extraordinary event without the
need to file a proposed rule change; these unanticipated closures would
not be recognized on an annual basis. Today, the Exchange would utilize
emergency authority to close its market as a result of an extraordinary
circumstance.\13\ This amendment removes impediments to and perfects
the mechanism of a free and open market and a national market system by
allowing the Exchange to halt or suspend trading or close Exchange
facilities for unanticipated circumstances by providing notice to
members and member organizations in addition to continuing to post its
annual holiday schedule on its website.
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\12\ The special circumstances noted in proposed Rule 1030(b)
include, (1) actual or threatened physical danger, severe climatic
conditions, civil unrest, terrorism, acts of war, or loss or
interruption of facilities utilized by the Exchange, (2) a request
by a governmental agency or official, or (3) a period of mourning or
recognition for a person or event.
\13\ See Phlx By-Law 7.5.
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The Exchange's proposal to add rule text at the end of General 3,
Section 1030(b) to make clear the power of the Chief Executive Officer
to halt, suspend or close facilities of the Exchange within paragraph
(b) applies only to the circumstances noted within that paragraph is
consistent with the Act as that rule text will clarify the scope of the
Chief Executive Officer's powers. Making clear the powers of the Chief
Executive Officer adds greater transparency to the proposed rule.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. Memorializing its current
holidays within General 3, Rule 1030(a) and describing the way holidays
are observed today that fall on a Saturday or Sunday, unless unusual
business conditions exist, does not impose an undue burden on
competition, rather the proposal brings clarity to the Exchange's
Rules. Moreover, adding Juneteenth National Independence Day to its
list of annual holidays within General 3, Rule 1030(a) will not impose
any burden on competition as the holiday aligns with broad industry
sentiment \14\ and the approach recommended by SIFMA. The Exchange
would continue to coordinate with the securities industry regarding the
observation of annual holidays.
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\14\ See note 6 above.
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Further, the Exchange's proposed changes to General 3, Rule 1030(b)
to permit the Chief Executive Officer to halt, suspend trading in any
and all securities traded on the Exchange, to close some or all
Exchange facilities, and to determine the duration of any such halt,
suspension, or closing, when he or she deems such action necessary for
the maintenance of fair and orderly markets, the protection of
investors, or otherwise in the public interest including certain
specified special circumstances does not impose an undue burden on
competition. The proposed authority would permit the Exchange to close
on an ad hoc basis for an extraordinary event without the need to file
a rule change by providing notice to members and member organizations
of these unanticipated closures. This would allow the Exchange to
continue to coordinate with the securities industry for unanticipated
closures. These proposed changes are not designed to address any
competitive issues and are consistent with existing rules of other
exchanges.\15\
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\15\ See Cboe BYX Rule 11.1(b) and (c) and Cboe Rules 5.1(d) and
5.23(d).
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The Exchange's proposal to add rule text at the end of General 3,
Section 1030(b) to make clear the power of the Chief Executive Officer
to halt, suspend or close facilities of the Exchange within paragraph
(b) applies only to the circumstances noted within that paragraph does
not impose an undue burden on competition, rather, the rule text will
make clear the powers of the Chief Executive Officer thereby adding
greater transparency to the proposed rule.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 \16\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\17\
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\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the 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 to
determine whether the proposed rule should be approved or disapproved.
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-Phlx-2021-69 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-Phlx-2021-69. This file
[[Page 68714]]
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-Phlx-2021-69 and should be submitted on
or before December 27, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-26240 Filed 12-2-21; 8:45 am]
BILLING CODE 8011-01-P