[Federal Register Volume 89, Number 110 (Thursday, June 6, 2024)]
[Notices]
[Pages 48466-48473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12377]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100254; File No. 10-242]
In the Matter of the Application of 24X National Exchange LLC for
Registration as a National Securities Exchange; Order Instituting
Proceedings To Determine Whether To Grant or Deny an Application for
Registration as a National Securities Exchange Under Section 6 of the
Securities Exchange Act of 1934
May 31, 2024.
I. Introduction
On February 6, 2024, 24X National Exchange LLC (``24X'') filed with
the Securities and Exchange Commission (``Commission'') a Form 1
application under the Securities Exchange Act of 1934 (``Act''),
seeking registration as a national securities exchange under Section 6
of the Act.\1\ Notice of the application was published for comment in
the Federal Register on March 4, 2024.\2\ The Commission received five
comments on the Form 1 \3\ and a letter responding to the comments from
24X.\4\ Two commenters expressed support the 24X Form 1,\5\ one
commenter suggested a ``cautious approach to expanding trading hours''
because their ``research indicates that increasing trading hours has
negative consequences for retail investment performance'' \6\ and one
commenter stated that it ``believe[s] there are several aspects of the
Application that require careful review and analysis by the Commission,
or additional information and clarification from 24X, before the
Application is permitted to move forward.'' \7\
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\1\ 15 U.S.C. 78f.
\2\ See Securities Exchange Act Release No. 99614 (Feb. 27,
2024), 89 FR 15621 (``Notice'').
\3\ The public comment file for 24X's Form 1 (File No. 10-242)
is available on the Commission's website at: https://www.sec.gov/comments/10-242/10-242.htm.
\4\ See letter from David Sassoon, General Counsel, 24X, to
Commission, dated May 30, 2024 (``24X Letter'').
\5\ See letters from James J. Angel, Ph.D., CFP, CFA, Associate
Professor of Finance, Georgetown University, McDonough School of
Business, to Commission, dated Apr. 5, 2024 (``Angel Letter I'')
(stating that ``[t]he 24X Application should be approved'' because
it will ``provide additional convenience to investors and facilitate
futures trading,'' promote innovation and competition, improve price
discovery during regular trading hours, and reduce risks for market
participants.) and dated May 13, 2024 (discussing the information
provided in the Glover and deHaan Letter, infra note 6, and stating
that ``[s]ince we already have 24-hour trading, it is best that it
be on regulated national securities exchanges'' because it ``will
create the highest level of investor protection.'') (``Angel Letter
II''); letter from Stan Sater, Senior Legal Counsel, Polygon.io,
Inc., to Commission, dated Apr. 25, 2024 (``Polygon Letter'').
\6\ See Letter from Andrew Glover, University of Washington and
Ed deHaan, Professor of Accounting, Stanford University, to
Commission, dated Apr. 22, 2024 (``Glover and deHaan Letter'').
\7\ See Letter from Eun Ah Choi, Senior Vice President, Nasdaq,
Inc., to Commission, dated Apr. 25, 2024 (``Nasdaq Letter'') at 2.
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Section 19(a)(1) of the Act \8\ requires the Commission, within
ninety days of the date of publication of notice of an application for
registration as a national securities exchange, or such longer period
as to which the applicant consents, to, by order, grant such
registration \9\ or institute proceedings to determine whether such
registration should be denied.\10\ This order is instituting
proceedings under Section 19(a)(1)(B) of the Act \11\ to determine
whether 24X's application for registration as a national securities
exchange should be granted or denied, and provides notice of the
grounds for denial under consideration by the Commission, as set forth
below.
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\8\ 15 U.S.C. 78s(a)(1).
\9\ 15 U.S.C. 78s(a)(1)(A).
\10\ 15 U.S.C. 78a(a)(1)(B).
\11\ 15 U.S.C. 78s(a)(1)(B).
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II. Description of 24X's Proposed Trading System
24X proposes to operate a fully automated electronic trading
platform for the trading of listed NMS stocks \12\ pursuant to unlisted
trading privileges (``UTP'') 23 hours per day,\13\ 7 days per week,
including certain holidays, subject to certain trading pauses, as
[[Page 48467]]
provided in 24X's proposed rules.\14\ 24X would not maintain a physical
trading floor.\15\ Liquidity would be derived from quotes as well as
orders to buy and orders to sell submitted to 24X electronically by
exchange members.\16\ 24X proposes to operate a fully automated
electronic limit order book with a continuous matching function \17\
and orders resting on the book would be ranked in price/time
priority.\18\ 24X proposes to accept Market Orders,\19\ Limit Orders
\20\ and Pegged Orders \21\ with various modifiers and time-in-force
instructions, although subject to certain limitations \22\ during the
24X Market Session.\23\ Specifically, Market Orders would be accepted
only during the Core Market Session, Pegged Orders would be accepted
only during the Pre-Market Session, the Core Market Session, and the
Post-Market Session, and Limit Orders would be accepted during all
sessions.\24\ Orders may be submitted in round lots, odd lots or mixed
lots.\25\ 24X proposes to permit orders to be entered, cancelled,
modified, executed on or routed away from 24X during the Pre-Market
Session, the Core Market Session, and the Post-Market Session.\26\ 24X
would also permit orders to be entered, canceled, modified or executed
on the Exchange during the 24X Market Session.\27\ Market makers would
be required to provide continuous two-sided quotes of at least 100
shares during Regular Trading Hours.\28\
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\12\ See 17 CFR 242.600(b)(55) (defining ``NMS Stock'').
\13\ Unless otherwise noted, all times referred to in this order
are Eastern Time (``ET''). As described further below, 24X proposes
to define four different trading sessions. See proposed 24X Rules
1.5(c) (defining the ``24X Market Session''); 1.5(l) (defining the
``Core Market Session''); 1.5(x) (defining the ``Post-Market
Session''); and 1.5(y) (defining the ``Pre-Market Session''). In
addition, 24X proposes, among others, the following terms: ``24X
Trading Day'' (see proposed 24X Rule (1.5(b)); ``Exchange Trading
Hours other than the 24X Market Session'' (see proposed 24X Rule
1.5(q)); ``Extended Hours Trading'' (see proposed 24X Rule 1.5(r));
``Regular Trading Hours'' (see proposed 24X Rule 1.5(cc)); and
``U.S. Business Day'' (see proposed 24X Rule 1.5(kk)).
\14\ See, e.g., proposed 24X Rule 11.15(c); Exhibit E-1 to 24X's
Form 1 at 4. See also infra Section III.A.1. (discussing 24X's
proposed trading pauses).
\15\ See Exhibit E-1 of 24X's Form 1 at 2.
\16\ 24X proposes to have one class of membership open to
registered broker-dealers. See proposed 24X Rule 2.3 (stating, in
part, that ``any registered broker or dealer that is and remains a
member of a national securities association registered under Section
15A(a) of the Act or a member of another national securities
exchange registered under Section 6(a) of the Act or any person
associated with such a registered broker or dealer shall be eligible
to be, and to remain, a Member'').
\17\ See Exhibit E-1 of 24X's Form 1 at 2.
\18\ See proposed 24X Rule 11.8(a).
\19\ 24X proposes to define the term ``Market Order,'' in part,
as ``[a]n order to buy or sell a stated amount of a security that is
to be executed at the NBBO or better when the order reaches the
Exchange.'' See 24X proposed Rule 11.7(a).
\20\ 24X proposes to define the term ``Limit Order'' as ``[a]n
order to buy or sell a stated amount of a security at a specified
price or better. A marketable Limit Order is a Limit Order to buy
(sell) at or above (below) the lowest (highest) Protected Offer
(Protected Bid) for the security.'' See proposed 24X Rule 11.7(b).
\21\ 24X proposes to define the term ``Pegged Order,'' in part,
as ``[a] User may indicate to peg an order to a reference price,
including an instruction of Primary Peg (the NBB for buy orders and
NBO for sell orders, with or without offsets) or an instruction of
Midpoint Peg (the midpoint of the NBBO). The System's calculation of
the NBBO would not take into account any Pegged Orders that are
resting on the 24X Book. A new timestamp is created for a Pegged
Order each time it is automatically re-priced.'' See proposed 24X
Rule 11.7(c).
\22\ See proposed 24X Rule 11.7 (describing, among other things,
order types eligible for the various 24X trading sessions).
\23\ See, e.g., proposed 24X Rule 11.7; Exhibit B of 24X's Form
1; and proposed 24X Rule 1.5(c) (defining the term ``24X Market
Session'' as ``(i) the time between 8:00 p.m. and 4:00 a.m. Eastern
Time, (ii) any time that falls on a Saturday or a Sunday Eastern
Time, (iii) any time that falls on one of the following U.S.
holidays: 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
Eastern Time, or such other U.S. holiday(s) as published by the
Exchange from time to time; provided, however, it shall not include
any trading pauses as described in Rule 11.15(c)'').
\24\ See proposed 24X Rule 11.7(a)(4) for Market Orders,
proposed 24X Rule 11.7(c)(4) for Pegged Orders, and proposed 24X
Rule 11.7(b) for Limit Orders.
\25\ See proposed 24X Rule 11.6(q). See also Exhibit E-1 of
24X's Form 1 at 5.
\26\ See proposed 24X Rule 11.1(b).
\27\ See proposed 24X Rule 11.1(c) (providing, in part, that
``to the extent that other Trading Centers are open during the 24X
Market Session, orders may be routed away to such Trading Centers
during the 24X Market Session'').
\28\ See proposed 24X Rule 11.20(a)(1). The term ``Regular
Trading Hours'' is defined as ``the time between 9:30 a.m. and 4:00
p.m. Eastern Time each U.S. Business Day.'' See proposed 24X Rule
1.5(cc).
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24X proposes certain rules to govern trading during Exchange
Trading Hours other than the 24X Market Session,\29\ while other rules
and requirements would apply specifically to trading during the 24X
Market Session.\30\
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\29\ See proposed 24X Rule 11.1(a). 24X proposes to define the
term ``Exchange Trading Hours other than the 24X Market Session'' as
``the Pre-Market Session, Core Market Session and Post-Market
Session.'' See proposed 24X Rule 1.5(q).
\30\ See proposed 24X Rule 11.1(a). For example, the proposed
rules make specific provisions for the 24X Market Session with
respect to matters such as order types permitted and certain
volatility moderators that would be in place. See, e.g., Exhibit E-1
to 24X's Form 1; proposed 24X Rules 11.7, 11.15.
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One novel feature of 24X's Form 1 is that 24X proposes to extend
the hours of exchange trading of certain NMS stocks \31\ to include
overnight and weekend trading and trading on certain holidays.\32\ As
noted above, 24X proposes certain rules that would apply specifically
during its proposed 24X Market Session. For example, 24X proposes to
implement certain ``24X Price Bands'' to moderate risk and volatility
during the 24X Market Session.\33\ As discussed below,\34\ 24X proposes
certain trading pauses during the 24X Market Session.\35\ 24X also
proposes to require that 24X Members make certain disclosures to
investors concerning risks associated with trading during Extended
Hours Trading, as discussed below.\36\ In its Form 1, 24X states that
it will join and participate in any applicable plan that other national
securities exchanges and/or market centers have joined, including, for
example, the three Equity Data Plans \37\ that currently govern the
collection, consolidation, processing, and dissemination of core
data.\38\ 24X further states that it is ``working with such [Equity
Data Plans] to expand their operation to include the 24X Market
Session.'' \39\
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\31\ See proposed 24X Rule 11.2 (describing securities eligible
for trading on 24X).
\32\ See proposed 24X Rule 11.1 (setting out the hours of
trading and trading days for 24X).
\33\ See, e.g., proposed 24X Rule 11.15; infra Section III
(discussing proposed Rule 11.15 in greater detail); Exhibit E-1 to
24X's Form 1. As proposed, trade executions occurring during times
other than during Extended Hours Trading would be governed by the
National Market System Plan to Address Extraordinary Market
Volatility pursuant to Rule 608 of Regulation NMS. See, e.g.,
proposed 24X Rules 11.21, 11.22; Exhibit E-1 to 24X's Form 1. 24X
proposes to define the term ``Extended Hours Trading'' as ``trading
during the Pre-Market Session, Post-Market Session and 24X Market
Session.'' See proposed 24X Rule 1.5(r).
\34\ See infra Section III.
\35\ See, e.g., infra Section III (discussing proposed 24X Rule
11.15(c) in greater detail); proposed 24X Rule 11.15(c); Exhibit E-1
to 24X's Form 1; and 24X proposed Rule 1.5(b) (defining the term
``24X Trading Day,'' in part, as ``the 23-hour period commencing at
8:00 p.m. on one calendar day and ending at 7:00 p.m. on the next
calendar day . . . [s]ubject to any trading pauses, halts or
suspensions as described in 24X's proposed rules.'').
\36\ See proposed 24X Rule 3.21.
\37\ The three equity data plans that currently govern the
collection, consolidation, processing, and dissemination of
exclusive Securities Information Processor (``SIP'') data are (1)
the Consolidated Tape Association Plan (``CTA Plan''), (2) the
Consolidated Quotation Plan (``CQ Plan''), and (3) the Joint Self-
Regulatory Organization Plan Governing the Collection,
Consolidation, and Dissemination of Quotation and Transaction
Information for Nasdaq-Listed Securities Traded on Exchanges on an
Unlisted Trading Privileges Basis (``UTP Plan'') (collectively, the
``Equity Data Plans'').
\38\ See Exhibit E to 24X's Form 1. See also proposed 24X Rule
11.11 (providing, in part, that 24X proposes to report executions to
the appropriate consolidated transaction reporting system ``to the
extent required by the Act and the rules and regulations
thereunder.''). On May 1, 2024, 24X submitted a request for
temporary conditional exemptive relief from Rules 601 and 602 of
Regulation NMS and the Equity Data Plans until such time as the
Equity Data Plans can establish a mechanism to collect, consolidate
and disseminate quotation and transaction information during the 24X
Market Session. See letter from David Sassoon, General Counsel, 24X
National Securities Exchange LLC, to Commission, dated May 1, 2024.
\39\ See Exhibit E to 24X's Form 1. 24X further states that it
would ``likewise join all other applicable Plans as deemed necessary
and in the interest of its Users, including, but not limited to, the
NMS Plan to Address Extraordinary Market Volatility, the NMS Plan
Governing the Consolidated Audit Trail (the `CAT NMS Plan'), the NMS
Plan for the Selection and Reservation of Securities Symbols, and
the 17d-2 Plans for Allocation of Regulatory Responsibilities.'' See
id.
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[[Page 48468]]
Another novel feature of 24X's Form 1 is that 24X proposes to enter
into a technology services agreement with MEMX Technologies, LLC
(``MEMX Technologies'') to license the technology underlying 24X.\40\
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\40\ See infra Section III (discussing the proposed technical
services agreement between 24X and MEMX Technologies in greater
detail). See also Exhibit E to 24X's Form 1.
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A more detailed description of the manner of operation of 24X's
proposed system can be found in Exhibit E to 24X's Form 1. The proposed
rulebook for 24X can be found in Exhibit B to 24X's Form 1, and the
governing documents for 24X, 24X US Holdings, LLC \41\ and 24X Bermuda
Holdings, LLC \42\ can be found in Exhibit A and Exhibit C. A complete
set of forms concerning membership and access can be found in Exhibit
F.
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\41\ 24X is wholly owned by its direct parent company, 24X US
Holdings, LLC, which in turn is wholly-owned by 24X Bermuda Holdings
LLC. See, e.g., Exhibits C, E, to 24X's Form 1.
\42\ See supra note 41 and accompanying text.
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III. Proceedings To Determine Whether To Grant or Deny the Application
and Grounds for Potential Denial Under Consideration
As required by Section 19(a)(1)(B) of the Act,\43\ the Commission
is hereby providing notice of grounds for denial under consideration,
as set forth below. Institution of such proceedings is appropriate at
this time in view of the issues raised by the application. Institution
of proceedings does not indicate that the Commission has reached any
conclusions with respect to any of the issues involved.
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\43\ 15 U.S.C. 78s(a)(1)(B).
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Under Section 19(a)(1) of the Act, the Commission shall grant an
application for registration as a national securities exchange if the
Commission finds that the requirements of the Act and the rules and
regulations thereunder with respect to the applicant are satisfied. The
Commission shall deny such application for registration if it does not
make such a finding.\44\ Under Section 6(b) of the Act, an exchange
shall not be registered as a national securities exchange unless the
Commission determines that it has satisfied the relevant requirements
of the Act.\45\ In particular, Section 6(b)(1) of the Act requires that
the Commission find that an exchange is so organized and has the
capacity to carry out the purposes of the Act.\46\ In addition, under
Section 6(b)(3) of the Act, the Commission must find that the rules of
the exchange assure a fair representation of its members in the
selection of its directors and administration of its affairs and
provide that one or more directors shall be representative of issuers
and investors and not be associated with a member of the exchange,
broker or dealer.\47\ Section 6(b)(5) of the Act requires that the
rules of the exchange be designed, among other things, to prevent
fraudulent and manipulative acts and practices, 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.\48\ Finally, under Section
6(b)(8) of the Act, the Commission must find that the rules of the
exchange do not impose any burden on competition that is not necessary
or appropriate in furtherance of the purposes of Act.\49\
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\44\ 15 U.S.C. 78s(a)(1).
\45\ 15 U.S.C. 78f.
\46\ 15 U.S.C. 78f(b)(1).
\47\ 15 U.S.C. 78f(b)(3).
\48\ 15 U.S.C. 78f(b)(5).
\49\ 15 U.S.C. 78f(b)(8).
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The Commission is particularly interested in commenters' views as
to whether 24X's proposed rules that would extensively expand the hours
of trading in NMS stocks, as described in more detail below, are
consistent with Section 6(b)(5) of the Act such that the proposed rules
are designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, remove impediments to and perfect the mechanisms of a
free and open market and a national market system, and in general
protect investors and the public interest. The Commission is also
interested in commenters' views as to whether 24X's proposed technology
services agreement is consistent with Section 6(b)(1) of the Act such
that 24X would be so organized and have the capacity to be able to
carry out the purposes of the Act.
A. 24X Trading Sessions
24X proposes to offer significantly expanded trading outside of
regular trading hours for NMS stocks by operating a national securities
exchange 23 hours a day,\50\ seven days a week, 365 days a year,
including holidays, subject to certain trading pauses, as provided in
24X's proposed rules.\51\ While several exchanges offer a pre-market
trading session starting as early as 4:00 a.m. ET on each U.S. business
day,\52\ and most exchanges offer a post-close trading session until
8:00 p.m. ET on each U.S. business day,\53\ 24X's proposal would
significantly expand exchange trading hours such that exchange trading
would be conducted on a largely continuous basis.\54\
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\50\ See supra note 14 and accompanying text.
\51\ See id.
\52\ See, e.g., NYSE Arca, Inc., Cboe EDGX Exchange, Inc. and
The Nasdaq Stock Market LLC.
\53\ See, e.g., NYSE Arca, Inc., NYSE American LLC, NYSE
Chicago, Inc., NYSE National, Inc., Cboe BZX Exchange, Inc., Cboe
BYX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange,
Inc., and The Nasdaq Stock Market LLC.
\54\ See, e.g., proposed 24X Rule 11.1; Exhibit E-1 to 24X's
Form 1.
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24X proposes to offer four trading sessions as follows: a ``Core
Market Session'' \55\ that corresponds with Regular Trading Hours each
U.S. Business Day; \56\ a ``Post-Market Session'' \57\ that would run
from 4:00 p.m. to 7:00 p.m. ET on each U.S. Business Day; a ``Pre-
Market Session'' \58\ that would run from 4:00 a.m. to 9:30 a.m. ET on
each U.S. Business Day; and a ``24X Market Session'' \59\ that would
run from 8:00 p.m. to 4:00 a.m. ET and any time that falls on weekends
and certain holidays,\60\ not including any trading pauses as described
in 24X's proposed rules.\61\
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\55\ See proposed 24X Rule 1.5(l).
\56\ See id. See also proposed 24X Rule 1.5(kk) (defining the
term ``U.S. Business Day'' as ``any Monday, Tuesday, Wednesday,
Thursday or Friday other than any of the following U.S. holidays if
they are celebrated on a Monday, Tuesday, Wednesday, Thursday or
Friday: 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
Eastern Time, or such other U.S. holiday(s) as published by the
Exchange from time to time'').
\57\ See proposed 24X Rule 1.5(x).
\58\ See proposed 24X Rule 1.5(y).
\59\ See proposed 24X Rule 1.5(c).
\60\ See id.
\61\ See proposed 24X Rules 1.5(c), 11.15(c). See also infra
Section III.A.1 (discussing proposed trading pauses during the 24X
Market Session in greater detail).
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1. 24X Market Session
24X proposes to apply some, but not all, of the rules that would
apply during Exchange Trading Hours other than the 24X Market Session
to trading that would occur during the 24X Market Session.\62\ Market
Orders and Pegged Orders would not be eligible for execution during the
24X Market
[[Page 48469]]
Session \63\ and only Limit Orders would be permitted during the 24X
Market Session.\64\ The proposed rules further provide that, to the
extent that other Trading Centers are open during the 24X Market
Session, orders may be routed away to such Trading Centers during the
24X Market Session.\65\
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\62\ See, e.g., proposed 24X Rules 11.1, 11.16.
\63\ See proposed 24X Rule 11.16(b). See also proposed 24X Rules
11.7(a)(4), 11.7(c)(4).
\64\ See proposed 24X Rules 11.7(b)(6), 11.16(b). 24X's proposed
rules would permit orders to be entered, cancelled, modified or
executed on 24X during the 24X Market Session. See proposed 24X Rule
11.1(c).
\65\ See proposed 24X Rule 11.1(c).
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24X proposes that only certain NMS stocks would be eligible to
trade during the 24X Market Session.\66\ Specifically, 24X proposes
that ``[a]ny security in the Nasdaq-100[supreg] Index, S&P 500[supreg]
Index, Russell 2000[supreg] Index and the top 50 exchange-traded funds
by average daily volume during a given month'' \67\ would be eligible
to become designated for trading on 24X during the 24X Market
Session.\68\ 24X further proposes rules for allowing Members \69\ to
request that 24X designate additional securities for trading during the
24X Market Session.\70\
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\66\ See proposed 24X Rule 11.2(a).
\67\ See proposed 24X Rule 11.2. See also proposed 24X Rule
11.2(g) (setting out, among other things, the proposed methodology
for this calculation).
\68\ See proposed 24X Rule 11.2(a).
\69\ The term ``Member'' would be defined under the proposed
rules as ``any registered broker or dealer that has been admitted to
membership in the Exchange. A Member will have the status of a
`member' of the Exchange as that term is defined in Section 3(a)(3)
of the Act. Membership may be granted to a sole proprietor,
partnership, corporation, limited liability company or other
organization which is a registered broker or dealer pursuant to
Section 15 of the Act, and which has been approved by the
Exchange.'' See proposed 24X Rule 1.5(t).
\70\ See proposed 24X Rule 11.2(h) (setting out, among other
things, the proposed rules for such Member requests). One commenter
stated that ``24X should provide more transparency on the minimum
time frame that market participants will receive notice of
securities that will be available for trading during the 24X Market
Session.'' See Nasdaq Letter at 3. In response, 24X stated that
proposed 24X Rule 11.2(f) would provide sufficient notice of
securities that would be made available for trading or that would
not be made available for trading in the 24X Market Session and that
it ``does not anticipate that there would be substantial daily
changes in the symbols traded during the 24X Market Session.'' See
24X Letter at 3.
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24X proposes certain pauses in trading during the 24X Market
Session. Specifically, 24X proposes to pause trading at 8:00 a.m. ET
each Saturday and resume trading at 11:00 a.m. ET each Saturday.\71\
Orders outstanding at 7:59:59 a.m. ET each Saturday would be
automatically cancelled.\72\ 24X further proposes to pause trading at
7:00 p.m. ET every day and resume trading at 8:00 p.m. ET every
day.\73\ Orders outstanding at 6:59:59 p.m. ET every day would be
automatically cancelled.\74\ 24X also proposes that it would have
authority to pause trading during the 24X Market Session at such other
times as 24X may determine is necessary for technological or other
purposes.\75\ Furthermore, 24X proposes to provide that if there are
any material corporate actions with respect to a particular security
(i.e., corporate actions that may affect a stock price, stock additions
and subtractions, and similar actions) during the 24X Market Session,
24X would pause trading in the underlying security until trading
resumes on the primary listing market for the security.\76\
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\71\ See, e.g., proposed 24X Rule 11.15(c)(1); Exhibit E-1 to
24X's Form 1. One commenter stated that the Form 1 ``does not
sufficiently explain how 24X will coordinate with primary listing
exchanges and the SIP to implement regulatory trading halts and
pauses during the entirety of the 24X Market Session'' and further
stated that the exclusive SIP for the UTP Plan conducts testing on
weekends during a portion of the 24X Market Session. See Nasdaq
Letter at 4. In response, 24X stated that proposed 24X Rule
11.15(c)(3) addresses how industry-wide testing would be handled
during the 24X Market Session. 24X also stated that proposed 24X
Rule 11.15(c)(4) addresses other types of trading pauses and states
that 24X would pause trading during the 24X Market Session at ``such
other times as the Exchange may determine is necessary for
technological or other purposes.'' See 24X Letter at 5.
\72\ See proposed 24X Rule 11.15(c)(1).
\73\ See, e.g., proposed 24X Rule 11.15(c)(2); Exhibit E-1 to
24X's Form 1.
\74\ See proposed 24X Rule 11.15(c)(2).
\75\ See proposed 24X Rule 11.15(c)(4). 24X proposes to require
that notice of such pause as well as notice of resumption of
trading, will be provided. See, e.g., proposed 24X Rule 11.15(c)(4);
Exhibit E-1 to 24X's Form 1.
\76\ See proposed 24X Rule 11.15(c)(5); Exhibit E-1 to 24X's
Form 1. 24X proposes other trading halts, pauses, and suspensions.
See, e.g., proposed 24X Rule 11.1(e) (providing 24X's Chief
Executive Office with power to halt or suspend trading in any and
all securities, and to determine the duration of any such halt
``when he deems such action necessary for the maintenance of fair
and orderly markets, the protection of investors, or otherwise in
the public interest.''); proposed 24X Rules 11.21, 11.22. One
commenter stated that ``while 24X provides examples of corporate
actions that would be deemed material, it does not explicitly define
the term of material corporate action, nor does it provide details
on how it would handle material corporate actions that are announced
during the 24X Market Session.'' See Nasdaq Letter at 3. In
response, 24X stated that ``material corporate action'' would
include ``all actions that the primary listing markets would
determine to require a trading halt under their rules.'' See 24X
Letter at 4.
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24X proposes to require that Members make certain disclosures to
investors concerning risks associated with trading during Extended
Hours Trading, including the 24X Market Session.\77\ Specifically, 24X
proposes to require that ``[n]o Member may accept an order from a
customer for execution during Extended Hours Trading without disclosing
to such customer that Extended Hours Trading involves material trading
risks, including the possibility of lower liquidity, high volatility,
changing prices, unlinked markets, an exaggerated effect from news
announcements, wider spreads and any other relevant risk.'' \78\ 24X
proposes to require that such investor disclosures provide information
substantially similar to that provided under the proposed rule and
address the following risks: (1) lower liquidity, (2) higher
volatility, (3) changing prices, (4) unlinked markets, (5) news
announcements, (6) wider spreads, (7) trading during hours in which
financial market infrastructure companies are closed, and (8) lack of
calculation or dissemination of underlying index value or intraday
indicative value.\79\
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\77\ See proposed 24X Rule 3.21. One commenter stated, among
other things that ``[their] research indicates that increasing
trading hours has negative consequences for retail investment
performance.'' See Glover and deHaan Letter. In the 24X Letter, 24X
stated that retail trading ``outside of regular market hours is not
a new phenomenon'' and that its proposed disclosures under proposed
24X Rule 3.21 ``address the additional risks posed by the 24X Market
Sessions.'' See 24X Letter at 6.
\78\ See proposed 24X Rule 3.21; Exhibit E-1 to 24X's Form 1.
24X further proposes the disclosures required pursuant to this
proposed 24X Rule 3.21 may take the form provided in or that
contains information substantially similar to that provided under
proposed 24X Rule 3.21(a)-(h).
\79\ See, e.g., proposed 24X Rule 3.21; Exhibit E-1 to 24X's
Form 1.
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The proposed 24X Market Session rules relating to risk and
volatility moderators would, as noted above,\80\ differ from those
applicable during the Core Market Session.\81\ During the Core Market
Session, 24X would participate in the Plan to Address Extraordinary
Market Volatility (``LULD Plan'').\82\ The LULD Plan, however, is
currently not effective during the proposed 24X Market Session. 24X
proposes a certain ``24X Price Band'' that would be in effect during
the 24X Market Session.\83\ As proposed, during the 24X Market Session,
a 24X Price Band would be calculated for each relevant security by
multiplying the ``Reference Price,'' as specified in 24X proposed Rule
11.15, by the applicable ``Percentage Parameter,'' also set out in
proposed 24X Rule 11.15. This figure (rounded to the nearest $0.01)
would then be added
[[Page 48470]]
to the Reference Price to calculate the ``Upper 24X Price Band'' and
subtracted from the Reference Price to calculate the ``Lower 24X Price
Band.'' \84\ No trades would be allowed outside the 24X Price Bands. As
further proposed, the Reference Price of a given security would be
defined as either the last sale price for the security in the 24X Post-
Market Session prior to the start of the 24X Market Session, or if such
last sale price is not available, the primary listing market's most
recent closing price for the security during Regular Trading Hours.\85\
Five minutes after the start of the 24X Market Session, the Reference
Price would be required to be updated every 30 seconds to reflect the
average price of the security over the last preceding five minute
period of the 24X Market Session, but only if the new Reference Price
would be at least 1% above or below the existing Reference Price.\86\
In addition, 24X proposes that 24X may set a new Reference Price under
certain circumstances. Specifically, as proposed, 24X would set a new
Reference Price as the Upper/Lower 24X Price Band if orders received
from three separate and distinct Members are displayed for at least 100
shares on the 24X Book at the Upper 24X Price Band or Lower 24X Price
Band for 30 seconds.\87\ As proposed, any such adjustment could be made
only once in any 30 second period. 24X proposes that trades executed
during the 24X Market Session will only be reviewed under proposed 24X
Rule 11.14, Clearly Erroneous Executions, if the trade was executed
when the 24X Price Bands and/or Reference Prices under proposed 24X
Rule 11.15 were not operating correctly due to technical or other
circumstances.\88\
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\80\ See supra Section II.
\81\ See, e.g., proposed 24X Rule 11.22; Exhibit E-1 to 24X's
Form 1. 24X also proposes a limit order price protection rule that
would reject limit orders that are priced outside of specified
thresholds. See proposed 24X Rule 11.9(g).
\82\ See Securities Exchange Act Release No. 85623 (April 11,
2019), 84 FR 16086 (April 17, 2019) (Order Approving the Eighteenth
Amendment to the National Market System Plan to Address
Extraordinary Market Volatility).
\83\ See proposed 24X Rule 11.15. One commenter stated that
24X's proposed Price Bands ``should be sufficient to prevent
extremely erroneous trades.'' See Angel Letter I at 3.
\84\ See, e.g., proposed 24X Rule 11.15; Exhibit E-1 to 24X's
Form 1.
\85\ Proposed 24X Rule 11.15(a)(2). As further proposed, if
neither of those prices are available, the initial Reference Price
for the 24X Price Band for the security would be the previous day's
closing price for the security on the primary listing market for the
security. If none of those prices are available, the initial
Reference Price for the 24X Price Band for the security would be the
previous day's last sale price for the security on the primary
listing market for the security during Regular Trading Hours. See
id.
\86\ See, e.g., proposed 24X Rule 11.15(a)(2); Exhibit E-1 to
24X's Form 1.
\87\ See proposed 24X Rule 11.15(a)(4).
\88\ See proposed 24X Rule 11.14(d)(4).
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Further, 24X states that it would join and participate in the three
Equity Data Plans \89\ that currently govern the collection,
consolidation, processing, and dissemination of core data.\90\ The
Equity Data Plans do not operate during the times that cover the 24X
Market Session.\91\ 24X states that it is ``working with such [Equity
Data Plans] plans to expand their operation to include the 24X Market
Session.'' \92\
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\89\ See supra note 3737 and accompanying text.
\90\ See Exhibit E to 24X's Form 1. See also proposed 24X Rule
11.11 (providing that 24X proposes to report executions to the
appropriate consolidated transaction reporting system ``to the
extent required by the Act and the rules and regulations
thereunder.'').
\91\ One commenter stated that stated that ``the SIPs and the
other SROs should evolve. Because of the SIPs' hours . . . 24X
[would] transmit quotation and transaction information to the SIPs
when the SIPs are not open and, therefore, [could not] transmit this
data in real-time to those consuming the SIP Feed.'' See Polygon
Letter at 2.
\92\ See Exhibit E to 24X's Form 1. See also supra notes 36-38
and accompanying text.
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24X's proposal to provide for continuous trading on an exchange
outside of Regular Trading Hours, subject to certain trading pauses,
raises several issues, many of which have been considered previously in
the context of trading in the pre-market and post-market trading
sessions. These issues include the need for heightened investor
disclosures and consolidated last sale and quotation information in the
after-hours market, as well as the potential risks associated with
trading outside of regular hours, including, among others, the risk of
greater price volatility, reduced liquidity, wider spreads, and fewer
investor protections.\93\ As other exchanges have proposed expanded
trading hours to include pre-market and post-market sessions, the
Commission has approved such expansion where certain safeguards were
implemented to mitigate these concerns.\94\ Such safeguards include,
among other things, requiring specific disclosures to investors
regarding the heightened risks of after-hours trading,\95\ establishing
risk and volatility moderators, and implementing a corresponding
expansion of the operational hours of the exclusive SIPs \96\ to help
ensure the availability of consolidated last sale and quotation
information.
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\93\ See, e.g., Special Study: Electronic Communication Networks
and Afterhours Trading, Division of Market Regulation, Commission
(June 2000), https://www.sec.gov/news/studies/ecnafter.htm; Investor
Bulletin: After-Hours Trading, Office of Investor Education and
Advocacy, Commission (May 2011), https://www.sec.gov/files/afterhourtrading.pdf; and Investor Publications, Commission, After-
Hours Trading: Understanding the Risks (Nov. 8, 2008), https://www.sec.gov/reportspubs/investor-publications/investorpubsafterhourshtm.html; Investor Bulletin: Extended Hours
Trading (June 6, 2022), https://www.sec.gov/oiea/investor-alerts-and-bulletins/extended-hours-trading-investor-bulletin. Staff
reports, Investor Bulletins, and other staff documents (including
those cited herein) represent the views of Commission staff and are
not a rule, regulation, or statement of the Commission. The
Commission has neither approved nor disapproved the content of these
documents and, like all staff statements, they have no legal force
or effect, do not alter or amend applicable law, and create no new
or additional obligations for any person. The Commission has
expressed no view regarding the analysis, findings, or conclusions
contained herein.
\94\ See, e.g., Securities and Exchange Act Nos. 77607 (Apr. 13,
2016), 81 FR 23032 (Apr. 19, 2016) (Order Approving Proposed Rule
Change, as Modified by Amendment No. 1 Thereto, To Adopt an Early
Trading Session and Three New Time-In-Force Instructions), at 23034;
42003 (Oct. 13, 1999), 64 FR 56554 (Oct. 20, 1999) (Notice of Filing
and Order Granting Accelerated Approval of Proposed Rule Change and
Amendment No. 1 by National Association of Securities Dealers, Inc.
Relating to the Extension of Certain Nasdaq Services and Facilities
Until 6:30 p.m. Eastern Time); 42004 (Oct. 13, 1999), 64 FR 56548
(Oct. 20,1999) (Notice of Filing of Proposed Rule Change and
Amendment Nos. 1 and 2 and Order Granting Accelerated Approval of
Proposed Rules Change and Amendment Nos. 1 and 2 by the Chicago
Stock Exchange Relating to the Implementation of an Extended Hours
Trading Session).
\95\ See, e.g., FINRA Rule 2265; Investors Exchange Rule 3.290;
NYSE American Exchange Rule 7.34E; Cboe BYX Exchange Rule 3.21.
\96\ The exclusive SIPs, which collect, consolidate, and
disseminate consolidated data, including the NBBO, in the equity
markets are currently governed by the Equity Data Plans. See supra
note 37 and accompanying text.
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a. Extended Hours Investor Disclosures
The Commission is considering whether 24X's application to operate
as an exchange that permits continuous trading, subject to certain
proposed trading pauses, is consistent with Section 6(b)(5) of the Act,
which requires, among other things, that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, remove impediments to and perfect the mechanisms of a
free and open market and a national market system, and in general
protect investors and the public interest, particularly during the 24X
Market Session. One commenter suggested a ``cautious approach to
expanding trading hours'' because their research ``indicates that
increasing trading hours has negative consequences for retail
investment performance.'' \97\ In response, 24X stated that the
proposed disclosures ``provide investors with the information to
understand the potential risks of trading in the 24X Market Session.''
\98\ The Commission is considering and requests comment on whether
24X's proposed investor disclosures \99\ are sufficient to highlight
what appear to be the unique risks associated with continuous trading,
subject to certain trading pauses, during the 24X Market Session.
[[Page 48471]]
Specifically, the Commission is evaluating whether these disclosures
are sufficient to inform investors of the potentially greater risks
associated with what would constitute a significant expansion of
afterhours trading during the proposed 24X Market Session.
---------------------------------------------------------------------------
\97\ See Glover and deHaan Letter.
\98\ See 24X Letter at 5.
\99\ See proposed 24X Rule 3.21.
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b. Trading Pauses, Halts, Suspensions
In addition, the Commission is considering whether 24X's proposal
to implement certain trading pauses during the 24X Trading Day,\100\ in
light of 24X's proposed model for trading 23 hours a day, including
weekends and holidays, subject to certain trading pauses,\101\ is
consistent with 6(b)(5) of the Act, which requires, among other things,
that the rules of an exchange be designed to prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, remove impediments to and
perfect the mechanisms of a free and open market and a national market
system, and in general protect investors and the public interest,
particularly during the 24X Market Session. One commenter stated that
the 24X Form 1 did not explain how 24X would coordinate with the
primary listing exchanges and the exclusive SIPs with regard to
implementing regulatory trading halts and pauses during the 24X Market
Session.\102\ In response, 24X stated that its proposed rules address
trading halts and pauses, including those that may occur during the 24X
Market Session.\103\ Among other things, the Commission is evaluating
whether the proposed pauses and resumption of trading would be
conducted in a manner that would both further the objectives of the
proposed rule with respect to system maintenance and participation in
industry-wide testing, as well as facilitate transactions in securities
and promote the maintenance of fair and orderly markets and the
protection of investors, consistent with Section 6(b)(5) of the Act.
The Commission requests commenters' views on 24X's proposed rules on
trading pauses and resumptions of trading during the 24X Market
Session.
---------------------------------------------------------------------------
\100\ See supra note 14 and accompanying text.
\101\ See id.
\102\ See Nasdaq Letter at 4.
\103\ See 24X Letter at 4 and 5.
---------------------------------------------------------------------------
c. Volatility Moderators, Risk Controls
The Commission is also considering whether the proposed 24X rules
to address certain risks associated with trading during the 24X Market
Session--and, specifically, the proposed risk and volatility
moderators--are consistent with the Act. Certain mechanisms that
address volatility in individual symbols and the equities market are
not available during the after-hours sessions.\104\ Currently, the
exchanges have adopted rules to determine whether an execution is
clearly erroneous that apply to their after-hours sessions.\105\ As
noted above, subject to certain exceptions, 24X proposes to utilize its
volatility moderator in place of the clearly erroneous execution rules
in the 24X Market Session.\106\ The Commission is considering whether
the risk and volatility moderators proposed \107\ for use during the
24X Market Session only on 24X, are consistent with Section 6(b)(5) of
the Act which requires that an exchange's rules be designed to prevent
fraudulent and manipulative acts and practices, promote just and
equitable principles of trade, foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, remove impediments to and perfect the mechanisms of a free
and open market and a national market system, and, in general protect
investors and the public interest. The Commission requests commenters'
views on 24X's proposed risk and volatility moderators during the 24X
Market Session.
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\104\ Specifically, LULD trading pauses and market wide circuit
breakers are unavailable during after-hours trading.
\105\ See, e.g., MEMX Rule 11.15; Nasdaq Rule 11890; NYSE Rule
7.10; CboeEDGX Rule 11.15.
\106\ One commenter stated that 24X's proposed system ``should
be sufficient to prevent extremely erroneous executions.'' See Angel
Letter I at 3.
\107\ See, e.g., proposed 24X Rule 11.15 (setting out rules
governing, among other things, operation of the proposed ``24X Price
Band''); Exhibit E-1 to 24X's Form 1.
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d. Equity Data Plans, Consolidated Data
The Commission also is considering whether 24X's application to
operate as an exchange during the 24X Market Session, in light of the
fact that the Equity Data Plans currently do not operate during this
time, is consistent with Section 6(b)(5) of the Act, which requires
among other things, that the rules of an exchange be designed to
prevent fraudulent and manipulative acts and practices, promote just
and equitable principles of trade, foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, remove impediments to and perfect the mechanisms of a free
and open market and a national market system, and in general protect
investors and the public interest. While 24X commits to ``working with
such [Equity Data Plans] to expand their operation to include the 24X
Market Session,'' \108\ at this time, the Equity Data Plans do not
operate during the times that cover the 24X Market Session. One
commenter stated that the 24X trading sessions should align with the
operational hours for the exclusive SIPs to avoid potential risks
related to a lack of transparency.\109\ In response, 24X stated that it
has been actively working with the exclusive SIPs to effect changes
necessary to accommodate the 24X Market Session, and that it has
requested temporary exemptive relief with regard to the reporting of
certain quoting and transaction activity during the 24X Market Session
until the exclusive SIPs are ready.\110\ 24X stated that it would
publish the same information that would be required to be reported to
the exclusive SIPs during the 24X Market Session at no cost to
investors during the time any such exemption were in effect.\111\ The
Commission requests commenters' views on 24X's proposed operation
during the 24X Market Session when the Equity Data Plans are not
operating.
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\108\ See Exhibit E to 24X's Form 1.
\109\ See Nasdaq Letter at 3. See also Polygon Letter at 2.
\110\ See 24X Letter at 2-3. 24X stated that such relief would
facilitate competition ``without adversely affecting the regulatory
goals of Rule [sic] 601 and 602.'' See id.
\111\ See id.
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e. Market Surveillance
Further, the Commission is considering and requests comment on
other issues raised by commenters about 24X's proposal to substantially
extend trading hours. Commenters raise concerns about whether 24X's
proposal is consistent with the requirements of Section 6(b)(5) of the
Act that an exchange's rules be designed to prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, remove impediments to and
perfect the mechanisms of a free and open market and a national market
system, and, in general protect investors and the public interest.
Specifically, one commenter questioned the impact that proposal may
have on market surveillance and stated that 24X's Form
[[Page 48472]]
1 is unclear with respect to (1) how 24X will manage real-time
surveillance during the 24X Market Session, (2) how the existing
surveillance, trading halt and trade review infrastructure will work in
the context of the 24X Market Session, including how 24X will
coordinate with self-regulatory organizations (``SROs''), and (3) the
impact such extended trading would have on investors, listed companies,
and other market participants.\112\ The commenter also raised concerns
in connection with market-wide surveillance more broadly, including how
24X would proposes to integrate itself into the national market system
and coordinate with primary listing exchanges to perform its regulatory
surveillance obligations during the 24X Market Session.\113\ In
response, 24X stated that it ``will surveil the trading in the 24X
Market Session as it does with the other 24X trading sessions.'' \114\
24X further stated that it expects that listed companies will continue
to follow applicable requirements of the primary listing market,
including those of significant events, and that 24X will coordinate
with the primary listing markets with regard to their regulatory roles
to their listed companies.\115\
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\112\ See Nasdaq Letter at 3. The commenter further stated that
24X's Form 1 would be the first occurrence of a national securities
exchange that utilizes unlisted trading privileges to operate
outside the trading hours of the primary listing exchanges, which
proposal ``poses a series of surveillance questions and a burden on
listing exchange.'' See id.
\113\ See Nasdaq Letter at 2.
\114\ See 24X Letter at 4.
\115\ 24X stated that, for example, in recognition of the
primary listing market's role, 24X proposes to pause trading in the
event of a material corporate action that occurs during the 24X
Market Session and only resume trading once trading resumes on the
primary listing market, as described in 24X proposed Rule 11.15(c).
See 24X Letter at 4.
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f. Issuer Disclosures
A commenter stated that listed companies disclose material
information outside of Regular Trading Hours and questioned how the 24X
Market Session would affect the current processes for listed companies
to disclose, and for investors to consider, material information.\116\
The commenter also stated that the proposed 24X rules did not provide
details on how material corporate actions announced during the 24X
Market Session would be handled.\117\ 24X stated that proposed 24X Rule
11.15(c) would address those circumstances in which a listed company
may have significant events during the 24X Market Session, and that, as
provided under that rule, 24X proposes to pause trading in the relevant
security until trading resumes on the primary listing market.\118\ 24X
stated that ``material corporate action'' would include all actions
that the primary listing markets would determine to require a trading
halt under their rules.\119\
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\116\ See Nasdaq Letter at 4.
\117\ Id.
\118\ See 24X Letter at 4-5.
\119\ Id.
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B. Technology Services Agreement With MEMX Technologies, LLC
24X proposes to enter into an technology services agreement with
MEMX Technologies, to license the technology underlying 24X.\120\
Specifically, 24X states that, pursuant to this agreement, MEMX
Technologies would provide technology support services to 24X,
including ``(1) the development and testing of software and hardware
necessary to operate the matching engine and connectivity to other
exchanges via a third-party routing broker(s) and third party-developed
functions (including clearing, custody and client connectivity); (2)
the provision of technical support in order for [24X] to operate and
monitor the [exchange]; and (3) the provision of ongoing system
availability commitments, updates, fixes, and technology support.''
\121\
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\120\ See Exhibit E to 24X's Form 1.
\121\ 24X's Form 1 further provides, in part, that ``[a]ll
services provided to the Exchange by MEMX Technologies will be based
upon requirements and instructions determined by the Exchange.'' 24X
further states that, although MEMX Technologies would provide the
technology support services, the Exchange would be responsible for
operating and monitoring its Exchange-related systems and
administering Exchange Rules and other rules and regulations
applicable to the Exchange. See Exhibit E to 24X's Form 1.
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The Commission is evaluating whether the proposed technical
services agreement between 24X and MEMX Technologies would raise
concerns under Section 6(b)(1) of the Act,\122\ including Regulation
SCI thereunder.\123\ The Commission is considering whether, under the
terms of the technology services agreement between 24X and MEMX
Technologies, as described in the 24X Form 1, 24X would be so organized
and have the capacity to be able to carry out the purposes of the Act
and to comply and enforce compliance by its members and persons
associated with its members with the Act and the rules thereunder.
Specifically, the Commission is considering, and requests commenters'
views on, whether 24X would be capable of exercising sufficient control
over the operation of 24X, and be sufficiently independent from MEMX
Technologies, to enable 24X to comply with requirements under the Act
and applicable rules, including, among other things, Regulation SCI,
which requires an SCI entity to have written policies and procedures
reasonably designed to ensure that its SCI systems have levels of
capacity, integrity, resilience, availability and security adequate to
maintain the SCI entity's operation capability.\124\
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\122\ 15 U.S.C. 78f(b)(1).
\123\ 17 CFR 242.1000-1007; Securities Exchange Act Release No.
73639 (Nov. 19, 2014), 79 FR 72252 (Dec. 5, 2014) (``SCI Adopting
Release'').
\124\ 17 CFR. 242.1000-1007. An SCI entity is responsible for
having in place policies and procedures to ensure that it is able to
satisfy the requirements of Regulation SCI for SCI systems operated
on its behalf by a third party. See SCI Adopting Release, 79 FR at
72275-76.
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IV. Request for Written Comment
The Commission requests that interested persons provide written
views and data with respect to 24X's Form 1 and the questions included
above or other relevant issues. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File No. 10-242 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 No. 10-242. 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 (https://www.sec.gov/rules/other). Copies
of the submission, all subsequent amendments, all written statements
with respect to 24X's Form 1 filed with the Commission, and all written
communications relating to the application 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 a.m. and 3 p.m. Do not include personal
identifiable information in submissions; you should submit only
information that you wish
[[Page 48473]]
to make available publicly. We may redact in part or withhold entirely
from publication submitted material that is obscene or subject to
copyright protection. All submissions should refer to File No. 10-242
and should be submitted on or before June 27, 2024.
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-12377 Filed 6-5-24; 8:45 am]
BILLING CODE 8011-01-P