[Federal Register Volume 89, Number 170 (Tuesday, September 3, 2024)]
[Notices]
[Pages 71471-71472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19646]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release 34-100839; File No. 10-242]


24X National Exchange LLC; Notice of Filing of Amendment No. 1 to 
an Application for Registration as a National Securities Exchange Under 
Section 6 of the Securities Exchange Act of 1934

August 27, 2024.
    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 comments 
on the Form 1 \3\ and a letter responding to the comments from 24X.\4\ 
On May 31, 2024, the Commission instituted proceedings pursuant to 
Section 19(a)(1)(B) of the Act \5\ to determine whether to grant or 
deny 24X's application for registration as a national securities 
exchange under Section 6 of the Act (the ``OIP'').\6\ The Commission 
received comment letters in response to the OIP \7\ and a letter 
responding to the OIP and comments from 24X.\8\ On August 21, 2024, 24X 
filed an amendment to its Form 1 application (``Amendment No. 1'').\9\ 
The

[[Page 71472]]

Commission is publishing this notice in order to solicit views of 
interested persons on 24X's Form 1, as amended by Amendment No. 1.
---------------------------------------------------------------------------

    \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 to Secretary, Commission, from David Sassoon, 
General Counsel, 24X, dated May 30, 2024 (``24X Letter'').
    \5\ 15 U.S.C. 78s(a)(1)(B).
    \6\ See Securities Exchange Act Release No. 100254 (May 31, 
2024), 89 FR 48466 (Jun. 6, 2024).
    \7\ See letters to Secretary, Commission, from Richard Montone, 
JD/MBA student, Hofstra University, dated Jun. 26, 2024; Ellen 
Greene, Managing Director, Equity and Options Market Structure, 
Securities Industry and Financial Markets Association, dated Jun. 
27, 2024; Benjamin L. Schiffrin, Director of Securities Policy, 
Better Markets, Inc., dated Jun. 27, 2024; Chris Nagy, Research 
Director, and Tyler Gellasch, President and Chief Executive Officer, 
Healthy Markets Association, dated Jun. 28, 2024; Jeffrey M. 
Pasquerella, Chief Legal Officer, DriveWealth, LLC., dated Jun. 28, 
2024; Joanna Mallers, Secretary, FIA Principal Traders Group, dated 
Jul. 26, 2024. 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.
    \8\ See letter to Secretary, Commission, from David Sassoon, 
General Counsel, 24X, dated Aug. 21, 2024 (``24X OIP Letter'').
    \9\ Amendment No. 1 is available on the Commission's website at: 
https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/24x-form-1.
---------------------------------------------------------------------------

I. Description of 24X's Proposed Trading System

    As described in the Notice, 24X proposes to significantly expand 
trading outside of regular trading hours \10\ for NMS stocks by 
operating a national securities exchange 23 hours a day, seven days a 
week, 365 days a year, including holidays, subject to certain trading 
pauses.\11\
---------------------------------------------------------------------------

    \10\ ``Regular trading hours'' is defined in Commission Rule 
600(b)(88) as ``the time between 9:30 a.m. and 4:00 p.m. Eastern 
Time.'' 17 CFR 242.600(b)(88).
    \11\ See proposed 24X Rule 11.1 (describing the hours of trading 
and trading days for 24X).
---------------------------------------------------------------------------

II. Amendment No. 1 to 24X's Form 1

    In Amendment No. 1, 24X proposes to revise Exhibit B-1 to: (1) 
revise proposed 24X Rule 1.5(c) (the definition of ``24X Market 
Session'') to expressly condition the operation of the 24X Market 
Session; \12\ (2) revise proposed 24X Rule 3.21 (``Customer 
Disclosures'') to provide greater specificity with regard to the 
additional risks of trading during the 24X Market Session; (3) revise 
proposed 24X Rule 11.2 (``Securities Eligible for Trading'') to 
eliminate restrictions on the classes of securities that would be 
eligible to become designated for trading on 24X during the 24X Market 
Session; \13\ (4) revise paragraph (g) of proposed 24X Rule 11.9 
(``Order Execution'') relating to the determination of the reference 
price for purposes of limit order price protection; (5) revise proposed 
24X Rule 11.14 (``Clearly Erroneous Executions'') to delete 
subparagraph (d)(4) regarding calculation of the reference price when 
the proposed 24X price band would have been in effect during the 24X 
Market Session; and (6) revise proposed 24X Rule 11.15 (``24X Market 
Session Price Bands and Trading Halts, Suspensions and Pauses'') to 
delete all references to the proposed 24X price band and to clarify its 
rules relating to trading halts made in conjunction with trading halts 
on the primary listing market.\14\
---------------------------------------------------------------------------

    \12\ Specifically, Amendment No. 1 would revise the definition 
of ``24X Market Session'' in proposed Rule 1.5(c) to read, ``(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). For the avoidance of doubt, 
notwithstanding anything to the contrary in these Rules, the 
Exchange shall not commence operation of the 24X Market Session 
unless (1) the equity data national market system plans have 
established a mechanism to collect, consolidate and disseminate 
quotation and transaction information during the 24X Market Session, 
or (2) the Securities and Exchange Commission has provided exemptive 
or other relief from the requirements under Rule 601, 602 and such 
plans (or their successors) applicable to the 24X Market Session.''
    \13\ In Amendment No. 1, 24X also proposes conforming changes to 
Exhibit N to reflect this revision.
    \14\ 24X also proposes a non-substantive correction to proposed 
Rule 11.21.
---------------------------------------------------------------------------

    In Amendment No. 1, 24X also proposes to revise proposed Exhibits 
C, C-2, D (including Exhibits D-1 through D-4), E, and E-1. More 
specifically, in Amendment No. 1, 24X proposes to (1) revise proposed 
Exhibit C to reflect 24X's intention to enter into a technology 
services agreement with MEMX Technologies, LLC (``MEMX Technologies'') 
to license the technology underlying 24X from MEMX Technologies; (2) 
revise proposed Exhibit C-2 to update the number of authorized 
ownership units for 24X Bermuda Holdings LLC, the ultimate holding 
company for 24X; (3) revise proposed Exhibit D, including proposed 
Exhibits D-1 through D-4, to provide updated financial information on 
24X's affiliates; and (4) revise proposed Exhibit E and E-1 to describe 
24X's proposed compliance with Regulation Systems Compliance and 
Integrity, its arrangement with MEMX Technologies, and make other 
conforming changes to reflect Amendment No. 1.

III. Request for Written Comment

    The Commission requests that interested persons provide written 
views and data with respect to 24X's Form 1, as amended by Amendment 
No. 1. 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 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 Number 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 (http://www.sec.gov/rules/other.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to 24X's Form 1, as amended by Amendment No. 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 10:00 a.m. and 
3:00 p.m. All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from submissions. You should submit 
only information that you wish to make publicly available.
    All submissions should refer to File Number 10-242 and should be 
submitted on or before September 24, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(71)(ii).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-19646 Filed 8-30-24; 8:45 am]
BILLING CODE 8011-01-P