[Federal Register Volume 91, Number 118 (Monday, June 22, 2026)]
[Notices]
[Pages 37201-37208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-12410]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105704; File No. SR-NYSEAMER-2026-34]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing of Proposed Change To Amend Its Rules To Extend Trading Hours
for Certain Eligible Equity Options
June 16, 2026.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on June 5, 2026, 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, II,
and III 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 its rules to extend trading hours
for certain eligible equity options and make related conforming
changes. The proposed rule change is available on the Exchange's
website at www.nyse.com and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its rules to adopt extended hours
trading for certain eligible equity \4\ options and make related
conforming changes. Specifically, the Exchange proposes to adopt a new
Rule 901.1NY to establish two additional trading sessions to its Core
Trading Session (9:30 a.m.-4:00 p.m. Eastern Time) \5\ and to adopt new
Rule 901.2NY to establish and govern the trading of certain eligible
equity options during the two newly created trading sessions (i.e.,
``Extended Hours Trading''). In addition, the Exchange proposes to
amend Rule 952NYP to address the auction process during Extended Hours
Trading.
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\4\ Including Exchange-Traded Funds (``ETF'') and commodity-
based trust shares.
\5\ Unless noted otherwise, all times in this filing are Eastern
Time.
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Background
Currently, option transactions may only be made on the Exchange
during the Core Trading Session (i.e., 9:30 a.m. through 4:00 p.m. or
4:15 p.m., as applicable).\6\ The Core Trading Session is consistent
with the regular trading hours of other U.S. options exchanges and U.S.
equity exchanges. However, many U.S. equity exchanges and certain other
U.S. options exchanges, including Cboe Exchange, Inc. (``Cboe''),
presently allow for trading outside of regular trading hours as
well.\7\
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\6\ See Rule 900.2NY (Definitions). ``The term `Core Trading
Hours' shall mean the regular trading hours for business set forth
in the rules of the primary markets underlying those option classes
listed on the Exchange; provided, however, that transactions may be
effected on the Exchange until the regular time set for the normal
close of trading in the primary markets with respect to equity
option classes and ETF option classes, and 15 minutes after the
regular time set for the normal close of trading in the primary
markets with respect to index option classes, or such other hours as
may be determined by the Exchange from time to time.'' Per Rule
901NY, Commentary .02, Options on ETFs and Options on Index-Linked
Securities (or ETNs) may be traded on the Exchange until 4:15 p.m.
each business day. The Exchange proposes a non-substantive change to
Rule 901NY, Commentary .02 to provide a beginning and ending time
for options on ETFs and options on Index-Linked Securities to align
itself with the practices of other options exchanges. See proposed
Rule 901NY, Commentary .02.
\7\ For example, NYSE Arca Equities currently allows for an
Early Trading Session from 4:00 a.m. to 9:30 a.m., a Core Trading
Session from 9:30 a.m. until the conclusion of Core Trading Hours or
the Core Closing Auction and a Late Trading Session following the
Conclusion of the Core Trading Session and to 8:00 p.m. NYSE has an
Early Trading Session of 7 a.m. until the opening of the Core
Trading Session (9:30 a.m.) for UTP Securities. The Nasdaq Stock
Exchange LLC (``Nasdaq'') currently allows for a Pre-Market Hours
session from 4:00 a.m. to 9:30 a.m. and a Post-Market Hours session
from 4:00 p.m. until 8:00 p.m. See Nasdaq Equity 1, Section 1(a)(20)
and (21). Cboe BZX Exchange, Inc. (``BZX'') also allows for an Early
Trading Session from 4:00 a.m. to 8:00 a.m., a Pre-Opening Session
from 8:00 a.m. to 9:30 a.m., and an After Hours Trading Session from
4:00 p.m. through 8:00 p.m. See BZX Rule 1.5(c), (r), and (ff).
Additionally, Cboe currently allows for the trading of certain index
options during Global Trading Hours from 8:15 p.m. (previous day) to
9:25 a.m. and during Curb Trading Hours from 4:15 p.m. to 5:00 p.m.
See Cboe Rule 5.1(c) & (d). In addition, Cboe currently has a
pending proposal to allow for the trading of certain eligible
multiply-listed equity options during Global Trading Hours and
NASDAQ MRX has a pending proposal for the trading of certain
eligible multiply-listed equity options during an Early Extended
Trading Hours Session. See note 33, infra.
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[[Page 37202]]
The Exchange believes there is investor demand to trade equity
options outside of the Core Trading Session. Securities trading has
become a global industry, but investors located outside of the United
States may choose not to access U.S. markets during regular trading
hours with which the Core Trading Session aligns. The Exchange further
believes there is global demand from investors for options on equities
for various investment purposes. However, given that equity options
trade only during regular trading hours, it is difficult for non-U.S.
investors to participate. Additionally, U.S. investors that trade in
equities outside of regular trading hours are unable to access the
equities options for hedging and other purposes as part of their
investment strategies during trading sessions outside of the Exchange's
Core Trading Session.
In response, the Exchange proposes to designate equity options that
meet certain criteria as eligible for trading outside of its Core
Trading Session. Doing so would help align trading in such products to
the expanded trading that already occurs for the underlying securities
and help meet investor demand to use these products outside of regular
trading hours and keep pace with the continuing internationalization of
securities markets.
Trading Sessions
Specifically, the Exchange proposes to adopt new Rule 901.1NY
(Trading Sessions) to establish two additional separate trading
sessions to its Core Trading Session: (i) an early trading session of
7:30 a.m. to 9:25 a.m. (the ``Early Trading Session''); and (ii) a late
trading session of 4:00 p.m. to 4:15 p.m. (the ``Late Trading
Session'').\8\ The Exchange further proposes to adopt new Rule 901.2NY
to establish Extended Hours Trading, which, under the proposed rule,
will be defined as trading during the Early Trading Session and the
Late Trading Session.
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\8\ The Early Trading Session and the Late Trading Session will
be classified as distinct sessions from the Core Trading Session to
allow ATP Holders granular control over which session their orders
participate in.
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Session Designation
Proposed Rule 901.1NY(b) will require that any order entered on the
Exchange must include a designation for which trading session(s) the
order will remain in effect. Any order without a designation will be
rejected. In addition, unless otherwise specified, an order designated
for a later trading session will be accepted but not eligible to trade
until the designated trading session begins. An order designated for
trading session(s) that already ended will be rejected.\9\
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\9\ See proposed Rule 901.1NY(b)(1) & (2).
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Proposed Rule 901.1NY(c) will specify the interaction between the
different trading sessions and holidays and shortened trading days.
Proposed Rule 901.1NY(c)(1) will provide that if there is no Core
Trading Session, there will be no Early Trading Session and no Late
Trading Session. Proposed Rule 901.1(c)(2) will provide that on a
trading day with a shortened Core Trading Session (e.g., the Exchange
is open for a half day of regular trading between 9:30 a.m. through 1
p.m.): (1) the Early Trading Session will occur prior to the shortened
Core Trading Session; and (2) the Late Trading Session will commence at
the end of the shortened Core Trading Session and continue for 15
minutes (e.g., 1:00 p.m. to 1:15 p.m.).
Extended Hours Trading
As noted above, the Exchange proposes to adopt a new Rule 901.2NY
to establish trading during the Early Trading Session and the Late
Trading Session, which the proposed Rule defines as ``Extended Hours
Trading.'' \10\ Proposed Rule 901.2NY, however, will only address the
operational and structural differences that are unique to trading
outside of Extended Hours Trading while maintaining the applicability
of the broader rulebook. Accordingly, proposed Rule 901.2NY(a) provides
that, while proposed Rule 901.2NY will apply only to Extended Hours
Trading, all rules applicable to options during the Core Trading
Session will apply to the extent possible to options during Extended
Hours Trading, including, without limitation, trading rules, listing
rules and business conduct rules. For instance,
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\10\ See proposed Rule 901.2NY(a).
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Consolidated Book or Book: As stated in definition Rule
900.2NY, ``Consolidated Book or Book'' means the Exchange's electronic
book of orders and quotes..
ATP Holders: As stated in Rule 924 ATP Holders including
Market Makers must have a Letter of Guarantee from a Clearing Member
authorized by the OCC in order to make any transaction on the Floor of
the Exchange or through the Facilities of the Exchange. Any Market
Maker or Specialist assigned to act in the Early Trading Session and/or
the Late Trading Session must comply with the quoting obligations of
Rule 925NY and Rule 925.1.
Risk Controls: The Exchange has various price protection
mechanisms and risk controls available to market participants as set
forth in Rule 967NY. These will apply in the same manner during the
Early Trading Session and the Late Trading as they do during Core
Trading Hours.
Market Orders: User will not be able to submit market
orders in equity options during the Early Trading Session and the Late
Trading Session.
Eligible Expirations: The Early Trading Session and the
Late Trading Session will utilize existing criteria for listing option
series for an option class.
Market Maker and Specialist Obligations: Market-Maker
obligations contained in Rule 925NY and Market Maker and Specialist
quoting requirements contained in Rule 925.1NYP apply.
The Exchange recognizes that the proposed Extended Hours Trading is
shorter than the extended trading hours for equities, which may
commence as early as 4:00 a.m. and conclude as late as 8:00 p.m.\11\
Since equity options generally will not trade unless the underlying
security also trades, any trading hours outside of regular trading
hours (which is aligned with the Exchange's Core Trading Session)
available for equity options are limited to extended trading hours
available for the underlying equities. Thus, while the proposed
Extended Hours Trading for equity options could mirror the extended
trading hours available for the underlying equities, the Exchange
proposes limiting Extended Hours Trading and establishing trading hours
for equity options that are notably shorter than the hours of extended
trading for equities.
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\11\ See note 7, supra.
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[[Page 37203]]
The Exchange believes that the shorter Extended Hours Trading
running from 7:30 a.m. to 9:25 a.m. and 4:00 p.m. to 4:15 p.m., rather
than hours that align with the full extended trading hours available to
the underlying equities, is appropriate because of the lack of industry
experience with extended hours trading for equity options that are
physically-settled. Limiting the extended window of time for equity
options allows for a paced introduction of this new type of trading
session for equity options. The limited hours for Extended Hours
Trading will allow the Exchange to monitor and assess the development
and functioning of Extended Hours Trading markets for equity options.
Additionally, the Exchange believes that the proposed timeframe for
Extended Hours Trading for equity options can be supported by Market
Makers, Specialists and e-Specialists (collectively ``Specialists''),
clearing firms, and other market participants from a personnel coverage
perspective.
Equity Option Criteria for Extended Hours Trading Eligibility
Extended Hours Trading will allow market participants to engage in
trading designated equity options in conjunction with the trading in
the underlying securities during these hours. However, since trading in
such options is a new initiative, the Exchange proposes to limit the
number of equity option classes that may be designated for Extended
Hours Trading to 100 option classes. The limit is intended to allow the
Exchange to monitor and assess the development and functioning of the
new Extended Hours Trading for equity options within a controlled group
of equity options initially.
Accordingly, as set forth in proposed Rule 901.2NY(c), only
multiply-listed option classes designated for trading under Rule 901
that satisfy certain criteria will be eligible for trading during
Extended Hours Trading. The number of eligible equity options shall not
exceed 100. However, pursuant to proposed subparagraph (2), the
Exchange may also designate as eligible for trading during Extended
Hours Trading any equity option that is traded on another exchange
during the Early Trading Session, the Late Trading Session or any other
trading session that is not the Core Trading Session, and any equity
option designated in this manner will not be subject to the 100
multiply listed option class limit established pursuant to this
subparagraph.
The criteria and the limit are intended to allow the Exchange to
monitor and assess the development and functioning of the Extended
Hours Trading markets for equity options within a limited group of
equity options initially. In particular, proposed Rule 901.2NY(c) will
establish specific eligibility criteria for an equity option class to
be eligible for Extended Hours Trading. Accordingly, as proposed, the
Exchange may designate as eligible for trading during Extended Hours
Trading up to 100 actively-traded and multiply-listed equity option
classes that satisfy the following criteria:
(i) the option has an average daily volume of 150,000 contracts;
(ii) the underlying equity to the option has a $50 billion market
capitalization; and
(iii) the underlying equity to the option has an average daily
trading volume of 10 million shares.
Equity option classes with an underlying security that is an ETF or
commodity-based trust share are exempt from the requirement set forth
in proposed Rule 901.2NY(c)(ii) in determining eligibility for trading
during Extended Hours Trading. The Exchange believes these criteria
will help ensure equity options trading during Extended Hours Trading
will have sufficient demand and liquidity to support the options
markets during the Early and Late Trading Sessions. Additionally, the
chosen criteria limits the initial number of equity options eligible
for extended trading hours to those most likely to have the most
liquidity and avoids options with underlying securities that may have
temporarily high volume or market capitalization.
Semi-Annual Review of Equity Option Eligibility for Extended Hours
Trading
For the initial process to determine the equity options that meet
the criteria in proposed Rule 901.2NY(c), the Exchange will use data
from the nearest six-month period ending either June 30 or December 31
prior to launch of equity options trading during Extended Hours
Trading. The initial list of options designated for trading in extended
trading hours sessions will be announced via the Exchange's Trader
Update, as will the first day of trading for equity options during
Extended Hours Trading.\12\ The Exchange will designate options for
trading in the Early and Late Trading Sessions from the equity options
meeting the criteria in proposed Rule 901.2NY(c). Qualifying options on
ETFs that trade until 4:15 p.m. under existing Rule 901NY Commentary
.02 will continue to trade until 4:15 p.m. via the Exchange's Core
Trading Session, rather than trading during the Late Trading Session.
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\12\ The initial listing of equity options for Extended Hours
Trading will be selected by the Exchange and is not subject to the
listing date requirements of the semiannual review process that will
occur after the launch of the new trading sessions.
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Thereafter, the Exchange will identify on a semiannual basis
(following each January 1 and July 1) the option classes meeting the
criteria in proposed Rule 901.2NY(c) and select up to 100 of such
option classes to be designated for trading during Extended Hours
Trading. However, the Exchange has discretion to determine which of the
eligible option classes will be designated to trade during Extended
Hours Trading. The Exchange is not obligated to include all options
that meet the criteria for Extended Hours Trading eligibility, and the
number of designated equity options may be less than 100 option
classes.
The Exchange will conduct a review twice per year to reassess the
list of eligible equity options. The Exchange will designate equity
options eligible for trading during Extended Hours Trading and publish
the updated list of designated equity options via Trader Update.
Specifically, as set forth in proposed Rule 901.2NY(c)(3) the Exchange
will determine semi-annually the underlying securities that satisfy the
eligibility criteria in subparagraph (c) by using trading statistics
for the previous six-month period.\13\
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\13\ The Exchange proposes to conduct the bi-annual review as of
January 1 and July 1 of each year. As such, the six-month periods
will be from January to June, and from July to December each year.
The result of the bi-annual review will be announced through Trader
Update and any new equity options that qualify would be permitted to
trade during Extended Hours Trading beginning on February 1 and
August 1 of each year.
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If, following the semiannual review, an option that was previously
designated for trading in extended trading hours no longer meets the
criteria in proposed Rule 901.2NY(c), the Exchange will identify any
such equity option class and provide the last day of trading during
Extended Hours trading for each such option class in a Trader Update.
Equity options identified as no longer meeting eligibility requirements
for trading during Extended Hours Trading will be removed from Extended
Hours Trading within 18 months of the determination that the option
class no longer meets the eligibility criteria, and the last day of
trading for any such equity option class during Extended Hours Trading
will be communicated via Trader Update.
Providing a notice of removal of an equity option class from
Extended Hours Trading up to 18 months after the date the option class
is determined to be
[[Page 37204]]
no longer eligible for extended trading hours sessions will avoid
sudden market disturbances resulting from the abrupt removal of any
such option from Extended Hours Trading. Allowing the Exchange to
determine a removal date within 18 months ensures that, except for
certain longer dated series, open interest existing in the equity
option class to be removed from Extended Hours Trading will have
generally expired. Additionally, the 18-month period will allow for two
additional semiannual review cycles during which equity options
previously designated for removal may subsequently meet eligibility
criteria again and consequently may continue to trade during Extended
Hours Trading pursuant to new Rule 901.2NY(c)(4)(iii).
Whereas the removal process established in new Rule 901.2NY(c)(4)
is intended to provide an extended time period for the removal of
equity options to avoid sudden market disruptions, the Exchange
acknowledges that certain conditions, although unlikely, may warrant an
acceleration of removal of an equity option class from Extended Hours
Trading. Consequently, new Rule 901.2NY(c)(4)(ii) allows the Exchange
to remove an equity option class from trading during Extended Hours
Trading prior to the announced removal date if the Exchange observes
limited or no market activity during Extended Hours Trading for the
option class. If such a condition is observed, the Exchange may remove
the option class from trading during Extended Hours Trading with at
least seven days' notice. The Exchange may remove the option class from
Extended Hours Trading prior to the removal date by issuing a Trader
Update designating a new removal date for the option class from
Extended Hours Trading.
Additionally, pursuant to proposed Rule 901.2NY(c)(4)(iv), the
Exchange may remove any option class from trading in Extended Hours
Trading for any reason with at least 30 days' notice. The Exchange
expects to use such authority in limited situations, such as in
response to Market Maker or Specialist preference or concern regarding
continued extended trading hours sessions in a particular option class
or the announcement of an unusual corporate action on the underlying
equity to an option class (and the effective date of such corporate
action is not imminent) that could introduce confusion or uncertainty
about the value of an option, thereby significantly reducing liquidity
during Extended Hours Trading for the option class. Similarly, the
Exchange may immediately remove an option class from Extended Hours
Trading if the Exchange deems such action is necessary in the interest
of investor protection or the maintenance of fair and orderly markets.
The Exchange will provide notice of such determination as soon as
practicable after the determination to remove has been made. Any option
class designated for removal from Extended Hours Trading pursuant to
new Rule 901.2NY(c)(4) and that is included in the 100 multiply-listed
option class limit will continue to be included in the 100-option class
limit until the removal date of any such option class.
The Exchange may also designate for trading during Extended Hours
Trading any equity option that is traded on another exchange during
Extended Hours Trading.\14\ Similarly, the Exchange may waive the
proposed Rule 901.2NY(c) criteria if, during the three days following
an underlying security's initial public offering (``IPO'') day, the
underlying security has a market capitalization of at least $3 billion
based upon the offering price of its IPO, in which case options on the
underlying security may be listed and traded during Extended Hours
Trading starting on or after the second business day following the IPO
day.\15\
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\14\ See proposed Rule 901.2NY(c)(2).
\15\ See proposed Rule 901.2NY(c)(1). The Exchange is aware that
other exchanges planning to adopt extended hours trading rules may
not waive IPOs from its listing criteria, but believes that its
inclusion is appropriate given its positioning as an IPO listing
venue.
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In either instance, the eligible equity option will not be counted
against the 100-option class limit proposed in Rule 901.2NY(c). The
Exchange believes that the exclusion from the 100-option class limit of
such equity options initially traded during Extended Hours Trading on
another options exchange is appropriate for competitive purposes since
such listings can indicate the continued expansion of equity options
trading outside of regular trading hours, which align with the
Exchange's Core Trading Session. As it related to the IPO waiver, the
Exchange believes that the requirements established in proposed Rule
901.2NY(c)(1) will result in the eligibility of equity option classes
for Extended Hours Trading with the highest anticipated demand.
Proposed Rule 901.2NY(j) will provide that expiring equity options
eligible for trading during Extended Hours Trading shall continue to
trade through the Late Trading Session. This is consistent with
American-style physical settlement and will allow participants to close
expiring positions rather than take or deliver shares.
Session Participation and Trading Activity
As set forth above, any order entered on the Exchange must include
a designation for which trading session(s) the order will remain in
effect.\16\ The Early Trading Session will be electronic only, while
the Trading Floor will be open during the Core Trading Session and 4:15
p.m. for certain eligible options.
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\16\ See proposed Rule 901.1NY(b) and amended Rule
900.3NYP(a)(1)(A).
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The queuing for order and market maker quotes for both the Early
Trading Session and the Core Trading Session will begin,
simultaneously, at 6:00 a.m. and there will be no opening auction for
the Late Trading Session orders. The Late Trading Session will overlap
with late trading ETFs, which will be in its Core Trading Session. ETF
options will not have a Late Trading Session. As noted above,
participants may designate orders for participation in certain
sessions. Any order designated for less than all sessions will not be
included in any session for which it is not eligible.
Market Maker and Specialists will not designate their quotes for a
specific trading session. Quotes will persist across sessions. However,
to address the potential for different quoting widths and varied Market
Maker and Specialist participation across sessions, the Early Trading
Session will conclude at 9:25 a.m. (five minutes before the opening of
the Core Trading Session).
The Exchange expects reduced liquidity and wider spreads during the
Early Trading Session and the Late Trading Session (i.e., Extended
Hours Trading). Therefore, the Exchange proposes not to allow market
orders \17\ during Extended Hours Trading and such orders designated
for participation in the Early Trading Session or the Late Trading
Session will be rejected.\18\ The Exchange believes it is appropriate
to not allow Market Orders during Extended Hours Trading in order to
protect customers should wide price fluctuations occur due to the
potential illiquid and volatile nature of the market or other factors
that could impact market activity.
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\17\ A ``Market Order'' is an unpriced order message to buy or
sell a stated number of option contracts at the best price
obtainable, subject to the Trading Collar assigned to the order. A
Market Order may be designated Day or GTC. Unexecuted Market Orders
are ranked Priority 1--Market Orders. For purposes of processing
Market Orders, the Exchange will not use an adjusted NBBO. See Rule
900.3NYP(a)(1).
\18\ See proposed Rule 901.1NY(d)(1) and proposed Rule
901.2NY(f).
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[[Page 37205]]
Order Routing
Pursuant to the Options Order Protection and Locked/Crossed Market
Plan (``Linkage Plan''),\19\ participant exchanges to the Linkage Plan
established a framework to provide order protection. The Linkage Plan
(and Exchange Rules 991NY and 992NY) will apply during all trading
sessions during which multiply-listed options trade.
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\19\ The Linkage Plan requires U.S. options exchanges to
establish a framework for providing order protection and addressing
locked and crossed markets in eligible options classes. The Linkage
Plan is a national market system plan approved by the Commission
pursuant to Section 11A of the Act and Rule 608 thereunder. The full
text of the Linkage Plan is available at https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf.
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Rule 964NYP(k) addresses order routing away from the Exchange to
promote compliance with the Linkage Plan. As the Exchange may route
orders during the Early Trading Session and Late Trading Session in
multiply-listed options if another U.S. options exchange lists the same
options outside of the Core Trading Session, Rule 964NYP(k) will apply
during Extended Hours Trading (i.e., the Early Trading Session and the
Late Trading Session). Consequently, ATP Holders may designate an order
for routing (or not available for routing) during all trading sessions
for multi-listed equity options. The Exchange System is designed to, at
all times, prevent trade-throughs and avoid displaying locked/crossed
markets in accordance with the Linkage Plan, and, as proposed, ATP
Holder orders will be eligible for routing during the Early Trading
Session and the Late Trading Session, just as they are during the Core
Trading Session.
Opening Process
The Exchange will replicate its current multiply-listed opening
process and apply it to the Early Trading Session.\20\ Accordingly, the
Exchange proposes to amend the Opening Auction Process in Rule 952NYP
to incorporate the Early Trading Session for equity options.
Specifically, the Exchange proposes to amend Rule 952NYP to add
subparagraph (a)(12)(C) which will provide that, similar to the Core
Open Auction, the pre-open state for the Early Open Auction begins at
6:00 a.m.\21\
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\20\ There will be no opening auction for the Late Trading
Session. Trading will continue seamlessly from the Core Trading
Session into the Late Trading Session in eligible symbols.
\21\ The Exchange also proposes a non-substantive amendment to
Rule 952NYP(b) to limit the priority for Market On Open orders to
the Core Auction Open and the Trading Halt Auction. As noted above,
market orders will not be permitted during the Early Trading
Session.
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As it relates to Auction Triggers, as that term is defined in Rule
952NYP, the trigger for the Early Open Auction will differ from Core
Open Auction. Specifically, the Core Open Auction begins when the
Primary Market first disseminates at or after 9:30 a.m. both a two-
sided quote and a trade that is at or within the quote.\22\ Conversely,
under proposed Rule 952NYP(a)(7)(C), the Early Open Auction will begin
when any national securities exchange first disseminates in the
underlying, at or after 7:30 a.m. Eastern Time, either a two-sided
quote or a trade of any size. The Exchange emphasizes that the Auction
Trigger for the Early Open Auction is not based on disseminated trades
or quotes from the Primary Market and is instead based on trades or
quotes from any national securities exchange as not all securities will
be trading on their Primary Market during the Early Trading Session
(e.g., NYSE-listed securities), and, therefore, an Auction Trigger
based on the Primary Market may not occur. An option will not open
unless the composite market is within a configured opening collar,
although collars may differ for the Early Open Auction.
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\22\ See Rule 952NYP(a)(7)(A).
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Market Makers and Market Participants
Pursuant to Rule 924NY, ATP Holders including Market Makers must
have a Letter of Guarantee from a Clearing Member authorized by the
Options Clearing Corporation (``OCC'') in order to make any transaction
on the Floor of the Exchange or through the Facilities of the Exchange.
Accordingly, as set forth in proposed Rule 901.2NY(k), any ATP Holder
with an effective Letter of Guarantee issued by a Clearing Member and
approved by the Options Clearing Corporation may participate in
Extended Hours Trading. Participation is voluntary and no additional
authorization with the Exchange is required.
Similarly, the participation of a Market Maker appointed in a class
of options contracts pursuant to Rule 923NY in the Early Trading
Session or the Late Trading Session is voluntary. Accordingly, as set
forth in proposed Rule 901.2NY(h), while Market Maker appointments will
apply across all three trading sessions and the Market Maker assigned
to an option class eligible for trading during the Core Trading Session
will automatically receive the appointment in that class during the
Early Trading Session and the Late Trading Session, a Market Maker is
not required to enter quotations.
However, if a Market Maker chooses to enter quotations in its
assigned class during the Early Trading Session or the Late Trading
Session it will be subject to its continuous quoting obligation (Rule
923NY). Market Makers will not have a way to designate quotes for a
specific session. Upon receipt by the Exchange, the quote will be
available for all three sessions, as there will not be automatic
cancellation of quotes at the conclusion of a session.
A Market Maker that does not enter quotations during the Early
Trading Session or Late Trading Session will not be subject to the
continuous quoting obligation. Nevertheless, nothing will relieve the
Market Maker of its continuous quoting obligations during the Core
Trading Session.\23\
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\23\ See proposed Rule 901.2NY(h)(2).
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Finally, Specialist allocations will persist across all three
sessions. However, like Market Maker assignments, the participation of
a Specialist assigned in a class eligible to participate in trading
during Extended Hours Trading is voluntary. Accordingly, as set forth
in proposed Rule 901.2NY(i)(2), a Specialist allocated such an
allocated class may opt out of participating in the Early Trading
Session and/or the Late Trading Session.
Disclosures
Proposed Rule 901.2NY(f) will require Participants to make certain
disclosures to customers regarding material trading risks that exist
during the Early Trading Session and the Late Trading Session (i.e.
Extended Hours Trading). The Exchange expects overall lower levels of
trading during Extended Hours Trading compared with the Core Trading
Session. While trading processes during Extended Hours Trading will be
substantially similar to trading processes during the Core Trading
Session, the Exchange believes it is important for investors,
particularly non-professional customers, to be aware of any differences
and risks that may result from lower trading levels and thus will
require these disclosures.
Proposed Rule 901.2NY(f) will provide that no ATP Holder may accept
an order from a customer for execution during Extended Hours Trading
without disclosing to that customer that trading during Extended Hours
Trading involves, among other things, material trading risks, including
the possibility of lower liquidity, high volatility, changing prices,
an exaggerated effect from news announcements, wider spreads. The
proposed rule provides an example of these disclosures in
[[Page 37206]]
subparagraphs (1) through (7). The Exchange believes that requiring ATP
Holders to disclose these risks to non-member customers will facilitate
informed participation in Extended Hours Trading. The required
disclosures are materially identical to the disclosure requirements
imposed by the Cboe during its Global Trading Hours.\24\
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\24\ See Cboe Rule 9.20.
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Due to differences in the trading process during the Core Trading
Session and Extended Hours Trading, ATP Holders that accept orders from
customers during Extended Hours Trading will be required to make
certain disclosures to those customers. The requirements addressing the
differences between the trading sessions are consistent with the
Exchange's goal of permitting ATP Holders, that choose to do so, to
trade during Extended Hours Trading without imposing additional burdens
on those that do not.\25\
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\25\ See proposed Rule 901.2NY(g) & (h), permitting Market
Makers and Specialists to not participate in trading activity during
the Early Trading Session or the Late Trading Session. To the extent
that a Market Maker chooses to participate in eth additional trading
sessions their quoting obligations are refined in proposed mended
Rule 925NY(b)(5).
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Accordingly, the Exchange will minimize ATP Holder's preparation
efforts to the greatest extent possible by allowing ATP Holders to
trade during Extended Hours Trading with the same ports and data feeds
and employing existing session designations used during the Core
Trading Session. Session designation will be controlled via existing
order tags; order processing will operate in the same manner during
Extended Hours Trading as it does during the Core Trading Session.
There will be no changes to the ranking, display, or allocation
algorithm rules.
Similarly, there will be no changes to the processes for clearing,
settlement, exercise, and expiration.\26\ The Exchange notes that the
OCC already clears certain ETFs that are eligible pursuant to Exchange
Rules to trade until 4:15 p.m. as part of the Core Trading Session.
Therefore, the OCC already has the operational functionality to support
the proposed Extended Hours Trading for equity options.\27\
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\26\ The Exchange has held discussions with the Options Clearing
Corporation, which is responsible for clearing and settlement of all
listed options transactions and has informed the Exchange that no
operational changes are required for clearance and settlement during
Extended Hours Trading. All transactions during Extended Hours
Trading will be cleared and settled in the same manner that trades
during the Core Trading Session are cleared and settled. It is
operationally ready and will use existing processes and marginal
requirements.
\27\ It is the Exchange's understanding that the OCC intends to
make rule filing to allow it to clear non-ETF equity options during
extended trading hours being proposed by various exchanges. See OCC
Memo #59061 (May 28, 2026) https://infomemo.theocc.com/infomemos?number=59061.
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In addition, the Options Price Reporting Authority (``OPRA'') will
accommodate equity options during Extended Hours trading on the
existing lines used during the Core Trading Session. With the exception
of imbalance messages, Exchange proprietary data feeds will also be
disseminated during Extended Hours Trading using the same formats and
delivery mechanisms with which the Exchange disseminates during the
Core Trading Session. Finally, price protection mechanisms,
participant-level risk controls and obvious error adjustment processes
employed during the Core Trading Session shall apply during Extended
Hours Trading.\28\
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\28\ In addition, the Exchange will continue to explore
additional risk controls specific to the Early Trading Session and
the Late Trading Session.
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The Exchange understands that systems and other issues may arise
and is committed to resolving those issues as quickly as possible,
including during Extended Hours Trading. Thus, the Exchange will have
appropriate staff available as necessary during Extended Hours Trading
to handle any technical and support issues that may arise during those
hours. Additionally, the Exchange will have personnel available to
address any trading issues that may arise during Extended Hours
Trading. The Exchange also will have appropriately trained, qualified
regulatory staff in place during Extended Hours Trading to the extent
it deems necessary to satisfy its self-regulatory obligations. The
Exchange believes its surveillance procedures are adequate to properly
monitor trading of eligible equity options during Extended Hours
Trading.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\29\ in
general, and furthers the objectives of Section 6(b)(5) of the Act,\30\
in particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, 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.
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\29\ 15 U.S.C. 78f(b).
\30\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposal would remove impediments to
and perfect the mechanism of a free and open market and a national
market system by providing a rules framework to support the Exchange's
introduction of Extended Hours Trading, which the Exchange believes
will increase market accessibility, promote capital formation, and
facilitate portfolio management.
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange operates in a
highly competitive market. The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \31\
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\31\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04).
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Extended Hours Trading is a competitive initiative designed to
improve the Exchange's marketplace for the benefit of investors. The
proposed rule changes provide a new investment opportunity within the
options trading industry that more closely aligns the Exchange's
trading hours with extended trading hours of stock exchanges and other
options exchanges.\32\ The Exchange believes the competition among
exchanges ultimately benefits the entire marketplace. Given the robust
competition among options exchanges, innovative trading mechanisms are
consistent with the above-mentioned goals of the Act.
---------------------------------------------------------------------------
\32\ See note 7, supra.
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The proposed rule change also provides a mechanism for the Exchange
to more effectively compete with exchanges located outside the United
States. Global markets have become increasingly interdependent and
linked through improved communications technology. This has been
accompanied by an increased desire among investors to have access to
U.S.-listed exchange products outside of regular trading hours, and the
Exchange believes this desire extends to equity options. The Exchange
believes that its proposal is reasonably designed to provide an
appropriate mechanism for trading outside the Core Trading Session
while providing for appropriate Exchange oversight and surveillance
pursuant to the Act.
As noted above, the Commission has authorized stock exchanges and a
small number of options exchanges to be open
[[Page 37207]]
for trading outside of regular trading hours pursuant to the Act.\33\
In addition, the proposal for extended trading hours for certain
qualifying equity options is similar to additional proposals under
review by the Commission.\34\ Thus, the proposed rule change to adopt
Extended Hours Trading is not novel or unique. Moreover, the Exchange
believes it is reasonable to trade a limited number of equity option
classes for which demand is anticipated to be the highest during the
Early Trading Session and the Late Trading Session upon implementation
of Extended Hours Trading in those options.
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\33\ Id.
\34\ See Exchange Act Release No. 105153 (April 4, 2026), 91 FR
18010 (April 9, 2026) (SR-CBOE-2025-079) (Notice of Filing of
Amendment No. 1 to a Proposed Rule Change To Allow for Extended
Trading of Multi-Listed Equity Options) (``Cboe Notice'') and
Exchange Act Release No. 105097 (March 26, 2026), 91 FR 16066 (March
31, 2026) (SR-MRX-2026-11) (Notice of Filing of a Proposed Rule
Change To Adopt Extended Trading Hours for Eligible Equity and Index
Options) (``MRX Notice''). The Exchange would be in support of
harmonization efforts made by the Commission and Market Participants
between the NYSE, Cboe, and Nasdaq filings in favor of simplicity
for Market Participants, as there exist material differences among
the filings. The Exchange would also support such an effort even if
it means additional time is needed for discussion between the
Commission, Exchanges, and Market Participants beyond the currently
proposed timelines.
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With few exceptions, options traded during Extended Hours Trading
will be subject to all other rules applicable to options on the
Exchange, including, without limitation, listing rules and business
conduct rules. These rules have all been previously filed with the
Commission and established as being consistent with the goals of the
Act. For example, during Extended Hours Trading, rules that protect
public customers, impose best execution requirements, and prohibit acts
and practices that are inconsistent with just and equitable principles
of trade or are otherwise fraudulent or manipulative practices.
Similarly, the proposed rule changes offer the same opportunity for
price improvement during Extended Hours Trading and applies the same
allocation and priority rules that are available on the Exchange during
the Core Trading Session. Thus, the Exchange believes that, during
Extended Hours Trading, market participants will continue to be
protected by the Exchange's rules that promote just and equitable
principles of trade and prevent fraudulent and manipulative acts.
Similarly, the proposed rule change requires disclosures that
clearly identify the ways in which trading during Extended Hours
Trading differs from trading during the Core Trading Session and
highlight any related risks. Specifically, the proposed rule change
will note that trading during Extended Hours Trading involves material
risks, such as, lower liquidity, higher volatility, changing prices,
unlinked market, and exaggerated effect from news announcements. This
ensures that investors would be aware of any differences among trading
sessions before being allowed to participate in Extended Hours Trading.
Consistent with the goals of investor protection, the Exchange will not
allow Market Orders during Extended Hours Trading due to the expected
increased volatility and decreased liquidity during those hours.\35\
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\35\ In addition, the Exchange does not propose to initially
offer the following order types during the Early Trading Session and
the Late Trading Session: G-`Til-Cancelled Orders, Market-on-Open
Orders, Imbalance Offset Orders, Stop Orders, Stop Limit Orders,
Complex Orders, Cross Orders, CUBE Orders, Limit-on-Open Orders,
Reserve Orders and GTX Orders.
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Additionally, the Exchange believes that the proposed rule change
will foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information. As noted above,
trading during Extended Hours Trading will use the same ports and data
feeds and order processing will operate in the same manner. Similarly,
there will be no changes to the processes for clearing, settlement,
exercise, and expiration. Finally, OPRA will accommodate equity options
during Extended Hours Trading on the existing lines used during the
Core Trading Session and, with the exception of imbalance messages,
Exchange proprietary data feeds will also be disseminated during
Extended Hours Trading using the same formats and delivery mechanisms
with which the Exchange disseminates during the Core Trading Session.
The proposed rule change is also consistent with Section 11A of the
Act and Regulation NMS thereunder, because it provides for the
dissemination of transaction and quotation information during Extended
Hours Trading through OPRA, pursuant to the OPRA Plan, which the
Commission approved and indicated as consistent with the Act. As noted
above, the Exchange will also comply with the Linkage Plan for all
eligible option classes that list and trade on another U.S. options
exchange outside of regular trading hours. The proposed rule change
will remove impediments to and perfect the mechanism of a free and open
market and a national market system because, as noted above, other
options exchanges currently offer trading in certain index options
outside of regular trading hours.\36\ The Exchange believes that the
proposed rule change will also help further competition by providing
market participants with yet another investment option.
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\36\ See note 7, supra.
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Price protection mechanisms and participant-level risk controls
employed during the Core Trading Session will apply during Early
Trading Session with necessary session-based modifications made. With
respect to this, the Exchange will ensure that adequate staffing is
available during Extended Hours Trading to provide appropriate trading
support during those hours, as well as Exchange personnel to make any
necessary determinations under the rules during Extended Hours Trading.
The Exchange is also committed to fulfilling its obligations as a self-
regulatory organization at all times, including during Extended Hours
Trading. The Exchange believes its surveillance procedures are adequate
to properly monitor trading in eligible equity options during Extended
Hours Trading.
In addition, while their participation is likewise optional, Market
Makers will be subject to continuous quoting obligations during
Extended Hours Trading with respect to their option class appointments
as they are during the Core Trading Session. In such cases, the Market
Maker's quoting activity would be aggregated for all trading sessions
to determine whether the Market Maker met its continuous quoting
obligations.
The Exchange believes that these provisions reflect different
liquidity and participation dynamics of Extended Hours Trading and the
Core Trading Session. The Exchange expects lower levels of trading
during the Early Trading Session and the Late Trading Session (i.e.,
Extended Hours Trading) compared to the Core Trading Session, which
could result in potentially lower liquidity (including fewer Market
Makers quoting) and wider spreads. Accordingly, participation in
Extended Hours Trading is voluntary to provide ATP Holders, Market
Makers, Specialists and customers with the choice to engage in that
market.
If the Exchange required Market Makers to meet continuous quoting
obligations during the Early Trading Session and/or the Late Trading
Session even though a Market Maker chose not to participate in that
session, the Market Maker could be penalized for choosing not to quote
during either session while nonetheless meeting their continuous
quoting obligations during the Core
[[Page 37208]]
Trading Session. The Exchange believes that the proposed trading
session-based calculation promotes clarity and would encourage Market
Maker and Specialist participation in either the Early Trading Session
or the Late Trading Session without inadvertently penalizing them if
they choose not to participate in either session for that day.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act.
Intramarket Competition
The Exchange does not believe that the proposed rule change will
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act as all ATP
Holders with access to the Exchange may trade during Extended Hours
Trading using the same ports and data feeds they use during the Core
Trading Session, minimizing any preparation efforts necessary to
participate during Extended Hours Trading.
ATP Holders will be authorized, but not required, to participate in
trading activity during Extended Hours Trading. As such, the proposal
does not impose additional burdens on a ATP Holder, particularly those
that do not elect to participate. The Exchange believes the obligations
imposed on ATP Holders to be eligible to trade during Extended Hours
Trading is an appropriate balance of obligations of additional
requirements with the benefits of additional trading sessions.
Intermarket Competition
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act, because the
proposed rule change is a new competitive initiative that will benefit
the marketplace and investors. The Exchange also believes the proposed
rule change will enhance competition by providing new trading sessions
to investors that other options exchanges currently are not providing.
Additionally, all options exchanges are free to compete in the same
manner, including CBOE which had extended hours trading rules similar
to those being proposed by the Exchange recently approved. The Exchange
does not believe that the level of competition among options exchanges
will change during the Core Trading Session because of the introduction
of Extended Hours Trading for equity options. The Exchange also
believes the proposed rule change would enhance its competitive
position internationally by enabling market participants to access its
market during hours that overlap with regular trading sessions in non-
U.S. jurisdictions.
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSEAMER-2026-34 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-2026-34. 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/sro.shtml). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish 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 number SR-NYSEAMER-2026-34 and
should be submitted on or before July 13, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
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\37\ 17 CFR 200.30-3(a)(12).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2026-12410 Filed 6-18-26; 8:45 am]
BILLING CODE 8011-01-P