Rule 701 60 Day Federal Register Notice

Federal Register / Vol. 87, No. 116 / Thursday, June 16, 2022 / Notices
intervals and supersedes Supplementary
Material .03(d) which permits
additional series to be opened for
trading on the Exchange when the
Exchange deems it necessary to
maintain an orderly market, to meet
customer demand or when the market
price of the underlying security moves
substantially from the exercise price or
prices of the series already opened.’’ 18
The Exchange states that Supplementary
Material .07 is related to strike intervals,
but does not supersede rules governing
the addition of option series.19 The
Exchange further states that
Supplementary Material .07 and
Supplementary Material .03(d) do not
conflict, and deleting the reference to
Supplementary .03(d) will avoid
confusion.20
Finally, the Exchange proposes to
delete the sentence from Supplementary
Material .03, which states,
‘‘Notwithstanding the limitations
imposed by Supplementary Material
.07, this proposal does not amend the
range of strikes that may be listed
pursuant to Supplementary Material .03,
regarding the Short Term Option Series
Program.’’ 21 The Exchange states that
while the range limitations continue to
be applicable to the table within
Supplementary Material .07, the strike
ranges do not conflict with strike
intervals and therefore the sentence is
not necessary.22 The Exchange further
states that Supplementary Material
.03(f) otherwise indicates when
Supplementary Material .07 would
apply.23
The Exchange proposes to implement
this rule change on August 1, 2022.24
The Exchange represents that it will
issue an Options Trader Alert to notify
Members of the implementation date.25
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change, as
modified by Amendment No. 1, is
consistent with the Act and the rules
and regulations thereunder applicable to
a national securities exchange.26 In
particular, the Commission finds that
the proposed rule change, as modified
18 See

id. at 10.
id.
20 See id.
21 See id. at 10–11.
22 See id. at 11.
23 See id.
24 See id.
25 See id.
26 In approving this proposed rule change, as
modified by Amendment No. 1, the Commission
has considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).

khammond on DSKJM1Z7X2PROD with NOTICES

19 See

VerDate Sep<11>2014

16:41 Jun 15, 2022

Jkt 256001

by Amendment No. 1, is consistent with
Section 6(b)(5) of the Act,27 which
requires, among other things, that the
Exchange’s rules be 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.
The Exchange states that the Strike
Interval Proposal was designed to
reduce the density of strike intervals
that have an expiration date more than
twenty-one days from the listing date.28
In support of the current proposal, the
Exchange states it would result in a
reduction of the number of strikes listed
in a manner consistent with the intent
of the Strike Interval Proposal, which
was to reduce strikes which were
further out in time and would
harmonize strike intervals for the Short
Term Option Series such that strike
intervals would not widen as the
expiration date approaches.29 The
Exchange further states that Strike
Interval Proposal continues to reduce
the number of strikes listed on ISE,
allowing Lead Market Makers and
Market Makers to expend their capital
in the options market in a more efficient
manner, thereby improving overall
market quality on ISE.30
The Exchange’s proposal to apply the
greater interval to Outer STOs in cases
where Supplementary Material .03(e)
and .07 conflict serves to increase, and
thus limit, the intervals between strikes
in those cases. The proposal seeks to
continue to focus more granular strike
increments on those series where they
are more relevant, applicable, and likely
more in demand from customers and
eliminate certain clusters of relatively
granular strikes in further out weekly
series, consistent with the Strike
Interval Proposal.31 Further, the
proposal would add additional clarity to
the Exchange’s Short Term Option
Series rules, which should provide
greater certainty as to the permitted
strike intervals and minimize confusion.
The Commission believes that the
proposal is reasonably designed to
effectuate the Exchange’s goal of
balancing a reduction in the number of
strikes in the Short Term Option Series
27 15

U.S.C. 78f(b)(5).
Amendment No. 1, supra note 4, at 13–14.
29 See id. at 14.
30 See id. at 14.
31 See also Securities Exchange Act Release No.
91125 (Feb. 12, 2021), 86 FR 10375 (Feb. 19, 2021)
(SR–BX–2020–032) (Order approving proposal by
Nasdaq BX, Inc. to limit Short Term Options Series
intervals).
28 See

PO 00000

Frm 00051

Fmt 4703

Sfmt 4703

36355

Program with the needs of market
participants. Accordingly, the
Commission finds that the proposed
rule change, as modified by Amendment
No. 1, is consistent with Section 6(b)(5)
of the Act 32 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,33 that the
proposed rule change (SR–ISE–2022–
10), as modified by Amendment No. 1,
be and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–12940 Filed 6–15–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–306, OMB Control No.
3235–0522]

Proposed Collection; Comment
Request: Extension; Rule 701
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 701(17 CFR 230.701) under the
Securities Act of 1933 (‘‘Securities Act’’)
(15 U.S.C. 77a et seq.) provides an
exemption for certain issuers from the
registration requirements of the
Securities Act for limited offerings and
sales of securities issued under
compensatory benefit plans or contracts.
The purpose of Rule 701 is to ensure
that a basic level of information is
available to employees and others when
substantial amounts of securities are
issued in compensatory arrangements.
We estimate that approximately 800
companies annually rely on the Rule
701 exemption and that it takes 2 hours
to prepare each response. We estimate
32 15

U.S.C. 78f(b)(5).
U.S.C. 78f(b)(2).
34 17 CFR 200.30–3(a)(12).
33 15

E:\FR\FM\16JNN1.SGM

16JNN1

36356

Federal Register / Vol. 87, No. 116 / Thursday, June 16, 2022 / Notices

that 25% of the 2 hours per response
(0.5 hours) is prepared by the company
for a total annual reporting burden of
400 hours (0.5 hours per response × 800
responses).
Written comments are invited on: (a)
whether this proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden imposed by the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication by August 15, 2022.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Please direct your written comment to
David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
[email protected].
Dated: June 10, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–12947 Filed 6–15–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 95086; File No. SR–NYSE–
2021–74]

Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Granting Approval of a Proposed Rule
Change To Amend the Provisions of
NYSE Rule 7.35B

khammond on DSKJM1Z7X2PROD with NOTICES

June 10, 2022.

I. Introduction
On December 14, 2021, New York
Stock Exchange LLC (‘‘NYSE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend NYSE Rule 7.35B relating to the
1 15
2 17

U.S.C. 78s(b)(1).
CFR 240.19b–4.

VerDate Sep<11>2014

16:41 Jun 15, 2022

Jkt 256001

cancellation of MOC, LOC, and Closing
IO Orders before the Closing Auction.
The proposed rule change was
published for comment in the Federal
Register on December 29, 2021.3 On
February 8, 2022, pursuant to Section
19(b)(2) of the Act,4 the Commission
extended the time period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to approve or disapprove the
proposed change.5
On March 22, 2022, the Commission
instituted proceedings under Section
19(b)(2)(B) of the Act to determine
whether to approve or disapprove the
proposed rule change.6 The Commission
has received one comment on the
proposed rule change.7 This Order
approves the proposal.
II. Description of the Proposal
The Exchange proposes to modify
NYSE Rule 7.35B(f)(2), which sets forth
rules pertaining to the cancellation of
MOC, LOC, and Closing IO Orders
before the Closing Auction Imbalance
Freeze,8 and to make conforming
changes to NYSE Rule 7.35B(j)(2)(B).
NYSE Rule 7.35B(f)(2)(A) currently
provides that, between the Closing
Auction Imbalance Freeze Time, which
is 10 minutes before the scheduled end
of Core Trading Hours,9 and two
minutes before the scheduled end of the
Core Trading Hours, MOC, LOC, and
Closing IO Orders may be canceled or
reduced in size only to correct a
Legitimate Error.10 NYSE Rule
7.35B(f)(2)(B) currently specifies that,
except as provided for in NYSE Rule
7.35B(j)(2)(B),11 a request to cancel,
3 See Securities Exchange Act Release No. 93849
(Dec. 22, 2021), 86 FR 74204 (Dec. 29, 2021
(‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 94181
(Feb. 8, 2022), 87 FR 8305 (Feb. 14, 2022).
6 See Securities Exchange Act Release No. 94483
(Mar. 22, 2022), 87 FR 17346 (Mar. 28, 2022)
(‘‘OIP’’).
7 See letter to Vanessa Countryman, Secretary,
Commission, from Hope M. Jarkowski, General
Counsel, New York Stock Exchange LLC (May 24,
2022) (‘‘NYSE Letter’’).
8 A ‘‘MOC Order’’ or ‘‘Market-on-Close Order’’ is
a Market Order that is to be traded only during a
closing auction. See NYSE Rule 7.31(c)(2)(B). A
‘‘LOC Order’’ or ‘‘Limit-on-Close Order’’ is a Limit
Order that is to be traded only during a closing
auction. See NYSE Rule 7.31(c)(2)(A). A ‘‘Closing
IO Order’’ or ‘‘Closing Imbalance Offset Order’’ is
a Limit Order to buy (sell) an in an Auction-Eligible
Security that it to be traded only in a Closing
Auction. See NYSE Rule 7.31(c)(2)(D).
9 See NYSE Rule 7.35(a)(8).
10 ‘‘Legitimate Error’’ means an error in any term
of an order, such as price, number of shares, side
of the transaction (buy or sell), or identification of
the security. See NYSE Rule 7.35(a)(13).
11 NYSE Rule 7.35B(j)(2)(B) currently specifies
the circumstances under which the Exchange may

PO 00000

Frm 00052

Fmt 4703

Sfmt 4703

cancel and replace, or reduce in size a
MOC, LOC, or Closing IO Order entered
two minutes or less before the
scheduled end of the Core Trading
Hours will be rejected.
The Exchange proposes to modify
NYSE Rule 7.35B(f)(2) to provide that
any requests to cancel, cancel and
replace, or reduce in size a MOC, LOC,
or Closing IO Order that is entered
between the beginning of the Auction
Imbalance Freeze and the scheduled
end of Core Trading Hours would be
rejected. Thus, as proposed, requests to
cancel, replace, or reduce in size a
MOC, LOC, or Closing IO Order would
have to be received before the beginning
of the Auction Imbalance Freeze (i.e., 10
minutes prior to the scheduled end of
Core Trading Hours), even in the case of
a Legitimate Error. The Exchange
represents that, since August 2021, the
Exchange has not received any requests
to cancel, cancel and replace, or reduce
in size a MOC, LOC, or Closing IO Order
between the beginning of the Auction
Imbalance Freeze and two minutes
before the scheduled end of Core
Trading Hours.12
Additionally, NYSE proposes to make
the following conforming changes to
make NYSE Rule 7.35B(j)(2)(B)
consistent with the proposed changes
described above: (1) replace the
reference to ‘‘two minutes before the
scheduled end of Core Trading Hours’’
with ‘‘the beginning of the Auction
Imbalance Freeze,’’ and (2) replace the
reference to ‘‘paragraph (f)(2)(B)’’ with
‘‘paragraph (f)(2).’’ Thus, NYSE Rule
7.35B(j)(2)(B), as amended, would
provide that the Exchange may
temporarily suspend the prohibition on
cancelling an MOC or LOC Order after
the beginning of the Auction Imbalance
Freeze (as such prohibition would be set
forth in NYSE Rule 7.35B(f)(2), as
amended).
III. Discussion and Commission
Findings
After careful review of the proposal
and the comment letter, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.13 In particular, the
Commission finds that the proposed
rule change is consistent with Section
temporarily suspend the prohibition on canceling
an MOC or LOC Order in connection with the
Closing Auction.
12 See Notice, supra note 3, 86 FR at 74205.
13 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).

E:\FR\FM\16JNN1.SGM

16JNN1