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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Notices II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
SECURITIES AND EXCHANGE
COMMISSION
Release No. 3492304; File No. SR
NYSEArca202147

Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed Rule Change for New Rules 6.1PO, 6.37APO, 6.40PO, 6.41PO, 6.62PO, 6.64PO, 6.76PO, and 6.76APO and Amendments to Rules 1.1, 6.1O, 6.1AO, 6.37O, 6.65AO and 6.96O
June 30, 2021.

Pursuant to Section 19b1 1 of the Securities Exchange Act of 1934 the Act 2 and Rule 19b4 thereunder,3
notice is hereby given that, on June 21, 2021, NYSE Arca, Inc. NYSE Arca 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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I. Self-Regulatory Organizations Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes new Rules 6.1PO Applicability, 6.37APO
Market Maker Quotations, 6.40PO
Pre-Trade and Activity-Based Risk Controls, 6.41PO Price Reasonability ChecksOrders and Quotes, 6.62PO
Orders and Modifiers, 6.64PO
Auction Process, 6.76PO Order Ranking and Display, and 6.76APO
Order Execution and Routing and proposes amendments to Rules 1.1
Definitions, 6.1O Applicability, Definitions and References, 6.1AO
Definitions and ReferencesOX, 6.37
O Obligations of Market Makers, 6.65AO Limit-Up and Limit-Down During Extraordinary Market Volatility, and 6.96O Operation of Routing Broker to reflect the implementation of the Exchanges Pillar trading technology on its options market. The proposed change is available on the Exchanges website at www.nyse.com, at the principal office of the Exchange, and at the Commissions Public Reference Room.

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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 Organizations Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Background The Exchange plans to transition its options trading platform to its Pillar technology platform. The Exchanges and its national securities exchange affiliates 4 together with the Exchange, the NYSE Exchanges cash equity markets are currently operating on Pillar. For this transition, the Exchange proposes to use the same Pillar technology already in operation for its cash equity market. In doing so, the Exchange will be able to offer not only common specifications for connecting to both of its cash equity and equity options markets, but also common trading functions.
The Exchange plans to roll out the new technology platform over a period of time based on a range of symbols, anticipated for the fourth quarter of 2021. With this transition, certain rules would continue to be applicable to symbols trading on the current trading platformthe OX system,5 but would 4 The Exchanges national securities exchange affiliates are the New York Stock Exchange LLC
NYSE, NYSE American LLC NYSE
American, NYSE National, Inc. NYSE
National, and NYSE Chicago, Inc. NYSE
Chicago.
5 OX refers to the Exchanges current electronic order delivery, execution, and reporting system for designated option issues through which orders and quotes of Users are consolidated for execution and/
or display. See Rule 6.1AO13. OX Book refers to the OXs electronic file of orders and quotes, which contain all of the orders in each of the Display Order and Working Order processes and all of the Market Makers quotes in the Display Order Process. See Rule 6.1AO14. With the transition to Pillar, the Exchange would no longer use the terms OX or OX Book and rules using those terms would not be applicable to trading on Pillar.
Once the transition is complete, the Exchange will file a subsequent proposed rule change to delete references to OX and OX Book from the rulebook.

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not be applicable to symbols that have transitioned to trading on Pillar.
Instead, the Exchange proposes new rules to reflect how options would trade on the Exchange once Pillar is implemented. These proposed rule changes will 1 use Pillar terminology that is based on Exchange Rule 7E
Pillar terminology governing cash equity trading; 2 provide for common functionality on both its options and cash equity markets; and 3 introduce new functionality.
The Exchange notes that certain of the proposed new Pillar rules concern functionality not currently available on the OX system and that would be unique to how option contracts trade, and therefore would be new rules with no parallel version for the Exchanges cash equity market.
Proposed Use of P Modifier As proposed, new rules governing options trading on Pillar would have the same numbering as current rules that address the same functionality, but with the modifier P appended to the rule number. For example, Rule 6.76O, governing Order Ranking and Display OX, would remain unchanged and continue to apply to any trading in symbols on the OX system. Proposed Rule 6.76PO would govern Order Ranking and Display for trading in options symbols migrated to the Pillar platform. All other current rules that have not had a version added with a P
modifier will be applicable to how trading functions on both the OX system and Pillar. Once all options symbols have migrated to the Pillar platform, the Exchange will file a separate rule proposal to delete rules that are no longer operative because they apply only to trading on the OX system.
To reflect how the P modifier would operate, the Exchange proposes to add rule text immediately following the title Rule 6O Options Trading, and before Rules Principally Applicable to Trading of Option Contracts that would provide that rules with a P modifier would be operative for symbols that are trading on the Pillar trading platform. As further proposed, if a symbol is trading on the Pillar trading platform, a rule with the same number as a rule with a P modifier would no longer be operative for that symbol and the Exchange would announce by Trader Update 6 when symbols are trading on the Pillar trading platform.7
6 Trader Updates are available here: https
www.nyse.com/trader-update/history. Anyone can subscribe to email updates of Trader Updates, available here: https www.nyse.com/subscriptions.
7 The Exchange used the same description when it transitioned its cash equity platform to Pillar. See
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