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Federal Register / Vol. 86, No. 143 / Thursday, July 29, 2021 / Notices higher than $3.00 and $0.30 for securities with an Indication Reference Price equal to or lower than $3.00, which are currently in effect on a temporary basis, and to provide for an Applicable Price Range for Trading Halt Auctions of 5% for securities with an Indication Reference Price higher than $3.00 and $0.15 for securities with an Indication Reference Price equal to or lower than $3.00 would remove impediments to and perfect the mechanism of a free and open market and a national market system because the Exchange believes that these updated Applicable Price Ranges would promote fair and orderly Auctions on the Exchange.
Exchange rules already provide for a correlation between the parameters for when a DMM may facilitate an Auction electronically and the Applicable Price Range for determining whether to disseminate a pre-opening indication.
The Exchange believes that the proposed Applicable Price Ranges should be aligned with the Exchanges proposed parameters for when a DMM
may facilitate an Auction electronically.
Specifically, with this proposed change, if there is a significant enough price movement to require a DMM to effect a Core Open or Trading Halt Auction manually, the DMM would be required to publish a pre-opening indication for such Core Open or Trading Halt Auction. The Exchange notes that if a DMM chooses to facilitate a Core Open Auction or Trading Halt Auction manually i.e., if there is less than a 10%
price movement for a Core Open Auction or 5% for a Trading Halt Auction, a DMM could still choose to publish a pre-opening indication in connection with such Auction, even if the Applicable Price Range has not been triggered.
The Exchange does not believe that permanently widening the Applicable Price Range for when a DMM is required to publish a pre-opening indication would reduce transparency in connection with Core Open Auctions.
The Exchange currently disseminates Auction Imbalance Information for Core Open Auctions and Trading Halt Auctions. Since August 2019, when the Exchange transitioned Exchange-listed securities to the Pillar trading platform, all Floor broker orders for the Core Open and Trading Halt Auctions must be entered electronically. Accordingly, all such interest is reflected in the Auction Imbalance Information, which was not the case before the Exchange transitioned to Pillar. Accordingly, the Auction Imbalance Information includes information about all buy and sell
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orders entered in advance of such Auctions.
Proposed Changes to Floor Broker Interest for the Closing Auction The Exchange believes that the proposed change to make permanent that Floor Broker Interest would not be eligible to participate in the Closing Auction, which is currently in effect on a temporary basis as set forth in Commentary .03 to Rule 7.35B, would remove impediments to and perfect the mechanism of a free and open market because it would promote fair and orderly Closing Auctions on the Exchange.
The Exchange has observed that even in the absence of Floor Broker Interest, Floor broker participation in the Closing Auction has returned, and indeed increased, as compared to the level of Floor broker participation in the Closing Auction for February 2020. Moreover, even when Floor Broker Interest was available to participate in Closing Auctions, such interest represented only 0.1% of total Floor broker orders that participated in Closing Auctions.
Accordingly, the Exchange does not believe that the proposed change would materially alter Floor brokers ability to meaningfully participate in the Closing Auction. Moreover, in the absence of Floor Broker Interest, the Exchange was able to move the time for DMMfacilitated electronic Closing Auctions from 4:02 p.m. to shortly after 4:00. By making this change permanent, DMMfacilitated electronic Closing Auctions would continue to occur shortly after 4:00.
The Exchange further believes that the proposed amendments to Rules 7.32, 7.35, 46B, and 47b would remove impediments to and perfect the mechanism of a free and open market and a national market system because such rules would no longer be necessary in the absence of Floor Broker Interest for the Closing Auction. Accordingly, these proposed rule changes would promote transparency and clarity by removing references that would be obsolete.
B. Self-Regulatory Organizations Statement on Burden on Competition In accordance with Section 6b8 of the Act,32 the Exchange believes that the proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not designed to address any competitive issues. Instead, the proposed rule changes are designed
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to make permanent changes that have been implemented on a temporary basis relating to the functions of Auctions on the Exchange and that have contributed to the fair and orderly Auction process during the period that they have been in effect. The proposed rule change does not have any effect on intermarket competition because these proposed changes relate to Auctions in Exchangelisted securities for which the Exchange is the primary listing exchange.
C. Self-Regulatory Organizations 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. Order Instituting Proceedings In the Order Instituting Proceedings, the Commission requested comment on, among other things: 1 Whether the primary listing exchanges should harmonize their respective processes for reopening trading by fully automated auction after a limit-up/limit-down LULD pause or a Level 1 or Level 2
market-wide circuit breaker MWCB
halt; 33 2 whether the NYSE should further harmonize its proposed Trading Halt Auction process for fully automated auctions facilitated electronically by DMMs to align with Nasdaq, NYSE Arca, and Cboe BZX
regarding the establishment of permitted price bands, and/or the limit or lack thereof on price band adjustments; 3
whether the Exchange should permit a DMM to reopen a security up to 10%
away from the reference price immediately after an LULD pause or MWCB halt without human intervention; 4 whether there are characteristics of the NYSE market structure that warrant divergence from the price parameters in place for other exchanges fully automated reopening auctions immediately following an LULD pause or MWCB halt; and 5
whether the price parameters within which DMMs are permitted to electronically facilitate auctions should be the same for Core Open Auctions, Trading Halt Auctions, and Closing 33 As originally proposed by the Exchange, Trading Halt Auctions facilitated electronically by DMMs would differ from other primary listing markets reopening processes after LULD pauses and MWCB halts in that they would permit a fully automated reopening of trading at prices up to 10%
away from the auction reference price immediately after trading pauses or halts, whereas Nasdaq, NYSE
Arca, and Cboe BZX establish 5% price bands for reopening and then widen those price bands in increments of 5%, with additional auction extension messages associated with each widening, until market interest can be satisfied.

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