[Federal Register Volume 85, Number 85 (Friday, May 1, 2020)]
[Notices]
[Pages 25487-25489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09250]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88754; File No. SR-NYSE-2020-34]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 1.1 To Modify the Definition of ``UTP Exchange Traded 
Product'' and Rule 5.1 To Incorporate the Modified Definition of ``UTP 
Exchange Traded Product''

April 27, 2020.
    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 April 16, 2020, New York Stock Exchange LLC (``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II 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 (1) Rule 1.1 to modify the 
definition of ``UTP Exchange Traded Product'' and (2) Rule 5.1 to 
incorporate the definition of UTP Exchange Traded Product as set forth 
in revised Rule 1.1. The proposed rule change is available on the 
Exchange's website at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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 (1) Rule 1.1 to modify the 
definition of ``UTP Exchange Traded Product'' and (2) Rule 5.1 to 
incorporate the definition of UTP Exchange Traded Product as set forth 
in revised Rule 1.1.
Rule 1.1
    Rule 1.1(l) currently provides that the term ``Exchange Traded 
Product'' means a security that meets the definition of ``derivative 
securities product'' in Rule 19b-4(e) under the Securities Exchange Act 
of 1934 and a ``UTP Exchange Traded Product'' means an Exchange Traded 
Product that trades on the Exchange pursuant to unlisted trading 
privileges. The Exchange proposes to amend the definition of ``UTP 
Exchange Traded Product'' to mean one of the following Exchange Traded 
Products that trades on the Exchange pursuant to unlisted trading 
privileges: Equity Linked Notes, Investment Company Units, Index-Linked 
Exchangeable Notes, Equity Gold Shares, Equity Index-Linked Securities, 
Commodity-Linked Securities, Currency-Linked Securities, Fixed-Income 
Index-Linked Securities, Futures-Linked Securities, Multifactor-Index-
Linked Securities, Trust Certificates, Currency and Index Warrants, 
Portfolio Depository Receipts, Trust Issued Receipts, Commodity-Based 
Trust Shares, Currency Trust Shares, Commodity Index Trust Shares, 
Commodity Futures Trust Shares, Partnership Units, Paired Trust Shares, 
Trust Units, Managed Fund Shares, Managed Trust Securities, and Managed 
Portfolio Shares.
    This proposed change is based on NYSE National, Inc. (``NYSE 
National'') Rule 1.1(m) and NYSE Chicago, Inc. (``NYSE Chicago'') Rule 
1.1(k).\4\ This list is designed to align the rules of the Exchange 
with the rules of NYSE National and NYSE Chicago and to enumerate the 
types of Exchange Traded Products to which the Exchange would extend 
unlisted trading privileges (``UTP'').
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    \4\ NYSE National and NYSE Chicago have filed proposed rule 
changes for immediate effectiveness to amend their respective rules 
to add Managed Portfolio Shares to their definitions of UTP Exchange 
Traded Products. See SR-NYSENAT-2020-16 (filed April 16, 2020) and 
SR-NYSECHX-2020-13 (filed April 16, 2020).
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Rule 5.1
    Rule 5.1(a)(1) provides that the Exchange may extend UTP to any 
security that is an NMS stock (as defined in Rule 600 of Regulation NMS 
under the Act) that is listed on another national securities exchange 
or with respect to which unlisted trading privileges may otherwise be 
extended in accordance with Section 12(f) of the Act. Rule 5.1(a)(2) 
further specifies that a UTP Exchange Traded Product, which is defined 
in that Rule as a ``new derivative securities product'' as defined in 
Rule 19b-4(e) under the Exchange Act and traded pursuant to Rule 19b-
4(e) under the Act, would be subject to the additional rules enumerated 
in Rule 5.1(a)(2)(A)-(E).
    Because the Exchange proposes to modify the definition of UTP 
Exchange Trading Product in Rule 1.1(l) to conform to the rules of NYSE 
National and NYSE Chicago, the Exchange proposes to amend Rule 
5.1(a)(2) to eliminate redundant text and cross reference the term 
``UTP Exchange Traded Product'' as it is defined in Rule 1.1. This 
proposed change would also

[[Page 25488]]

conform Rule 5.1(a)(2) with the NYSE National rule of the same number.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\6\ in particular, because it 
is designed to remove impediments to and perfect the mechanism of a 
free and open market, to promote just and equitable principles of 
trade, and, in general, to protect investors and the public interest.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) & (5).
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    The Exchange believes its proposed rule change ensures that Rule 
1.1 identifies and publicly states the complete list of Exchange Traded 
Products to which UTP may be extended for trading on the Exchange. The 
Exchange also believes that the proposed rule change removes 
impediments to and perfects the mechanism of a free and open market, 
promotes just and equitable principles of trade, and protects investors 
and the public interest by promoting consistency with the rules of the 
Exchange's affiliated markets and by providing additional specificity, 
clarity, and transparency in the Exchange's rules with respect to the 
Exchange Traded Products that may be traded on a UTP basis on the 
Exchange.
    The Exchange believes that its proposal to amend Rule 5.1(a)(2) 
also removes impediments to and perfects the mechanism of a free and 
open market, promotes just and equitable principles of trade, and 
protects investors and the public interest because it proposes to 
conform this rule governing the trading of UTP Exchange Traded Products 
with the comparable rule of the Exchange's affiliated market, NYSE 
National, which has been approved by the Commission.\7\ The proposed 
rule change would also remove impediments to and perfect the mechanism 
of a free and open market and a national market system and protect 
investors and the public interest by promoting continuity across 
affiliated exchanges.
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    \7\ In its Order approving the NYSE National rule on which this 
proposed change is based, the Commission found that the NYSE 
National rules set forth an ``appropriate framework for the trading 
of Exchange Traded Products on a UTP basis on the Exchange'' and are 
consistent with Section 6(b)(5) of the Act. See Securities and 
Exchange Act Release No. 83289 (May 17, 2018), 83 FR 23968 (May 23, 
2018), at 23975.
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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. The proposed change would 
conform Exchange rules, as described herein, with the comparable rules 
of its affiliated exchanges, NYSE National and NYSE Chicago, and permit 
UTP trading of Exchange Traded Products on the Exchange in a manner 
consistent with its affiliated exchange.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative for 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission notes that 
the Exchange's proposal would conform the Exchange's rules, as 
described herein, to the corresponding rules of its affiliated 
exchanges.\12\ Accordingly, the Commission believes that the proposal 
raises no new or novel regulatory issues and waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. The Commission therefore waives the 30-day operative 
delay and designates the proposed rule change to be operative upon 
filing.\13\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See NYSE National Rules 1.1 and 5.1 and NYSE Chicago Rule 
1.1.
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2020-34 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-NYSE-2020-34. 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 (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change 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,

[[Page 25489]]

Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSE-2020-34 and should be 
submitted on or before May 22, 2020.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09250 Filed 4-30-20; 8:45 am]
BILLING CODE 8011-01-P


