[Federal Register Volume 89, Number 210 (Wednesday, October 30, 2024)]
[Notices]
[Pages 86400-86402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25170]
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SECURITIES AND EXCHANGE COMMISSION
[Release 34-101431; File No. 10-242]
24X National Exchange LLC; Notice of Filing of Amendment No. 2 to
an Application for Registration as a National Securities Exchange Under
Section 6 of the Securities Exchange Act of 1934
October 24, 2024.
On February 6, 2024, 24X National Exchange LLC (``24X'') filed with
the Securities and Exchange Commission (``Commission'') a Form 1
application under the Securities Exchange Act of 1934 (``Act'') seeking
registration as a national securities exchange under Section 6 of the
Act.\1\ Notice of the application was published for comment in the
Federal Register on March 4, 2024.\2\ The Commission received comments
on the Form 1 \3\ and a letter
[[Page 86401]]
responding to the comments from 24X.\4\ On May 31, 2024, the Commission
instituted proceedings pursuant to Section 19(a)(1)(B) of the Act \5\
to determine whether to grant or deny 24X's application for
registration as a national securities exchange under Section 6 of the
Act (the ``OIP'').\6\ After issuance of the OIP, Commission received
six comment letters \7\ and a letter responding to the OIP and comments
from 24X.\8\ On August 21, 2024, 24X filed an amendment to its Form 1
application (``Amendment No. 1''),\9\ which was published for comment
in the Federal Register on September 3, 2024.\10\ On August 30, 2024,
the Commission extended, pursuant to Section 19(a)(1)(B) of the
Exchange Act,\11\ the time period for granting or denying 24X's Form 1
application for an additional 90 days, until November 29, 2024.\12\ The
Commission subsequently received three comment letters.\13\ On October
23, 2024, 24X filed a second amendment to its Form 1 application
(``Amendment No. 2'').\14\ The Commission is publishing this notice in
order to solicit views of interested persons on 24X's Form 1, as
amended by Amendment No. 2.
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\1\ 15 U.S.C. 78f.
\2\ See Securities Exchange Act Release No. 99614 (Feb. 27,
2024), 89 FR 15621 (``Notice'').
\3\ The public comment file for 24X's Form 1 (File No. 10-242)
is available on the Commission's website at: https://www.sec.gov/comments/10-242/10-242.htm.
\4\ See letter to Secretary, Commission, from David Sassoon,
General Counsel, 24X, dated May 30, 2024 (``24X Letter'').
\5\ 15 U.S.C. 78s(a)(1)(B).
\6\ See Securities Exchange Act Release No. 100254 (May 31,
2024), 89 FR 48466 (Jun. 6, 2024).
\7\ The public comment file for 24X's Form 1 (File No. 10-242)
is available on the Commission's website at: https://www.sec.gov/comments/10-242/10-242.htm.
\8\ See letter to Secretary, Commission, from David Sassoon,
General Counsel, 24X, dated Aug. 21, 2024 (``24X OIP Letter'').
\9\ Amendment No. 1 is available on the Commission's website at:
https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/24x-form-1.
\10\ See Securities Exchange Act Release No. 100839 (Aug. 27,
2024), 89 FR 71471 (Sept. 3, 2024).
\11\ 15 U.S.C. 78s(a)(1)(B).
\12\ See Securities Exchange Act Release No. 100884 (Aug. 30,
2024), 89 FR 72917 (Sept. 6, 2024).
\13\ See letters from Patrick Blonien, Instructor of Finance,
Carnegie Mellon University, and Alexander Ober, Ph.D. Candidate in
Finance, Rice University, undated; John Ramsay, Chief Market Policy
Officer, Investors' Exchange LLC, dated Oct. 9, 2024; Joanna
Mallers, Secretary, FIA Principal Traders Group, dated Oct. 11,
2024.
\14\ Amendment No. 2 is available on the Commission's website
at: https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/24x-form-1.
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I. Description of 24X's Proposed Trading System
As described in the Notice, 24X proposes to operate as a national
securities exchange with expanded hours of trading that are outside of
regular trading hours.\15\
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\15\ ``Regular trading hours'' is defined in Commission Rule
600(b)(88) as ``the time between 9:30 a.m. and 4:00 p.m. Eastern
Time.'' 17 CFR 242.600(b)(88).
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II. Amendment No. 2 to 24X's Form 1
In Amendment No. 2, 24X proposes to revise Exhibit B-1 to: (1)
modify the definition of ``24X Trading Day'' in 24X Rule 1.5(b) to
reflect trading over 5 days, rather than the 7 days initially proposed,
and make corresponding changes to 24X Rule 11.1; \16\ (2) modify the
definition of ``24X Market Session'' in 24X Rule 1.5(c) to revise the
hours of, and to expressly condition the operation of, the 24X Market
Session; \17\ (3) add subparagraph (o) to 24X Rule 1.5 to define the
term, ``Equity Data Plans''; \18\ (4) revise 24X Rule 3.21(i)
(``Customer Disclosures'') to reflect the proposed amendment to the 24X
Market Session; \19\ (5) revise the Time-in-Force instructions in 24X
Rule 11.6(o)(4) to reflect the new operating hours; (6) make
corresponding changes to 24X Rule 11.15(c), governing trading pauses,
consistent with the new operating hours; and (7) modify 24X Rule 11.16
to clarify that the Exchange will not operate the 24X Market Session
until the 24X Market Session Proposed Rule Change as required under 24X
Rule 1.5(c) has been approved or otherwise become effective under
Section 19(b) of the Act.\20\
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\16\ In Amendment No. 2, 24X proposes to revise the 24X Rule
1.5(b) definition of ``24X Trading Day'' to mean, ``the 23-hour
period commencing at 8:00 p.m. Eastern Time on one calendar day and
ending at 7:00 p.m. Eastern Time on the next calendar day for the
period from Sunday at 8 p.m. Eastern Time through Friday at 7:00
p.m. Eastern Time. Subject to any trading pauses, halts or
suspensions as described in these Rules, including the pause in
trading described in the next sentence, trading will be continuous
during this period, despite the designation of specified times for
the Pre-Market Session, Core Market Session, Post-Market Session and
24X Market Session. For RHO Orders entered outside the Core Market
Session, or during the Core Market Session but prior to the
commencement of trading, trading for such RHO Orders will commence
once the security has begun trading on the primary listing market on
or after 9:30:00 a.m. Eastern Time; for all orders eligible to trade
in the Core Market Session other than such RHO Orders, trading will
be continuous in the Core Market Session, with no pause in trading
related to the commencement of trading on the primary listing
market.''
\17\ Specifically, 24X proposes in Amendment No. 2 to revise the
definition of ``24X Market Session'' in 24X Rule 1.5(c) to read,
``(i) the time between 8:00 p.m. Eastern Time on Sunday and 4:00
a.m. Eastern Time on Monday, unless Monday is not a U.S. Business
Day, (ii) the time between 8:00 p.m. Eastern Time on Monday and 4:00
a.m. Eastern Time on Tuesday, unless Tuesday is not a U.S. Business
Day, (iii) the time between 8:00 p.m. Eastern Time on Tuesday and
4:00 a.m. Eastern Time on Wednesday, unless Wednesday is not a U.S.
Business Day, (iv) the time between 8:00 p.m. Eastern Time on
Wednesday and 4:00 a.m. Eastern Time on Thursday, unless Thursday is
not a U.S. Business Day, and (v) the time between 8:00 p.m. Eastern
Time on Thursday and 4:00 a.m. Eastern Time on Friday, unless Friday
is not a U.S. Business Day; provided, however, it shall not include
any trading pauses as described in Rule 11.15(c). For the avoidance
of doubt, notwithstanding anything to the contrary in these Rules,
the Exchange shall not commence operation of the 24X Market Session
unless the Equity Data Plans (1) have established a mechanism to
collect, consolidate, process and disseminate quotation and
transaction information at all times during the 24X Market Session
that is equivalent to the mechanism established for Exchange Trading
Hours other than the 24X Market Session, and (2) have provided the
Exchange with notification that they are prepared to collect,
consolidate, process and disseminate quotation and transaction
information to accommodate the 24X Market Session. Prior to
commencing operation during the 24X Market Session, the Exchange
will file a proposed rule change pursuant to Section 19(b) of the
Exchange Act and the rules thereunder to amend its rules confirming
that the Exchange is able to comply with its obligations under the
Exchange Act and the rules thereunder during the 24X Market Session
and that such Equity Data Plans are prepared to collect,
consolidate, process and disseminate quotation and transaction
information at all times during the 24X Market Session (``24X Market
Session Proposed Rule Change''). The 24X Market Session Proposed
Rule Change must be filed with the SEC within 18 months of the SEC's
approval of the Exchange's application for registration as a
national securities exchange. If the 24X Market Session Proposed
Rule Change is not filed within 18 months of the SEC's approval of
the Exchange's application for registration as a national securities
exchange, the Exchange will promptly file a proposed rule change to
remove the rules that apply to the 24X Market Session.''
\18\ 24X proposes to define ``Equity Data Plans'' in 24X Rule
1.5(o) as ``the effective national market system plan(s) that govern
the collection, consolidation, processing and dissemination of
consolidated equity market data via the exclusive securities
information processors (``SIPs''), including (1) Consolidated Tape
Association Plan (``CTA Plan''), (2) Consolidated Quotation Plan
(``CQ Plan''), (3) the Joint Self-Regulatory Organization Plan
Governing the Collection, Consolidation and Dissemination of
Quotation and Transaction Information for Nasdaq-Listed Securities
Traded on Exchanges on an Unlisted Trading Privileges Basis (``UTP
Plan''), and (4) any successor thereto to the named Plan(s).''
\19\ In particular, in Amendment No. 2, 24X proposes to remove
subparagraph (2) to 24X Rule 3.21(i).
\20\ Specifically, 24X proposes in Amendment No. 2 to add
language to 24X Rule 11.16 to read, ``[t]he Exchange will not
commence operation of the 24X Market Session until a proposed rule
change as required under 24X Rule 1.5(c) has been approved or become
otherwise effective under Section 19(b) of the Exchange Act and the
rules thereunder.''
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In Amendment No. 2, 24X also proposes to revise Exhibit E and
Exhibit E-1 to make conforming changes to reflect the new operating
hours of the Exchange, and in particular, the operating hours of, and
conditions for commencement of operations of, the 24X Market Session.
III. Request for Written Comment
The Commission requests that interested persons provide written
views and data with respect to 24X's
[[Page 86402]]
Form 1, as amended by Amendment No. 2. 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 [email protected]. Please include
File Number 10-242 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 10-242. 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/other.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to 24X's Form 1, as amended, filed with the
Commission, and all written communications relating to the application
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, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from submissions. You should submit
only information that you wish to make publicly available.
All submissions should refer to File Number 10-242 and should be
submitted on or before November 14, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(71)(ii).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-25170 Filed 10-29-24; 8:45 am]
BILLING CODE 8011-01-P