Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 6.78-O and Adopt New Rules Related Thereto and Delete Paragraph (d) to Rule 6.69-O
Deletion of the following no longer needing to report options and transfers will be based on previous days closing price.
May be wrong but seems this could essentially open up more ways to escape squeeze pressure on open following previous day halting activity.
40. See Rule 6.69-O(d) (providing that “[f]or each transaction in which an OTP Holder or OTP Firm participates off-board (off a participating Exchange) in any option pertaining to an underlying security which is currently approved for Exchange options transactions, such OTP Holder or OTP Firm shall report the transaction to the Exchange in a form and manner prescribed by the Exchange. (With the identity of participants removed, such transaction may be made public by the Exchange.)”).
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 6.78-O and Adopt New Rules Related Thereto and Delete Paragraph (d) to Rule 6.69-O
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to modify Rule 6.78-O and to adopt new rules related thereto regarding certain position transfers, including off-floor transfers. The Exchange also proposes to delete paragraph (d) to Rule 6.69-O (Reporting Duties). The proposed rule change is available on the Exchange's Start Printed Page 54728 website at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room.
PROPOSED RULE 6.78A-O: OFF-FLOOR TRANSFER OF POSITIONS
Rule 6.78-O specifies the circumstances under which OTP Holder and OTP Firms may effect transfers of positions, both on and off the trading floor, notwithstanding the general prohibition against off-floor transfers (discussed above). The Exchange proposes to adopt new Rule 6.78A-O, titled “Off-Floor Transfer of Positions,” which would set forth the permissible reasons for and procedures related to off-floor position transfers, but would not include the provisions related to on-floor position transfers. Proposed Rule 6.78A-O is substantively identical to the rules of other option exchanges regarding permissible off-floor transfers of options positions and would align Exchange rules with those of its competitors.
First, the on-floor position transfer procedure set forth in Rule 6.78-O(e) and (f) was designed to help OTP Holders and OTP Firms with a need to transfer positions in bulk as part of a sale or disposition of all or substantially all of its assets or options positions to obtain the best possible price for the positions while also ensuring that other OTP Holders and OTP Firms had an adequate opportunity to make bids and offers on the positions being transferred. In addition, the “on-floor” position transfer procedure could be used by OTP Holders and OTP Firms that, for reasons other than a forced liquidation, such as an extended vacation, wished to liquidate their entire, or nearly their entire, open positions in a single set of transactions, subject to certain restrictions. Currently, because OTP Holders have been largely consolidated in the hands of firms rather than individuals, such transfers are, for the most part unnecessary; if an individual takes an extended vacation, another member of the firm handles the firm's book. Accordingly, the Exchange believes that the on-floor transfer of positions procedure no longer serves the uses for which it was originally adopted. Moreover, the process—which is only used on a limited basis—is nonetheless administratively burdensome on the Exchange. Further, other options exchange with a trading floor and a transfer of positions rule do not offer an on-floor transfer procedure.
Current Rule 6.78-O(d) lists the circumstances in which OTP Holders or OTP Firms may transfer their positions off the floor. The circumstances currently listed include: (i) the dissolution of a joint account in which the remaining OTP Holder or OTP Firm assumes the positions of the joint account; (ii) the dissolution of a corporation or partnership in which a former nominee of the corporation or partnership assumes the positions; (iii) positions transferred as part of an OTP Holder's or OTP Firm's capital contribution to a new joint account, partnership, or corporation; (iv) the donation of positions to a not-for-profit corporation; (v) the transfer of positions to a minor under the Uniform Gifts to Minors Act; (vi) a merger or acquisition resulting in continuity of ownership or management; or (vii) consolidation of accounts within an OTP Holder or OTP Firm (the “current Exchange-permitted off-floor transfers”). As set forth below, the Exchange proposes to carry forward the current Exchange-permitted off-floor transfers into proposed Rule 6.78A-O and to add three new permissible circumstances.
Submitted September 08, 2022 at 01:29AM by Apelsauss
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