Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Several NYSE Rules To Reflect Changes to Rules and Adopt Guidance of the Financial Industry Regulatory Authority, 42573-42577 [2013-16936]
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Federal Register / Vol. 78, No. 136 / Tuesday, July 16, 2013 / Notices
business in any way. CME notes that it
has also submitted the proposed rule
changes that are the subject of this filing
to its primary regulator, the Commodity
Futures Trading Commission (‘‘CFTC’’),
in CME Submission 13–164.
CME believes the proposed rule
changes are consistent with the
requirements of the Exchange Act
including Section 17A of the Exchange
Act. The proposed rule changes involve
enhancements to CME’s interest rate
swap product offering for investors,
including new products for clearing,
and as such are designed to promote the
prompt and accurate clearance and
settlement of securities transactions and
derivatives agreements, contracts and
transactions, and to assure the
safeguarding of securities and funds
which are in the custody or control of
the clearing agency and, in general, help
to protect investors and the public
interest. Furthermore, the proposed
changes are limited to listing new IRS
for clearing and making changes to
CME’s existing IRS clearing offering. IRS
is under the exclusive jurisdiction of the
CFTC. As such, the proposed CME
changes are limited to CME’s activities
as a derivatives clearing organization
clearing swaps that are not securitybased swaps; CME notes that the
policies of the CFTC with respect to
administering the Commodity Exchange
Act are comparable to a number of the
policies underlying the Exchange Act,
such as promoting market transparency
for over-the-counter derivatives markets,
promoting the prompt and accurate
clearance of transactions and protecting
investors and the public interest. In
summary, the proposed CME changes
do not significantly affect the securitybased swap clearing operations of CME
or any related rights or obligations of
CME security-based swap clearing
participants. The changes are therefore
consistent with the requirements of
Section 17A of the Exchange and are
properly filed under Section 19(b)(3)(A)
and Rule 19b–4(f)(4)(ii) thereunder.
emcdonald on DSK67QTVN1PROD with NOTICES
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CME does not believe that the
proposed rule change will have any
impact, or impose any burden, on
competition. The rule changes simply
add new types of interest rates swaps to
the CME rulebook and make certain
other additions to the existing swap
certifications in the CME Rulebook.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
CME has not solicited, and does not
intend to solicit, comments regarding
this proposed rule change. CME has not
received any unsolicited written
comments from interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has been
filed pursuant to Section 19(b)(3)(A) 5 of
the Act and paragraph (f)(4)(ii) of Rule
19b–4 6 thereunder and will become
effective on filing. 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 (https://www.sec.gov/
rules/sro.shtml) or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–CME–2013–09 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CME–2013–09. 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 Web site (https://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
18:49 Jul 15, 2013
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–16932 Filed 7–15–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69963; File No. SR–NYSE–
2013–49]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Several NYSE Rules To Reflect
Changes to Rules and Adopt Guidance
of the Financial Industry Regulatory
Authority
July 10, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 26,
2013, New York Stock Exchange LLC
(‘‘NYSE’’ 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 substantially prepared by the
Exchange. The Commission is
publishing this notice to solicit
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4 (2013).
note 3.
6 Supra note 4.
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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 Web site 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. Copies of such
filing also will be available for
inspection and copying at the principal
office of CME and on CME’s Web site
(https://www.cmegroup.com/marketregulation/files/sec_19b-4_13–09.pdf).
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–CME–2013–09 and should
be submitted on or before August 6,
2013.
7 17
5 Supra
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Federal Register / Vol. 78, No. 136 / Tuesday, July 16, 2013 / Notices
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend and
adopt several NYSE rules 3 to reflect
changes to rules of the Financial
Industry Regulatory Authority
(‘‘FINRA’’). Specifically, the Exchange
proposes to: (1) Amend Rule 8210 to
conform to changes recently adopted by
FINRA for FINRA Rule 8210, which
concerns the provision of information
and testimony and inspection and
copying of books and records; (2) adopt
certain FINRA guidance on the Rule
8000–9000 Series; and (3) amend Rule
8320 with respect to the non-payment of
fines. The text of the proposed rule
changes is available on the Exchange’s
Web site 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
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule changes and
discussed any comments it received on
the proposed rule changes. 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
emcdonald on DSK67QTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to: (1) Amend
Rule 8210 to conform it to changes
recently adopted by FINRA for FINRA
Rule 8210, which concerns the
provision of information and testimony
and inspection and copying of books
and records; (2) adopt certain FINRA
guidance on the Rule 8000–9000 Series;
and (3) amend Rule 8320 with respect
to the non-payment of fines.
Background
On July 30, 2007, the National
Association of Securities Dealers, Inc.
(‘‘NASD’’), NYSE, and NYSE
Regulation, Inc. (‘‘NYSER’’)
consolidated their member firm
3 All references to rules herein are to NYSE rules,
unless otherwise specified.
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18:49 Jul 15, 2013
Jkt 229001
regulation operations into a combined
organization, FINRA, and entered into a
plan to allocate to FINRA regulatory
responsibility for common rules and
common members (‘‘17d–2
Agreement’’).4 In 2007, the parties also
entered into a Regulatory Services
Agreement (‘‘RSA’’), whereby FINRA
was retained to perform certain
regulatory services on behalf of NYSER
for non-common rules. On June 14,
2010, the Exchange, NYSER, and FINRA
amended the RSA and retained FINRA
to perform the market surveillance and
enforcement functions that had
previously been performed by NYSER
up to that point.5 Accordingly, since
June 14, 2010, FINRA has been
performing all NYSE enforcementrelated regulatory services on behalf of
NYSER, including disciplinary
proceedings relating to NYSE-only rules
and against dual members and nonFINRA members. To facilitate FINRA’s
performance of these enforcement
functions under the RSA and to further
harmonize the rules of NYSE with those
of FINRA, NYSE recently adopted the
text of the FINRA Rule 8000–9000
Series, which set forth rules for
conducting investigations and
enforcement actions, with certain
modifications.6 The new rules were
implemented on July 1, 2013.7
Proposed Rule Change
FINRA recently amended FINRA Rule
8210, effective February 25, 2013.8 The
Exchange proposes to amend the text of
Rule 8210 to conform to FINRA Rule
8210. The Exchange’s Rule 8210 became
operative on July 1, 2013, which was the
date that the Exchange had announced
as the operative date of the Rule 8000–
9000 Series.9 The text of the rule is
4 See Securities Exchange Act Release No. 56148
(July 26, 2007), 72 FR 42146 (Aug. 1, 2007) (File
No. 4–544) (Notice of Filing and Order Approving
and Declaring Effective a Plan for the Allocation of
Regulatory Responsibilities). The 17d–2 Agreement
was entered into in accordance with the
requirements of Rule 17d–2 of the Commission,
which permits self-regulatory organizations to
allocate regulatory responsibilities with respect to
common members and common rules. See 17 CFR
240.17d–2 (2013).
5 See Securities Exchange Act Release No. 62355
(June 22, 2010), 75 FR 36729 (June 28, 2010) (SR–
NYSE–2010–46).
6 See Securities Exchange Act Release Nos. 68678
(Jan. 16, 2013), 78 FR 5213 (Jan. 24, 2013) (SR–
NYSE–2013–02), and 69045 (Mar. 5, 2013), 78 FR
15394 (Mar. 11, 2013).
7 See NYSE Information Memorandum 13–8 (May
24, 2013).
8 See Securities Exchange Act Release No. 68386
(Dec. 7, 2012), 77 FR 74253 (Dec. 13, 2012) (SR–
FINRA–2009–060) and FINRA Regulatory Notice
13–06. When the Exchange submitted the Notice to
the Commission, FINRA had not yet announced the
effective date of the amendments to FINRA Rule
8210.
9 See supra note 7.
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substantially the same as the text of
FINRA’s rule, except for technical and
conforming amendments.10
Rule 8210 confers on Exchange staff
the authority to compel a member
organization or covered person to
produce documents, provide testimony,
or supply written responses or
electronic data in connection with an
investigation, complaint, examination,
or adjudicatory proceeding. The
proposed rule change would clarify the
scope of the Exchange’s authority under
the rule to inspect and copy the books,
records, and accounts of such member
organizations or covered persons,
specify the method of service for certain
unregistered persons under the rule, and
authorize service on attorneys who are
representing clients.
Rule 8210 applies to all member
organizations and covered persons over
whom the Exchange has jurisdiction,
including former covered persons
subject to the Exchange’s jurisdiction as
described in Rule 8130. Rule 8210(c)
provides that a member organization’s
or covered person’s failure to provide
information or testimony or to permit an
inspection and copying of books,
records, or accounts is a violation of the
rule.
Information in a Member Organization’s
or Covered Person’s Possession, Custody
or Control
Rule 8210(a)(2) currently provides
that Exchange staff shall have the right
to inspect and copy the books, records,
and accounts of all member
organizations and covered persons with
respect to any matter involved in an
investigation, complaint, examination,
or proceeding. The proposed rule
change would clarify that the
information that Exchange staff shall
have the right to inspect and copy must
be in the member organization’s or
covered person’s ‘‘possession, custody
or control.’’ This language parallels the
Federal Rules of Civil Procedure
regarding document requests and
subpoenas for documents.11
Notice to Associated but Unregistered
Persons
Rule 8210 addresses the legal concept
of service of a written request by using
the term ‘‘notice’’ of a request.
Currently, Rule 8210(d) states that, with
10 The Exchange uses the terms member
organization and covered person rather than
member and associated person, which FINRA uses.
The term covered person includes anyone subject
to the Exchange’s jurisdiction. See Notice, supra
note 6, at 5219–5220. Also, unlike FINRA, the
Exchange does not enforce Municipal Securities
Rulemaking Board rules, so reference to those rules
is not included in the Exchange’s text.
11 See Fed. R. Civ. P. 34.
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respect to member organizations and
covered persons, notice shall be deemed
received by the member organization or
covered person when a copy of the
notice is mailed or otherwise
transmitted to the last known relevant
address of the member organization or
covered person as reflected in the
Central Registration Depository
(‘‘CRD’’). The CRD system contains
information concerning registered
member organizations and certain
covered persons,12 but in most instances
it does not contain information
concerning unregistered persons who
are or were associated with a member
organization.13
Although not routine, some
investigations require Exchange
examiners or investigators to request
information from persons currently or
formerly associated with a member
organization in an unregistered
capacity.14 The current rule is unclear
as to what would constitute proper
notice on such persons for whom
information is not available in CRD. The
proposed rule change would explicitly
address the methods by which notice
would be deemed received by persons
currently or formerly associated with a
member organization in an unregistered
capacity.
With respect to unregistered persons
currently associated with a member
organization, the proposed rule change
would provide that notice shall be
deemed received by mailing or
otherwise transmitting the notice to the
last known business address of the
member organization as reflected in
CRD. In addition, the proposed rule
change would retain the provision that
if Exchange staff responsible for
transmitting the notice has actual
knowledge that the member
organization’s address provided through
emcdonald on DSK67QTVN1PROD with NOTICES
12 Member
organizations and registered persons
will have an affirmative duty to update CRD with
their current address for at least two years after they
have had their registration terminated. See infra
note 18.
13 In some limited instances, CRD may contain
information concerning unregistered persons who
were required to submit information, including
fingerprint information, to CRD in connection with
their employment.
14 Unregistered persons may include persons
exempt from registration, e.g., personnel performing
the mechanical function of recording an order and
passing it along the usual communication channels,
telephoning reports of executions or reading
quotations when the person handling the account
is unavailable. See NYSE Interpretation Handbook,
Rule 345(a)/01. For purposes of Rule 8210,
unregistered persons associated with a member
organization may also include direct owners and
executive officers listed in Schedule A of Form BD
of a member organization whose job functions do
not otherwise require them to register; such persons
would fall under the definition of covered person.
See Rule 9120(g).
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CRD is out of date or inaccurate, then
a copy of the notice must be transmitted
to both the address provided through
CRD, as well as any more current
address known to Exchange staff.
With respect to unregistered persons
formerly associated with a member
organization, the proposed rule change
would provide that notice shall be
deemed received upon personal service,
which is described in Rule 9134(a)(1).15
FINRA Rule 9134(a)(1) is based on
traditional concepts for serving a
summons under Rule 4 of the Federal
Rules of Civil Procedure.16
Notice to Member Organizations and
Covered Persons Represented by
Counsel
The proposed rule change would
amend Rule 8210(d) to explicitly
address issues of service on member
organizations or covered persons that
are known to be represented by counsel.
Currently, the rule does not explicitly
permit Exchange staff to serve notice on
a member organization’s or covered
person’s counsel in situations in which
Exchange staff knows that the member
organization or covered person is
represented by counsel regarding the
matter in question. The proposed rule
change would allow Exchange staff to
recognize that counsel can act as an
authorized agent on behalf of a member
organization or covered person. It would
provide that, if Exchange staff knows
that a member organization or covered
person is represented by counsel
regarding the matter in question, then
notice shall be provided to counsel
rather than to the member organization
or covered person. The proposed rule
change would harmonize the
Exchange’s rule in this regard with
Codes of Professional Conduct in many
states regarding service on counsel.17
Supplementary Material
The proposed rule change would add
supplementary material to Rule 8210.
The supplementary material would state
9134(a)(1) provides that personal service
may be accomplished by handing a copy of the
papers to the person required to be served, leaving
a copy at the person’s office with an employee or
other person in charge thereof, or leaving a copy at
the person’s dwelling or usual place of abode with
a person of suitable age and discretion then residing
therein.
16 See Fed. R. Civ. P. 4.
17 See, e.g., American Bar Association model Rule
of Professional Conduct 4.2 (‘‘ABA Rule 4.2’’). ABA
Rule 4.2 provides: ‘‘In representing a client, a
lawyer shall not communicate about the subject of
the representation with a person the lawyer knows
to be represented by another lawyer in the matter,
unless the lawyer has the consent of the other
lawyer or is authorized to do so by law or a court
order.’’ Id. Many states have rules regarding
communication with a person represented by
counsel that are based on ABA Rule 4.2.
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15 Rule
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42575
that Rule 8210 requires Exchange
member organizations and covered
persons to provide Exchange staff and
adjudicators with requested books,
records, and accounts. In specifying the
books, records and accounts ‘‘of such
member organization or covered
person,’’ paragraph (a) of the rule refers
to books, records, and accounts that the
broker-dealer or its associated persons
make or keep relating to its operation as
a broker-dealer or relating to the
person’s association with the member.
This includes but is not limited to
records relating to an Exchange
investigation of outside business
activities, private securities transactions
or possible violations of just and
equitable principles of trade, as well as
other Exchange rules and the federal
securities laws. It does not ordinarily
include books and records that are in
the possession, custody or control of a
member organization or covered person,
but whose bona fide ownership is held
by an independent third party and the
records are unrelated to the business of
the member organization. The rule
requires, however, that an Exchange
member organization or covered person
make available its books, records, or
accounts when the books, records, or
accounts are in the possession of
another person or entity, such as a
professional service provider, but the
Exchange member organization or
covered person controls or has a right to
demand them.
Adoption of FINRA Guidance
The Exchange has determined that all
interpretive guidance issued by FINRA
with respect to the Rule 8000–9000
Series for which the Exchange has
adopted substantially the same rule text
would be equally applicable in NYSE
investigations and disciplinary
proceedings as a stated policy and
practice of the Exchange.18 The
Exchange notes that it has not adopted
the text of certain FINRA rules, which
18 See, e.g., FINRA Rule 8210 Frequently Asked
Questions, available at https://www.finra.org/web/
groups/industry/@ip/@reg/@guide/documents/
industry/p250124.pdf; Notice to Members 99–77
(noting that requests for information and
disciplinary complaints issued during the period of
retained jurisdiction will be mailed to a person’s
last address in CRD, and thus there is an affirmative
duty to update CRD with a current address for at
least two years after a member organization or
registered person has had its registration
terminated); Notice to Members 04–19 (noting that
a minor rule violation letter may be appropriate to
address more than one violation in a single action,
and in cases where two or more rule violations are
disposed of in one letter, the maximum penalty will
be $2,500); Regulatory and Compliance Alerts, Vol.
12, No. 4, Winter 1998 (allowing respondents to
submit a ‘‘Correction Action Statement’’ and
‘‘Mitigation Statement’’ with an executed
acceptance, waiver, and consent letter).
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Federal Register / Vol. 78, No. 136 / Tuesday, July 16, 2013 / Notices
are marked ‘‘Reserved’’ in the
Exchange’s rulebook. The text of Rule
9217 and the Rule 9300 Series are not
substantially the same as FINRA’s
counterpart rules because the Exchange
has retained its own list of minor rule
violations and its own appellate
process. As such, FINRA guidance
concerning such rules and ‘‘Reserved’’
rules would not be applicable. The
Exchange believes that this policy and
practice would help ensure that there is
consistency in the application of
substantially similar rules.
emcdonald on DSK67QTVN1PROD with NOTICES
Amendment to Rule 8320
To facilitate the transition from the
Exchange’s former disciplinary rules to
the new FINRA-based disciplinary
rules, the Exchange amended Rule 309
to provide that any member, member
organization or principal executive who
fails to pay a fee or any other sums due
to the Exchange, within 45 days after
the same is payable, shall be reported to
the Chief Financial Officer of the
Exchange or designee who, after notice
has been given to such member, member
organization or principal executive of
such arrearages, may suspend access to
some or all of the facilities of the
Exchange until payment is made. The
rule provides an exception for failing to
pay a fine levied in connection with a
disciplinary action, which would be
governed by Rule 8320. Rule 8320
permits summary suspensions for the
non-payment of fines, monetary
sanctions, and costs.
Rule 8320 cross-references to
sanctions imposed under Rule 8310,
which in turn references sanctions
imposed under the Rule 9000 Series.
The Exchange notes that if a
disciplinary action was ongoing at the
time that the Rule 9000 Series became
effective on July 1, 2013, it would be
concluded under Rule 476. To prevent
any potential gap in the rules and clarify
the transitional rules, the Exchange
proposes to amend Rule 8320 to add a
new paragraph (d) that would provide
that the Exchange may exercise the
authority set forth in Rule 8320 with
respect to non-payment of a fine,
monetary sanction, or cost assessed in a
disciplinary action initiated under Rule
476 for which a decision was issued on
or after July 1, 2013.
2. Statutory Basis
The Exchange believes that the
proposed rule changes are consistent
with Section 6(b) of the Act,19 in
general, and furthers the objectives of
Section 6(b)(5) of the Act,20 in
particular, in that the proposal is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. In addition, the Exchange
believes that the proposed rule changes
further the objectives of Section 6(b)(7)
of the Act,21 in particular, in that it
provides fair procedures for the
disciplining of members 22 and persons
associated with members, the denial of
membership to any person seeking
membership therein, the barring of any
person from becoming associated with a
member thereof, and the prohibition or
limitation by the Exchange of any
person with respect to access to services
offered by the Exchange or a member
thereof.
The proposed change to Rule 8210
would provide greater harmonization
between Exchange and FINRA rules of
similar purpose, resulting in greater
uniformity in investigative rules and
less burdensome and more efficient
regulatory compliance. As previously
noted, the proposed rule text is
substantially the same as FINRA’s
recently adopted rule text, which
already has been approved by the
Commission.23 As such, the proposed
rule change would foster cooperation
and coordination with persons engaged
in facilitating transactions in securities
and would remove impediments to and
perfect the mechanism of a free and
open market and a national market
system.
The proposed change to Rule 8320
would prevent any potential gap in the
rules concerning non-payment of fines,
monetary sanctions, and costs and
clarify the transition from the old to the
new disciplinary rules. The Exchange
believes that the proposed rule change
will provide respondents with better
notice of potential sanctions, thereby
improving the fairness of its
disciplinary proceedings.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would result
in any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not designed to
21 15
U.S.C. 78f(b)(7).
Exchange’s equivalent to the term member
in this context is member organization.
23 See supra note 8.
22 The
19 15
20 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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address any competitive issues but
rather is designed to provide greater
harmonization among Exchange and
FINRA rules of similar purpose for
investigations, resulting in less
burdensome and more efficient
regulatory compliance for common
members and facilitating FINRA’s
performance of its regulatory functions
under the RSA. The proposed rule
changes are also intended to provide
greater clarity and notice to respondents
during the transition from the old
disciplinary rules to the new
disciplinary rules.
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act24 and Rule
19b–4(f)(6) thereunder.25 Because the
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
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 26 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),27 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 Exchange stated its belief
that this proposal is non-controversial
24 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6) (2013). In addition,
Rule 19b–4(f)(6) requires the Exchange to give the
Commission written notice of the Exchange’s 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.
26 17 CFR 240.19b–4(f)(6) (2013).
27 17 CFR 240.19b–4(f)(6)(iii) (2013).
25 17
E:\FR\FM\16JYN1.SGM
16JYN1
Federal Register / Vol. 78, No. 136 / Tuesday, July 16, 2013 / Notices
and will not significantly affect the
protection of investors because the
Exchange is not proposing any
substantive changes and is merely
amending its rule text to mirror FINRA’s
rules. Further, the Commission has
previously considered the amendments
to FINRA Rule 8210, which this
proposed rule change mirrors, as well as
comments responding to the
amendments to FINRA Rule 8210.28
Based on the Exchange’s statements and
the Commission’s previous experiences
with FINRA Rule 8210 amendments, the
Commission believes that waiving the
operative delay is consistent with the
protection of investors and the public
interest. Accordingly, the Commission
hereby grants the Exchange’s request
and waives the 30-day operative
delay.29
At any time within 60 days of the
filing of such 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.
emcdonald on DSK67QTVN1PROD with NOTICES
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:
28 See Securities Exchange Act Release No. 68386
(Dec. 7, 2012), 77 FR 74253 (Dec. 13, 2012) (SR–
FINRA–2009–060). FINRA initially filed its
proposed rule change to FINRA Rule 8210 with the
Commission on September 10, 2009. The proposed
rule change was published for comment in the
Federal Register on October 22, 2009. See Exchange
Act Release No. 60836 (Oct. 16, 2009), 74 FR 54614
(Oct. 22, 2009). The Commission received seven
comment letters on the proposed rule change. See
Securities Exchange Act Release No. 68386 (Dec. 7,
2012), 77 FR 74253 (Dec. 13, 2012) (SR–FINRA–
2009–060). On December 22, 2009, FINRA filed a
letter with the Commission responding to these
comments, and on December 21, 2011, FINRA filed
Amendment No. 1 with the Commission to further
respond to the comments and to propose
amendments in response. See letter from Stan
Macel, Assistant General Counsel, Regulatory
Policy and Oversight, FINRA, to Elizabeth M.
Murphy, Secretary, SEC, dated December 22, 2009,
available at https://www.sec.gov/comments/sr-finra2009-060/finra2009060.shtml. On December 5,
2012, FINRA filed Amendment No. 2 with the
Commission to modify a phrase that was included
in Amendment No. 1. The Commission published
notice of the filing on December 7, 2012 and
solicited comments on Amendments Nos. 1 and 2.
See Securities Exchange Act Release No. 68386
(Dec. 7, 2012), 77 FR 74253 (Dec. 13, 2012) (SR–
FINRA–2009–060). The Commission did not receive
comments in response to the amendments.
29 For purposes only of waiving the operative
delay, the Commission has considered the proposed
rule’s impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
VerDate Mar<15>2010
18:49 Jul 15, 2013
Jkt 229001
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
No. SR–NYSE–2013–49 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File No.
SR–NYSE–2013–49. 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 Web site (https://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 Web site 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. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–NYSE–
2013–49 and should be submitted on or
before August 6, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.30
Elizabeth M. Murphy,
Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69965; File No. SR–BOX–
2013–36]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change to Amend
BOX Rule 3120 (Position Limits) and
BOX Rule 3130 (Exemptions from
Position Limits)
July 11, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 3,
2013, BOX Options Exchange LLC
(‘‘BOX’’ or ‘‘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 Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
BOX Rule 3120 (Position Limits) and
BOX Rule 3130 (Exemptions from
Position Limits). The text of the
proposed rule change is available from
the principal office of the Exchange, at
the Commission’s Public Reference
Room and also on the Exchange’s
Internet Web site at https://
boxexchange.com.
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
[FR Doc. 2013–16936 Filed 7–15–13; 8:45 am]
BILLING CODE 8011–01–P
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30 17
CFR 200.30–3(a)(12) (2013).
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]]>Agencies
[Federal Register Volume 78, Number 136 (Tuesday, July 16, 2013)]
[Notices]
[Pages 42573-42577]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16936]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69963; File No. SR-NYSE-2013-49]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Several NYSE Rules To Reflect Changes to Rules and Adopt Guidance
of the Financial Industry Regulatory Authority
July 10, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 26, 2013, New York Stock Exchange LLC (``NYSE'' 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 substantially prepared by the
Exchange. The Commission is publishing this notice to solicit
[[Page 42574]]
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4 (2013).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend and adopt several NYSE rules \3\ to
reflect changes to rules of the Financial Industry Regulatory Authority
(``FINRA''). Specifically, the Exchange proposes to: (1) Amend Rule
8210 to conform to changes recently adopted by FINRA for FINRA Rule
8210, which concerns the provision of information and testimony and
inspection and copying of books and records; (2) adopt certain FINRA
guidance on the Rule 8000-9000 Series; and (3) amend Rule 8320 with
respect to the non-payment of fines. The text of the proposed rule
changes is available on the Exchange's Web site at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------
\3\ All references to rules herein are to NYSE rules, unless
otherwise specified.
---------------------------------------------------------------------------
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 Exchange included statements
concerning the purpose of, and basis for, the proposed rule changes and
discussed any comments it received on the proposed rule changes. 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: (1) Amend Rule 8210 to conform it to
changes recently adopted by FINRA for FINRA Rule 8210, which concerns
the provision of information and testimony and inspection and copying
of books and records; (2) adopt certain FINRA guidance on the Rule
8000-9000 Series; and (3) amend Rule 8320 with respect to the non-
payment of fines.
Background
On July 30, 2007, the National Association of Securities Dealers,
Inc. (``NASD''), NYSE, and NYSE Regulation, Inc. (``NYSER'')
consolidated their member firm regulation operations into a combined
organization, FINRA, and entered into a plan to allocate to FINRA
regulatory responsibility for common rules and common members (``17d-2
Agreement'').\4\ In 2007, the parties also entered into a Regulatory
Services Agreement (``RSA''), whereby FINRA was retained to perform
certain regulatory services on behalf of NYSER for non-common rules. On
June 14, 2010, the Exchange, NYSER, and FINRA amended the RSA and
retained FINRA to perform the market surveillance and enforcement
functions that had previously been performed by NYSER up to that
point.\5\ Accordingly, since June 14, 2010, FINRA has been performing
all NYSE enforcement-related regulatory services on behalf of NYSER,
including disciplinary proceedings relating to NYSE-only rules and
against dual members and non-FINRA members. To facilitate FINRA's
performance of these enforcement functions under the RSA and to further
harmonize the rules of NYSE with those of FINRA, NYSE recently adopted
the text of the FINRA Rule 8000-9000 Series, which set forth rules for
conducting investigations and enforcement actions, with certain
modifications.\6\ The new rules were implemented on July 1, 2013.\7\
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\4\ See Securities Exchange Act Release No. 56148 (July 26,
2007), 72 FR 42146 (Aug. 1, 2007) (File No. 4-544) (Notice of Filing
and Order Approving and Declaring Effective a Plan for the
Allocation of Regulatory Responsibilities). The 17d-2 Agreement was
entered into in accordance with the requirements of Rule 17d-2 of
the Commission, which permits self-regulatory organizations to
allocate regulatory responsibilities with respect to common members
and common rules. See 17 CFR 240.17d-2 (2013).
\5\ See Securities Exchange Act Release No. 62355 (June 22,
2010), 75 FR 36729 (June 28, 2010) (SR-NYSE-2010-46).
\6\ See Securities Exchange Act Release Nos. 68678 (Jan. 16,
2013), 78 FR 5213 (Jan. 24, 2013) (SR-NYSE-2013-02), and 69045 (Mar.
5, 2013), 78 FR 15394 (Mar. 11, 2013).
\7\ See NYSE Information Memorandum 13-8 (May 24, 2013).
---------------------------------------------------------------------------
Proposed Rule Change
FINRA recently amended FINRA Rule 8210, effective February 25,
2013.\8\ The Exchange proposes to amend the text of Rule 8210 to
conform to FINRA Rule 8210. The Exchange's Rule 8210 became operative
on July 1, 2013, which was the date that the Exchange had announced as
the operative date of the Rule 8000-9000 Series.\9\ The text of the
rule is substantially the same as the text of FINRA's rule, except for
technical and conforming amendments.\10\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 68386 (Dec. 7,
2012), 77 FR 74253 (Dec. 13, 2012) (SR-FINRA-2009-060) and FINRA
Regulatory Notice 13-06. When the Exchange submitted the Notice to
the Commission, FINRA had not yet announced the effective date of
the amendments to FINRA Rule 8210.
\9\ See supra note 7.
\10\ The Exchange uses the terms member organization and covered
person rather than member and associated person, which FINRA uses.
The term covered person includes anyone subject to the Exchange's
jurisdiction. See Notice, supra note 6, at 5219-5220. Also, unlike
FINRA, the Exchange does not enforce Municipal Securities Rulemaking
Board rules, so reference to those rules is not included in the
Exchange's text.
---------------------------------------------------------------------------
Rule 8210 confers on Exchange staff the authority to compel a
member organization or covered person to produce documents, provide
testimony, or supply written responses or electronic data in connection
with an investigation, complaint, examination, or adjudicatory
proceeding. The proposed rule change would clarify the scope of the
Exchange's authority under the rule to inspect and copy the books,
records, and accounts of such member organizations or covered persons,
specify the method of service for certain unregistered persons under
the rule, and authorize service on attorneys who are representing
clients.
Rule 8210 applies to all member organizations and covered persons
over whom the Exchange has jurisdiction, including former covered
persons subject to the Exchange's jurisdiction as described in Rule
8130. Rule 8210(c) provides that a member organization's or covered
person's failure to provide information or testimony or to permit an
inspection and copying of books, records, or accounts is a violation of
the rule.
Information in a Member Organization's or Covered Person's Possession,
Custody or Control
Rule 8210(a)(2) currently provides that Exchange staff shall have
the right to inspect and copy the books, records, and accounts of all
member organizations and covered persons with respect to any matter
involved in an investigation, complaint, examination, or proceeding.
The proposed rule change would clarify that the information that
Exchange staff shall have the right to inspect and copy must be in the
member organization's or covered person's ``possession, custody or
control.'' This language parallels the Federal Rules of Civil Procedure
regarding document requests and subpoenas for documents.\11\
---------------------------------------------------------------------------
\11\ See Fed. R. Civ. P. 34.
---------------------------------------------------------------------------
Notice to Associated but Unregistered Persons
Rule 8210 addresses the legal concept of service of a written
request by using the term ``notice'' of a request. Currently, Rule
8210(d) states that, with
[[Page 42575]]
respect to member organizations and covered persons, notice shall be
deemed received by the member organization or covered person when a
copy of the notice is mailed or otherwise transmitted to the last known
relevant address of the member organization or covered person as
reflected in the Central Registration Depository (``CRD''). The CRD
system contains information concerning registered member organizations
and certain covered persons,\12\ but in most instances it does not
contain information concerning unregistered persons who are or were
associated with a member organization.\13\
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\12\ Member organizations and registered persons will have an
affirmative duty to update CRD with their current address for at
least two years after they have had their registration terminated.
See infra note 18.
\13\ In some limited instances, CRD may contain information
concerning unregistered persons who were required to submit
information, including fingerprint information, to CRD in connection
with their employment.
---------------------------------------------------------------------------
Although not routine, some investigations require Exchange
examiners or investigators to request information from persons
currently or formerly associated with a member organization in an
unregistered capacity.\14\ The current rule is unclear as to what would
constitute proper notice on such persons for whom information is not
available in CRD. The proposed rule change would explicitly address the
methods by which notice would be deemed received by persons currently
or formerly associated with a member organization in an unregistered
capacity.
---------------------------------------------------------------------------
\14\ Unregistered persons may include persons exempt from
registration, e.g., personnel performing the mechanical function of
recording an order and passing it along the usual communication
channels, telephoning reports of executions or reading quotations
when the person handling the account is unavailable. See NYSE
Interpretation Handbook, Rule 345(a)/01. For purposes of Rule 8210,
unregistered persons associated with a member organization may also
include direct owners and executive officers listed in Schedule A of
Form BD of a member organization whose job functions do not
otherwise require them to register; such persons would fall under
the definition of covered person. See Rule 9120(g).
---------------------------------------------------------------------------
With respect to unregistered persons currently associated with a
member organization, the proposed rule change would provide that notice
shall be deemed received by mailing or otherwise transmitting the
notice to the last known business address of the member organization as
reflected in CRD. In addition, the proposed rule change would retain
the provision that if Exchange staff responsible for transmitting the
notice has actual knowledge that the member organization's address
provided through CRD is out of date or inaccurate, then a copy of the
notice must be transmitted to both the address provided through CRD, as
well as any more current address known to Exchange staff.
With respect to unregistered persons formerly associated with a
member organization, the proposed rule change would provide that notice
shall be deemed received upon personal service, which is described in
Rule 9134(a)(1).\15\ FINRA Rule 9134(a)(1) is based on traditional
concepts for serving a summons under Rule 4 of the Federal Rules of
Civil Procedure.\16\
---------------------------------------------------------------------------
\15\ Rule 9134(a)(1) provides that personal service may be
accomplished by handing a copy of the papers to the person required
to be served, leaving a copy at the person's office with an employee
or other person in charge thereof, or leaving a copy at the person's
dwelling or usual place of abode with a person of suitable age and
discretion then residing therein.
\16\ See Fed. R. Civ. P. 4.
---------------------------------------------------------------------------
Notice to Member Organizations and Covered Persons Represented by
Counsel
The proposed rule change would amend Rule 8210(d) to explicitly
address issues of service on member organizations or covered persons
that are known to be represented by counsel. Currently, the rule does
not explicitly permit Exchange staff to serve notice on a member
organization's or covered person's counsel in situations in which
Exchange staff knows that the member organization or covered person is
represented by counsel regarding the matter in question. The proposed
rule change would allow Exchange staff to recognize that counsel can
act as an authorized agent on behalf of a member organization or
covered person. It would provide that, if Exchange staff knows that a
member organization or covered person is represented by counsel
regarding the matter in question, then notice shall be provided to
counsel rather than to the member organization or covered person. The
proposed rule change would harmonize the Exchange's rule in this regard
with Codes of Professional Conduct in many states regarding service on
counsel.\17\
---------------------------------------------------------------------------
\17\ See, e.g., American Bar Association model Rule of
Professional Conduct 4.2 (``ABA Rule 4.2''). ABA Rule 4.2 provides:
``In representing a client, a lawyer shall not communicate about the
subject of the representation with a person the lawyer knows to be
represented by another lawyer in the matter, unless the lawyer has
the consent of the other lawyer or is authorized to do so by law or
a court order.'' Id. Many states have rules regarding communication
with a person represented by counsel that are based on ABA Rule 4.2.
---------------------------------------------------------------------------
Supplementary Material
The proposed rule change would add supplementary material to Rule
8210. The supplementary material would state that Rule 8210 requires
Exchange member organizations and covered persons to provide Exchange
staff and adjudicators with requested books, records, and accounts. In
specifying the books, records and accounts ``of such member
organization or covered person,'' paragraph (a) of the rule refers to
books, records, and accounts that the broker-dealer or its associated
persons make or keep relating to its operation as a broker-dealer or
relating to the person's association with the member. This includes but
is not limited to records relating to an Exchange investigation of
outside business activities, private securities transactions or
possible violations of just and equitable principles of trade, as well
as other Exchange rules and the federal securities laws. It does not
ordinarily include books and records that are in the possession,
custody or control of a member organization or covered person, but
whose bona fide ownership is held by an independent third party and the
records are unrelated to the business of the member organization. The
rule requires, however, that an Exchange member organization or covered
person make available its books, records, or accounts when the books,
records, or accounts are in the possession of another person or entity,
such as a professional service provider, but the Exchange member
organization or covered person controls or has a right to demand them.
Adoption of FINRA Guidance
The Exchange has determined that all interpretive guidance issued
by FINRA with respect to the Rule 8000-9000 Series for which the
Exchange has adopted substantially the same rule text would be equally
applicable in NYSE investigations and disciplinary proceedings as a
stated policy and practice of the Exchange.\18\ The Exchange notes that
it has not adopted the text of certain FINRA rules, which
[[Page 42576]]
are marked ``Reserved'' in the Exchange's rulebook. The text of Rule
9217 and the Rule 9300 Series are not substantially the same as FINRA's
counterpart rules because the Exchange has retained its own list of
minor rule violations and its own appellate process. As such, FINRA
guidance concerning such rules and ``Reserved'' rules would not be
applicable. The Exchange believes that this policy and practice would
help ensure that there is consistency in the application of
substantially similar rules.
---------------------------------------------------------------------------
\18\ See, e.g., FINRA Rule 8210 Frequently Asked Questions,
available at https://www.finra.org/web/groups/industry/@ip/@reg/@guide/documents/industry/p250124.pdf; Notice to Members 99-77
(noting that requests for information and disciplinary complaints
issued during the period of retained jurisdiction will be mailed to
a person's last address in CRD, and thus there is an affirmative
duty to update CRD with a current address for at least two years
after a member organization or registered person has had its
registration terminated); Notice to Members 04-19 (noting that a
minor rule violation letter may be appropriate to address more than
one violation in a single action, and in cases where two or more
rule violations are disposed of in one letter, the maximum penalty
will be $2,500); Regulatory and Compliance Alerts, Vol. 12, No. 4,
Winter 1998 (allowing respondents to submit a ``Correction Action
Statement'' and ``Mitigation Statement'' with an executed
acceptance, waiver, and consent letter).
---------------------------------------------------------------------------
Amendment to Rule 8320
To facilitate the transition from the Exchange's former
disciplinary rules to the new FINRA-based disciplinary rules, the
Exchange amended Rule 309 to provide that any member, member
organization or principal executive who fails to pay a fee or any other
sums due to the Exchange, within 45 days after the same is payable,
shall be reported to the Chief Financial Officer of the Exchange or
designee who, after notice has been given to such member, member
organization or principal executive of such arrearages, may suspend
access to some or all of the facilities of the Exchange until payment
is made. The rule provides an exception for failing to pay a fine
levied in connection with a disciplinary action, which would be
governed by Rule 8320. Rule 8320 permits summary suspensions for the
non-payment of fines, monetary sanctions, and costs.
Rule 8320 cross-references to sanctions imposed under Rule 8310,
which in turn references sanctions imposed under the Rule 9000 Series.
The Exchange notes that if a disciplinary action was ongoing at the
time that the Rule 9000 Series became effective on July 1, 2013, it
would be concluded under Rule 476. To prevent any potential gap in the
rules and clarify the transitional rules, the Exchange proposes to
amend Rule 8320 to add a new paragraph (d) that would provide that the
Exchange may exercise the authority set forth in Rule 8320 with respect
to non-payment of a fine, monetary sanction, or cost assessed in a
disciplinary action initiated under Rule 476 for which a decision was
issued on or after July 1, 2013.
2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with Section 6(b) of the Act,\19\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\20\ in particular, in that
the proposal is designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in
facilitating transactions in securities, and to remove impediments to
and perfect the mechanism of a free and open market and a national
market system. In addition, the Exchange believes that the proposed
rule changes further the objectives of Section 6(b)(7) of the Act,\21\
in particular, in that it provides fair procedures for the disciplining
of members \22\ and persons associated with members, the denial of
membership to any person seeking membership therein, the barring of any
person from becoming associated with a member thereof, and the
prohibition or limitation by the Exchange of any person with respect to
access to services offered by the Exchange or a member thereof.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ 15 U.S.C. 78f(b)(7).
\22\ The Exchange's equivalent to the term member in this
context is member organization.
---------------------------------------------------------------------------
The proposed change to Rule 8210 would provide greater
harmonization between Exchange and FINRA rules of similar purpose,
resulting in greater uniformity in investigative rules and less
burdensome and more efficient regulatory compliance. As previously
noted, the proposed rule text is substantially the same as FINRA's
recently adopted rule text, which already has been approved by the
Commission.\23\ As such, the proposed rule change would foster
cooperation and coordination with persons engaged in facilitating
transactions in securities and would remove impediments to and perfect
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------
\23\ See supra note 8.
---------------------------------------------------------------------------
The proposed change to Rule 8320 would prevent any potential gap in
the rules concerning non-payment of fines, monetary sanctions, and
costs and clarify the transition from the old to the new disciplinary
rules. The Exchange believes that the proposed rule change will provide
respondents with better notice of potential sanctions, thereby
improving the fairness of its disciplinary proceedings.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
rule change is not designed to address any competitive issues but
rather is designed to provide greater harmonization among Exchange and
FINRA rules of similar purpose for investigations, resulting in less
burdensome and more efficient regulatory compliance for common members
and facilitating FINRA's performance of its regulatory functions under
the RSA. The proposed rule changes are also intended to provide greater
clarity and notice to respondents during the transition from the old
disciplinary rules to the new disciplinary rules.
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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act\24\ and Rule 19b-4(f)(6) thereunder.\25\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78s(b)(3)(A)(iii).
\25\ 17 CFR 240.19b-4(f)(6) (2013). In addition, Rule 19b-
4(f)(6) requires the Exchange to give the Commission written notice
of the Exchange's 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \26\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\27\ 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 Exchange stated its
belief that this proposal is non-controversial
[[Page 42577]]
and will not significantly affect the protection of investors because
the Exchange is not proposing any substantive changes and is merely
amending its rule text to mirror FINRA's rules. Further, the Commission
has previously considered the amendments to FINRA Rule 8210, which this
proposed rule change mirrors, as well as comments responding to the
amendments to FINRA Rule 8210.\28\ Based on the Exchange's statements
and the Commission's previous experiences with FINRA Rule 8210
amendments, the Commission believes that waiving the operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission hereby grants the Exchange's request and
waives the 30-day operative delay.\29\
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\26\ 17 CFR 240.19b-4(f)(6) (2013).
\27\ 17 CFR 240.19b-4(f)(6)(iii) (2013).
\28\ See Securities Exchange Act Release No. 68386 (Dec. 7,
2012), 77 FR 74253 (Dec. 13, 2012) (SR-FINRA-2009-060). FINRA
initially filed its proposed rule change to FINRA Rule 8210 with the
Commission on September 10, 2009. The proposed rule change was
published for comment in the Federal Register on October 22, 2009.
See Exchange Act Release No. 60836 (Oct. 16, 2009), 74 FR 54614
(Oct. 22, 2009). The Commission received seven comment letters on
the proposed rule change. See Securities Exchange Act Release No.
68386 (Dec. 7, 2012), 77 FR 74253 (Dec. 13, 2012) (SR-FINRA-2009-
060). On December 22, 2009, FINRA filed a letter with the Commission
responding to these comments, and on December 21, 2011, FINRA filed
Amendment No. 1 with the Commission to further respond to the
comments and to propose amendments in response. See letter from Stan
Macel, Assistant General Counsel, Regulatory Policy and Oversight,
FINRA, to Elizabeth M. Murphy, Secretary, SEC, dated December 22,
2009, available at https://www.sec.gov/comments/sr-finra-2009-060/finra2009060.shtml. On December 5, 2012, FINRA filed Amendment No. 2
with the Commission to modify a phrase that was included in
Amendment No. 1. The Commission published notice of the filing on
December 7, 2012 and solicited comments on Amendments Nos. 1 and 2.
See Securities Exchange Act Release No. 68386 (Dec. 7, 2012), 77 FR
74253 (Dec. 13, 2012) (SR-FINRA-2009-060). The Commission did not
receive comments in response to the amendments.
\29\ For purposes only of waiving the operative delay, the
Commission has 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 such 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File No. SR-NYSE-2013-49 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-NYSE-2013-49. 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 Web site (https://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 Web site 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. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File No. SR-NYSE-2013-49 and should be
submitted on or before August 6, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12) (2013).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-16936 Filed 7-15-13; 8:45 am]
BILLING CODE 8011-01-P
