Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Harmonize Rules 10.9261 and 10.9830 With Recent Changes by the Financial Industry Regulatory Authority, Inc., 50680-50684 [2022-17667]
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50680
Federal Register / Vol. 87, No. 158 / Wednesday, August 17, 2022 / Notices
subparagraph (f)(2) of Rule 19b–4 19
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
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. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 20 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
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:
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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 Number SR–
NYSEARCA–2022–49 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–NYSEARCA–2022–49. 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 website (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 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. 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–NYSEARCA–2022–49 and
should be submitted on or before
September 7, 2022.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.21
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–17670 Filed 8–16–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95477; File No. SR–
NYSECHX–2022–19]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Harmonize Rules
10.9261 and 10.9830 With Recent
Changes by the Financial Industry
Regulatory Authority, Inc.
August 11, 2022.
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 July 29,
2022, the NYSE Chicago, Inc. (‘‘NYSE
Chicago’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to harmonize
Rules 10.9261 and 10.9830 with recent
changes by the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
19 17
20 15
CFR 240.19b–4(f)(2).
U.S.C. 78s(b)(2)(B).
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that temporarily grants the Chief or
Deputy Chief Hearing Officer the
authority to order that hearings be
conducted by video conference if
warranted by public health risks posed
by in-person hearings during the
ongoing novel coronavirus (‘‘COVID–
19’’) pandemic. As proposed, these
temporary amendments would be in
effect through October 31, 2022. 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 harmonize
Rules 10.9261 (Evidence and Procedure
in Hearing) and 10.9830 (Hearing) with
recent changes by FINRA to its Rules
9261 and 9830 that temporarily grants to
the Chief or Deputy Chief Hearing
Officer the authority to order that
hearings be conducted by video
conference if warranted by public health
risks posed by in-person hearings
during the ongoing COVID–19
pandemic. As proposed, these
temporary amendments would be in
effect through October 31, 2022.4
Background
In 2022, NYSE Chicago adopted
disciplinary rules that are, with certain
exceptions, substantially the same as the
disciplinary rules of its affiliate NYSE
Arca, Inc., which are in turn
substantially similar to the FINRA Rule
4 The Exchange may submit a separate rule filing
to extend the expiration date of the proposed
temporary amendments if the Exchange requires
temporary relief from the rule requirements
identified in this proposal beyond October 31, 2022.
The amended NYSE Chicago rules will revert back
to their original [current] [sic] state at the
conclusion of the temporary relief period and any
extension thereof.
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8000 Series and Rule 9000 Series, and
which set forth rules for conducting
investigations and enforcement actions.5
In adopting disciplinary rules
modeled on FINRA’s rules, NYSE
Chicago adopted the hearing and
evidentiary processes set forth in Rule
10.9261 and in Rule 10.9830 for
hearings in matters involving temporary
and permanent cease and desist orders
under the Rule 9800 Series. As adopted,
the text of Rule 10.9261 and Rule
10.9830 are substantially the same as
the FINRA rules with certain
modifications.6
In 2020, in view of the ongoing spread
of COVID–19 and its effect on FINRA’s
adjudicatory functions nationwide,
FINRA filed a temporary rule change to
grant FINRA’s Office of Hearing Officers
(‘‘OHO’’) and the National Adjudicatory
Council (‘‘NAC’’) the authority to
conduct certain hearings by video
conference, if warranted by the current
COVID–19-related public health risks
posed by in-person hearings. Among the
rules FINRA amended were Rules 9261
and 9830.7
FINRA represented in its filing that its
protocol for conducting hearings by
video conference would ensure that
such hearings maintain fair process for
the parties by, among other things,
FINRA’s use of a high quality, secure
and user-friendly video conferencing
service and provide thorough
instructions, training and technical
support to all hearing participants.8
According to FINRA, the proposed
changes were a reasonable interim
solution to allow FINRA’s critical
5 See Securities Exchange Act Release No. 95020
(June 1, 2022), 87 FR 35034, (June 8, 2022) (SR–
NYSECHX–2022–10) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
to Adopt Investigation, Disciplinary, Sanction, and
Other Procedural Rules Modeled on the Rules of the
Exchange’s Affiliates) (‘‘2022 Notice of Disciplinary
Rules’’).
6 See id.
7 See Securities Exchange Act Release Nos. 83289
(September 2, 2020), 85 FR 55712 (September 9,
2020) (SR–FINRA–2020–027) (‘‘Initial FINRA
Filing’’). FINRA also proposed to temporarily
amend FINRA Rules 1015 and 9524. FINRA Rule
1015 governs the process by which an applicant for
new or continuing membership can appeal a
decision rendered by FINRA’s Department of
Member Supervision under FINRA Rule 1014 or
1017 and request a hearing which would be
conducted by a subcommittee of the NAC. See id.
at 55714. The Exchange has not adopted FINRA
Rule 1015. FINRA Rule 9524 governs the process
by which a statutorily disqualified member firm or
associated person can appeal the Department’s
recommendation to deny a firm or sponsoring firm’s
application to the NAC. See id. Under the
Exchange’s version of Rule 10.9524, if the CRO
rejects the application, the ETP Holder or applicant
may request a review by the Exchange Board of
Directors. This differs from FINRA’s process, which
provides for a hearing before the NAC and further
consideration by the FINRA Board of Directors.
8 See Initial FINRA Filing, 85 FR at 55713.
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adjudicatory processes to continue to
function while protecting the health and
safety of hearing participants as FINRA
works towards resuming in-person
hearings in a manner that is compliant
with the current guidance of public
health authorities.9
Since the Initial FINRA Filing (in
2020), FINRA periodically extended the
temporary relief as the COVID–19
pandemic and concerns surrounding its
spread persisted.10 According to FINRA,
even though it has been more than two
years since the World Health
Organization declared COVID–19 a
pandemic, uncertainty still remains
around this disease. The continued
presence of COVID–19 variants
including the quickly emerging
Omicron BA.4 and BA.5 subvariants,
dissimilar vaccination rates throughout
the United States, and the current
medium to high COVID–19 community
levels in many states indicate that
COVID–19 remains an active and real
public health concern.11
Due to the uncertainty and the lack of
a clear timeframe for a sustained and
widespread abatement of COVID–19related health concerns and
corresponding restrictions,12 FINRA
believes that there is a continued need
for temporary relief beyond its most
recent extension until July 31, 2022.13
On July 8, 2022, FINRA accordingly
9 See
id.
e.g., Securities Exchange Act Release No.
94430 (March 16, 2022), 87 FR 16262 (March 22,
2022) (SR–FINRA–2022–004) (most recent
extension of temporary relief until July 31, 2022).
11 See Securities Exchange Act Release No. 95281
(July 14, 2022), 87 FR 43335 (July 20, 2022) (SR–
FINRA–2022–018) (‘‘SR–FINRA–2022–018’’).
FINRA noted that, for example, there has been a
notable upward trend in the number of daily
COVID–19 cases in the United States since April 1,
2022. See https://covid.cdc.gov/covid-data-tracker/
#trends_dailycases. In addition, on June 9, 2022,
the Biden Administration announced its
operational plan for COVID–19 vaccinations for
children under the age of five. See https://
www.whitehouse.gov/briefing-room/statementsreleases/2022/06/09/fact-sheetbidenadministration-announces-operational-plan-forcovid-19-vaccinations-for-children-under-5/. See
SR–FINRA–2022–018, 87 FR at 43335, n. 6.
12 For instance, FINRA noted that the Centers for
Disease Control and Prevention (‘‘CDC’’)
recommends that people wear a mask in public
indoor settings in areas with a high COVID–19
community level regardless of vaccination status or
individual risk. See https://www.cdc.gov/
coronavirus/2019-ncov/prevent-getting-sick/aboutface-coverings.html. The CDC also recommends that
people wear a mask in indoor areas of public
transportation and transportation hubs to protect
themselves and those around them and help keep
travel and public transportation safer for everyone.
See https://www.cdc.gov/coronavirus/2019-ncov/
travelers/masks-public-transportation.html.
Furthermore, numerous states currently have mask
mandates in certain settings, such as healthcare and
correctional facilities. See SR–FINRA–2022–018, 87
FR at 43335, n. 7.
13 See SR–FINRA–2022–018, 87 FR at 43335.
10 See,
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50681
filed to extend the expiration date of the
temporary rule amendments to, among
other rules, FINRA Rule 9261 and 9830
from July 31, 2022, to October 31,
2022.14
Pursuant to a regulatory services
agreement (‘‘RSA’’), FINRA’s Office of
Hearing Officers will administer all
aspects of adjudications, including
assigning hearing officers to serve as
NYSE Chicago hearing officers. A
hearing officer from OHO will, among
other things, preside over the
disciplinary hearing, select and chair
the hearing panel, and prepare and issue
written decisions. The Chief or Deputy
Hearing Officer for all Exchange
disciplinary hearings are currently
drawn from OHO and are all FINRA
employees. The Exchange believes that
OHO will utilize the same video
conference protocol and processes for
Exchange matters under the RSA as it
proposes for FINRA matters.
Given that FINRA and its Office of
Hearing Officers administers
disciplinary hearings on the Exchange’s
behalf, and given that the public health
concerns addressed by FINRA’s
amendments apply equally to the
Exchange’s disciplinary hearings, the
Exchange proposes to temporarily
amend its disciplinary rules to allow
FINRA to conduct virtual hearings on its
behalf.
Proposed Rule Change
Rule 10.9261(b) states that if a
disciplinary hearing is held, a party
shall be entitled to be heard in-person,
by counsel, or by the party’s
representative. Absent an agreement by
all parties to proceed in another
manner, an Exchange disciplinary
hearings are in-person. As noted, the
Chief and Deputy Hearing Officers for
all Exchange and cross-market matters
are supplied by OHO and are FINRA
employees. Accordingly, absent an
agreement by all parties to proceed in
another manner, under Rule 10.9261(b)
the Chief or Deputy Hearing Officer
conducts disciplinary hearings inperson.
Similarly, Rule 10.9830 outlines the
requirements for hearings for temporary
and permanent cease and desist orders.
Rule 10.9830(a), however, does not
specify that a party shall be entitled to
be heard in-person, by counsel, or by
the party’s representative.
Consistent with FINRA’s temporary
amendment to FINRA Rules 9261 and
9830, the Exchange proposes to
temporarily grant the Chief or Deputy
Chief Hearing Officer temporary
authority to order, upon consideration
14 See
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SR–FINRA–2022–018, 87 FR at 43335–36.
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Federal Register / Vol. 87, No. 158 / Wednesday, August 17, 2022 / Notices
of the current COVID–19-related public
health risks presented by an in-person
hearing, that a hearing under those rules
be conducted by video conference. The
proposed change will permit OHO to
make an assessment, based on critical
COVID–19 data and criteria and the
guidance of health and security
consultants, whether an in-person
hearing would compromise the health
and safety of the hearing participants
such that the hearing should proceed by
video conference. As noted, FINRA has
adopted a detailed and thorough
protocol to ensure that hearings
conducted by video conference will
maintain fair process for the parties.15
The Exchange believes that this is a
reasonable procedure to follow in
hearings under Rules 10.9261 and
10.9830 chaired by a FINRA
employee.16
To effectuate these changes, the
Exchange proposes to add the following
sentence to Rule 10.9261(b):
Upon consideration of the current public
health risks presented by an in-person
hearing, the Chief Hearing Officer or Deputy
Chief Hearing Officer may, on a temporary
basis, determine that the hearing shall be
conducted, in whole or in part, by video
conference.
The proposed text is identical to the
language adopted by FINRA.17
Similarly, the Exchange proposes to
add the following text to Rule
10.9830(a):
Upon consideration of the current public
health risks presented by an in-person
hearing, the Chief Hearing Officer or Deputy
Chief Hearing Officer may, on a temporary
basis, determine that the hearing shall be
conducted, in whole or in part, by video
conference.
Once again, the proposed language is
identical to the language adopted by
FINRA.18
Consistent with FINRA’s most recent
filing, the Exchange proposes that these
temporary amendments would be in
effect through October 31, 2022.19
As noted below, the Exchange has
filed the proposed rule change for
immediate effectiveness and has
requested that the SEC waive the
requirement that the proposed rule
15 See
Initial FINRA Filing, 85 FR at 55713.
Exchange notes, as did FINRA, that SEC’s
Rules of Practice pertaining to temporary cease-anddesist orders provide that parties and witnesses
may participate by telephone or, in the
Commission’s discretion, through the use of
alternative technologies that allow remote access,
such as a video link. See SEC Rule of Practice
511(d)(3); Comment (d); see Initial FINRA Filing, 85
FR at 55714, n. 21.
17 See Initial FINRA Filing, 85 FR at 55712.
18 Id.
19 See SR–FINRA–2022–018, 87 FR at 43337. See
supra note 4.
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16 The
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change not become operative for 30 days
after the date of the filing, so the
Exchange can implement the proposed
rule change immediately.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Act,20 in general, and furthers the
objectives of Section 6(b)(5),21 in
particular, because it 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, to remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system and, in
general, to protect investors and the
public interest. Additionally, the
Exchange believes the proposed rule
change is designed to provide a fair
procedure for the disciplining of
members and persons associated with
members, consistent with Sections
6(b)(7) and 6(d) of the Act.22
The Exchange believes that the
proposed rule change support the
objectives of the Act by providing
greater harmonization between
Exchange rules and FINRA rules of
similar purpose, resulting in less
burdensome and more efficient
regulatory compliance. As previously
noted, the text of Rule 10.9261 and Rule
10.9830 is substantially the same as
FINRA’s rule. As such, the proposed
rule change will foster cooperation and
coordination with persons engaged in
facilitating transactions in securities and
will remove impediments to and perfect
the mechanism of a free and open
market and a national market system.
The Exchange believes that the
proposed temporary rule change will
permit the Exchange to effectively
conduct hearings during the COVID–19
pandemic in situations where in-person
hearings present likely public health
risks. Given the current and frequently
changing COVID–19 conditions and the
uncertainty around when those
conditions will see meaningful,
widespread and sustained
improvement, without this relief
allowing OHO to proceed by video
conference, some or all hearings may
have to be postponed.
The ability to conduct hearings by
video conference will thereby permit
the adjudicatory functions of the
Exchange’s disciplinary rules to
continue unabated, thereby avoiding
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
22 15 U.S.C. 78f(b)(7) and 78f(d).
protracted delays. The Exchange
believes that this is especially important
in matters where temporary and
permanent cease and desist orders are
sought because the proposed rule
change would enable those hearings to
proceed without delay, thereby enabling
the Exchange to take immediate action
to stop significant, ongoing customer
harm, to the benefit of the investing
public.
Conducting hearings via video
conference will give the parties and
adjudicators simultaneous visual and
oral communication without the risks
inherent in physical proximity during a
pandemic. Temporarily permitting
hearings for disciplinary matters to
proceed by video conference maintains
fair process by providing respondents a
timely opportunity to address and
potentially resolve any allegations of
misconduct.
As noted, FINRA will use a high
quality, secure video conferencing
technology with features that will allow
the parties to reasonably approximate
those tasks that are typically performed
at an in-person hearing, such as sharing
documents, marking documents, and
utilizing breakout rooms. FINRA will
also provide training for participants on
how to use the video conferencing
platform and detailed guidance on the
procedures that will govern such
hearings. Moreover, the Chief or Deputy
Chief Hearing Officer may take into
consideration, among other things, a
hearing participant’s access to
connectivity and technology in
scheduling a video conference hearing
and can also, at their discretion, allow
a party or witness to participate by
telephone, if necessary, to address such
access issues.23
The Exchange believes that the
temporary relief to permit hearings to be
conducted via video conference
maintains fair process and will continue
to provide fair process consistent with
Sections 6(b)(7) and 6(d) of the Act 24
while striking an appropriate balance
between providing fair process and
enabling the Exchange to fulfill its
statutory obligations to protect investors
and maintain fair and orderly markets
while avoiding the COVID–19-related
public health risks for hearing
participants. The Exchange notes that
this proposal provides only temporary
relief, which would be in place through
October 31, 2022. As noted in herein
(see supra note 4), the amended rules
will revert back to their original state at
the conclusion of the temporary relief
20 15
21 15
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23 See
24 15
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text accompanying note 8, supra.
U.S.C. 78f(b)(7) & 78f(d).
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period and, if applicable, any extension
thereof.
Accordingly, the proposed rule
change extending this temporary relief
is in the public interest and consistent
with the Act’s purpose.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed temporary rule change
will impose any burden on competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
The proposed rule change is not
intended to address competitive issues
but is rather intended solely to provide
temporary relief given the impacts of the
COVID–19 pandemic and the related
health and safety risks of conducting inperson activities. In the Initial FINRA
Filing, FINRA provides an abbreviated
economic impact assessment
maintaining that the changes are
necessary to temporarily rebalance the
attendant benefits and costs of the
obligations under FINRA Rules 1015,
9261, 9524 and 9830 in response to the
impacts of the COVID–19 pandemic that
is equally applicable to the changes the
Exchange proposes.25 The Exchange
accordingly incorporates FINRA’s
abbreviated economic impact
assessment by reference. The Exchange
believes that the proposed rule change
will prevent unnecessary impediments
to critical adjudicatory processes and its
ability to fulfill its statutory obligations
to protect investors and maintain fair
and orderly markets that would
otherwise result if the temporary
amendments were not in place.
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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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 26 and Rule
19b–4(f)(6) thereunder.27 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
25 See
Initial FINRA Filing, 85 FR at 55716.
U.S.C. 78s(b)(3)(A)(iii).
27 17 CFR 240.19b–4(f)(6).
26 15
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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) 28 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),29 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
has indicated that the proposal would
provide greater harmonization between
Exchange rules and FINRA rules of
similar purpose, resulting in less
burdensome and more efficient
regulatory compliance at a time when
the health risks of in-person hearings
are significant. The Exchange also states
that the temporary relief provided in
this proposal immediately upon filing
and without a 30-day operative delay
will allow the Exchange to continue
critical adjudicatory and review
processes so that the Exchange may
continue to operate effectively and meet
its critical investor protection goals,
while also protecting the health and
safety of hearing participants.30 As
proposed, the temporary changes would
be in place through October 31, 2022
and the amended rules will revert back
to their original state at the conclusion
of the temporary relief period and, if
applicable, any extension thereof.31 For
these reasons, the Commission believes
that waiver of the 30-day operative
delay for this proposal is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the 30-day
operative delay and designates the
proposal operative upon filing.32
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
28 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
30 See 87 FR 43335, at 43337–38 (noting the same
in granting FINRA’s request to waive the 30-day
operative delay so that SR–FINRA–2022–018 would
become operative immediately upon filing).
31 See supra note 4. As noted above, the Exchange
states that if it requires temporary relief from the
rule requirements identified in this proposal
beyond October 31, 2022, it may submit a separate
rule filing to extend the effectiveness of the
temporary relief under these rules.
32 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule change’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
29 17
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50683
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. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 33 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
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 Number SR–
NYSECHX–2022–19 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–NYSECHX–2022–19. 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 (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 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. 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
33 15
E:\FR\FM\17AUN1.SGM
U.S.C. 78s(b)(2)(B).
17AUN1
50684
Federal Register / Vol. 87, No. 158 / Wednesday, August 17, 2022 / Notices
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–NYSECHX–2022–19 and
should be submitted on or before
September 7, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–17667 Filed 8–16–22; 8:45 am]
SOCIAL SECURITY ADMINISTRATION
[Docket No: SSA–2022–0044]
JSPEARS on DSK121TN23PROD with NOTICES
Agency Information Collection
Activities: Comment Request
The Social Security Administration
(SSA) publishes a list of information
collection packages requiring clearance
by the Office of Management and
Budget (OMB) in compliance with
Public Law 104–13, the Paperwork
Reduction Act of 1995, effective October
1, 1995. This notice includes one new
collection.
SSA is soliciting comments on the
accuracy of the agency’s burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility, and clarity; and ways to
minimize burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Mail, email, or
fax your comments and
recommendations on the information
collection(s) to the OMB Desk Officer
and SSA Reports Clearance Officer at
the following addresses or fax numbers.
(OMB), Office of Management and
Budget, Attn: Desk Officer for SSA,
Comments: https://www.reginfo.gov/
public/do/PRAMain. Submit your
comments online referencing Docket ID
Number [SSA–2022–0044].
(SSA), Social Security
Administration, OLCA, Attn: Reports
Clearance Director, 3100 West High
Rise, 6401 Security Blvd., Baltimore,
MD 21235, Fax: 410–966–2830, Email
address: OR.Reports.Clearance@ssa.gov.
Or you may submit your comments
online through https://www.reginfo.gov/
public/do/PRAMain, referencing Docket
ID Number [SSA–2022–0044].
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:22 Aug 16, 2022
Jkt 256001
1. The National Beneficiary Survey
(NBS)—0960–NEW
Background
BILLING CODE 8011–01–P
34 17
SSA submitted the information
collection below to OMB for clearance.
Your comments regarding this
information collection would be most
useful if OMB and SSA receive them 30
days from the date of this publication.
To be sure we consider your comments,
we must receive them no later than
September 16, 2022. Individuals can
obtain copies of the OMB clearance
package by writing to
OR.Reports.Clearance@ssa.gov.
SSA’s Social Security Disability
Insurance (SSDI) and SSI programs
provide a crucial and necessary income
for people with disabilities. By
improving employment outcomes for
SSDI beneficiaries and SSI recipients,
SSA supports the effort to reduce the
reliance of people with disabilities on
these programs. SSA previously
conducted seven rounds of the National
Beneficiary Survey (NBS) in 2004, 2005,
2006, 2010, 2015, 2017, and 2019.
Conducting the prior rounds of the NBS
provided SSA with an important
understanding of the work interests and
experiences of SSI recipients and SSDI
beneficiaries, and helped SSA gain
information about their impairments;
health; living arrangements; family
structure; pre-disability occupation; and
use of non-SSA programs (e.g., the
Supplemental Nutrition Assistance
Program). The prior rounds of NBS data
are available to researchers and the
public. SSA contracted with
Mathematica to conduct the NBS data
collection.
NBS Project Description
The primary purpose of the new NBS
is to: (1) assess beneficiary well-being
and interest in work; (2) learn about
beneficiary work experiences
(successful and unsuccessful); and (3)
identify factors that promote or restrict
long-term work success. As with the
previous NBS rounds, the current NBS
will collect information on factors such
as health; living arrangements; family
structure; current occupation; use of
non-SSA programs; knowledge of SSDI
and SSI work incentive programs;
obstacles to work; and beneficiary
interest and motivation to return to
work.
SSA is requesting approval to
administer Round 8 of the NBS in 2023.
The information we will collect is not
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
something we could obtain from SSA
administrative data or other sources. In
the Round 8 NBS, the sample design is
similar to the ones we used for the prior
NBS. The sample includes the
nationally representative beneficiary
samples (RBS) of adult SSDI and SSI
disability program participants, as well
as the successful worker sample (SWS)
which includes beneficiaries who
worked above the substantial gainful
activity for at least three consecutive
months during the six months preceding
their NBS interview. SSA plans to
complete 8,000 interviews: 5,000 from a
cross-sectional sample of active
beneficiaries (SSI and SSDI) and 3,000
from a successful worker sample, and
will conduct the survey interviews
primarily by telephone. We will send a
letter in advance informing the
beneficiary that an interviewer will
contact them to conduct, or schedule a
date and time for the survey. The
beneficiary can also contact the 800
number we provide in the sample letter
to schedule the interview or take the
survey with an interviewer. We will
send follow-up letters and postcards
reminding the beneficiary to contact us,
if they have not already done so, and we
will also send postcard messages about
establishing the best time for the
beneficiary to take the survey.
In addition to the Round 8 NBS, we
propose to conduct an experimental
web and a paper-based data collection
effort to test if these modes are feasible
methods to collect data from
nonrespondents. SSA will conduct this
experiment during the administration of
the Round 8 NBS, and we will include
a shorter version of the instrument for
web and paper administration designed
to collect critical data from
nonrespondents to the telephone
interview modality. We will mail the
abbreviated experimental paper version
survey to the beneficiaries to complete
and send back to Mathematica.
We will pull the sample for the
experimental web and paper
administration of the NBS from Round
8 SWS nonrespondents. Respondent
participation in the NBS is voluntary
and the decision to participate has no
impact on current or future receipt of
payments or benefits. Respondents are
current SSDI beneficiaries and SSI
recipients.
Type of Request: Request for a new
information collection.
E:\FR\FM\17AUN1.SGM
17AUN1
]]>Agencies
[Federal Register Volume 87, Number 158 (Wednesday, August 17, 2022)]
[Notices]
[Pages 50680-50684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17667]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95477; File No. SR-NYSECHX-2022-19]
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Harmonize
Rules 10.9261 and 10.9830 With Recent Changes by the Financial Industry
Regulatory Authority, Inc.
August 11, 2022.
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 July 29, 2022, the NYSE Chicago, Inc. (``NYSE Chicago'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to harmonize Rules 10.9261 and 10.9830 with
recent changes by the Financial Industry Regulatory Authority, Inc.
(``FINRA'') that temporarily grants the Chief or Deputy Chief Hearing
Officer the authority to order that hearings be conducted by video
conference if warranted by public health risks posed by in-person
hearings during the ongoing novel coronavirus (``COVID-19'') pandemic.
As proposed, these temporary amendments would be in effect through
October 31, 2022. 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 harmonize Rules 10.9261 (Evidence and
Procedure in Hearing) and 10.9830 (Hearing) with recent changes by
FINRA to its Rules 9261 and 9830 that temporarily grants to the Chief
or Deputy Chief Hearing Officer the authority to order that hearings be
conducted by video conference if warranted by public health risks posed
by in-person hearings during the ongoing COVID-19 pandemic. As
proposed, these temporary amendments would be in effect through October
31, 2022.\4\
---------------------------------------------------------------------------
\4\ The Exchange may submit a separate rule filing to extend the
expiration date of the proposed temporary amendments if the Exchange
requires temporary relief from the rule requirements identified in
this proposal beyond October 31, 2022. The amended NYSE Chicago
rules will revert back to their original [current] [sic] state at
the conclusion of the temporary relief period and any extension
thereof.
---------------------------------------------------------------------------
Background
In 2022, NYSE Chicago adopted disciplinary rules that are, with
certain exceptions, substantially the same as the disciplinary rules of
its affiliate NYSE Arca, Inc., which are in turn substantially similar
to the FINRA Rule
[[Page 50681]]
8000 Series and Rule 9000 Series, and which set forth rules for
conducting investigations and enforcement actions.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 95020 (June 1,
2022), 87 FR 35034, (June 8, 2022) (SR-NYSECHX-2022-10) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Adopt
Investigation, Disciplinary, Sanction, and Other Procedural Rules
Modeled on the Rules of the Exchange's Affiliates) (``2022 Notice of
Disciplinary Rules'').
---------------------------------------------------------------------------
In adopting disciplinary rules modeled on FINRA's rules, NYSE
Chicago adopted the hearing and evidentiary processes set forth in Rule
10.9261 and in Rule 10.9830 for hearings in matters involving temporary
and permanent cease and desist orders under the Rule 9800 Series. As
adopted, the text of Rule 10.9261 and Rule 10.9830 are substantially
the same as the FINRA rules with certain modifications.\6\
---------------------------------------------------------------------------
\6\ See id.
---------------------------------------------------------------------------
In 2020, in view of the ongoing spread of COVID-19 and its effect
on FINRA's adjudicatory functions nationwide, FINRA filed a temporary
rule change to grant FINRA's Office of Hearing Officers (``OHO'') and
the National Adjudicatory Council (``NAC'') the authority to conduct
certain hearings by video conference, if warranted by the current
COVID-19-related public health risks posed by in-person hearings. Among
the rules FINRA amended were Rules 9261 and 9830.\7\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release Nos. 83289 (September 2,
2020), 85 FR 55712 (September 9, 2020) (SR-FINRA-2020-027)
(``Initial FINRA Filing''). FINRA also proposed to temporarily amend
FINRA Rules 1015 and 9524. FINRA Rule 1015 governs the process by
which an applicant for new or continuing membership can appeal a
decision rendered by FINRA's Department of Member Supervision under
FINRA Rule 1014 or 1017 and request a hearing which would be
conducted by a subcommittee of the NAC. See id. at 55714. The
Exchange has not adopted FINRA Rule 1015. FINRA Rule 9524 governs
the process by which a statutorily disqualified member firm or
associated person can appeal the Department's recommendation to deny
a firm or sponsoring firm's application to the NAC. See id. Under
the Exchange's version of Rule 10.9524, if the CRO rejects the
application, the ETP Holder or applicant may request a review by the
Exchange Board of Directors. This differs from FINRA's process,
which provides for a hearing before the NAC and further
consideration by the FINRA Board of Directors.
---------------------------------------------------------------------------
FINRA represented in its filing that its protocol for conducting
hearings by video conference would ensure that such hearings maintain
fair process for the parties by, among other things, FINRA's use of a
high quality, secure and user-friendly video conferencing service and
provide thorough instructions, training and technical support to all
hearing participants.\8\ According to FINRA, the proposed changes were
a reasonable interim solution to allow FINRA's critical adjudicatory
processes to continue to function while protecting the health and
safety of hearing participants as FINRA works towards resuming in-
person hearings in a manner that is compliant with the current guidance
of public health authorities.\9\
---------------------------------------------------------------------------
\8\ See Initial FINRA Filing, 85 FR at 55713.
\9\ See id.
---------------------------------------------------------------------------
Since the Initial FINRA Filing (in 2020), FINRA periodically
extended the temporary relief as the COVID-19 pandemic and concerns
surrounding its spread persisted.\10\ According to FINRA, even though
it has been more than two years since the World Health Organization
declared COVID-19 a pandemic, uncertainty still remains around this
disease. The continued presence of COVID-19 variants including the
quickly emerging Omicron BA.4 and BA.5 subvariants, dissimilar
vaccination rates throughout the United States, and the current medium
to high COVID-19 community levels in many states indicate that COVID-19
remains an active and real public health concern.\11\
---------------------------------------------------------------------------
\10\ See, e.g., Securities Exchange Act Release No. 94430 (March
16, 2022), 87 FR 16262 (March 22, 2022) (SR-FINRA-2022-004) (most
recent extension of temporary relief until July 31, 2022).
\11\ See Securities Exchange Act Release No. 95281 (July 14,
2022), 87 FR 43335 (July 20, 2022) (SR-FINRA-2022-018) (``SR-FINRA-
2022-018''). FINRA noted that, for example, there has been a notable
upward trend in the number of daily COVID-19 cases in the United
States since April 1, 2022. See https://covid.cdc.gov/covid-data-tracker/#trends_dailycases. In addition, on June 9, 2022, the Biden
Administration announced its operational plan for COVID-19
vaccinations for children under the age of five. See https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/09/fact-sheetbiden-administration-announces-operational-plan-for-covid-19-vaccinations-for-children-under-5/. See SR-FINRA-2022-018, 87 FR
at 43335, n. 6.
---------------------------------------------------------------------------
Due to the uncertainty and the lack of a clear timeframe for a
sustained and widespread abatement of COVID-19-related health concerns
and corresponding restrictions,\12\ FINRA believes that there is a
continued need for temporary relief beyond its most recent extension
until July 31, 2022.\13\ On July 8, 2022, FINRA accordingly filed to
extend the expiration date of the temporary rule amendments to, among
other rules, FINRA Rule 9261 and 9830 from July 31, 2022, to October
31, 2022.\14\
---------------------------------------------------------------------------
\12\ For instance, FINRA noted that the Centers for Disease
Control and Prevention (``CDC'') recommends that people wear a mask
in public indoor settings in areas with a high COVID-19 community
level regardless of vaccination status or individual risk. See
https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/about-face-coverings.html. The CDC also recommends that people wear
a mask in indoor areas of public transportation and transportation
hubs to protect themselves and those around them and help keep
travel and public transportation safer for everyone. See https://www.cdc.gov/coronavirus/2019-ncov/travelers/masks-public-transportation.html. Furthermore, numerous states currently have
mask mandates in certain settings, such as healthcare and
correctional facilities. See SR-FINRA-2022-018, 87 FR at 43335, n.
7.
\13\ See SR-FINRA-2022-018, 87 FR at 43335.
\14\ See SR-FINRA-2022-018, 87 FR at 43335-36.
---------------------------------------------------------------------------
Pursuant to a regulatory services agreement (``RSA''), FINRA's
Office of Hearing Officers will administer all aspects of
adjudications, including assigning hearing officers to serve as NYSE
Chicago hearing officers. A hearing officer from OHO will, among other
things, preside over the disciplinary hearing, select and chair the
hearing panel, and prepare and issue written decisions. The Chief or
Deputy Hearing Officer for all Exchange disciplinary hearings are
currently drawn from OHO and are all FINRA employees. The Exchange
believes that OHO will utilize the same video conference protocol and
processes for Exchange matters under the RSA as it proposes for FINRA
matters.
Given that FINRA and its Office of Hearing Officers administers
disciplinary hearings on the Exchange's behalf, and given that the
public health concerns addressed by FINRA's amendments apply equally to
the Exchange's disciplinary hearings, the Exchange proposes to
temporarily amend its disciplinary rules to allow FINRA to conduct
virtual hearings on its behalf.
Proposed Rule Change
Rule 10.9261(b) states that if a disciplinary hearing is held, a
party shall be entitled to be heard in-person, by counsel, or by the
party's representative. Absent an agreement by all parties to proceed
in another manner, an Exchange disciplinary hearings are in-person. As
noted, the Chief and Deputy Hearing Officers for all Exchange and
cross-market matters are supplied by OHO and are FINRA employees.
Accordingly, absent an agreement by all parties to proceed in another
manner, under Rule 10.9261(b) the Chief or Deputy Hearing Officer
conducts disciplinary hearings in-person.
Similarly, Rule 10.9830 outlines the requirements for hearings for
temporary and permanent cease and desist orders. Rule 10.9830(a),
however, does not specify that a party shall be entitled to be heard
in-person, by counsel, or by the party's representative.
Consistent with FINRA's temporary amendment to FINRA Rules 9261 and
9830, the Exchange proposes to temporarily grant the Chief or Deputy
Chief Hearing Officer temporary authority to order, upon consideration
[[Page 50682]]
of the current COVID-19-related public health risks presented by an in-
person hearing, that a hearing under those rules be conducted by video
conference. The proposed change will permit OHO to make an assessment,
based on critical COVID-19 data and criteria and the guidance of health
and security consultants, whether an in-person hearing would compromise
the health and safety of the hearing participants such that the hearing
should proceed by video conference. As noted, FINRA has adopted a
detailed and thorough protocol to ensure that hearings conducted by
video conference will maintain fair process for the parties.\15\ The
Exchange believes that this is a reasonable procedure to follow in
hearings under Rules 10.9261 and 10.9830 chaired by a FINRA
employee.\16\
---------------------------------------------------------------------------
\15\ See Initial FINRA Filing, 85 FR at 55713.
\16\ The Exchange notes, as did FINRA, that SEC's Rules of
Practice pertaining to temporary cease-and-desist orders provide
that parties and witnesses may participate by telephone or, in the
Commission's discretion, through the use of alternative technologies
that allow remote access, such as a video link. See SEC Rule of
Practice 511(d)(3); Comment (d); see Initial FINRA Filing, 85 FR at
55714, n. 21.
---------------------------------------------------------------------------
To effectuate these changes, the Exchange proposes to add the
following sentence to Rule 10.9261(b):
Upon consideration of the current public health risks presented
by an in-person hearing, the Chief Hearing Officer or Deputy Chief
Hearing Officer may, on a temporary basis, determine that the
hearing shall be conducted, in whole or in part, by video
conference.
The proposed text is identical to the language adopted by
FINRA.\17\
---------------------------------------------------------------------------
\17\ See Initial FINRA Filing, 85 FR at 55712.
---------------------------------------------------------------------------
Similarly, the Exchange proposes to add the following text to Rule
10.9830(a):
Upon consideration of the current public health risks presented
by an in-person hearing, the Chief Hearing Officer or Deputy Chief
Hearing Officer may, on a temporary basis, determine that the
hearing shall be conducted, in whole or in part, by video
conference.
Once again, the proposed language is identical to the language
adopted by FINRA.\18\
---------------------------------------------------------------------------
\18\ Id.
---------------------------------------------------------------------------
Consistent with FINRA's most recent filing, the Exchange proposes
that these temporary amendments would be in effect through October 31,
2022.\19\
---------------------------------------------------------------------------
\19\ See SR-FINRA-2022-018, 87 FR at 43337. See supra note 4.
---------------------------------------------------------------------------
As noted below, the Exchange has filed the proposed rule change for
immediate effectiveness and has requested that the SEC waive the
requirement that the proposed rule change not become operative for 30
days after the date of the filing, so the Exchange can implement the
proposed rule change immediately.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\20\ in general, and furthers the objectives of Section
6(b)(5),\21\ in particular, because it 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, to
remove impediments to, and perfect the mechanism of, a free and open
market and a national market system and, in general, to protect
investors and the public interest. Additionally, the Exchange believes
the proposed rule change is designed to provide a fair procedure for
the disciplining of members and persons associated with members,
consistent with Sections 6(b)(7) and 6(d) of the Act.\22\
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
\22\ 15 U.S.C. 78f(b)(7) and 78f(d).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change support the
objectives of the Act by providing greater harmonization between
Exchange rules and FINRA rules of similar purpose, resulting in less
burdensome and more efficient regulatory compliance. As previously
noted, the text of Rule 10.9261 and Rule 10.9830 is substantially the
same as FINRA's rule. As such, the proposed rule change will foster
cooperation and coordination with persons engaged in facilitating
transactions in securities and will remove impediments to and perfect
the mechanism of a free and open market and a national market system.
The Exchange believes that the proposed temporary rule change will
permit the Exchange to effectively conduct hearings during the COVID-19
pandemic in situations where in-person hearings present likely public
health risks. Given the current and frequently changing COVID-19
conditions and the uncertainty around when those conditions will see
meaningful, widespread and sustained improvement, without this relief
allowing OHO to proceed by video conference, some or all hearings may
have to be postponed.
The ability to conduct hearings by video conference will thereby
permit the adjudicatory functions of the Exchange's disciplinary rules
to continue unabated, thereby avoiding protracted delays. The Exchange
believes that this is especially important in matters where temporary
and permanent cease and desist orders are sought because the proposed
rule change would enable those hearings to proceed without delay,
thereby enabling the Exchange to take immediate action to stop
significant, ongoing customer harm, to the benefit of the investing
public.
Conducting hearings via video conference will give the parties and
adjudicators simultaneous visual and oral communication without the
risks inherent in physical proximity during a pandemic. Temporarily
permitting hearings for disciplinary matters to proceed by video
conference maintains fair process by providing respondents a timely
opportunity to address and potentially resolve any allegations of
misconduct.
As noted, FINRA will use a high quality, secure video conferencing
technology with features that will allow the parties to reasonably
approximate those tasks that are typically performed at an in-person
hearing, such as sharing documents, marking documents, and utilizing
breakout rooms. FINRA will also provide training for participants on
how to use the video conferencing platform and detailed guidance on the
procedures that will govern such hearings. Moreover, the Chief or
Deputy Chief Hearing Officer may take into consideration, among other
things, a hearing participant's access to connectivity and technology
in scheduling a video conference hearing and can also, at their
discretion, allow a party or witness to participate by telephone, if
necessary, to address such access issues.\23\
---------------------------------------------------------------------------
\23\ See text accompanying note 8, supra.
---------------------------------------------------------------------------
The Exchange believes that the temporary relief to permit hearings
to be conducted via video conference maintains fair process and will
continue to provide fair process consistent with Sections 6(b)(7) and
6(d) of the Act \24\ while striking an appropriate balance between
providing fair process and enabling the Exchange to fulfill its
statutory obligations to protect investors and maintain fair and
orderly markets while avoiding the COVID-19-related public health risks
for hearing participants. The Exchange notes that this proposal
provides only temporary relief, which would be in place through October
31, 2022. As noted in herein (see supra note 4), the amended rules will
revert back to their original state at the conclusion of the temporary
relief
[[Page 50683]]
period and, if applicable, any extension thereof.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78f(b)(7) & 78f(d).
---------------------------------------------------------------------------
Accordingly, the proposed rule change extending this temporary
relief is in the public interest and consistent with the Act's purpose.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed temporary rule
change will impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
rule change is not intended to address competitive issues but is rather
intended solely to provide temporary relief given the impacts of the
COVID-19 pandemic and the related health and safety risks of conducting
in-person activities. In the Initial FINRA Filing, FINRA provides an
abbreviated economic impact assessment maintaining that the changes are
necessary to temporarily rebalance the attendant benefits and costs of
the obligations under FINRA Rules 1015, 9261, 9524 and 9830 in response
to the impacts of the COVID-19 pandemic that is equally applicable to
the changes the Exchange proposes.\25\ The Exchange accordingly
incorporates FINRA's abbreviated economic impact assessment by
reference. The Exchange believes that the proposed rule change will
prevent unnecessary impediments to critical adjudicatory processes and
its ability to fulfill its statutory obligations to protect investors
and maintain fair and orderly markets that would otherwise result if
the temporary amendments were not in place.
---------------------------------------------------------------------------
\25\ See Initial FINRA Filing, 85 FR at 55716.
---------------------------------------------------------------------------
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \26\ and Rule 19b-4(f)(6) thereunder.\27\
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.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(3)(A)(iii).
\27\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \28\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\29\ 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 has
indicated that the proposal would provide greater harmonization between
Exchange rules and FINRA rules of similar purpose, resulting in less
burdensome and more efficient regulatory compliance at a time when the
health risks of in-person hearings are significant. The Exchange also
states that the temporary relief provided in this proposal immediately
upon filing and without a 30-day operative delay will allow the
Exchange to continue critical adjudicatory and review processes so that
the Exchange may continue to operate effectively and meet its critical
investor protection goals, while also protecting the health and safety
of hearing participants.\30\ As proposed, the temporary changes would
be in place through October 31, 2022 and the amended rules will revert
back to their original state at the conclusion of the temporary relief
period and, if applicable, any extension thereof.\31\ For these
reasons, the Commission believes that waiver of the 30-day operative
delay for this proposal is consistent with the protection of investors
and the public interest. Accordingly, the Commission hereby waives the
30-day operative delay and designates the proposal operative upon
filing.\32\
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\28\ 17 CFR 240.19b-4(f)(6).
\29\ 17 CFR 240.19b-4(f)(6)(iii).
\30\ See 87 FR 43335, at 43337-38 (noting the same in granting
FINRA's request to waive the 30-day operative delay so that SR-
FINRA-2022-018 would become operative immediately upon filing).
\31\ See supra note 4. As noted above, the Exchange states that
if it requires temporary relief from the rule requirements
identified in this proposal beyond October 31, 2022, it may submit a
separate rule filing to extend the effectiveness of the temporary
relief under these rules.
\32\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change'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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \33\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\33\ 15 U.S.C. 78s(b)(2)(B).
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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 [email protected]. Please include
File Number SR-NYSECHX-2022-19 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-NYSECHX-2022-19. 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 (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 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. 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
[[Page 50684]]
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-NYSECHX-2022-19 and should be submitted
on or before September 7, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
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\34\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17667 Filed 8-16-22; 8:45 am]
BILLING CODE 8011-01-P
