Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delete Legacy Disciplinary Rules 475, 476, 476A, and 477; Adopt New Rule 2050; and Make Conforming Changes to Rules 2A, 27, 36, 600A, 619, 637, 3170, 8001, 8130, 8320, 9001 and 9217, 68208-68210 [2022-24648]
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68208
Federal Register / Vol. 87, No. 218 / Monday, November 14, 2022 / Notices
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 such
filing also will be available for
inspection and copying at the principal
office of OCC and on OCC’s website at
https://www.theocc.com/CompanyInformation/Documents-and-Archives/
By-Laws-and-Rules.
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–OCC–2022–011 and should
be submitted on or before December 5,
2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–24647 Filed 11–10–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96247; File No. SR–NYSE–
2022–48]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Delete
Legacy Disciplinary Rules 475, 476,
476A, and 477; Adopt New Rule 2050;
and Make Conforming Changes to
Rules 2A, 27, 36, 600A, 619, 637, 3170,
8001, 8130, 8320, 9001 and 9217
khammond on DSKJM1Z7X2PROD with NOTICES
November 7, 2022.
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 October
27, 2022, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘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
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
17:30 Nov 10, 2022
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to (1) delete
legacy disciplinary Rules 475, 476,
476A, and 477 as obsolete and make
conforming changes to Rules 2A, 36,
600A(c), 637, 8001, 8130(d), 8320(d)
and 9001, and (2) adopt a new Rule
2050 incorporating the substantive
violations currently in Rule 476(a)
without change and make conforming
changes to Rules 27, 619(h), 3170(C)(3)
and 9217. 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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to (1) delete
legacy disciplinary Rules 475, 476,
476A, and 477 as obsolete and make
conforming changes to Rules 2A, 36,
600A(c), 637, 8001, 8130(d), 8320(d)
and 9001, and (2) adopt a new Rule
2050 incorporating the substantive
violations currently in Rule 476(a)
without change and make conforming
changes to Rules 27, 619(h), 3170(C)(3)
and 9217.
Background and Proposed Rule Change
In 2013, the Commission approved
the Exchange’s adoption of rules
relating to investigation, discipline, and
sanctions, and other procedural rules,
based on the rules of the Financial
Industry Regulatory Authority
(‘‘FINRA’’).3 The Exchange represented
3 See Securities Exchange Act Release No. 69045
(March 5, 2013), 78 FR 15394 (March 11, 2013) (SR–
NYSE–2013–02) (Order Approving Proposed Rule
Change Adopting Investigation, Disciplinary,
19 17
VerDate Sep<11>2014
solicit comments on the proposed rule
change from interested persons.
Jkt 259001
PO 00000
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Sfmt 4703
in that filing that when the transition to
the new disciplinary rules was complete
and there are no longer any member
organizations or persons subject to
Rules 475, 476, 476A, and 477, the
Exchange would submit a proposed rule
change that would delete such rules
(except for the listed offenses under
NYSE Rule 476(a)).4 The Exchange
represents that the transition to the new
disciplinary rules is complete and there
are no longer any member organizations
or persons 5 subject to Rules 475, 476,
Sanction, and Other Procedural Rules That Are
Modeled on the Rules of the Financial Industry
Regulatory Authority and To Make Certain
Conforming and Technical Changes). Beginning in
2016, the Exchange’s affiliates have each in turn
adopted the FINRA disciplinary rules. In 2016,
NYSE American LLC (‘‘NYSE American’’) adopted
its Rule 8000 and Rule 9000 Series based on the
NYSE and FINRA Rule 8000 and Rule 9000 Series.
See Securities Exchange Act Release Nos. 77241
(February 26, 2016), 81 FR 11311 (March 3, 2016)
(SR–NYSEMKT–2016–30). In 2018, the Commission
approved NYSE National, Inc.’s (‘‘NYSE National’’)
adoption of the NYSE National Rule 10.8000 and
Rule 10.9000 Series based on the NYSE American
and FINRA Rule 8000 and Rule 9000 Series. See
Securities Exchange Act Release No. 83289 (May
17, 2018), 83 FR 23968 (May 23, 2018) (SR–
NYSENat–2018–02). In 2019, NYSE Arca, Inc.
(‘‘NYSE Arca’’) adopted the NYSE Arca Rule
10.8000 and 10.9000 Series based on the NYSE
American Rule 8000 and Rule 9000 Series. See
Securities Exchange Act Release No. 85639 (April
12, 2019), 84 FR 16346 (April 18, 2019) (SR–
NYSEArca–2019–15). Most recently, NYSE Chicago
also adopted investigation, disciplinary, sanction,
and other procedural rules modeled on the rules of
its affiliates. See Securities Exchange Act Release
No. 95020 (June 1, 2022), 87 FR 35034 (June 8,
2022) (SR–NYSECHX–2022–10).
4 See Securities Exchange Act Release No. 68678
(January 16, 2013), 78 FR 5213, 5219 (January 24,
2013) (SR–NYSE–2013–02) (Notice of Filing of
Proposed Rule Change Adopting Investigation,
Disciplinary, Sanction, and Other Procedural Rules
That Are Modeled on the Rules of the Financial
Industry Regulatory Authority and To Make Certain
Conforming and Technical Changes) (‘‘Release No.
68678’’).
5 The Exchange no longer has allied members.
The references to ‘‘allied member’’ in Rules 476 and
476A should be to ‘‘principal executive.’’ In 2008,
the Exchange replaced the term ‘‘allied member’’
with the newly defined category of ‘‘principal
executive’’ but did not make corresponding
technical changes to Rules 476 and 476A. See
Securities Exchange Act Release No. 58549
(September 15, 2008), 73 FR 54444, 54445
(September 19, 2008) (SR–NYSE–2008–80) (Notice
of Filing and Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1 Thereto
Conforming Certain NYSE Rules to Changes to
NYSE Incorporated Rules Recently Filed by the
Financial Industry Regulatory Authority, Inc.); Rule
311.18 (defining ‘‘principal executive’’). See
generally Securities and Exchange Act Release No.
58103 (July 3, 2008), 73 FR 40403, 40403–04 (July
14, 2008) (SR–FINRA–2008–036) (Notice of Filing
of a Proposed Rule Change Relating to the
Incorporated NYSE Rules) (proposing in part to
substitute ‘‘principal executive’’ for ‘‘allied
member’’ in the Incorporated NYSE Rules);
Securities and Exchange Act Release No. 58533
(September 12, 2008), 73 FR 54652 (September 22,
2008) (SR–FINRA–2008–036) (Order Approving
Proposed Rule Change Relating to Incorporated
NYSE Rules). The Exchange will be submitting a
separate rule filing to replace the remaining
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Federal Register / Vol. 87, No. 218 / Monday, November 14, 2022 / Notices
476A, and 477, and that those rules can
therefore be deleted as obsolete.
The Exchange proposes conforming
changes to Rules 2A (Jurisdiction), 36
(Communications Between Exchange
and Members’ Offices), 600A(c), and
637 (Failure to Honor Award) that
contain references to one or more of the
rules proposed to be deleted. The
following rules reflecting the transition
from the legacy disciplinary rules to the
current rule set would be deleted in
their entirety: Rule 8130(d) (Retention of
Jurisdiction); Rule 8320(d) (Payment of
Fines, Other Monetary Sanctions, or
Costs; Summary Action for Failure to
Pay); Rule 8001 (Effective Date of Rule
8000 Series); and Rule 9001 (Effective
Date of Rule 9000 Series).
In connection with the deletion of
Rule 476, the Exchange also proposes a
new Rule 2050 titled ‘‘Other Offenses’’
that would, consistent with its filing
adopting the FINRA disciplinary rules,
retain the listed offenses in Rule
476(a)(1)–(11) without substantive
change. Proposed Rule 2050 would
provide that a member organization or
covered person 6 violates the provisions
of the Rule if it commits any of the
enumerated offenses, which would be
transposed from Rule 476(a) in the same
order and without changes except for
Rule 476(a)(8), which is marked
‘‘Reserved.’’ The Exchange further
proposes conforming changes to the
following rules to replace references to
Rule 476(a) with Rule 2050: Rule 27
(Regulatory Cooperation); Rule 619(h)
(General Provision Governing
Subpoenas, Production of Documents,
etc.); Rule 3170(C)(3) (Tape Recording of
Registered Persons by Certain Firms);
and Rule 9217 (Violations Appropriate
for Disposition Under Rule 9216(b)).
2. Statutory Basis
khammond on DSKJM1Z7X2PROD with NOTICES
The Exchange believes that the
proposed rule change is consistent with
Section 6(b)(5) of the Exchange Act,7 in
that it is designed to prevent fraudulent
references to ‘‘allied member’’ in its rules with
‘‘principal executive.’’
6 NYSE Rule 9120(g) defines ‘‘covered person’’ to
mean a ‘‘member, principal executive, approved
person, registered or non-registered employee of a
member organization, or other person (excluding a
member organization) subject to the jurisdiction of
the Exchange.’’ The term was drafted to
appropriately capture all persons subject to the
legacy disciplinary rules and preserve the
Exchange’s scope of jurisdiction at the time the
Rule 8000 and Rule 9000 Series were adopted. See
Release No. 68678, 78 FR 5213 at 5219. Under
NYSE Rule 2(a), the term ‘‘member’’ means a
natural person associated with a member
organization who has been approved by the
Exchange and designated by such member
organization to effect transactions on the floor of the
Exchange or any facility thereof. See id.
7 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014
17:30 Nov 10, 2022
Jkt 259001
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.
Specifically, the Exchange believes
that deletion of the obsolete legacy
disciplinary rules now that there are no
longer any member organizations or
persons subject to those rules, and
making conforming changes to the rules
referencing those legacy disciplinary
rules, would increase the clarity and
transparency of the Exchange’s rules
and remove impediments to and perfect
the mechanism of a free and open
market by ensuring that persons subject
to the Exchange’s jurisdiction,
regulators, and the investing public
could more easily navigate and
understand the Exchange Bylaws and
rules. The Exchange further believes
that the proposed amendments would
not be inconsistent with the public
interest and the protection of investors
because investors will not be harmed
and in fact would benefit from increased
transparency and clarity, thereby
reducing potential confusion.
The Exchange further believes that
retaining the substantive offenses in
Rule 476(a) without change is designed
to prevent fraudulent and manipulative
acts and practices by permitting the
Exchange to continue to carry out its
oversight and enforcement
responsibilities with respect to the
substantive provisions currently
enumerated in Rule 476(a). For the same
reasons, retention of those provisions
would not be inconsistent with the
public interest and the protection of
investors.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Exchange Act.
The proposed rule change is not
intended to address competitive issues
but rather is concerned solely with
deleting obsolete rules and making
related and conforming changes.
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.
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
68209
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 8 and
subparagraph (f)(6) of Rule 19b–4
thereunder.9
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. If the
Commission takes such action, the
Commission will institute proceedings
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–
NYSE–2022–48.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2022–48. 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
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
9 17
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68210
Federal Register / Vol. 87, No. 218 / Monday, November 14, 2022 / Notices
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–NYSE–2022–48, and
should be submitted on or before
December 5, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–24648 Filed 11–10–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96252; File No. SR–
NYSEARCA–2022–74]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify the NYSE Arca
Options Fee Schedule
khammond on DSKJM1Z7X2PROD with NOTICES
November 7, 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 October
31, 2022, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
10 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
VerDate Sep<11>2014
17:30 Nov 10, 2022
Jkt 259001
III 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 modify the
NYSE Arca Options Fee Schedule (‘‘Fee
Schedule’’) regarding the Ratio
Threshold Fee. The Exchange proposes
to implement the fee change effective
November 1, 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 purpose of this filing is to amend
the Fee Schedule to extend the waiver
of the Ratio Threshold Fee that was
implemented in connection with the
Exchange’s migration to the Pillar
platform.4 The Exchange proposes to
implement the rule change on
November 1, 2022.
The Ratio Threshold Fee is based on
the number of orders entered as
compared to the number of executions
received in a calendar month and is
intended to deter OTP Holders from
submitting an excessive number of
orders that are not executed.5 Because
order to execution ratios of 10,000 to 1
4 See Securities Exchange Act Release No. 94095
(January 28, 2022), 87 FR 6216 (February 3, 2022)
(SR–NYSEArca–2022–04) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
To Amend the NYSE Arca Options Fee Schedule).
5 See Fee Schedule, RATIO THRESHOLD FEE;
see also Securities Exchange Act Release No. 60102
(June 11, 2009), 74 FR 29251 (June 19, 2009) (SR–
NYSEArca–2009–50).
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
or greater have the potential residual
effect of exhausting system resources,
bandwidth, and capacity, such ratios
may create latency and impact other
OTP Holders’ ability to receive timely
executions.6 In connection with the
Exchange’s migration to the Pillar
platform, the Exchange implemented a
waiver of the Ratio Threshold Fee (the
‘‘Waiver’’) that took effect beginning in
the month in which the Exchange began
its migration to the Pillar platform and
would remain in effect for the three
months following the month during
which the Exchange completed its
migration to the Pillar platform. As the
Exchange completed the migration in
July 2022, the Waiver is currently due
to expire on October 31, 2022.
The Exchange now proposes to extend
the Waiver for an additional three
months. The Exchange believes that
extending the Waiver would allow the
Exchange additional time to continue to
work with OTP Holders to monitor
traffic rates and order to execution
ratios, without imposing a financial
burden on OTP Holders based on their
order to execution ratios. The extension
of the Waiver would also allow the
Exchange to continue to evaluate system
performance as OTP Holders continue
to adapt to trading on the Pillar
platform. The Exchange thus proposes
to modify the Fee Schedule to provide
that the Waiver would extend for the six
months following the month in which
the Exchange completed its migration to
the Pillar platform (i.e., until January 31,
2023).7
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,8 in general, and
furthers the objectives of Sections
6(b)(4) and (5) of the Act,9 in particular,
because it provides for the equitable
allocation of reasonable dues, fees, and
other charges among its members,
issuers and other persons using its
facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
The Proposed Rule Change Is
Reasonable
The Exchange operates in a highly
competitive market. The Commission
has repeatedly expressed its preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
6 See
id.
proposed Fee Schedule, RATIO
THRESHOLD FEE.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(4) and (5).
7 See
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]]>Agencies
[Federal Register Volume 87, Number 218 (Monday, November 14, 2022)]
[Notices]
[Pages 68208-68210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24648]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96247; File No. SR-NYSE-2022-48]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Delete Legacy Disciplinary Rules 475, 476, 476A, and 477; Adopt New
Rule 2050; and Make Conforming Changes to Rules 2A, 27, 36, 600A, 619,
637, 3170, 8001, 8130, 8320, 9001 and 9217
November 7, 2022.
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 October 27, 2022, New York Stock Exchange LLC (``NYSE'' or the
``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 (1) delete legacy disciplinary Rules 475,
476, 476A, and 477 as obsolete and make conforming changes to Rules 2A,
36, 600A(c), 637, 8001, 8130(d), 8320(d) and 9001, and (2) adopt a new
Rule 2050 incorporating the substantive violations currently in Rule
476(a) without change and make conforming changes to Rules 27, 619(h),
3170(C)(3) and 9217. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to (1) delete legacy disciplinary Rules 475,
476, 476A, and 477 as obsolete and make conforming changes to Rules 2A,
36, 600A(c), 637, 8001, 8130(d), 8320(d) and 9001, and (2) adopt a new
Rule 2050 incorporating the substantive violations currently in Rule
476(a) without change and make conforming changes to Rules 27, 619(h),
3170(C)(3) and 9217.
Background and Proposed Rule Change
In 2013, the Commission approved the Exchange's adoption of rules
relating to investigation, discipline, and sanctions, and other
procedural rules, based on the rules of the Financial Industry
Regulatory Authority (``FINRA'').\3\ The Exchange represented in that
filing that when the transition to the new disciplinary rules was
complete and there are no longer any member organizations or persons
subject to Rules 475, 476, 476A, and 477, the Exchange would submit a
proposed rule change that would delete such rules (except for the
listed offenses under NYSE Rule 476(a)).\4\ The Exchange represents
that the transition to the new disciplinary rules is complete and there
are no longer any member organizations or persons \5\ subject to Rules
475, 476,
[[Page 68209]]
476A, and 477, and that those rules can therefore be deleted as
obsolete.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 69045 (March 5,
2013), 78 FR 15394 (March 11, 2013) (SR-NYSE-2013-02) (Order
Approving Proposed Rule Change Adopting Investigation, Disciplinary,
Sanction, and Other Procedural Rules That Are Modeled on the Rules
of the Financial Industry Regulatory Authority and To Make Certain
Conforming and Technical Changes). Beginning in 2016, the Exchange's
affiliates have each in turn adopted the FINRA disciplinary rules.
In 2016, NYSE American LLC (``NYSE American'') adopted its Rule 8000
and Rule 9000 Series based on the NYSE and FINRA Rule 8000 and Rule
9000 Series. See Securities Exchange Act Release Nos. 77241
(February 26, 2016), 81 FR 11311 (March 3, 2016) (SR-NYSEMKT-2016-
30). In 2018, the Commission approved NYSE National, Inc.'s (``NYSE
National'') adoption of the NYSE National Rule 10.8000 and Rule
10.9000 Series based on the NYSE American and FINRA Rule 8000 and
Rule 9000 Series. See Securities Exchange Act Release No. 83289 (May
17, 2018), 83 FR 23968 (May 23, 2018) (SR-NYSENat-2018-02). In 2019,
NYSE Arca, Inc. (``NYSE Arca'') adopted the NYSE Arca Rule 10.8000
and 10.9000 Series based on the NYSE American Rule 8000 and Rule
9000 Series. See Securities Exchange Act Release No. 85639 (April
12, 2019), 84 FR 16346 (April 18, 2019) (SR-NYSEArca-2019-15). Most
recently, NYSE Chicago also adopted investigation, disciplinary,
sanction, and other procedural rules modeled on the rules of its
affiliates. See Securities Exchange Act Release No. 95020 (June 1,
2022), 87 FR 35034 (June 8, 2022) (SR-NYSECHX-2022-10).
\4\ See Securities Exchange Act Release No. 68678 (January 16,
2013), 78 FR 5213, 5219 (January 24, 2013) (SR-NYSE-2013-02) (Notice
of Filing of Proposed Rule Change Adopting Investigation,
Disciplinary, Sanction, and Other Procedural Rules That Are Modeled
on the Rules of the Financial Industry Regulatory Authority and To
Make Certain Conforming and Technical Changes) (``Release No.
68678'').
\5\ The Exchange no longer has allied members. The references to
``allied member'' in Rules 476 and 476A should be to ``principal
executive.'' In 2008, the Exchange replaced the term ``allied
member'' with the newly defined category of ``principal executive''
but did not make corresponding technical changes to Rules 476 and
476A. See Securities Exchange Act Release No. 58549 (September 15,
2008), 73 FR 54444, 54445 (September 19, 2008) (SR-NYSE-2008-80)
(Notice of Filing and Immediate Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto Conforming Certain NYSE Rules to
Changes to NYSE Incorporated Rules Recently Filed by the Financial
Industry Regulatory Authority, Inc.); Rule 311.18 (defining
``principal executive''). See generally Securities and Exchange Act
Release No. 58103 (July 3, 2008), 73 FR 40403, 40403-04 (July 14,
2008) (SR-FINRA-2008-036) (Notice of Filing of a Proposed Rule
Change Relating to the Incorporated NYSE Rules) (proposing in part
to substitute ``principal executive'' for ``allied member'' in the
Incorporated NYSE Rules); Securities and Exchange Act Release No.
58533 (September 12, 2008), 73 FR 54652 (September 22, 2008) (SR-
FINRA-2008-036) (Order Approving Proposed Rule Change Relating to
Incorporated NYSE Rules). The Exchange will be submitting a separate
rule filing to replace the remaining references to ``allied member''
in its rules with ``principal executive.''
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The Exchange proposes conforming changes to Rules 2A
(Jurisdiction), 36 (Communications Between Exchange and Members'
Offices), 600A(c), and 637 (Failure to Honor Award) that contain
references to one or more of the rules proposed to be deleted. The
following rules reflecting the transition from the legacy disciplinary
rules to the current rule set would be deleted in their entirety: Rule
8130(d) (Retention of Jurisdiction); Rule 8320(d) (Payment of Fines,
Other Monetary Sanctions, or Costs; Summary Action for Failure to Pay);
Rule 8001 (Effective Date of Rule 8000 Series); and Rule 9001
(Effective Date of Rule 9000 Series).
In connection with the deletion of Rule 476, the Exchange also
proposes a new Rule 2050 titled ``Other Offenses'' that would,
consistent with its filing adopting the FINRA disciplinary rules,
retain the listed offenses in Rule 476(a)(1)-(11) without substantive
change. Proposed Rule 2050 would provide that a member organization or
covered person \6\ violates the provisions of the Rule if it commits
any of the enumerated offenses, which would be transposed from Rule
476(a) in the same order and without changes except for Rule 476(a)(8),
which is marked ``Reserved.'' The Exchange further proposes conforming
changes to the following rules to replace references to Rule 476(a)
with Rule 2050: Rule 27 (Regulatory Cooperation); Rule 619(h) (General
Provision Governing Subpoenas, Production of Documents, etc.); Rule
3170(C)(3) (Tape Recording of Registered Persons by Certain Firms); and
Rule 9217 (Violations Appropriate for Disposition Under Rule 9216(b)).
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\6\ NYSE Rule 9120(g) defines ``covered person'' to mean a
``member, principal executive, approved person, registered or non-
registered employee of a member organization, or other person
(excluding a member organization) subject to the jurisdiction of the
Exchange.'' The term was drafted to appropriately capture all
persons subject to the legacy disciplinary rules and preserve the
Exchange's scope of jurisdiction at the time the Rule 8000 and Rule
9000 Series were adopted. See Release No. 68678, 78 FR 5213 at 5219.
Under NYSE Rule 2(a), the term ``member'' means a natural person
associated with a member organization who has been approved by the
Exchange and designated by such member organization to effect
transactions on the floor of the Exchange or any facility thereof.
See id.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5) of the Exchange Act,\7\ in that 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.
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\7\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that deletion of the obsolete
legacy disciplinary rules now that there are no longer any member
organizations or persons subject to those rules, and making conforming
changes to the rules referencing those legacy disciplinary rules, would
increase the clarity and transparency of the Exchange's rules and
remove impediments to and perfect the mechanism of a free and open
market by ensuring that persons subject to the Exchange's jurisdiction,
regulators, and the investing public could more easily navigate and
understand the Exchange Bylaws and rules. The Exchange further believes
that the proposed amendments would not be inconsistent with the public
interest and the protection of investors because investors will not be
harmed and in fact would benefit from increased transparency and
clarity, thereby reducing potential confusion.
The Exchange further believes that retaining the substantive
offenses in Rule 476(a) without change is designed to prevent
fraudulent and manipulative acts and practices by permitting the
Exchange to continue to carry out its oversight and enforcement
responsibilities with respect to the substantive provisions currently
enumerated in Rule 476(a). For the same reasons, retention of those
provisions would not be inconsistent with the public interest and the
protection of investors.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Exchange Act. The proposed rule
change is not intended to address competitive issues but rather is
concerned solely with deleting obsolete rules and making related and
conforming changes.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not: (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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. If the Commission
takes such action, the Commission will institute proceedings 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 [email protected]. Please include
File Number SR-NYSE-2022-48.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2022-48. 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
[[Page 68210]]
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-
NYSE-2022-48, and should be submitted on or before December 5, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-24648 Filed 11-10-22; 8:45 am]
BILLING CODE 8011-01-P
