Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules 9132, 9133, 9135, 9146, 9522, 9524, 9559 and 9630, 4239-4243 [2023-01265]

Download as PDF Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / Notices 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 Act. The proposed rule change is not intended to address competitive issues but is designed to modernize the service and filing process in harmonization with the approved FINRA Rules. tkelley on DSK125TN23PROD with NOTICES 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 32 and Rule 19b–4(f)(6) thereunder.33 Because the proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 34 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),35 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 states that this filing is noncontroversial and eligible to become effective immediately because the proposal promotes uniformity in disciplinary rules across self-regulatory organizations and thereby enables the Exchange to modernize the service and filing process related to the conduct of disciplinary hearings.36 The Exchange U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 34 17 CFR 240.19b–4(f)(6). 35 17 CFR 240.19b–4(f)(6)(iii). 36 See supra Item II. 33 17 19:17 Jan 23, 2023 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– NYSEAMER–2023–04 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–NYSEAMER–2023–04. 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/ 37 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). 38 15 U.S.C. 78s(b)(2)(B). 32 15 VerDate Sep<11>2014 further states that the proposed rule change would not significantly affect the protection of investors or the public interest or impose any significant burden on competition because the proposed rule change is based on the approved FINRA Rules. After reviewing the filing, 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.37 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) 38 of the Act to determine whether the proposed rule change should be approved or disapproved. Jkt 259001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 4239 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–NYSEAMER–2023–04 and should be submitted on or before February 14, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.39 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–01266 Filed 1–23–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96688; File No. SR–NYSE– 2023–04] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules 9132, 9133, 9135, 9146, 9522, 9524, 9559 and 9630 January 18, 2023. 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 January 4, 2023, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have 39 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 E:\FR\FM\24JAN1.SGM 24JAN1 4240 Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / Notices 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 amend Rules 9132, 9133, 9135, 9146, 9522, 9524, 9559 and 9630 to permit, and in some instances require, electronic service and filing of documents in disciplinary and other proceedings and appeals, in conformity with recent changes by the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’). 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. tkelley on DSK125TN23PROD with NOTICES 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 amend Rules 9132, 9133, 9135, 9146, 9522, 9524, 9559 and 9630 to permit, and in some instances require, electronic service and filing of documents in disciplinary and other proceedings, in conformity with recent changes by FINRA. In 2020, following the outbreak of the Coronavirus Disease (‘‘COVID–19’’), FINRA temporarily amended certain of its rules, including related to the method of service and filing in disciplinary proceedings before the Office of Hearing Officers (OHO) and appeals before the National Adjudicatory Council (NAC), among other types of administrative proceedings (the ‘‘temporary amendments’’).4 The temporary 4 See, e.g., Securities Exchange Act Release No. 88917 (May 20, 2020), 85 FR 31832 (May 27, 2020) VerDate Sep<11>2014 19:17 Jan 23, 2023 Jkt 259001 amendments allowed, and in some instances required, FINRA (in its capacity as an Adjudicator per Rule 9120) to serve certain documents on parties by electronic mail (‘‘email’’) and required parties to file or serve documents by email, unless the parties agreed to an alternative method of service.5 Earlier this year, FINRA made permanent the temporary amendments to its rules regarding electronic service and filing permanent, with some modifications.6 In support of its filing, FINRA noted that advances in technology and its availability made filing and service permitted by the temporary amendments more efficient than under FINRA’s ‘‘original’’ (non-amended) rules.7 Moreover, FINRA determined that electronic service and filing is beneficial for parties, panelists and FINRA staff.8 FINRA also noted that the Commission likewise amended its rules in November 2020 to require electronic filing and service of documents in its administrative proceedings.9 For these reasons, FINRA determined that making permanent the temporary amendments would similarly improve and modernize FINRA’s operations.10 To likewise improve and modernize Exchange rules, the Exchange proposes to modify certain of its disciplinary rules to allow for electronic service and filing of documents in disciplinary and (SR–FINRA–2020–015) (Notice and immediate effectiveness of filing to temporarily amend certain timing, method of service and other procedural requirements in FINRA Rules during the outbreak of COVID–19). FINRA extended the temporary amendments several times before filing to make certain of the aforementioned amendments permanent. The temporary amendments included rule changes to permit the conduct of virtual hearings (i.e., Rules 9261 and 9830), which rule changes are not being included in this proposal. Rather, the Exchange is solely copying a subset of rules covered by the temporary amendments as discussed herein. 5 See id. 6 See Securities Exchange Act Release Nos. 95147 (June 23, 2022), 87 FR 38803 (June 29, 2022) (order approving change to certain FINRA rules to permit, and in some instances require, electronic service and filing of documents in disciplinary and other proceedings and appeals) (‘‘Approval Order of FINRA Rules’’); 94654 (April 8, 2022), 87 FR 22264 (April 14, 2022) (SR–FINRA–2022–009) (‘‘FINRA Notice’’). The Approval Order of FINRA Rules related to FINRA Rules 1012, 1015, 6490, 9132, 9133, 9135, 9146, 9321, 9341, 9349, 9351, 9522, 9524, 9559 and 9630 (collectively, ‘‘the approved FINRA Rules’’). 7 See FINRA Notice, 87 FR at 22267. 8 See FINRA Notice, 87 FR at 22267. 9 See Amendments to the Commission’s Rules of Practice, Securities Exchange Act Release No. 90442 (November 17, 2020), 85 FR 86464 (File No. S7–18– 15) (December 30, 2020) (codified at 17 CFR 201 (2020)). 10 See FINRA Notice, 87 FR at 22266–67. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 other proceedings in conformity with the approved FINRA Rules.11 Background In 2013, the NYSE adopted disciplinary rules that are, with certain exceptions, substantially the same as the FINRA Rule 8000 Series and Rule 9000 Series, and which set forth rules for conducting investigations and enforcement actions.12 The NYSE disciplinary rules were implemented on July 1, 2013.13 The Exchange notes that FINRA and OHO administers disciplinary hearings on the Exchange’s behalf. In adopting disciplinary rules modeled on FINRA’s rules, the NYSE adopted the filing, service and other procedural requirements as contained the FINRA Rule 9100, 9500, and 9600 Series. As adopted, the text of Exchange Rules 9132, 9133, 9135, 9146, 9522, 9524, 9559 and 9630 are based on, and are substantially the same as, their counterpart FINRA rules.14 Proposed Rule Change Consistent with FINRA’s recent proposal, the Exchange proposes to amend certain of its disciplinary rules related to filing, service and other procedural requirements and appeals. The proposed rule change includes provisions to allow, and in some instances require, FINRA (in its capacity as an Adjudicator per Rule 9120) to serve certain documents on parties by email and require parties to file or serve documents by email, unless another method of service is ordered by the Adjudicator.15 In addition, to support the transition to email service and filing, the Exchange proposes to require parties in OHO proceedings to file and serve all 11 Consistent with the Approval Order of FINRA Rules, the Exchange is not proposing to permit electronic service of an initial complaint on a respondent due to heightened fair process concerns. As is the case today, the only permissible methods of serving the initial complaint are by hand, mail or courier. See Rule 9131(b) (requiring that service be pursuant to Rule 9134(a)). 12 See Securities Exchange Act Release No. 68678 (January 16, 2013), 78 FR 5213 (January 24, 2013) (SR–NYSE–2013–02), 69045 (March 5, 2013), 78 FR 15394 (March 11, 2013) (SR–NYSE–2013–02), and 69963 (July 10, 2013), 78 FR 42573 (July 16, 2013) (SR–NYSE–2013–49). 13 See NYSE Information Memorandum 13–8 (May 24, 2013). 14 The Exchange notes that this proposal adopts a subset of the approved FINRA Rules, which subset are applicable to the Exchange rules. As noted herein, this proposal does not extend to the temporary amendments related to the conduct of virtual hearings (i.e., Rules 9261 and 9830). 15 To the extent that a party lacks the ability to use or access technology needed to file, serve or accept service by email, FINRA, as adjudicator, may order an alternative method of service upon a showing of good cause. See FINRA Notice, 87 FR at 22265. E:\FR\FM\24JAN1.SGM 24JAN1 Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / Notices tkelley on DSK125TN23PROD with NOTICES parties with their current email address and contact information at the time of their first appearance, and to file and serve any change in email address or contact information during the course of the proceeding. The proposed rule change would permit service of documents other than the initial complaint by email among various other methods of service, such as personal service, mail and courier, and to provide that service by email is deemed complete upon sending. The Exchange intends to elect email service whenever possible. If the Exchange has knowledge that the address used for service is not current or not functional (i.e., the Exchange receives a bounce back or other message indicating that there was a failure to deliver the email), the Exchange will use other permissible methods of service until it can verify the party’s email address.16 The Exchange notes that, in most cases, the Exchange and the relevant party, or their counsel, will have already engaged in communications prior to the service of documents or other information. Accordingly, in most cases, the Exchange will already have information regarding the relevant party, or their counsel’s, preferred method of service. The Rule 9000 Series, among other things, sets forth the procedure for disciplinary proceedings concerning a member, associated person or formerly associated person. The Rule 9100 Series is of general applicability to all proceedings set forth in the Rule 9000 Series, unless a rule specifically provides otherwise. Rules 9132(b),17 9133(b),18 and 9146(l) 19 provide that the documents and other information governed by those rules be served pursuant to Rule 9134, which permits service on the parties using the following methods: (1) personal service, (2) mail, or (3) courier. Rule 9134 does not permit service by email. The proposed rule change would amend Rule 9132(b) to allow service of the relevant documents or information by email, and Rules 9133(b) and 9146(l) to require parties to serve documents by email, unless an alternative method of service is ordered by the Adjudicator. In addition, to support the transition to email service and filing, the Exchange 16 As indicated in the proposed rule text, the Exchange will consider service by email complete upon sending of the relevant document or other information. This is consistent with service by mail under the current rules. 17 Rule 9132(b) (Service of Orders, Notices, and Decisions by Adjudicator; How Served). 18 Rule 9133(b) (Service of Papers Other Than Complaints, Orders, Notices or Decisions; How Served). 19 Rule 9146(l) (Motions; General). VerDate Sep<11>2014 19:17 Jan 23, 2023 Jkt 259001 proposes to amend Rule 9135 to add paragraph (d), which would require parties in OHO proceedings to file and serve the parties with their current email address and contact information at the time of their first appearance, and to file and serve any change in email address or contact information during the course of the proceeding.20 The Exchange believes this proposed rule change will help ensure that documents are successfully sent from and received at a valid email address. It will also ensure that all participants, including the Exchange, applicants, respondents and any other parties, have accurate contact information for all parties. The Rule 9520 Series sets forth the procedures for eligibility proceedings and review of those proceedings by the Exchange Board. Because the applicable rules in this series do not allow for email as a method of service, the Exchange proposes to modify Rule 9522(a)(4) 21 and to add new paragraph (d) to Rule 9524 22 to permit effective service by email. The Rule 9550 Series sets forth the procedures for expedited proceedings and the ability of the Exchange Board to call for review a proposed decision prepared under the Rule 9550 Series. Rule 9559(h) 23 sets forth the timing and method of service requirements for the parties’ exchange of proposed exhibit and witness lists in advance of an expedited proceeding, but do not allow for email as a method of service. The Exchange proposes to amend Rule 9559(h)(2) to require service of exhibit and witness lists by email, unless an alternative method of service is ordered by the Adjudicator and to remove text from Rule 9559(h)(1) that requires that documents served by email must also be served by overnight courier or personal service.24 Finally, the Exchange proposes to add new paragraph (s) to Rule 9559 to provide that, for purposes of proposed Rule 9559(h), service by email is complete upon sending the documents or decision.25 20 See proposed Rule 9135(d) (Filing of Papers with Adjudicator: Procedure; Party Contact Information). 21 See proposed Rule 9522(a)(4) (Initiation of Eligibility Proceeding; Member Regulation Consideration; Service). 22 See proposed Rule 9524(d) (Exchange Board of Directors Consideration; Service by Electronic Mail; When Service is Complete). 23 Rule 9559(h) (Hearing Procedures for Expedited Proceedings Under the Rule 9550 Series). Rule 9559(h) currently permits email as a method of service. 24 See proposed Rule 9559(h)(1), (2) (Hearing Procedures for Expedited Proceedings Under the Rule 9550 Series; Transmission of Documents). 25 See proposed Rule 9559(s) (Hearing Procedures for Expedited Proceedings Under the Rule 9550 Series; Service by Email; When Service is PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 4241 The Rule 9600 Series sets forth the procedures for members to seek exemptive relief from a variety of Exchange rules. Rule 9630(e) 26 requires the Exchange (via the Chief Regulatory Officer) to serve its decision pursuant to Rules 9132 and 9134, which do not allow for email as a method of service. The proposed rule change would amend Rule 9630 to add new paragraph (d) to allow for email as a method of service.27 The Exchange believes that this proposal, like the approved FINRA Rules, will modernize the rules and make service and filing more efficient and effective. Email technology is widely available, and use of electronic methods of service and filing is common practice in the courts and other regulatory agencies, including the Commission.28 As noted below, the Exchange has filed the proposed rule change for immediate effectiveness and has requested that the Commission 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,29 in general, and furthers the objectives of section 6(b)(5),30 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.31 The Exchange believes that the proposed rule change protects investors and the public interest by requiring use of broadly available technology to make service and filing processes more Complete). Rule 9559(h) currently permits email as a method of service. 26 See Rule 9630 (Procedures for Exemptions; Appeal). 27 See proposed Rule 9630(f) (Appeal; Service by Electronic Mail; When Service is Complete). 28 See supra note 9 (regarding Amendments to the Commission’s Rules of Practice). 29 15 U.S.C. 78f(b). 30 15 U.S.C. 78f(b)(5). 31 15 U.S.C. 78f(b)(7) & 78f(d). E:\FR\FM\24JAN1.SGM 24JAN1 tkelley on DSK125TN23PROD with NOTICES 4242 Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / Notices efficient and effective. The Exchange’s disciplinary and eligibility proceedings and other review processes serve a critical role in providing investor protection and maintaining fair and orderly markets by, for example, sanctioning misconduct and preventing further customer harm by members and associated persons. The proposed rule change promotes efficiency in these processes by permitting electronic service and filing in most instances. To ensure that documents are effectively sent and received, the Exchange is proposing to require parties to provide and update their contact information, including their email address, during the course of a proceeding. These amendments reduce the reliance on paper documents in favor of more efficient electronic formats. The Exchange believes that the proposed rule change regarding electronic service and filing is especially important as hybrid and remote work become more common. The Exchange notes that, per the approved FINRA Rules, there are procedures in place for persons who lack the ability to use or access technology necessary to send or receive documents electronically to request relief from FINRA (as the Adjudicator) to file or serve documents by another method. Per FINRA, requests to use non-electronic methods of service were rare during the approximately two year period that it operated under the temporary amendments and, as such, FINRA anticipates that such requests under the approved FINRA Rules will be rare. In addition, the proposed rule change balances the interests of fairness and efficiency. As discussed, service of the initial complaint will continue to occur by hand, mail or courier, rather than by electronic means, thus ensuring there is satisfactory notice and fair process. Thus, the proposed rule change represents a significant step toward modernizing the service and filing processes in a manner that will protect investors and the public interest by promoting efficiency while preserving fair process. The Exchange believes that the proposed rule change supports 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 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 VerDate Sep<11>2014 19:17 Jan 23, 2023 Jkt 259001 mechanism of a free and open market and a national market system. 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 Act. The proposed rule change is not intended to address competitive issues but is designed to modernize the service and filing process in harmonization with the approved FINRA Rules. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received 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 32 and Rule 19b–4(f)(6) thereunder.33 Because the proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 34 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),35 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 states that this filing is noncontroversial and eligible to become effective immediately because the proposal promotes uniformity in disciplinary rules across self-regulatory organizations and thereby enables the Exchange to modernize the service and 32 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 34 17 CFR 240.19b–4(f)(6). 35 17 CFR 240.19b–4(f)(6)(iii). 33 17 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 filing process related to the conduct of disciplinary hearings.36 The Exchange further states that the proposed rule change would not significantly affect the protection of investors or the public interest or impose any significant burden on competition because the proposed rule change is based on the approved FINRA Rules. After reviewing the filing, 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.37 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) 38 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– NYSE–2023–04 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–NYSE–2023–04. 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 36 See supra Item II. 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). 38 15 U.S.C. 78s(b)(2)(B). 37 For E:\FR\FM\24JAN1.SGM 24JAN1 Federal Register / Vol. 88, No. 15 / Tuesday, January 24, 2023 / 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–2023–04 and should be submitted on or before February 14, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.39 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–01265 Filed 1–23–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96684; File No. SR–CBOE– 2022–051] Self-Regulatory Organizations; Cboe Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend Rules Relating to the Processing of Auction Responses tkelley on DSK125TN23PROD with NOTICES January 18, 2023. On October 3, 2022, Cboe Exchange, Inc. (‘‘the Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change to 39 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 19:17 Jan 23, 2023 Jkt 259001 amend its rules relating to the processing of auction responses. The proposed rule change was published for comment in the Federal Register on October 20, 2022.3 On November 23, 2022, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 The Commission has received no comments on the proposed rule change. This order institutes proceedings under Section 19(b)(2)(B) of the Act 6 to determine whether to approve or disapprove the proposed rule change. I. Summary of the Proposed Rule Change 7 The Exchange proposes to adopt new functionality that would be applicable to all of its auction mechanisms, to increase the likelihood that timely submitted auction responses may participate in the applicable auction, even during periods of high message traffic. The affected auctions are the Complex Order Auction,8 Step Up Mechanism,9 Automated Improvement Mechanism,10 Complex AIM,11 Solicitation Auction Mechanism,12 Complex SAM,13 FLEX Auction Process,14 FLEX AIM 15 and FLEX SAM.16 The Exchange also proposes to amend its current rule relating to Priority Queue 17 functionality to provide itself with discretion on whether or not to implement Priority Queue 18 functionality for responses to the auction mechanisms. The Exchange represents that the above-referenced auction mechanisms provide price improvement opportunities for an eligible order. Within each auction mechanism, the 3 See Securities Exchange Act Release No. 96081 (Oct. 14, 2022), 87 FR 63830 (‘‘Notice’’). 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 96380, 87 FR 73366 (Nov. 29, 2022). The Commission designated January 18, 2023 as the date by which the Commission shall approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. 6 15 U.S.C. 78s(b)(2)(B). 7 For a full description of all aspects of the proposed rule change, please see the Notice, supra note 3. 8 See Cboe Rule 5.33(d). 9 See Cboe Rule 5.35. 10 See Cboe Rule 5.37. 11 See Cboe Rule 5.38. 12 See Cboe Rule 5.39. 13 See Cboe Rule 5.40. 14 See Cboe Rule 5.72(c). 15 See Cboe Rule 5.73. 16 See Cboe Rule 5.74. 17 See Cboe Rule 5.25(c). 18 See Cboe Rule 5.25(c). PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 4243 eligible order is electronically exposed for an Exchange-determined period of time (‘‘auction response period’’) in accordance with the applicable Exchange Rule.19 After the Exchange disseminates an auction notification message, Users 20 may submit responses (‘‘auction responses’’ or ‘‘auction response messages’’) during the auction response period.21 An auction response may only execute in the applicable auction mechanism, and the auction response is cancelled if it does not execute during an auction.22 The Exchange states that auction response messages historically have waited in the same System 23 queue as all other order and quote message traffic.24 According to the Exchange, if an auction response is submitted when there is a deep queue of other unprocessed message traffic (such as mass cancellation messages or other orders and quotes), it is possible that the auction response may not be ‘‘processed’’ by the System prior to the end of the auction response period,25 The Exchange states that in such an instance, the queued auction response may not be able to participate in the applicable auction mechanism because the System had unprocessed (queued) messages at the time of the auction execution, despite the fact that the User submitted the auction response prior to the end of the auction response period.26 The Exchange believes that 19 See Notice, supra note 3, at 63831. term ‘‘User’’ means any Trading Permit Holder or Sponsored User who is authorized to obtain access to the System pursuant to Cboe Rule 5.5. See Cboe Rule 1.1. 21 See Notice, supra note 3, at 63831. 22 See id. 23 The term ‘‘System’’ means the Exchange’s hybrid trading platform that integrates electronic and open outcry trading of option contracts on the Exchange, and includes any connectivity to the foregoing trading platform that is administered by or on behalf of the Exchange, such as a communications hub. See Cboe Rule 1.1. 24 Although the Exchange previously adopted Priority Queue functionality, which provides that auction response messages may be processed through a Priority Queue, and all remaining messages would be processed through a General Queue, the Exchange never implemented use of the functionality. See Notice, supra note 3 at 63832. The Exchange states that, should it decide to implement use of a Priority Queue in the future, it would provide notice to all TPHs. Id. 25 For example, the Exchange states that it takes the System approximately 10 microseconds to process a single order/quote or auction response message and, on average, approximately 190 microseconds to process a mass cancel message. As such, under the current System, an auction response that is entered after a mass cancel message is more likely to be detrimentally delayed as compared to a mass cancel message that is entered after an auction response (i.e., a 190 microsecond ‘‘wait time’’ versus a 10 microsecond ‘‘wait time’’). See id. 26 See id. 20 The E:\FR\FM\24JAN1.SGM 24JAN1

Agencies

[Federal Register Volume 88, Number 15 (Tuesday, January 24, 2023)]
[Notices]
[Pages 4239-4243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01265]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96688; File No. SR-NYSE-2023-04]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rules 9132, 9133, 9135, 9146, 9522, 9524, 9559 and 9630

January 18, 2023.
    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 January 4, 2023, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have

[[Page 4240]]

been prepared by the self-regulatory organization. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rules 9132, 9133, 9135, 9146, 9522, 
9524, 9559 and 9630 to permit, and in some instances require, 
electronic service and filing of documents in disciplinary and other 
proceedings and appeals, in conformity with recent changes by the 
Financial Industry Regulatory Authority, Inc. (``FINRA''). 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 amend Rules 9132, 9133, 9135, 9146, 9522, 
9524, 9559 and 9630 to permit, and in some instances require, 
electronic service and filing of documents in disciplinary and other 
proceedings, in conformity with recent changes by FINRA.
    In 2020, following the outbreak of the Coronavirus Disease 
(``COVID-19''), FINRA temporarily amended certain of its rules, 
including related to the method of service and filing in disciplinary 
proceedings before the Office of Hearing Officers (OHO) and appeals 
before the National Adjudicatory Council (NAC), among other types of 
administrative proceedings (the ``temporary amendments'').\4\ The 
temporary amendments allowed, and in some instances required, FINRA (in 
its capacity as an Adjudicator per Rule 9120) to serve certain 
documents on parties by electronic mail (``email'') and required 
parties to file or serve documents by email, unless the parties agreed 
to an alternative method of service.\5\ Earlier this year, FINRA made 
permanent the temporary amendments to its rules regarding electronic 
service and filing permanent, with some modifications.\6\
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    \4\ See, e.g., Securities Exchange Act Release No. 88917 (May 
20, 2020), 85 FR 31832 (May 27, 2020) (SR-FINRA-2020-015) (Notice 
and immediate effectiveness of filing to temporarily amend certain 
timing, method of service and other procedural requirements in FINRA 
Rules during the outbreak of COVID-19). FINRA extended the temporary 
amendments several times before filing to make certain of the 
aforementioned amendments permanent. The temporary amendments 
included rule changes to permit the conduct of virtual hearings 
(i.e., Rules 9261 and 9830), which rule changes are not being 
included in this proposal. Rather, the Exchange is solely copying a 
subset of rules covered by the temporary amendments as discussed 
herein.
    \5\ See id.
    \6\ See Securities Exchange Act Release Nos. 95147 (June 23, 
2022), 87 FR 38803 (June 29, 2022) (order approving change to 
certain FINRA rules to permit, and in some instances require, 
electronic service and filing of documents in disciplinary and other 
proceedings and appeals) (``Approval Order of FINRA Rules''); 94654 
(April 8, 2022), 87 FR 22264 (April 14, 2022) (SR-FINRA-2022-009) 
(``FINRA Notice''). The Approval Order of FINRA Rules related to 
FINRA Rules 1012, 1015, 6490, 9132, 9133, 9135, 9146, 9321, 9341, 
9349, 9351, 9522, 9524, 9559 and 9630 (collectively, ``the approved 
FINRA Rules'').
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    In support of its filing, FINRA noted that advances in technology 
and its availability made filing and service permitted by the temporary 
amendments more efficient than under FINRA's ``original'' (non-amended) 
rules.\7\ Moreover, FINRA determined that electronic service and filing 
is beneficial for parties, panelists and FINRA staff.\8\ FINRA also 
noted that the Commission likewise amended its rules in November 2020 
to require electronic filing and service of documents in its 
administrative proceedings.\9\ For these reasons, FINRA determined that 
making permanent the temporary amendments would similarly improve and 
modernize FINRA's operations.\10\
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    \7\ See FINRA Notice, 87 FR at 22267.
    \8\ See FINRA Notice, 87 FR at 22267.
    \9\ See Amendments to the Commission's Rules of Practice, 
Securities Exchange Act Release No. 90442 (November 17, 2020), 85 FR 
86464 (File No. S7-18-15) (December 30, 2020) (codified at 17 CFR 
201 (2020)).
    \10\ See FINRA Notice, 87 FR at 22266-67.
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    To likewise improve and modernize Exchange rules, the Exchange 
proposes to modify certain of its disciplinary rules to allow for 
electronic service and filing of documents in disciplinary and other 
proceedings in conformity with the approved FINRA Rules.\11\
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    \11\ Consistent with the Approval Order of FINRA Rules, the 
Exchange is not proposing to permit electronic service of an initial 
complaint on a respondent due to heightened fair process concerns. 
As is the case today, the only permissible methods of serving the 
initial complaint are by hand, mail or courier. See Rule 9131(b) 
(requiring that service be pursuant to Rule 9134(a)).
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Background
    In 2013, the NYSE adopted disciplinary rules that are, with certain 
exceptions, substantially the same as the FINRA Rule 8000 Series and 
Rule 9000 Series, and which set forth rules for conducting 
investigations and enforcement actions.\12\ The NYSE disciplinary rules 
were implemented on July 1, 2013.\13\ The Exchange notes that FINRA and 
OHO administers disciplinary hearings on the Exchange's behalf.
---------------------------------------------------------------------------

    \12\ See Securities Exchange Act Release No. 68678 (January 16, 
2013), 78 FR 5213 (January 24, 2013) (SR-NYSE-2013-02), 69045 (March 
5, 2013), 78 FR 15394 (March 11, 2013) (SR-NYSE-2013-02), and 69963 
(July 10, 2013), 78 FR 42573 (July 16, 2013) (SR-NYSE-2013-49).
    \13\ See NYSE Information Memorandum 13-8 (May 24, 2013).
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    In adopting disciplinary rules modeled on FINRA's rules, the NYSE 
adopted the filing, service and other procedural requirements as 
contained the FINRA Rule 9100, 9500, and 9600 Series. As adopted, the 
text of Exchange Rules 9132, 9133, 9135, 9146, 9522, 9524, 9559 and 
9630 are based on, and are substantially the same as, their counterpart 
FINRA rules.\14\
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    \14\ The Exchange notes that this proposal adopts a subset of 
the approved FINRA Rules, which subset are applicable to the 
Exchange rules. As noted herein, this proposal does not extend to 
the temporary amendments related to the conduct of virtual hearings 
(i.e., Rules 9261 and 9830).
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Proposed Rule Change
    Consistent with FINRA's recent proposal, the Exchange proposes to 
amend certain of its disciplinary rules related to filing, service and 
other procedural requirements and appeals. The proposed rule change 
includes provisions to allow, and in some instances require, FINRA (in 
its capacity as an Adjudicator per Rule 9120) to serve certain 
documents on parties by email and require parties to file or serve 
documents by email, unless another method of service is ordered by the 
Adjudicator.\15\ In addition, to support the transition to email 
service and filing, the Exchange proposes to require parties in OHO 
proceedings to file and serve all

[[Page 4241]]

parties with their current email address and contact information at the 
time of their first appearance, and to file and serve any change in 
email address or contact information during the course of the 
proceeding.
---------------------------------------------------------------------------

    \15\ To the extent that a party lacks the ability to use or 
access technology needed to file, serve or accept service by email, 
FINRA, as adjudicator, may order an alternative method of service 
upon a showing of good cause. See FINRA Notice, 87 FR at 22265.
---------------------------------------------------------------------------

    The proposed rule change would permit service of documents other 
than the initial complaint by email among various other methods of 
service, such as personal service, mail and courier, and to provide 
that service by email is deemed complete upon sending. The Exchange 
intends to elect email service whenever possible. If the Exchange has 
knowledge that the address used for service is not current or not 
functional (i.e., the Exchange receives a bounce back or other message 
indicating that there was a failure to deliver the email), the Exchange 
will use other permissible methods of service until it can verify the 
party's email address.\16\ The Exchange notes that, in most cases, the 
Exchange and the relevant party, or their counsel, will have already 
engaged in communications prior to the service of documents or other 
information. Accordingly, in most cases, the Exchange will already have 
information regarding the relevant party, or their counsel's, preferred 
method of service.
---------------------------------------------------------------------------

    \16\ As indicated in the proposed rule text, the Exchange will 
consider service by email complete upon sending of the relevant 
document or other information. This is consistent with service by 
mail under the current rules.
---------------------------------------------------------------------------

    The Rule 9000 Series, among other things, sets forth the procedure 
for disciplinary proceedings concerning a member, associated person or 
formerly associated person. The Rule 9100 Series is of general 
applicability to all proceedings set forth in the Rule 9000 Series, 
unless a rule specifically provides otherwise. Rules 9132(b),\17\ 
9133(b),\18\ and 9146(l) \19\ provide that the documents and other 
information governed by those rules be served pursuant to Rule 9134, 
which permits service on the parties using the following methods: (1) 
personal service, (2) mail, or (3) courier. Rule 9134 does not permit 
service by email. The proposed rule change would amend Rule 9132(b) to 
allow service of the relevant documents or information by email, and 
Rules 9133(b) and 9146(l) to require parties to serve documents by 
email, unless an alternative method of service is ordered by the 
Adjudicator.
---------------------------------------------------------------------------

    \17\ Rule 9132(b) (Service of Orders, Notices, and Decisions by 
Adjudicator; How Served).
    \18\ Rule 9133(b) (Service of Papers Other Than Complaints, 
Orders, Notices or Decisions; How Served).
    \19\ Rule 9146(l) (Motions; General).
---------------------------------------------------------------------------

    In addition, to support the transition to email service and filing, 
the Exchange proposes to amend Rule 9135 to add paragraph (d), which 
would require parties in OHO proceedings to file and serve the parties 
with their current email address and contact information at the time of 
their first appearance, and to file and serve any change in email 
address or contact information during the course of the proceeding.\20\ 
The Exchange believes this proposed rule change will help ensure that 
documents are successfully sent from and received at a valid email 
address. It will also ensure that all participants, including the 
Exchange, applicants, respondents and any other parties, have accurate 
contact information for all parties.
---------------------------------------------------------------------------

    \20\ See proposed Rule 9135(d) (Filing of Papers with 
Adjudicator: Procedure; Party Contact Information).
---------------------------------------------------------------------------

    The Rule 9520 Series sets forth the procedures for eligibility 
proceedings and review of those proceedings by the Exchange Board. 
Because the applicable rules in this series do not allow for email as a 
method of service, the Exchange proposes to modify Rule 9522(a)(4) \21\ 
and to add new paragraph (d) to Rule 9524 \22\ to permit effective 
service by email.
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    \21\ See proposed Rule 9522(a)(4) (Initiation of Eligibility 
Proceeding; Member Regulation Consideration; Service).
    \22\ See proposed Rule 9524(d) (Exchange Board of Directors 
Consideration; Service by Electronic Mail; When Service is 
Complete).
---------------------------------------------------------------------------

    The Rule 9550 Series sets forth the procedures for expedited 
proceedings and the ability of the Exchange Board to call for review a 
proposed decision prepared under the Rule 9550 Series. Rule 9559(h) 
\23\ sets forth the timing and method of service requirements for the 
parties' exchange of proposed exhibit and witness lists in advance of 
an expedited proceeding, but do not allow for email as a method of 
service. The Exchange proposes to amend Rule 9559(h)(2) to require 
service of exhibit and witness lists by email, unless an alternative 
method of service is ordered by the Adjudicator and to remove text from 
Rule 9559(h)(1) that requires that documents served by email must also 
be served by overnight courier or personal service.\24\ Finally, the 
Exchange proposes to add new paragraph (s) to Rule 9559 to provide 
that, for purposes of proposed Rule 9559(h), service by email is 
complete upon sending the documents or decision.\25\
---------------------------------------------------------------------------

    \23\ Rule 9559(h) (Hearing Procedures for Expedited Proceedings 
Under the Rule 9550 Series). Rule 9559(h) currently permits email as 
a method of service.
    \24\ See proposed Rule 9559(h)(1), (2) (Hearing Procedures for 
Expedited Proceedings Under the Rule 9550 Series; Transmission of 
Documents).
    \25\ See proposed Rule 9559(s) (Hearing Procedures for Expedited 
Proceedings Under the Rule 9550 Series; Service by Email; When 
Service is Complete). Rule 9559(h) currently permits email as a 
method of service.
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    The Rule 9600 Series sets forth the procedures for members to seek 
exemptive relief from a variety of Exchange rules. Rule 9630(e) \26\ 
requires the Exchange (via the Chief Regulatory Officer) to serve its 
decision pursuant to Rules 9132 and 9134, which do not allow for email 
as a method of service. The proposed rule change would amend Rule 9630 
to add new paragraph (d) to allow for email as a method of service.\27\
---------------------------------------------------------------------------

    \26\ See Rule 9630 (Procedures for Exemptions; Appeal).
    \27\ See proposed Rule 9630(f) (Appeal; Service by Electronic 
Mail; When Service is Complete).
---------------------------------------------------------------------------

    The Exchange believes that this proposal, like the approved FINRA 
Rules, will modernize the rules and make service and filing more 
efficient and effective. Email technology is widely available, and use 
of electronic methods of service and filing is common practice in the 
courts and other regulatory agencies, including the Commission.\28\
---------------------------------------------------------------------------

    \28\ See supra note 9 (regarding Amendments to the Commission's 
Rules of Practice).
---------------------------------------------------------------------------

    As noted below, the Exchange has filed the proposed rule change for 
immediate effectiveness and has requested that the Commission 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,\29\ in general, and furthers the objectives of section 
6(b)(5),\30\ 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.\31\
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    \29\ 15 U.S.C. 78f(b).
    \30\ 15 U.S.C. 78f(b)(5).
    \31\ 15 U.S.C. 78f(b)(7) & 78f(d).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change protects 
investors and the public interest by requiring use of broadly available 
technology to make service and filing processes more

[[Page 4242]]

efficient and effective. The Exchange's disciplinary and eligibility 
proceedings and other review processes serve a critical role in 
providing investor protection and maintaining fair and orderly markets 
by, for example, sanctioning misconduct and preventing further customer 
harm by members and associated persons.
    The proposed rule change promotes efficiency in these processes by 
permitting electronic service and filing in most instances. To ensure 
that documents are effectively sent and received, the Exchange is 
proposing to require parties to provide and update their contact 
information, including their email address, during the course of a 
proceeding. These amendments reduce the reliance on paper documents in 
favor of more efficient electronic formats. The Exchange believes that 
the proposed rule change regarding electronic service and filing is 
especially important as hybrid and remote work become more common.
    The Exchange notes that, per the approved FINRA Rules, there are 
procedures in place for persons who lack the ability to use or access 
technology necessary to send or receive documents electronically to 
request relief from FINRA (as the Adjudicator) to file or serve 
documents by another method. Per FINRA, requests to use non-electronic 
methods of service were rare during the approximately two year period 
that it operated under the temporary amendments and, as such, FINRA 
anticipates that such requests under the approved FINRA Rules will be 
rare.
    In addition, the proposed rule change balances the interests of 
fairness and efficiency. As discussed, service of the initial complaint 
will continue to occur by hand, mail or courier, rather than by 
electronic means, thus ensuring there is satisfactory notice and fair 
process.
    Thus, the proposed rule change represents a significant step toward 
modernizing the service and filing processes in a manner that will 
protect investors and the public interest by promoting efficiency while 
preserving fair process.
    The Exchange believes that the proposed rule change supports 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 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.

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 Act. The proposed rule change is 
not intended to address competitive issues but is designed to modernize 
the service and filing process in harmonization with the approved FINRA 
Rules.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received 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 \32\ and Rule 19b-4(f)(6) thereunder.\33\ 
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.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \33\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \34\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\35\ 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 states that 
this filing is non-controversial and eligible to become effective 
immediately because the proposal promotes uniformity in disciplinary 
rules across self-regulatory organizations and thereby enables the 
Exchange to modernize the service and filing process related to the 
conduct of disciplinary hearings.\36\ The Exchange further states that 
the proposed rule change would not significantly affect the protection 
of investors or the public interest or impose any significant burden on 
competition because the proposed rule change is based on the approved 
FINRA Rules. After reviewing the filing, 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.\37\
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    \34\ 17 CFR 240.19b-4(f)(6).
    \35\ 17 CFR 240.19b-4(f)(6)(iii).
    \36\ See supra Item II.
    \37\ 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).
---------------------------------------------------------------------------

    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) \38\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-2023-04 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-NYSE-2023-04. 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 4243]]

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-2023-04 and should be submitted on or before February 14, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\39\
---------------------------------------------------------------------------

    \39\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-01265 Filed 1-23-23; 8:45 am]
BILLING CODE 8011-01-P
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