Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Expiration Date of the Temporary Amendments to Rules 9261 and 9830, 8487-8491 [2023-02713]

Download as PDF khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 88, No. 27 / Thursday, February 9, 2023 / Notices Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Sherry R. Haywood, Assistant Secretary. 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: [FR Doc. 2023–02712 Filed 2–8–23; 8:45 am] 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– MEMX–2023–03 on the subject line. Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Expiration Date of the Temporary Amendments to Rules 9261 and 9830 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–MEMX–2023–03. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–MEMX–2023–03 and should be submitted on or before March 2, 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 30, 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 been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. VerDate Sep<11>2014 16:28 Feb 08, 2023 Jkt 259001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96803; File No. SR–NYSE– 2023–10] February 3, 2023. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes extending the expiration date of the temporary amendments to Rules 9261 and 9830 as set forth in SR–NYSE–2020–76 from January 31, 2023 to April 30, 2023, in conformity with recent changes by the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’). The proposed rule change would not make any changes to the text of NYSE Rules 9261 and 9830. 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 27 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 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 8487 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 extending the expiration date of the temporary amendments as set forth in SR–NYSE– 2020–76 4 to Rules 9261 (Evidence and Procedure in Hearing) and 9830 (Hearing) from January 31, 2023 to April 30, 2023 to harmonize with recent changes by FINRA to extend the expiration date of the temporary amendments to its Rules 9261 and 9830. SR–NYSE–2020–76 temporarily granted to the Chief or Deputy Chief Hearing Officer the authority to order that hearings be conducted by video conference if warranted by the current COVID–19 public health risks posed by in-person hearings. The proposed rule change would not make any changes to the text of Exchange Rules 9261 and 9830.5 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.6 The NYSE disciplinary rules were implemented on July 1, 2013.7 In adopting disciplinary rules modeled on FINRA’s rules, the NYSE adopted the hearing and evidentiary processes set forth in Rule 9261 and in 4 See Securities Exchange Act Release No. 90024 (September 28, 2020), 85 FR 62353 (October 2, 2020) (SR–NYSE–2020–76) (‘‘SR–NYSE–2020–76’’). 5 The Exchange may submit a separate rule filing to extend the expiration date of the proposed extension beyond April 30, 2023 if the Exchange requires additional temporary relief from the rule requirements identified in NYSE–SR–2020–76. The amended NYSE rules will revert back to their original state at the conclusion of the temporary relief period and any extension thereof. 6 See Securities Exchange Act Release No. 68678 (January 16, 2013), 78 FR 5213 (January 24, 2013) (SR–NYSE–2013–02) (‘‘2013 Notice’’), 69045 (March 5, 2013), 78 FR 15394 (March 11, 2013) (SR– NYSE–2013–02) (‘‘2013 Approval Order’’), and 69963 (July 10, 2013), 78 FR 42573 (July 16, 2013) (SR–NYSE–2013–49). 7 See NYSE Information Memorandum 13–8 (May 24, 2013). E:\FR\FM\09FEN1.SGM 09FEN1 8488 Federal Register / Vol. 88, No. 27 / Thursday, February 9, 2023 / Notices khammond on DSKJM1Z7X2PROD with NOTICES Rule 9830 for hearings in matters involving temporary and permanent cease and desist orders under the Rule 9800 Series. As adopted, the text of Rule 9261 is identical to the counterpart FINRA rule. Rule 9830 is substantially the same as FINRA’s rule, except for conforming and technical amendments.8 In response to the COVID–19 global health crisis and the corresponding need to restrict in-person activities, on August 31, 2020, FINRA filed with the Commission a proposed rule change for immediate effectiveness, SR–FINRA– 2020–027, which allowed FINRA’s Office of Hearing Officers (‘‘OHO’’) to conduct hearings, on a temporary basis, by video conference, if warranted by the current COVID–19-related public health risks posed by an in-person hearing. Among the rules FINRA amended were Rules 9261 and 9830.9 Given that FINRA and OHO administers disciplinary hearings on the Exchange’s behalf, and that the public health concerns addressed by FINRA’s amendments apply equally to Exchange disciplinary hearings, on September 15, 2020, the Exchange filed to temporarily amend Rule 9261 and Rule 9830 to permit FINRA to conduct virtual hearings on its behalf.10 In December 2020, FINRA filed a proposed rule change, SR–FINRA–2020–042, to extend the expiration date of the temporary amendments in SR–FINRA–2020–027 from December 31, 2020, to April 30, 2021.11 On December 22, 2020, the Exchange similarly filed to extend the temporary amendments to Rule 9261 and Rule 9830 to April 30, 2021.12 On April 1, 2021, FINRA filed a proposed rule change, SR–FINRA–2021–006, to extend the expiration date of the temporary rule amendments to, among other rules, FINRA Rule 9261 and 9830 from April 30, 2021, to August 31, 2021.13 On April 20, 2021, the Exchange filed to extend the temporary amendments to Rule 9261 and Rule 9830 to August 31, 2021.14 On August 13, 2021, FINRA filed a proposed rule 8 See 2013 Approval Order, 78 FR 15394, n.7 & 15400; 2013 Notice, 78 FR 5228 & 5234. 9 See Securities Exchange Act Release No. 89737 (September 2, 2020), 85 FR 55712 (September 9, 2020) (SR–FINRA–2020–027) (the ‘‘August 31 FINRA Filing’’). 10 See note 4, supra. 11 See Securities Exchange Act Release No. 90619 (December 9, 2020), 85 FR 81250 (December 15, 2020) (SR–FINRA–2020–042). 12 See Securities Exchange Act Release No. 90821 (December 30, 2020), 86 FR 644 (January 6, 2021) (SR–NYSE–2020–107). 13 See Securities Exchange Act Release No. 91495 (April 7, 2021), 86 FR 19306 (April 13, 2021) (SR– FINRA–2021–006). 14 See Securities Exchange Act Release No. 91629 (April 22, 2021), 86 FR 22505 (April 28, 2021) (SR– NYSE–2020–27). VerDate Sep<11>2014 16:28 Feb 08, 2023 Jkt 259001 change, SR–FINRA–2021–019, to extend the expiration date of the temporary amendments to, among other rules, FINRA Rule 9261 and 9830 from August 31, 2021, to December 31, 2021.15 On August 27, 2021, the Exchange filed to extend the temporary amendments to Rule 9261 and Rule 9830 to December 31, 2021.16 On December 7, 2021, FINRA filed a proposed rule change, SR–FINRA–2021–031, to extend the expiration date of the temporary amendments to, among other rules, FINRA Rule 9261 and 9830 from December 31, 2021, to March 31, 2022.17 On December 27, 2021, the Exchange filed to extend the temporary amendments to Rule 9261 and Rule 9830 to March 31, 2022, after which the temporary amendments will expire absent another proposed rule change filing by the Exchange.18 On March 7, 2022, FINRA filed to extend the expiration date of the temporary rule amendments to, among other rules, FINRA Rule 9261 and 9830 from March 31, 2022, to July 31, 2022.19 On March 29, 2022, the Exchange filed to extend the temporary amendments to Rule 9261 and Rule 9830 to July 31, 2022.20 On July 8, 2022, FINRA filed to extend the expiration date of the temporary rule amendments to, among other rules, FINRA Rule 9261 and 9830 from July 31, 2022 to October 31, 2022.21 On July 29, 2022, the Exchange filed to extend the temporary amendments to Rule 9261 and Rule 9830 to October 31, 2022.22 On October 17, 2022, FINRA filed to extend the expiration date of the temporary rule amendments to, among other rules, FINRA Rule 9261 and 9830 from October 31, 2022 to January 31, 2023.23 On October 28, 2022, the Exchange filed to extend the temporary amendments to 15 See Securities Exchange Act Release No. 92685 (August 17, 2021), 86 FR 47169 (August 23, 2021) (SR–FINRA–2021–019). 16 See Securities Exchange Act Release No. 92907 (September 9, 2021), 86 FR 51421 (September 15, 2021) (SR–NYSE–2021–47). 17 See Securities Exchange Act Release No. 93758 (December 13, 2021), 86 FR 71695 (December 17, 2021) (SR–FINRA–2021–31). 18 See Securities Exchange Act Release No. 93920 (January 6, 2022), 87 FR 1794 (January 12, 2022) (SR–NYSE–2021–78). 19 See Securities Exchange Act Release No. 94430 (March 16, 2022), 87 FR 16262 (March 22, 2022) (SR–FINRA–2022–004). 20 See Securities Exchange Act Release No. 94585 (April 1, 2022), 87 FR 20479 (April 7, 2022) (SR– NYSE–2022–17). 21 See Securities Exchange Act Release No. 95281 (July 14, 2022), 87 FR 43335 (July 20, 2022) (SR– FINRA–2022–018). 22 See Securities Exchange Act Release No. 95473 (August 11, 2022), 87 FR 50648 (August17, 2022) (SR–NYSE–2022–35). 23 See Securities Exchange Act Release No. 96107 (October 19, 2022), 87 FR 64526 (October 25, 2022) (SR–FINRA–2022–029). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 Rule 9261 and Rule 9830 to January 31, 2023, after which the temporary amendments will expire absent another proposed rule change filing by the Exchange.24 According to FINRA, due to the upward trend in the number of COVID– 19 cases since October 2022—when FINRA last filed to extend the temporary relief, COVID–19 still remains a public health concern.25 For example, according to the Centers for Disease Control and Prevention (‘‘CDC’’), approximately 61.73 percent of counties in the United States have a medium or high COVID–19 Community Level based on the CDC’s most recent calculations.26 The daily average number of hospital admissions is also on the rise.27 Much uncertainty also remains as to whether there will be a significant increase in the number of cases of COVID–19 in the future given the emergence of new Omicron variants that the CDC currently is tracking 28 and the dissimilar vaccination rates (completed primary series and a first booster dose) throughout the United States.29 Due to the continued presence and uncertainty of COVID–19, FINRA believes that there is a continued need for temporary relief beyond January 31, 2023.30 On January 18, 2023, FINRA accordingly filed to extend the expiration date of the temporary rule amendments to, among other rules, FINRA Rule 9261 and 9830 from January 31, 2023 to April 30, 2023.31 24 See Securities Exchange Act Release No. 96259 (November 8, 2022), 87 FR 68544 (November 15, 2022) (SR–NYSE–2022–50). 25 See Securities Exchange Act Release No. 96746 (January 25, 2023) (‘‘SR–FINRA–2023–001’’). 26 See CDC, COVID Data Tracker—COVID–19 Integrated County View, https://covid.cdc.gov/ covid-data-tracker/#county-view?list_select_ state=all_states&list_select_county=all_ counties&datatype=CommunityLevels&null=CommunityLevels (last visited Jan. 9, 2023). 27 See CDC, COVID Data Tracker Weekly Review—Daily Trend in Number of New COVID– 19 Hospital Admissions in the United States, https://www.cdc.gov/coronavirus/2019-ncov/coviddata/covidview/ (last visited Jan. 9, 2023) (‘‘The current 7-day daily average for December 28, 2022–January 3, 2023, was 6,519. This is a 16.1% increase from the prior 7-day average (5,613) from December 21–27, 2022.’’). 28 These new Omicron variants include BQ.1.1, XBB.1.5 and BQ.1. See CDC, COVID Data Tracker— Variant Proportions, https://covid.cdc.govicoviddata-trackerNvariant-proportions (last visited Jan. 9, 2023). 29 A state-by-state comparison of vaccination rates is available at https://covid.cdc.gov/covid-datatracker/#vaccinations_vacc-people-additional-dosetotalpop (last visited Jan. 9, 2023). 30 See SR–FINRA–2023–001. 31 See generally SR–FINRA–2023–001. As a further basis for extending the temporary rule relief until April 30, 2023, FINRA noted that its Board has approved the submission of a rule proposal to the Commission to make permanent, with some E:\FR\FM\09FEN1.SGM 09FEN1 Federal Register / Vol. 88, No. 27 / Thursday, February 9, 2023 / Notices Proposed Rule Change khammond on DSKJM1Z7X2PROD with NOTICES Consistent with FINRA’s recent proposal, the Exchange proposes to extend the expiration date of the temporary rule amendments to NYSE Rules 9261 and 9830 as set forth in SR– NYSE–2020–76 from January 31, 2023 to April 30, 2023. As set forth in SR–FINRA–2023–001, due to the upward trend in the number of COVID–19 cases since October 2022—when FINRA last filed to extend the temporary relief, COVID–19 still remains a public health concern. For example, according to the Centers for Disease Control and Prevention (‘‘CDC’’), approximately 61.73 percent of counties in the United States have a medium or high COVID–19 Community Level based on the CDC’s most recent calculations.32 The daily average number of hospital admissions is also on the rise.33 Much uncertainty also remains as to whether there will be a significant increase in the number of cases of COVID–19 in the future given the emergence of new Omicron variants that the CDC currently is tracking 34 and the dissimilar vaccination rates (completed primary series and a first booster dose) throughout the United States.35 Due to the continued presence and uncertainty of COVID–19, FINRA believes that there is a continued need for temporary relief beyond January 31, 2023.36 FINRA accordingly proposed to extend the expiration date of the temporary rule amendments from January 31, 2023 to April 30, 2023. The Exchange proposes to similarly extend the expiration date of the temporary rule amendments to NYSE Rules 9261 and 9830 as set forth in SR– NYSE–2020–76 from January 31, 2023 to April 30, 2023. The Exchange agrees with FINRA that, due to the upward trend in the number of COVID–19 cases modifications, the temporary rules to allow hearings to be conducted by video conference originally set forth in SR–FINRA–2020–027 and SR–FINRA–2020–015. See https://www.finra.org/ about/governance/finra-board-governors/meetings/ update-finra-board-governors-meeting-december2022. See id., at n 14. FINRA indicated that the extension of the temporary rule amendments until April 30, 2023 would help avoid FINRA’s rules reverting to their original form and allow FINRA time to file for (and the Commission time to approve) the permanent rules. See id. 32 See supra note 26 (CDC, COVID Data Tracker— COVID–19 Integrated County View). 33 See supra note 27 (CDC, COVID Data Tracker Weekly Review—Daily Trend in Number of New COVID–19 Hospital Admissions in the United States). 34 See supra note 28 (regarding the new Omicron variants described in CDC, COVID Data Tracker— Variant Proportions). 35 See supra note 29 (regarding state-by-state comparison of COVID–19 vaccination rates). 36 See SR–FINRA–2023–001. VerDate Sep<11>2014 16:28 Feb 08, 2023 Jkt 259001 since October 2022—when FINRA last filed to extend the temporary relief, that COVID–19 still remains a public health concern. The Exchange also agrees that due to the continued presence and uncertainty of COVID–19, for the reasons set forth in SR–FINRA–2023– 001, there is a continued need for this temporary relief beyond January 31, 2023. The proposed change would permit OHO to continue to assess, based on critical COVID–19 data and criteria and the guidance of health and security consultants, whether an in-person hearing would compromise the health and safety of the hearing participants such that the hearing should proceed by video conference. As noted in SR– FINRA–2023–001, in deciding whether to schedule a hearing by video conference, OHO may consider a variety of other factors in addition to COVID– 19 trends. Similarly, as noted in SR– FINRA–2023–001, in SR–FINRA–2020– 027, FINRA provided a non-exhaustive list of other factors OHO may take into consideration, including a hearing participant’s individual health concerns and access to the connectivity and technology necessary to participate in a video conference hearing.37 The Exchange believes that this is a reasonable procedure to continue to follow for hearings under Rules 9261 and 9830 chaired by a FINRA employee. As noted below, the Exchange has filed the proposed rule change for immediate effectiveness and has requested that the SEC waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing, so the Exchange can implement the proposed rule change immediately. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,38 in general, and furthers the objectives of Section 6(b)(5),39 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 SR–FINRA–2023–001. U.S.C. 78f(b). 39 15 U.S.C. 78f(b)(5). members and persons associated with members, consistent with Sections 6(b)(7) and 6(d) of the Act.40 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. The proposed rule change, which extends the expiration date of the temporary amendments to Exchange rules consistent with FINRA’s extension to its Rules 9261 and 9830 as set forth in SR–FINRA–2023–001, will permit the Exchange to continue to effectively conduct hearings given the continued presence and uncertainty of COVID–19. Given that COVID–19 remains a public health concern and the uncertainty around a potential spike in cases of the disease, without this relief allowing OHO to proceed by video conference, some or all hearings may have to be postponed. The ability to conduct hearings by video conference will permit the adjudicatory functions of the Exchange’s disciplinary rules to continue unabated, thereby avoiding protracted delays. The Exchange believes that this is especially important in matters where temporary and permanent cease and desist orders are sought because the proposed rule change would enable those hearings to continue to proceed without delay, thereby enabling the Exchange to continue to take immediate action to stop significant, ongoing customer harm, to the benefit of the investing public. As set forth in detail in the SR– NYSE–2020–76, the temporary relief to permit hearings to be conducted via video conference maintains fair process and will continue to provide fair process consistent with Sections 6(b)(7) and 6(d) of the Act 41 while striking an appropriate balance between providing fair process and enabling the Exchange to fulfill its statutory obligations to protect investors and maintain fair and orderly markets while avoiding the COVID–19-related public health risks for hearing participants. The Exchange notes that this proposal, like SR–NYSE– 2020–76, provides only temporary 37 See 38 15 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 8489 40 15 41 15 E:\FR\FM\09FEN1.SGM U.S.C. 78f(b)(7) and 78f(d). U.S.C. 78f(b)(7) and 78f(d). 09FEN1 8490 Federal Register / Vol. 88, No. 27 / Thursday, February 9, 2023 / Notices relief. As proposed, the changes would be in place through April 30, 2023. As noted in SR–NYSE–2020–76 and above, the amended rules will revert back to their original state at the conclusion of the temporary relief period and, if applicable, any extension thereof. Accordingly, the proposed rule change extending this temporary relief is in the public interest and consistent with the Act’s purpose. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed temporary rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not intended to address competitive issues but is rather intended solely to extend temporary relief necessitated by the continued presence and uncertainty of COVID–19 and the related health and safety risks of conducting in-person activities. The Exchange believes that the proposed rule change will prevent unnecessary impediments to critical adjudicatory processes and its ability to fulfill its statutory obligations to protect investors and maintain fair and orderly markets that would otherwise result if the temporary amendments were to expire on January 31, 2023. 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. khammond on DSKJM1Z7X2PROD with NOTICES 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 42 and Rule 19b–4(f)(6) thereunder.43 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. 42 15 43 17 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). VerDate Sep<11>2014 16:28 Feb 08, 2023 Jkt 259001 A proposed rule change filed under Rule 19b–4(f)(6) 44 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),45 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange has indicated that there is a continued need to extend the temporary relief because the Exchange agrees with FINRA that the COVID–19 related health concerns necessitating this relief will continue beyond January 31, 2023.46 The Exchange also states that extending the temporary relief provided in SR–NYSE–2020–76 immediately upon filing and without a 30-day operative delay will allow the Exchange to continue critical adjudicatory and review processes so that the Exchange may continue to operate effectively and meet its critical investor protection goals, while also protecting the health and safety of hearing participants.47 The Commission also notes that this proposal extends without change the temporary relief previously provided by SR–NYSE– 2020–76.48 As proposed, the temporary changes would be in place through April 30, 2023 and the amended rules will revert back to their original state at the conclusion of the temporary relief period and, if applicable, any extension thereof.49 For these reasons, the Commission believes that waiver of the 30-day operative delay for this proposal is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.50 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may 44 17 CFR 240.19b–4(f)(6). CFR 240.19b–4(f)(6)(iii). 46 See supra Item II; see also SR–FINRA–2023– 001. 47 See SR–FINRA–2023–001 (noting the same in granting FINRA’s request to waive the 30-day operative delay so that SR–FINRA–2023–001 would become operative immediately upon filing). 48 See supra note 4. 49 See supra note 5. As noted above, the Exchange states that if it requires temporary relief from the rule requirements identified in this proposal beyond April 30, 2023, it may submit a separate rule filing to extend the effectiveness of the temporary relief under these rules. 50 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). 45 17 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 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) 51 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–2023–10 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–2023–10. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are 51 15 E:\FR\FM\09FEN1.SGM U.S.C. 78s(b)(2)(B). 09FEN1 Federal Register / Vol. 88, No. 27 / Thursday, February 9, 2023 / Notices cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE–2023–10 and should be submitted on or before March 2, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.52 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–02713 Filed 2–8–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96800; File No. SR–FICC– 2023–001] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Clearing Agency Risk Management Framework February 3, 2023. 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 January 30, 2023, Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the clearing agency. FICC filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(4) thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. khammond on DSKJM1Z7X2PROD with NOTICES I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change amends the Clearing Agency Risk Management Framework (‘‘Risk Management Framework’’, or ‘‘Framework’’) of FICC and its affiliates, The Depository Trust Company (‘‘DTC’’) and National Securities Clearing Corporation (‘‘NSCC,’’ and together with FICC, the ‘‘CCPs’’ and the CCPs together with 52 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(4). 1 15 VerDate Sep<11>2014 16:28 Feb 08, 2023 Jkt 259001 DTC, the ‘‘Clearing Agencies’’).5 Specifically, the proposed rule change would amend the Risk Management Framework to (1) update the description of the dashboards used by the Clearing Agencies as internal performance management tools to measure the effectiveness of their various operations; and (2) clarify and revise the descriptions of certain matters within the Framework and correct errors in those descriptions, as further described below. The proposed changes would update and clarify the Risk Management Framework but do not reflect changes to how the Clearing Agencies comply with the applicable requirements of Rule 17Ad–22(e), as described in greater detail below. II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. (A) Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Clearing Agencies adopted the Risk Management Framework 6 to provide an outline for how each of the Clearing Agencies (i) maintains a wellfounded, clear, transparent and enforceable legal basis for each aspect of its activities; (ii) comprehensively manages legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by it; (iii) identifies, monitors, and manages risks related to links it establishes with one or more clearing agencies, financial market utilities, or trading markets; (iv) meets the requirements of its 5 See Securities Exchange Act Release Nos. 81635 (September 15, 2017), 82 FR 44224 (September 21, 2017) (File Nos. SR–DTC–2017–013; SR–FICC– 2017–016; SR–NSCC–2017–012) (‘‘Initial Filing’’) and Securities Exchange Act Release No. 89271 (July 09, 2020), 85 FR 42933 (July 15, 2020) (File No. SR–NSCC–2020–012); Securities Exchange Act Release No. 89269 (July 09, 2020), 85 FR 42954 (July 15, 2020) (File No. SR–DTC–2020–009); and Securities Exchange Act Release No. 89270 (July 09, 2020), 85 FR 42927 (July 15, 2020) (File No. SR– FICC–2020–007) (together with the Initial Filing, the ‘‘Framework Filings’’). 6 Supra note 5. PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 8491 participants and the markets it serves efficiently and effectively; (v) uses, or at a minimum accommodates, relevant internationally accepted communication procedures and standards in order to facilitate efficient payment, clearing and settlement; and (vi) publicly discloses certain information, including market data. In this way, the Risk Management Framework currently supports the Clearing Agencies’ compliance with Rules 17Ad–22(e)(1), (3), (20), (21), (22) and (23) of the Standards,7 as described in the Framework Filings. In addition to setting forth the manner in which each of the Clearing Agencies addresses these requirements, the Risk Management Framework also contains a section titled ‘‘Framework Ownership and Change Management’’ that, among other matters, describes the Framework ownership and the required governance process for review and approval of changes to the Framework. In connection with the annual review and approval of the Framework by the Board of Directors of each of NSCC, DTC and FICC (each a ‘‘Board’’ and collectively, the ‘‘Boards’’), the Clearing Agencies are proposing to make certain revisions to the Framework. First, the proposed changes would update the Risk Management Framework to reflect a change to the dashboards used by the Clearing Agencies as internal performance management tools to measure the effectiveness of various aspects of their operations, as described in greater detail below. The proposed changes would also clarify and enhance the descriptions in the Risk Management Framework and correct errors in those descriptions by, for example, (1) enhancing the description of the Clearing Agencies processes for management of certain risks through risk tolerance statements; (2) clarifying the description of the ‘‘Three Lines of Defense,’’ including but not limited to updating the descriptions of the ‘‘first line of defense,’’ the ‘‘second line of defense,’’ and the ‘‘third line of defense,’’ (3) clarifying the definition of Rules; (4) enhancing the description of the purpose and approval process of ‘‘Risk Management Frameworks;’’ and (5) updating the name of the Operational Risk Management group and the Third Party Risk function. Finally, the proposed changes would capitalize terms that mistakenly were not previously capitalized but refer to a specific term, remove an unnecessary 7 17 CFR 240.17Ad–22(e)(1), (3), (20), (21), (22) and (23). E:\FR\FM\09FEN1.SGM 09FEN1

Agencies

[Federal Register Volume 88, Number 27 (Thursday, February 9, 2023)]
[Notices]
[Pages 8487-8491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02713]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96803; File No. SR-NYSE-2023-10]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Extending the Expiration Date of the Temporary Amendments to Rules 9261 
and 9830

February 3, 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 30, 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 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 extending the expiration date of the 
temporary amendments to Rules 9261 and 9830 as set forth in SR-NYSE-
2020-76 from January 31, 2023 to April 30, 2023, in conformity with 
recent changes by the Financial Industry Regulatory Authority, Inc. 
(``FINRA''). The proposed rule change would not make any changes to the 
text of NYSE Rules 9261 and 9830. 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 extending the expiration date of the 
temporary amendments as set forth in SR-NYSE-2020-76 \4\ to Rules 9261 
(Evidence and Procedure in Hearing) and 9830 (Hearing) from January 31, 
2023 to April 30, 2023 to harmonize with recent changes by FINRA to 
extend the expiration date of the temporary amendments to its Rules 
9261 and 9830. SR-NYSE-2020-76 temporarily granted to the Chief or 
Deputy Chief Hearing Officer the authority to order that hearings be 
conducted by video conference if warranted by the current COVID-19 
public health risks posed by in-person hearings. The proposed rule 
change would not make any changes to the text of Exchange Rules 9261 
and 9830.\5\
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    \4\ See Securities Exchange Act Release No. 90024 (September 28, 
2020), 85 FR 62353 (October 2, 2020) (SR-NYSE-2020-76) (``SR-NYSE-
2020-76'').
    \5\ The Exchange may submit a separate rule filing to extend the 
expiration date of the proposed extension beyond April 30, 2023 if 
the Exchange requires additional temporary relief from the rule 
requirements identified in NYSE-SR-2020-76. The amended NYSE rules 
will revert back to their original state at the conclusion of the 
temporary relief period and any extension thereof.
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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.\6\ The NYSE disciplinary rules 
were implemented on July 1, 2013.\7\
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    \6\ See Securities Exchange Act Release No. 68678 (January 16, 
2013), 78 FR 5213 (January 24, 2013) (SR-NYSE-2013-02) (``2013 
Notice''), 69045 (March 5, 2013), 78 FR 15394 (March 11, 2013) (SR-
NYSE-2013-02) (``2013 Approval Order''), and 69963 (July 10, 2013), 
78 FR 42573 (July 16, 2013) (SR-NYSE-2013-49).
    \7\ 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 hearing and evidentiary processes set forth in Rule 9261 
and in

[[Page 8488]]

Rule 9830 for hearings in matters involving temporary and permanent 
cease and desist orders under the Rule 9800 Series. As adopted, the 
text of Rule 9261 is identical to the counterpart FINRA rule. Rule 9830 
is substantially the same as FINRA's rule, except for conforming and 
technical amendments.\8\
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    \8\ See 2013 Approval Order, 78 FR 15394, n.7 & 15400; 2013 
Notice, 78 FR 5228 & 5234.
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    In response to the COVID-19 global health crisis and the 
corresponding need to restrict in-person activities, on August 31, 
2020, FINRA filed with the Commission a proposed rule change for 
immediate effectiveness, SR-FINRA-2020-027, which allowed FINRA's 
Office of Hearing Officers (``OHO'') to conduct hearings, on a 
temporary basis, by video conference, if warranted by the current 
COVID-19-related public health risks posed by an in-person hearing. 
Among the rules FINRA amended were Rules 9261 and 9830.\9\
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    \9\ See Securities Exchange Act Release No. 89737 (September 2, 
2020), 85 FR 55712 (September 9, 2020) (SR-FINRA-2020-027) (the 
``August 31 FINRA Filing'').
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    Given that FINRA and OHO administers disciplinary hearings on the 
Exchange's behalf, and that the public health concerns addressed by 
FINRA's amendments apply equally to Exchange disciplinary hearings, on 
September 15, 2020, the Exchange filed to temporarily amend Rule 9261 
and Rule 9830 to permit FINRA to conduct virtual hearings on its 
behalf.\10\ In December 2020, FINRA filed a proposed rule change, SR-
FINRA-2020-042, to extend the expiration date of the temporary 
amendments in SR-FINRA-2020-027 from December 31, 2020, to April 30, 
2021.\11\ On December 22, 2020, the Exchange similarly filed to extend 
the temporary amendments to Rule 9261 and Rule 9830 to April 30, 
2021.\12\ On April 1, 2021, FINRA filed a proposed rule change, SR-
FINRA-2021-006, to extend the expiration date of the temporary rule 
amendments to, among other rules, FINRA Rule 9261 and 9830 from April 
30, 2021, to August 31, 2021.\13\ On April 20, 2021, the Exchange filed 
to extend the temporary amendments to Rule 9261 and Rule 9830 to August 
31, 2021.\14\ On August 13, 2021, FINRA filed a proposed rule change, 
SR-FINRA-2021-019, to extend the expiration date of the temporary 
amendments to, among other rules, FINRA Rule 9261 and 9830 from August 
31, 2021, to December 31, 2021.\15\ On August 27, 2021, the Exchange 
filed to extend the temporary amendments to Rule 9261 and Rule 9830 to 
December 31, 2021.\16\ On December 7, 2021, FINRA filed a proposed rule 
change, SR-FINRA-2021-031, to extend the expiration date of the 
temporary amendments to, among other rules, FINRA Rule 9261 and 9830 
from December 31, 2021, to March 31, 2022.\17\ On December 27, 2021, 
the Exchange filed to extend the temporary amendments to Rule 9261 and 
Rule 9830 to March 31, 2022, after which the temporary amendments will 
expire absent another proposed rule change filing by the Exchange.\18\ 
On March 7, 2022, FINRA filed to extend the expiration date of the 
temporary rule amendments to, among other rules, FINRA Rule 9261 and 
9830 from March 31, 2022, to July 31, 2022.\19\ On March 29, 2022, the 
Exchange filed to extend the temporary amendments to Rule 9261 and Rule 
9830 to July 31, 2022.\20\ On July 8, 2022, FINRA filed to extend the 
expiration date of the temporary rule amendments to, among other rules, 
FINRA Rule 9261 and 9830 from July 31, 2022 to October 31, 2022.\21\ On 
July 29, 2022, the Exchange filed to extend the temporary amendments to 
Rule 9261 and Rule 9830 to October 31, 2022.\22\ On October 17, 2022, 
FINRA filed to extend the expiration date of the temporary rule 
amendments to, among other rules, FINRA Rule 9261 and 9830 from October 
31, 2022 to January 31, 2023.\23\ On October 28, 2022, the Exchange 
filed to extend the temporary amendments to Rule 9261 and Rule 9830 to 
January 31, 2023, after which the temporary amendments will expire 
absent another proposed rule change filing by the Exchange.\24\
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    \10\ See note 4, supra.
    \11\ See Securities Exchange Act Release No. 90619 (December 9, 
2020), 85 FR 81250 (December 15, 2020) (SR-FINRA-2020-042).
    \12\ See Securities Exchange Act Release No. 90821 (December 30, 
2020), 86 FR 644 (January 6, 2021) (SR-NYSE-2020-107).
    \13\ See Securities Exchange Act Release No. 91495 (April 7, 
2021), 86 FR 19306 (April 13, 2021) (SR-FINRA-2021-006).
    \14\ See Securities Exchange Act Release No. 91629 (April 22, 
2021), 86 FR 22505 (April 28, 2021) (SR-NYSE-2020-27).
    \15\ See Securities Exchange Act Release No. 92685 (August 17, 
2021), 86 FR 47169 (August 23, 2021) (SR-FINRA-2021-019).
    \16\ See Securities Exchange Act Release No. 92907 (September 9, 
2021), 86 FR 51421 (September 15, 2021) (SR-NYSE-2021-47).
    \17\ See Securities Exchange Act Release No. 93758 (December 13, 
2021), 86 FR 71695 (December 17, 2021) (SR-FINRA-2021-31).
    \18\ See Securities Exchange Act Release No. 93920 (January 6, 
2022), 87 FR 1794 (January 12, 2022) (SR-NYSE-2021-78).
    \19\ See Securities Exchange Act Release No. 94430 (March 16, 
2022), 87 FR 16262 (March 22, 2022) (SR-FINRA-2022-004).
    \20\ See Securities Exchange Act Release No. 94585 (April 1, 
2022), 87 FR 20479 (April 7, 2022) (SR-NYSE-2022-17).
    \21\ See Securities Exchange Act Release No. 95281 (July 14, 
2022), 87 FR 43335 (July 20, 2022) (SR-FINRA-2022-018).
    \22\ See Securities Exchange Act Release No. 95473 (August 11, 
2022), 87 FR 50648 (August17, 2022) (SR-NYSE-2022-35).
    \23\ See Securities Exchange Act Release No. 96107 (October 19, 
2022), 87 FR 64526 (October 25, 2022) (SR-FINRA-2022-029).
    \24\ See Securities Exchange Act Release No. 96259 (November 8, 
2022), 87 FR 68544 (November 15, 2022) (SR-NYSE-2022-50).
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    According to FINRA, due to the upward trend in the number of COVID-
19 cases since October 2022--when FINRA last filed to extend the 
temporary relief, COVID-19 still remains a public health concern.\25\ 
For example, according to the Centers for Disease Control and 
Prevention (``CDC''), approximately 61.73 percent of counties in the 
United States have a medium or high COVID-19 Community Level based on 
the CDC's most recent calculations.\26\ The daily average number of 
hospital admissions is also on the rise.\27\ Much uncertainty also 
remains as to whether there will be a significant increase in the 
number of cases of COVID-19 in the future given the emergence of new 
Omicron variants that the CDC currently is tracking \28\ and the 
dissimilar vaccination rates (completed primary series and a first 
booster dose) throughout the United States.\29\ Due to the continued 
presence and uncertainty of COVID-19, FINRA believes that there is a 
continued need for temporary relief beyond January 31, 2023.\30\ On 
January 18, 2023, FINRA accordingly filed to extend the expiration date 
of the temporary rule amendments to, among other rules, FINRA Rule 9261 
and 9830 from January 31, 2023 to April 30, 2023.\31\
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    \25\ See Securities Exchange Act Release No. 96746 (January 25, 
2023) (``SR-FINRA-2023-001'').
    \26\ See CDC, COVID Data Tracker--COVID-19 Integrated County 
View, https://covid.cdc.gov/covid-data-tracker/#county-view?list_select_state=all_states&list_select_county=all_counties&data-type=CommunityLevels&null=CommunityLevels (last visited Jan. 9, 
2023).
    \27\ See CDC, COVID Data Tracker Weekly Review--Daily Trend in 
Number of New COVID-19 Hospital Admissions in the United States, 
https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/ (last visited Jan. 9, 2023) (``The current 7-day daily 
average for December 28, 2022-January 3, 2023, was 6,519. This is a 
16.1% increase from the prior 7-day average (5,613) from December 
21-27, 2022.'').
    \28\ These new Omicron variants include BQ.1.1, XBB.1.5 and 
BQ.1. See CDC, COVID Data Tracker--Variant Proportions, https://covid.cdc.govicovid-data-trackerNvariant-proportions (last visited 
Jan. 9, 2023).
    \29\ A state-by-state comparison of vaccination rates is 
available at https://covid.cdc.gov/covid-data-tracker/#vaccinations_vacc-people-additional-dose-totalpop (last visited 
Jan. 9, 2023).
    \30\ See SR-FINRA-2023-001.
    \31\ See generally SR-FINRA-2023-001. As a further basis for 
extending the temporary rule relief until April 30, 2023, FINRA 
noted that its Board has approved the submission of a rule proposal 
to the Commission to make permanent, with some modifications, the 
temporary rules to allow hearings to be conducted by video 
conference originally set forth in SR-FINRA-2020-027 and SR-FINRA-
2020-015. See https://www.finra.org/about/governance/finra-board-governors/meetings/update-finra-board-governors-meeting-december-2022. See id., at n 14. FINRA indicated that the extension of the 
temporary rule amendments until April 30, 2023 would help avoid 
FINRA's rules reverting to their original form and allow FINRA time 
to file for (and the Commission time to approve) the permanent 
rules. See id.

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[[Page 8489]]

Proposed Rule Change
    Consistent with FINRA's recent proposal, the Exchange proposes to 
extend the expiration date of the temporary rule amendments to NYSE 
Rules 9261 and 9830 as set forth in SR-NYSE-2020-76 from January 31, 
2023 to April 30, 2023.
    As set forth in SR-FINRA-2023-001, due to the upward trend in the 
number of COVID-19 cases since October 2022--when FINRA last filed to 
extend the temporary relief, COVID-19 still remains a public health 
concern. For example, according to the Centers for Disease Control and 
Prevention (``CDC''), approximately 61.73 percent of counties in the 
United States have a medium or high COVID-19 Community Level based on 
the CDC's most recent calculations.\32\ The daily average number of 
hospital admissions is also on the rise.\33\ Much uncertainty also 
remains as to whether there will be a significant increase in the 
number of cases of COVID-19 in the future given the emergence of new 
Omicron variants that the CDC currently is tracking \34\ and the 
dissimilar vaccination rates (completed primary series and a first 
booster dose) throughout the United States.\35\ Due to the continued 
presence and uncertainty of COVID-19, FINRA believes that there is a 
continued need for temporary relief beyond January 31, 2023.\36\ FINRA 
accordingly proposed to extend the expiration date of the temporary 
rule amendments from January 31, 2023 to April 30, 2023.
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    \32\ See supra note 26 (CDC, COVID Data Tracker--COVID-19 
Integrated County View).
    \33\ See supra note 27 (CDC, COVID Data Tracker Weekly Review--
Daily Trend in Number of New COVID-19 Hospital Admissions in the 
United States).
    \34\ See supra note 28 (regarding the new Omicron variants 
described in CDC, COVID Data Tracker--Variant Proportions).
    \35\ See supra note 29 (regarding state-by-state comparison of 
COVID-19 vaccination rates).
    \36\ See SR-FINRA-2023-001.
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    The Exchange proposes to similarly extend the expiration date of 
the temporary rule amendments to NYSE Rules 9261 and 9830 as set forth 
in SR-NYSE-2020-76 from January 31, 2023 to April 30, 2023. The 
Exchange agrees with FINRA that, due to the upward trend in the number 
of COVID-19 cases since October 2022--when FINRA last filed to extend 
the temporary relief, that COVID-19 still remains a public health 
concern. The Exchange also agrees that due to the continued presence 
and uncertainty of COVID-19, for the reasons set forth in SR-FINRA-
2023-001, there is a continued need for this temporary relief beyond 
January 31, 2023. The proposed change would permit OHO to continue to 
assess, based on critical COVID-19 data and criteria and the guidance 
of health and security consultants, whether an in-person hearing would 
compromise the health and safety of the hearing participants such that 
the hearing should proceed by video conference. As noted in SR-FINRA-
2023-001, in deciding whether to schedule a hearing by video 
conference, OHO may consider a variety of other factors in addition to 
COVID-19 trends. Similarly, as noted in SR-FINRA-2023-001, in SR-FINRA-
2020-027, FINRA provided a non-exhaustive list of other factors OHO may 
take into consideration, including a hearing participant's individual 
health concerns and access to the connectivity and technology necessary 
to participate in a video conference hearing.\37\ The Exchange believes 
that this is a reasonable procedure to continue to follow for hearings 
under Rules 9261 and 9830 chaired by a FINRA employee.
---------------------------------------------------------------------------

    \37\ See SR-FINRA-2023-001.
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    As noted below, the Exchange has filed the proposed rule change for 
immediate effectiveness and has requested that the SEC waive the 
requirement that the proposed rule change not become operative for 30 
days after the date of the filing, so the Exchange can implement the 
proposed rule change immediately.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\38\ in general, and furthers the objectives of Section 
6(b)(5),\39\ 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.\40\
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    \38\ 15 U.S.C. 78f(b).
    \39\ 15 U.S.C. 78f(b)(5).
    \40\ 15 U.S.C. 78f(b)(7) and 78f(d).
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    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.
    The proposed rule change, which extends the expiration date of the 
temporary amendments to Exchange rules consistent with FINRA's 
extension to its Rules 9261 and 9830 as set forth in SR-FINRA-2023-001, 
will permit the Exchange to continue to effectively conduct hearings 
given the continued presence and uncertainty of COVID-19. Given that 
COVID-19 remains a public health concern and the uncertainty around a 
potential spike in cases of the disease, without this relief allowing 
OHO to proceed by video conference, some or all hearings may have to be 
postponed.
    The ability to conduct hearings by video conference will permit the 
adjudicatory functions of the Exchange's disciplinary rules to continue 
unabated, thereby avoiding protracted delays. The Exchange believes 
that this is especially important in matters where temporary and 
permanent cease and desist orders are sought because the proposed rule 
change would enable those hearings to continue to proceed without 
delay, thereby enabling the Exchange to continue to take immediate 
action to stop significant, ongoing customer harm, to the benefit of 
the investing public.
    As set forth in detail in the SR-NYSE-2020-76, the temporary relief 
to permit hearings to be conducted via video conference maintains fair 
process and will continue to provide fair process consistent with 
Sections 6(b)(7) and 6(d) of the Act \41\ while striking an appropriate 
balance between providing fair process and enabling the Exchange to 
fulfill its statutory obligations to protect investors and maintain 
fair and orderly markets while avoiding the COVID-19-related public 
health risks for hearing participants. The Exchange notes that this 
proposal, like SR-NYSE-2020-76, provides only temporary

[[Page 8490]]

relief. As proposed, the changes would be in place through April 30, 
2023. As noted in SR-NYSE-2020-76 and above, the amended rules will 
revert back to their original state at the conclusion of the temporary 
relief period and, if applicable, any extension thereof.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78f(b)(7) and 78f(d).
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    Accordingly, the proposed rule change extending this temporary 
relief is in the public interest and consistent with the Act's purpose.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed temporary rule 
change will impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
rule change is not intended to address competitive issues but is rather 
intended solely to extend temporary relief necessitated by the 
continued presence and uncertainty of COVID-19 and the related health 
and safety risks of conducting in-person activities. The Exchange 
believes that the proposed rule change will prevent unnecessary 
impediments to critical adjudicatory processes and its ability to 
fulfill its statutory obligations to protect investors and maintain 
fair and orderly markets that would otherwise result if the temporary 
amendments were to expire on January 31, 2023.

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 \42\ and Rule 19b-4(f)(6) thereunder.\43\ 
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.
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    \42\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \43\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \44\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\45\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange has 
indicated that there is a continued need to extend the temporary relief 
because the Exchange agrees with FINRA that the COVID-19 related health 
concerns necessitating this relief will continue beyond January 31, 
2023.\46\ The Exchange also states that extending the temporary relief 
provided in SR-NYSE-2020-76 immediately upon filing and without a 30-
day operative delay will allow the Exchange to continue critical 
adjudicatory and review processes so that the Exchange may continue to 
operate effectively and meet its critical investor protection goals, 
while also protecting the health and safety of hearing 
participants.\47\ The Commission also notes that this proposal extends 
without change the temporary relief previously provided by SR-NYSE-
2020-76.\48\ As proposed, the temporary changes would be in place 
through April 30, 2023 and the amended rules will revert back to their 
original state at the conclusion of the temporary relief period and, if 
applicable, any extension thereof.\49\ For these reasons, the 
Commission believes that waiver of the 30-day operative delay for this 
proposal is consistent with the protection of investors and the public 
interest. Accordingly, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\50\
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    \44\ 17 CFR 240.19b-4(f)(6).
    \45\ 17 CFR 240.19b-4(f)(6)(iii).
    \46\ See supra Item II; see also SR-FINRA-2023-001.
    \47\ See SR-FINRA-2023-001 (noting the same in granting FINRA's 
request to waive the 30-day operative delay so that SR-FINRA-2023-
001 would become operative immediately upon filing).
    \48\ See supra note 4.
    \49\ See supra note 5. As noted above, the Exchange states that 
if it requires temporary relief from the rule requirements 
identified in this proposal beyond April 30, 2023, it may submit a 
separate rule filing to extend the effectiveness of the temporary 
relief under these rules.
    \50\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \51\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \51\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2023-10 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-2023-10. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are

[[Page 8491]]

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-2023-10 and should be submitted on 
or before March 2, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\52\
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    \52\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-02713 Filed 2-8-23; 8:45 am]
BILLING CODE 8011-01-P
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