Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 308 as Defined in Rule 9232(b) and Delete and Replace Certain Obsolete References, 19334-19338 [2023-06657]
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Federal Register / Vol. 88, No. 62 / Friday, March 31, 2023 / Notices
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern Market Dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
Competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Docketed Proceeding(s)
Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the Market Dominant or
the Competitive product list, or the
modification of an existing product
currently appearing on the Market
Dominant or the Competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern Market Dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
Competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
II. Docketed Proceeding(s)
1. Docket No(s).: MC2023–124 and
CP2023–127; Filing Title: USPS Request
to Add Priority Mail Contract 777 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: March 24, 2023; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative: Arif
Hafiz; Comments Due: April 3, 2023.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2023–06658 Filed 3–30–23; 8:45 am]
BILLING CODE 7710–FW–P
POSTAL REGULATORY COMMISSION
[Docket Nos. MC2023–125 and CP2023–128]
New Postal Products
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
a negotiated service agreement. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: April 4,
2023.
SUMMARY:
ADDRESSES:
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section by
telephone for advice on filing
alternatives.
INFORMATION CONTACT
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II. Docketed Proceeding(s)
1. Docket No(s).: MC2023–125 and
CP2023–128; Filing Title: USPS Request
to Add Priority Mail Express
International, Priority Mail International
& First-Class Package International
Service Contract 17 to Competitive
Product List and Notice of Filing
Materials Under Seal; Filing Acceptance
Date: March 27, 2023; Filing Authority:
39 U.S.C. 3642, 39 CFR 3040.130
through 3040.135, and 39 CFR 3035.105;
Public Representative: Arif Hafiz;
Comments Due: April 4, 2023.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2023–06741 Filed 3–30–23; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97206; File No. SR–NYSE–
2023–19]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
308 as Defined in Rule 9232(b) and
Delete and Replace Certain Obsolete
References
March 27, 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 March 17,
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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to (1) amend
Rule 308 to reflect the consolidation of
the Acceptability Board with the
Hearing Board as defined in Rule
9232(b), and (2) delete and, where
applicable, replace certain obsolete
references in its rules and the Listed
Company Manual. The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
The Exchange proposes to (1) amend
Rule 308 to reflect the consolidation of
the Acceptability Board with the
Hearing Board as defined in Rule
9232(b), and (2) delete and, where
applicable, replace certain obsolete
references in its rules and the Listed
Company Manual.
Background
Pursuant to Rule 308, Acceptability
Committees are composed of at least
three persons who are members of the
Acceptability Board. Rule 308
establishes procedures for Acceptability
Committees to consider applications
prior to disapproval by the Exchange (1)
of prospective members or member
organizations; (2) of any prospective
member, principal executive, registered
representative, or other person required
by the Rules of the Exchange to be
approved by the Exchange for
employment or association with a
member or member organization; (3) for
any change in status of any person
which change requires Exchange
approval; and (4) of any prospective
non-member broker/dealer accessee.
Rule 308(c) provides that the
Acceptability Board be appointed
annually by, in part, the Chair of the
Board of Directors (‘‘Board’’) subject to
the approval of the Board, and that it be
composed of such number of members
and allied members 3 who are not
3 The Exchange no longer has allied members, a
former regulatory category based on a natural
person’s control of a member organization. Allied
members were replaced by the new category of
‘‘principal executives’’ in 2008. See Securities and
Exchange Act Release No. 58103 (July 3, 2008), 73
FR 40403, 40403 (July 14, 2008) (SR–FINRA–2008–
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members of the Board, and registered
employees and non-registered
employees of members and member
organizations.
Rule 9232 (Criteria for Selection of
Panelists, Replacement Panelists, and
Floor-Based Panelists) establishes
procedures for the selection and
appointment of panelists to a Hearing
Panel as defined in Rule 9120
(Definitions) to conduct disciplinary
proceedings and issue a decision.
Pursuant to Rule 9232(a), each panelist,
except for the Hearing Officer, shall be
a member of the NYSE hearing board
(‘‘Hearing Board’’) provided for in Rule
9232(b). Rule 9232(b) states that the
Board shall from time to time appoint a
Hearing Board to be composed of such
number of members and former allied
members 4 of the Exchange who are not
members of the Exchange Board of
Directors and registered employees and
nonregistered employees of member
organizations. Pursuant to Rule 9232(b),
former members, allied members,5 or
registered and non-registered employees
of member organizations who have
retired from the securities industry may
be appointed to the Hearing Board. Rule
9232(b) further provides that the
members of the Hearing Board be
appointed annually.
All of the current members of the
Acceptability Board are also members of
036) (Notice of Filing of a Proposed Rule Change
Relating to the Incorporated NYSE Rules) (proposal
by the Financial Industry Regulatory Authority
(‘‘FINRA’’) to substitute ‘‘principal executive’’ for
‘‘allied member’’ in the Incorporated NYSE Rules);
Securities and Exchange Act Release No. 58533
(September 12, 2008), 73 FR 54652 (September 22,
2008) (SR–FINRA–2008–0036) (‘‘Release No.
58533’’) (Order Approving Proposed Rule Change
Relating to Incorporated NYSE Rules); Securities
Exchange Act Release No. 58549 (September 15,
2008), 73 FR 54444, 54445 (September 19, 2008)
(SR–NYSE–2008–80) (amending NYSE Incorporated
Rules to conform to FINRA’s proposed rule change);
NYSE Rule 311.18 (‘‘Principal executive’’ includes
‘‘an employee of a member organization designated
to exercise senior principal executive responsibility
over the various areas of the business of the member
organization including: operations, compliance
with rules and regulations of regulatory bodies,
finances and credit, sales, underwriting, research
and administration; and any employee of a member
organization who is a functional equivalent of such
person.’’). As discussed below, the Exchange now
proposes conforming, non-substantive changes to
delete and, where applicable, replace the remaining
references to ‘‘allied member’’ in its rules with
‘‘principal executive.’’ Former allied members and
principal executives have had notice since 2008
that where the Exchange’s rules use ‘‘allied
member’’, the category of ‘‘principal executive’’ was
intended. See Release No. 58533, 73 FR at 54653,
n.5.
4 As discussed below, the Exchange proposes to
replace ‘‘former allied members’’ in Rule 9232(b)
with ‘‘principal executives.’’ See also note 3, supra.
5 The Exchange proposes to replace this reference
with ‘‘principal executives.’’ As proposed, principal
executives who have retired from the securities
industry may also be appointed to the Hearing
Board.
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19335
the Hearing Board. Given the overlap in
the composition of the Acceptability
Board and the Hearing Board, and the
fact that the Acceptability Board is
appointed for no other purpose than
providing a ready pool for staffing
Acceptability Committees, the Exchange
has determined to cease appointing a
separate Acceptability Board. In this
filing, the Exchange accordingly
proposes to amend Rule 308 to reflect
the consolidation but retain the current
composition of Acceptability
Committees. As noted, the Exchange
also proposes to amend Rule 9232 to
provide that the Hearing Board shall be
composed, in part, of members and
principal executives. As discussed in
detail below, this proposed change will
also harmonize Rule 9232 with Rule
308.
Rule 9232(b) provides that the
Hearing Board be appointed annually by
the Board and serve at their pleasure. By
contrast, Rule 308(c) provides that the
Acceptability Board be appointed
annually by the Chair, or officer,
employee or committee or board to
whom appropriate authority has been
delegated, subject to the approval of the
Board, to serve at the pleasure of the
Board. Despite the apparent difference,
the Exchange believes that as a practical
matter the proposed change is
consistent with current practice, as the
board to whom authority has been
delegated pursuant to Rule 308(c) is the
Board itself. As a result, the Board
appoints both the Hearing Board and the
Acceptability Board. Moreover, the
Exchange believes that having the full
Board make appointments is the more
conservative option for appointing
Hearing Board members, who serve at
the pleasure of the Board.
Finally, in addition to replacing the
remaining obsolete references to ‘‘allied
member,’’ the Exchange proposes to
replace obsolete references to
‘‘specialists’’ with ‘‘DMM’’ (i.e.,
Designated Market Maker) in its rules
and the Listed Company Manual, among
other non-substantive clarifying
changes, as described more fully below.
Proposed Rule Change
Acceptability Board
The composition of and criteria for
appointment to both the Acceptability
Board and the Hearing Board are
substantially similar. Current Rule
308(c) provides that the Acceptability
Board shall be composed of ‘‘members
and allied members of the Exchange
who are not members of the Board of
Directors, and registered employees and
non-registered employees of members
and member organizations, as the
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Chairman of the Board of the Exchange
shall deem necessary.’’ Rule 9232(b)
provides that the Hearing Board 6 shall
be composed ‘‘of such number of
members and former allied members of
the Exchange who are not members of
the Exchange Board of Directors and
registered employees and nonregistered
employees of member organizations.’’
Rule 9232 further provides that former
members, allied members, or registered
and non-registered employees of
member organizations who have retired
from the securities industry may be
appointed to the Hearing Board.
Rule 308(c) would be amended to
provide that Acceptability Committees
will consist of at least three persons that
are members of the Hearing Board and
that are also members and principal
executives of the Exchange who are not
Board members, or that are registered
employees and non-registered
employees of member organizations, as
the Chair of the Board shall deem
necessary. Amended Rule 308 would
further clarify that the term Chief
Hearing Officer is defined in Rule
9120(c).
As proposed, the Exchange would
consolidate the Acceptability Board and
the Hearing Board but not permit former
members, former principal executives,
or registered and non-registered
employees of member organizations
who have retired from the securities
industry to be appointed to
Acceptability Committees consistent
with current Rule 308(c).7 In addition,
the Exchange would delete references to
registered and non-registered employees
of members. Only member organizations
can have registered or non-registered
employees. Under Rule 2(a), a member
is a natural person associated with a
member organization who has been
approved by the Exchange and
designated by such member
organization to effect transactions on the
trading floor of the Exchange or any
facility thereof. With the exception of
the proposed changes described above,
the substantive processes set forth in
Rule 308 for the appointment and
composition of individual Acceptability
6 Hearing Board is currently lower case in Rule
9232(a) and (b). The Exchange proposes to
capitalize the term.
7 Legacy disciplinary Rule 476(b) permitted the
appointment of former members, allied members, or
registered and non-registered employees of
members and member organizations who have
retired from the securities industry to the Hearing
Board provided for in that rule, which was carried
forward to Rule 9232. Under Rule 9232, such
persons are eligible to be appointed to Hearing
Panels in connection with disciplinary matters. As
noted, Rule 308(c) does not permit former members
or allied members, or their registered and nonregistered employees who have retired, to be
appointed to the Acceptability Board.
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Committees, including the requirement
that Acceptability Committees consist of
at least three persons meeting the
criteria set forth in subdivision (d) of
Rule 308 selected by the Chief Hearing
Officer,8 would remain unchanged.
To effectuate these changes, the
Exchange would replace ‘‘Acceptability
Board’’ with ‘‘Hearing Board’’ in Rule
308(c) and (d). In addition, the
Exchange would update the obsolete
reference to Rule 476(b) in Rule 308(c)
with a reference to the definition of
Chief Hearing Officer in the Rule 9000
Series, the Exchange’s current
disciplinary rules. The second
paragraph in current Rule 308(c), which
sets forth the appointment and
composition requirements for the
Acceptability Board, would be deleted.
Proposed Rule 308(c) would read as
follows (new text italicized, deleted text
bracketed):
(c) All proceedings under this rule shall be
conducted in accordance with the provisions
of this rule and shall be held before an
Acceptability Committee consisting of at
least three persons being members of the
[Acceptability]Hearing Board described in
Rule 9232(b) that are members and principal
executives of the Exchange who are not
members of the Board of Directors, or are
registered employees and non-registered
employees of member organizations, as the
Chair of the Board of the Exchange shall
deem necessary, to be selected by the Chief
Hearing Officer (as defined in Rule
9120(c)[designated under Rule 476(b)]) in
accordance with paragraph (d) of this rule.
[The Chairman of the Board of the
Exchange, or officer, employee or committee
or board to whom appropriate authority has
been delegated, subject to the approval of the
Board of Directors, shall from time to time
appoint an Acceptability Board to be
composed of such number of members and
allied members of the Exchange who are not
members of the Board of Directors, and
registered employees and non-registered
employees of members and member
organizations, as the Chairman of the Board
of the Exchange shall deem necessary. The
members of the Acceptability Board shall be
appointed annually and shall serve at the
pleasure of the Board of Directors.]
Amendments to Rule 9232(b)
In 2013, the Exchange adopted Rule
9232 as part of its adoption of rules
relating to investigation, discipline, and
sanctions, and other procedural rules
based on FINRA’s rules.9 Current Rule
8 Chief Hearing Officer is defined in Rule 9120(c).
The Chief Hearing Officer is currently a FINRA
employee appointed by the Board to serve the
functions specified in the Exchange’s rules.
9 See Securities Exchange Act Release No. 69045
(March 5, 2013), 78 FR 15394 (March 11, 2013) (SR–
NYSE–2013–02) (Order Approving Proposed Rule
Change Adopting Investigation, Disciplinary,
Sanction, and Other Procedural Rules That Are
Modeled on the Rules of the Financial Industry
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9232(b) provides that the Hearing Board
shall be ‘‘composed of such number of
members and former allied members of
the Exchange who are not members of
the Exchange Board of Directors and
registered employees and nonregistered
employees of member organizations.’’
The Rule further provides that former
members, allied members, or registered
and non-registered employees of
member organizations who have retired
from the securities industry may be
appointed to the Hearing Board.
The Exchange has determined to
update the Rule since there are no
longer former allied members serving on
the Hearing Board. The Exchange
accordingly proposes to replace ‘‘former
allied members’’ in the first sentence of
Rule 9232(b) with ‘‘principal
executives.’’ In addition, the Exchange
would amend the second sentence of
Rule 9232(b) to replace ‘‘allied
members’’ with ‘‘principal executives’’.
As amended, Rule 9232(b) would permit
principal executives who have retired
from the securities industry to be
appointed to the Hearing Board.
Obsolete References
The Exchange proposes to replace
obsolete references to ‘‘allied member’’
or ‘‘allied members’’ with ‘‘principal
executive’’ or ‘‘principal executives,’’ as
applicable, in the following:
• Rule 17 (Use of Exchange Facilities
and Vendor Services)
• Rule 25 (Exchange Liability for Legal
Costs)
• Rule 93 (Trading for Joint Account)
• Rule 113 (DMM Unit’s Public
Customers) 10
• Rule 113 Former (DMMs’ Public
Customers)
• Rule 123 (Record of Orders) 11
• Rule 344 (Research Analysts and
Supervisory Analysts)
• Proxies (Rules 450–460)
• Rule 456 (Representations to
Management)
• Rule 457 (Filing Participant
Information (Schedule B))
• Rule 458 (Filing of Proxy Material
(Schedule A))
• Rule 459 (Other Persons to File
Information When Associated with
Member)
• Rule 472 (Communications With
The Public)
• Rule 600 (Arbitration) 12
Regulatory Authority and To Make Certain
Conforming and Technical Changes).
10 The Exchange proposes to also delete the
orphan ‘‘in which’’ in Rule 113.20.
11 The Exchange proposes to also add a space
between ‘‘(d)’’ and ‘‘By Accounts’’ in Rule 123.
12 The Exchange would also add a space between
‘‘(d)’’ and ‘‘Class Action Claims’’ in Rule 600.
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• Rule 607 (Designation of Number of
Arbitrators) 13
• Rule 629 (Schedule of Fees) 14
• Rule 630 (Uniform Arbitration
Code)
• Rule 632 (Member Controversies)
• Rule 633 (Board of Arbitration)
• Rule 637 (Failure To Honor Award)
• Sections 402.09 (Exchange Proxy
Contest Rules) and 703.18 (Contingent
Value Rights) of the Listed Company
Manual.
The Exchange proposes to delete
references to ‘‘allied member’’ in the
following rules:
• Rule 607 (Designation of Number of
Arbitrators). Principal executives do not
have associated persons. The references
to a person associated with an allied
member in Rule 607(a)(2)(i) and (a)(3)(i)
are therefore obsolete.15
• Section 202.03 (Dealing with
Rumors or Unusual Market Activity) of
the Listed Company Manual. Rule 435
referred to in Section 202.03 does not
apply to allied members or principal
executives, so deletion of the term from
Section 202.03 would be appropriate.
The Exchange further proposes to
replace obsolete references to
‘‘specialist’’ with ‘‘DMM’’ 16 in the
heading for Rules 99—114 (Specialists,
Odd-Lot Brokers, and Registered
Traders) and in the following sections of
the Listed Company Manual:
• The summary under ‘‘The Listing
Process,’’ which is Section 1 of the
‘‘Sectional Organization Summary’’
under the ‘‘General Organization’’
heading of the ‘‘Organization of the
Manual’’ section in the Introduction to
the Listed Company Manual;
• The third entry under the
‘‘Miscellaneous and Related Matters’’
heading below ‘‘Reference Guide for
Subsequent Listing Applications (703.00
& 903.02)’’; and
• The heading for Section 806.00
titled ‘‘Request of Listed Company for a
Change of Specialist Unit or for
13 The Exchange would replace ‘‘allied member’’
in Rule 607(a)(3)(iii). The references to ‘‘allied
member’’ in Rule 607(a)(2)(i) and (a)(3)(i) would be
deleted.
14 The Exchange would also add a space between
‘‘(i)’’ and ‘‘Schedule of Fees’’ in Rule 629.
15 See note 13, supra.
16 The specialist system was phased out and the
DMM structure adopted in 2008. See Securities
Exchange Act Release No. 58845 (October 24, 2008),
73 FR 64379 (October 29, 2008) (SR–NYSE–2008–
46) (Notice of Filing of Amendment Nos. 2 and 3
and Order Granting Accelerated Approval to a
Proposed Rule Change, as Modified by Amendment
Nos. 1, 2, and 3, to Create a New NYSE Market
Model, with Certain Components to Operate as a
One-Year Pilot, That Would Alter NYSE’s Priority
and Parity Rules, Phase Out Specialists by Creating
a Designated Market Maker, and Provide Market
Participants with Additional Abilities to Post
Hidden Liquidity).
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Removal from the List’’ in Section 8
(Suspension and Delisting) of the Listed
Company Manual.
Finally, the Exchange proposes to
delete an obsolete reference to ‘‘the
Medical Clinic located in the Exchange
building’’ in Rule 301(b) (Qualifications
for Membership).
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act,17 in general, and
furthers the objectives of section
6(b)(1) 18 in particular, in that it enables
the Exchange to be so organized as to
have the capacity to be able to carry out
the purposes of the Act and to comply,
and to enforce compliance by its
exchange members and persons
associated with its exchange members,
with the provisions of the Act, the rules
and regulations thereunder, and the
rules of the Exchange. The Exchange
also believes that the proposed rule
change is consistent with section 6(b)(5)
of the Act,19 in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest. In addition, the
Exchange believes that the proposed
rule change is designed to provide fair
procedures for the denial of
membership to any person seeking
Exchange membership, the barring of
any person from becoming associated
with a member, and the prohibition or
limitation by the Exchange of any
person with respect to access to services
offered by the Exchange or a member
thereof, consistent with the objectives of
section 6(b)(7) 20 and section 6(d)(2) 21of
the Act.
Amending Rule 308 to reflect the
consolidation of the Acceptability Board
with the Hearing Board would continue
to contribute to the orderly operation of
the Exchange. As proposed, given the
overlap in the membership of the two
boards, the Exchange would appoint the
same individuals to a single board that
would be available to serve on both
Hearing Panels for disciplinary actions
(the Hearing Board’s current function)
and Acceptability Committees for
17 15
U.S.C. 78f(b).
U.S.C. 78f(b)(1).
19 15 U.S.C. 78f(b)(5).
20 15 U.S.C. 78f(b)(7).
21 15 U.S.C. 78f(d)(2).
acceptability hearings (the Acceptability
Board’s sole current function). The
proposed change would streamline the
process of appointing individuals to
boards charged with specific functions
under the Exchange’s rules and
eliminate duplication in the
appointment of Exchange boards, which
would enable the Exchange to continue
to be so organized as to have the
capacity to carry out the purposes of the
Act and comply with the provisions of
the Act by its members and persons
associated with members, thereby
furthering the objectives of section
6(b)(1) 22 of the Act.
The Exchange further believes that the
proposed change would be beneficial to
both investors and the public interest,
thereby promoting the maintenance of a
fair and orderly market and the
protection of investors and the public
interest consistent with section 6(b)(5)
of the Act.23 The proposed changes
would continue to permit the
appointment of individuals that meet
the same qualifications and
requirements to consider applications
prior to disapproval by the Exchange
under current Rule 308. More
specifically, the Exchange believes that
there would be no material difference
between the requirements for
Acceptability Board composition under
current Rule 308(c) and proposed Rule
9232(b) insofar as both rules require that
the applicable body be composed of (1)
members and allied members (now
principal executives) 24 of the Exchange
who are not members of the Board, and
(2) registered employees and nonregistered employees of member
organizations. Proposed Rule 308(c)
makes it clear that the proposed
Acceptability Committee can only
include members and principal
executives of the Exchange who are
members of the Board of Directors, or
that are registered employees and nonregistered employees of member
organizations. Both rules also require
that the board be appointed annually
and serve at the pleasure of the Board,
so there will be no change in the
frequency of appointment.
Moreover, the Exchange believes that
as a practical matter the proposed
change is consistent with current
practice, as the board to whom authority
has been delegated pursuant to Rule
308(c) is the Board itself, and as a result
the Board appoints both the Hearing
Board and the Acceptability Board. The
Exchange believes that having the full
Board make appointments is the more
18 15
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22 15
U.S.C. 78f(b)(1).
U.S.C. 78f(b)(5).
24 See note 3, supra.
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ddrumheller on DSK120RN23PROD with NOTICES1
conservative option for appointing
Hearing Board members, who serve at
the pleasure of the Board. For this
reason, the Exchange believes that the
proposed change would be beneficial to
both investors and the public interest,
thereby promoting the maintenance of a
fair and orderly market and the
protection of investors and the public
interest. In addition, because the
substance and process set forth in Rule
308 would remain unchanged, the
Exchange believes that the proposed
changes would continue to provide fair
procedures for the denial of
membership to any person seeking
Exchange membership, the barring of
any person from becoming associated
with a member, and the prohibition or
limitation by the Exchange of any
person with respect to access to services
offered by the Exchange or a member
thereof consistent with the objectives of
section 6(b)(7) 25 and section 6(d)(2) 26 of
the Act.
Finally, the Exchange believes that
deletion and, where applicable,
replacement of the obsolete references
in its rules and the Listed Company
Manual to superseded membership
categories (allied members) and market
participants (specialists), and the
outdated reference to the Exchange’s
medical clinic, would increase the
clarity and transparency of the
Exchange’s rules and remove
impediments to and perfect the
mechanism of a free and open market by
ensuring that persons subject to the
Exchange’s jurisdiction, regulators, and
the investing public could more easily
navigate and understand the Exchange
Bylaws and rules. The Exchange further
believes that the proposed amendments
would not be inconsistent with the
public interest and the protection of
investors because investors will not be
harmed and in fact would benefit from
increased transparency and clarity,
thereby reducing potential confusion.
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 rather is
concerned solely with streamlining the
process of appointing individuals to
boards charged with specific functions
under the Exchange’s rules and
eliminating duplication in the
appointment of Exchange boards and
25 15
26 15
U.S.C. 78f(b)(7).
U.S.C. 78f(d)(2).
VerDate Sep<11>2014
17:54 Mar 30, 2023
Jkt 259001
with deleting and, where applicable,
replacing, references to obsolete
references in its rules.
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2023–19 on the subject line.
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.
Paper Comments
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) of the Act 27 and Rule 19b–
4(f)(6) 28 thereunder. Because the
foregoing proposed rule change does
not: (i) significantly affect the protection
of investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
for 30 days from the date on which it
was filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to section
19(b)(3)(A) of the Act 29 and Rule 19b–
4(f)(6) 30 thereunder.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
27 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
29 15 U.S.C. 78s(b)(3)(A).
30 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
28 17
PO 00000
Frm 00101
Fmt 4703
Sfmt 9990
• 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–2023–19. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
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–2023–19 and should
be submitted on or before April 21,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–06657 Filed 3–30–23; 8:45 am]
BILLING CODE 8011–01–P
31 17
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]]>Agencies
[Federal Register Volume 88, Number 62 (Friday, March 31, 2023)]
[Notices]
[Pages 19334-19338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06657]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97206; File No. SR-NYSE-2023-19]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 308 as Defined in Rule 9232(b) and Delete and Replace
Certain Obsolete References
March 27, 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 March 17, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to (1) amend Rule 308 to reflect the
consolidation of the Acceptability Board with the Hearing Board as
defined in Rule 9232(b), and (2) delete and, where applicable, replace
certain obsolete references in its rules and the Listed Company Manual.
The proposed rule change is available on the Exchange's website at
www.nyse.com, at the
[[Page 19335]]
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to (1) amend Rule 308 to reflect the
consolidation of the Acceptability Board with the Hearing Board as
defined in Rule 9232(b), and (2) delete and, where applicable, replace
certain obsolete references in its rules and the Listed Company Manual.
Background
Pursuant to Rule 308, Acceptability Committees are composed of at
least three persons who are members of the Acceptability Board. Rule
308 establishes procedures for Acceptability Committees to consider
applications prior to disapproval by the Exchange (1) of prospective
members or member organizations; (2) of any prospective member,
principal executive, registered representative, or other person
required by the Rules of the Exchange to be approved by the Exchange
for employment or association with a member or member organization; (3)
for any change in status of any person which change requires Exchange
approval; and (4) of any prospective non-member broker/dealer accessee.
Rule 308(c) provides that the Acceptability Board be appointed annually
by, in part, the Chair of the Board of Directors (``Board'') subject to
the approval of the Board, and that it be composed of such number of
members and allied members \3\ who are not members of the Board, and
registered employees and non-registered employees of members and member
organizations.
---------------------------------------------------------------------------
\3\ The Exchange no longer has allied members, a former
regulatory category based on a natural person's control of a member
organization. Allied members were replaced by the new category of
``principal executives'' in 2008. See Securities and Exchange Act
Release No. 58103 (July 3, 2008), 73 FR 40403, 40403 (July 14, 2008)
(SR-FINRA-2008-036) (Notice of Filing of a Proposed Rule Change
Relating to the Incorporated NYSE Rules) (proposal by the Financial
Industry Regulatory Authority (``FINRA'') to substitute ``principal
executive'' for ``allied member'' in the Incorporated NYSE Rules);
Securities and Exchange Act Release No. 58533 (September 12, 2008),
73 FR 54652 (September 22, 2008) (SR-FINRA-2008-0036) (``Release No.
58533'') (Order Approving Proposed Rule Change Relating to
Incorporated NYSE Rules); Securities Exchange Act Release No. 58549
(September 15, 2008), 73 FR 54444, 54445 (September 19, 2008) (SR-
NYSE-2008-80) (amending NYSE Incorporated Rules to conform to
FINRA's proposed rule change); NYSE Rule 311.18 (``Principal
executive'' includes ``an employee of a member organization
designated to exercise senior principal executive responsibility
over the various areas of the business of the member organization
including: operations, compliance with rules and regulations of
regulatory bodies, finances and credit, sales, underwriting,
research and administration; and any employee of a member
organization who is a functional equivalent of such person.''). As
discussed below, the Exchange now proposes conforming, non-
substantive changes to delete and, where applicable, replace the
remaining references to ``allied member'' in its rules with
``principal executive.'' Former allied members and principal
executives have had notice since 2008 that where the Exchange's
rules use ``allied member'', the category of ``principal executive''
was intended. See Release No. 58533, 73 FR at 54653, n.5.
---------------------------------------------------------------------------
Rule 9232 (Criteria for Selection of Panelists, Replacement
Panelists, and Floor-Based Panelists) establishes procedures for the
selection and appointment of panelists to a Hearing Panel as defined in
Rule 9120 (Definitions) to conduct disciplinary proceedings and issue a
decision. Pursuant to Rule 9232(a), each panelist, except for the
Hearing Officer, shall be a member of the NYSE hearing board (``Hearing
Board'') provided for in Rule 9232(b). Rule 9232(b) states that the
Board shall from time to time appoint a Hearing Board to be composed of
such number of members and former allied members \4\ of the Exchange
who are not members of the Exchange Board of Directors and registered
employees and nonregistered employees of member organizations. Pursuant
to Rule 9232(b), former members, allied members,\5\ or registered and
non-registered employees of member organizations who have retired from
the securities industry may be appointed to the Hearing Board. Rule
9232(b) further provides that the members of the Hearing Board be
appointed annually.
---------------------------------------------------------------------------
\4\ As discussed below, the Exchange proposes to replace
``former allied members'' in Rule 9232(b) with ``principal
executives.'' See also note 3, supra.
\5\ The Exchange proposes to replace this reference with
``principal executives.'' As proposed, principal executives who have
retired from the securities industry may also be appointed to the
Hearing Board.
---------------------------------------------------------------------------
All of the current members of the Acceptability Board are also
members of the Hearing Board. Given the overlap in the composition of
the Acceptability Board and the Hearing Board, and the fact that the
Acceptability Board is appointed for no other purpose than providing a
ready pool for staffing Acceptability Committees, the Exchange has
determined to cease appointing a separate Acceptability Board. In this
filing, the Exchange accordingly proposes to amend Rule 308 to reflect
the consolidation but retain the current composition of Acceptability
Committees. As noted, the Exchange also proposes to amend Rule 9232 to
provide that the Hearing Board shall be composed, in part, of members
and principal executives. As discussed in detail below, this proposed
change will also harmonize Rule 9232 with Rule 308.
Rule 9232(b) provides that the Hearing Board be appointed annually
by the Board and serve at their pleasure. By contrast, Rule 308(c)
provides that the Acceptability Board be appointed annually by the
Chair, or officer, employee or committee or board to whom appropriate
authority has been delegated, subject to the approval of the Board, to
serve at the pleasure of the Board. Despite the apparent difference,
the Exchange believes that as a practical matter the proposed change is
consistent with current practice, as the board to whom authority has
been delegated pursuant to Rule 308(c) is the Board itself. As a
result, the Board appoints both the Hearing Board and the Acceptability
Board. Moreover, the Exchange believes that having the full Board make
appointments is the more conservative option for appointing Hearing
Board members, who serve at the pleasure of the Board.
Finally, in addition to replacing the remaining obsolete references
to ``allied member,'' the Exchange proposes to replace obsolete
references to ``specialists'' with ``DMM'' (i.e., Designated Market
Maker) in its rules and the Listed Company Manual, among other non-
substantive clarifying changes, as described more fully below.
Proposed Rule Change
Acceptability Board
The composition of and criteria for appointment to both the
Acceptability Board and the Hearing Board are substantially similar.
Current Rule 308(c) provides that the Acceptability Board shall be
composed of ``members and allied members of the Exchange who are not
members of the Board of Directors, and registered employees and non-
registered employees of members and member organizations, as the
[[Page 19336]]
Chairman of the Board of the Exchange shall deem necessary.'' Rule
9232(b) provides that the Hearing Board \6\ shall be composed ``of such
number of members and former allied members of the Exchange who are not
members of the Exchange Board of Directors and registered employees and
nonregistered employees of member organizations.'' Rule 9232 further
provides that former members, allied members, or registered and non-
registered employees of member organizations who have retired from the
securities industry may be appointed to the Hearing Board.
---------------------------------------------------------------------------
\6\ Hearing Board is currently lower case in Rule 9232(a) and
(b). The Exchange proposes to capitalize the term.
---------------------------------------------------------------------------
Rule 308(c) would be amended to provide that Acceptability
Committees will consist of at least three persons that are members of
the Hearing Board and that are also members and principal executives of
the Exchange who are not Board members, or that are registered
employees and non-registered employees of member organizations, as the
Chair of the Board shall deem necessary. Amended Rule 308 would further
clarify that the term Chief Hearing Officer is defined in Rule 9120(c).
As proposed, the Exchange would consolidate the Acceptability Board
and the Hearing Board but not permit former members, former principal
executives, or registered and non-registered employees of member
organizations who have retired from the securities industry to be
appointed to Acceptability Committees consistent with current Rule
308(c).\7\ In addition, the Exchange would delete references to
registered and non-registered employees of members. Only member
organizations can have registered or non-registered employees. Under
Rule 2(a), a member is a natural person associated with a member
organization who has been approved by the Exchange and designated by
such member organization to effect transactions on the trading floor of
the Exchange or any facility thereof. With the exception of the
proposed changes described above, the substantive processes set forth
in Rule 308 for the appointment and composition of individual
Acceptability Committees, including the requirement that Acceptability
Committees consist of at least three persons meeting the criteria set
forth in subdivision (d) of Rule 308 selected by the Chief Hearing
Officer,\8\ would remain unchanged.
---------------------------------------------------------------------------
\7\ Legacy disciplinary Rule 476(b) permitted the appointment of
former members, allied members, or registered and non-registered
employees of members and member organizations who have retired from
the securities industry to the Hearing Board provided for in that
rule, which was carried forward to Rule 9232. Under Rule 9232, such
persons are eligible to be appointed to Hearing Panels in connection
with disciplinary matters. As noted, Rule 308(c) does not permit
former members or allied members, or their registered and non-
registered employees who have retired, to be appointed to the
Acceptability Board.
\8\ Chief Hearing Officer is defined in Rule 9120(c). The Chief
Hearing Officer is currently a FINRA employee appointed by the Board
to serve the functions specified in the Exchange's rules.
---------------------------------------------------------------------------
To effectuate these changes, the Exchange would replace
``Acceptability Board'' with ``Hearing Board'' in Rule 308(c) and (d).
In addition, the Exchange would update the obsolete reference to Rule
476(b) in Rule 308(c) with a reference to the definition of Chief
Hearing Officer in the Rule 9000 Series, the Exchange's current
disciplinary rules. The second paragraph in current Rule 308(c), which
sets forth the appointment and composition requirements for the
Acceptability Board, would be deleted. Proposed Rule 308(c) would read
as follows (new text italicized, deleted text bracketed):
(c) All proceedings under this rule shall be conducted in
accordance with the provisions of this rule and shall be held before
an Acceptability Committee consisting of at least three persons
being members of the [Acceptability]Hearing Board described in Rule
9232(b) that are members and principal executives of the Exchange
who are not members of the Board of Directors, or are registered
employees and non-registered employees of member organizations, as
the Chair of the Board of the Exchange shall deem necessary, to be
selected by the Chief Hearing Officer (as defined in Rule
9120(c)[designated under Rule 476(b)]) in accordance with paragraph
(d) of this rule.
[The Chairman of the Board of the Exchange, or officer, employee
or committee or board to whom appropriate authority has been
delegated, subject to the approval of the Board of Directors, shall
from time to time appoint an Acceptability Board to be composed of
such number of members and allied members of the Exchange who are
not members of the Board of Directors, and registered employees and
non-registered employees of members and member organizations, as the
Chairman of the Board of the Exchange shall deem necessary. The
members of the Acceptability Board shall be appointed annually and
shall serve at the pleasure of the Board of Directors.]
Amendments to Rule 9232(b)
In 2013, the Exchange adopted Rule 9232 as part of its adoption of
rules relating to investigation, discipline, and sanctions, and other
procedural rules based on FINRA's rules.\9\ Current Rule 9232(b)
provides that the Hearing Board shall be ``composed of such number of
members and former allied members of the Exchange who are not members
of the Exchange Board of Directors and registered employees and
nonregistered employees of member organizations.'' The Rule further
provides that former members, allied members, or registered and non-
registered employees of member organizations who have retired from the
securities industry may be appointed to the Hearing Board.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 69045 (March 5,
2013), 78 FR 15394 (March 11, 2013) (SR-NYSE-2013-02) (Order
Approving Proposed Rule Change Adopting Investigation, Disciplinary,
Sanction, and Other Procedural Rules That Are Modeled on the Rules
of the Financial Industry Regulatory Authority and To Make Certain
Conforming and Technical Changes).
---------------------------------------------------------------------------
The Exchange has determined to update the Rule since there are no
longer former allied members serving on the Hearing Board. The Exchange
accordingly proposes to replace ``former allied members'' in the first
sentence of Rule 9232(b) with ``principal executives.'' In addition,
the Exchange would amend the second sentence of Rule 9232(b) to replace
``allied members'' with ``principal executives''. As amended, Rule
9232(b) would permit principal executives who have retired from the
securities industry to be appointed to the Hearing Board.
Obsolete References
The Exchange proposes to replace obsolete references to ``allied
member'' or ``allied members'' with ``principal executive'' or
``principal executives,'' as applicable, in the following:
Rule 17 (Use of Exchange Facilities and Vendor Services)
Rule 25 (Exchange Liability for Legal Costs)
Rule 93 (Trading for Joint Account)
Rule 113 (DMM Unit's Public Customers) \10\
---------------------------------------------------------------------------
\10\ The Exchange proposes to also delete the orphan ``in
which'' in Rule 113.20.
---------------------------------------------------------------------------
Rule 113 Former (DMMs' Public Customers)
Rule 123 (Record of Orders) \11\
---------------------------------------------------------------------------
\11\ The Exchange proposes to also add a space between ``(d)''
and ``By Accounts'' in Rule 123.
---------------------------------------------------------------------------
Rule 344 (Research Analysts and Supervisory Analysts)
Proxies (Rules 450-460)
Rule 456 (Representations to Management)
Rule 457 (Filing Participant Information (Schedule B))
Rule 458 (Filing of Proxy Material (Schedule A))
Rule 459 (Other Persons to File Information When
Associated with Member)
Rule 472 (Communications With The Public)
Rule 600 (Arbitration) \12\
---------------------------------------------------------------------------
\12\ The Exchange would also add a space between ``(d)'' and
``Class Action Claims'' in Rule 600.
---------------------------------------------------------------------------
[[Page 19337]]
Rule 607 (Designation of Number of Arbitrators) \13\
---------------------------------------------------------------------------
\13\ The Exchange would replace ``allied member'' in Rule
607(a)(3)(iii). The references to ``allied member'' in Rule
607(a)(2)(i) and (a)(3)(i) would be deleted.
---------------------------------------------------------------------------
Rule 629 (Schedule of Fees) \14\
---------------------------------------------------------------------------
\14\ The Exchange would also add a space between ``(i)'' and
``Schedule of Fees'' in Rule 629.
---------------------------------------------------------------------------
Rule 630 (Uniform Arbitration Code)
Rule 632 (Member Controversies)
Rule 633 (Board of Arbitration)
Rule 637 (Failure To Honor Award)
Sections 402.09 (Exchange Proxy Contest Rules) and 703.18
(Contingent Value Rights) of the Listed Company Manual.
The Exchange proposes to delete references to ``allied member'' in
the following rules:
Rule 607 (Designation of Number of Arbitrators). Principal
executives do not have associated persons. The references to a person
associated with an allied member in Rule 607(a)(2)(i) and (a)(3)(i) are
therefore obsolete.\15\
---------------------------------------------------------------------------
\15\ See note 13, supra.
---------------------------------------------------------------------------
Section 202.03 (Dealing with Rumors or Unusual Market
Activity) of the Listed Company Manual. Rule 435 referred to in Section
202.03 does not apply to allied members or principal executives, so
deletion of the term from Section 202.03 would be appropriate.
The Exchange further proposes to replace obsolete references to
``specialist'' with ``DMM'' \16\ in the heading for Rules 99--114
(Specialists, Odd-Lot Brokers, and Registered Traders) and in the
following sections of the Listed Company Manual:
---------------------------------------------------------------------------
\16\ The specialist system was phased out and the DMM structure
adopted in 2008. See Securities Exchange Act Release No. 58845
(October 24, 2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46)
(Notice of Filing of Amendment Nos. 2 and 3 and Order Granting
Accelerated Approval to a Proposed Rule Change, as Modified by
Amendment Nos. 1, 2, and 3, to Create a New NYSE Market Model, with
Certain Components to Operate as a One-Year Pilot, That Would Alter
NYSE's Priority and Parity Rules, Phase Out Specialists by Creating
a Designated Market Maker, and Provide Market Participants with
Additional Abilities to Post Hidden Liquidity).
---------------------------------------------------------------------------
The summary under ``The Listing Process,'' which is
Section 1 of the ``Sectional Organization Summary'' under the ``General
Organization'' heading of the ``Organization of the Manual'' section in
the Introduction to the Listed Company Manual;
The third entry under the ``Miscellaneous and Related
Matters'' heading below ``Reference Guide for Subsequent Listing
Applications (703.00 & 903.02)''; and
The heading for Section 806.00 titled ``Request of Listed
Company for a Change of Specialist Unit or for Removal from the List''
in Section 8 (Suspension and Delisting) of the Listed Company Manual.
Finally, the Exchange proposes to delete an obsolete reference to
``the Medical Clinic located in the Exchange building'' in Rule 301(b)
(Qualifications for Membership).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\17\ in general, and furthers the
objectives of section 6(b)(1) \18\ in particular, in that it enables
the Exchange to be so organized as to have the capacity to be able to
carry out the purposes of the Act and to comply, and to enforce
compliance by its exchange members and persons associated with its
exchange members, with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange. The Exchange
also believes that the proposed rule change is consistent with section
6(b)(5) of the Act,\19\ in that it is designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest. In addition, the Exchange believes that the proposed
rule change is designed to provide fair procedures for the denial of
membership to any person seeking Exchange membership, the barring of
any person from becoming associated with a member, and the prohibition
or limitation by the Exchange of any person with respect to access to
services offered by the Exchange or a member thereof, consistent with
the objectives of section 6(b)(7) \20\ and section 6(d)(2) \21\of the
Act.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(1).
\19\ 15 U.S.C. 78f(b)(5).
\20\ 15 U.S.C. 78f(b)(7).
\21\ 15 U.S.C. 78f(d)(2).
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Amending Rule 308 to reflect the consolidation of the Acceptability
Board with the Hearing Board would continue to contribute to the
orderly operation of the Exchange. As proposed, given the overlap in
the membership of the two boards, the Exchange would appoint the same
individuals to a single board that would be available to serve on both
Hearing Panels for disciplinary actions (the Hearing Board's current
function) and Acceptability Committees for acceptability hearings (the
Acceptability Board's sole current function). The proposed change would
streamline the process of appointing individuals to boards charged with
specific functions under the Exchange's rules and eliminate duplication
in the appointment of Exchange boards, which would enable the Exchange
to continue to be so organized as to have the capacity to carry out the
purposes of the Act and comply with the provisions of the Act by its
members and persons associated with members, thereby furthering the
objectives of section 6(b)(1) \22\ of the Act.
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\22\ 15 U.S.C. 78f(b)(1).
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The Exchange further believes that the proposed change would be
beneficial to both investors and the public interest, thereby promoting
the maintenance of a fair and orderly market and the protection of
investors and the public interest consistent with section 6(b)(5) of
the Act.\23\ The proposed changes would continue to permit the
appointment of individuals that meet the same qualifications and
requirements to consider applications prior to disapproval by the
Exchange under current Rule 308. More specifically, the Exchange
believes that there would be no material difference between the
requirements for Acceptability Board composition under current Rule
308(c) and proposed Rule 9232(b) insofar as both rules require that the
applicable body be composed of (1) members and allied members (now
principal executives) \24\ of the Exchange who are not members of the
Board, and (2) registered employees and non-registered employees of
member organizations. Proposed Rule 308(c) makes it clear that the
proposed Acceptability Committee can only include members and principal
executives of the Exchange who are members of the Board of Directors,
or that are registered employees and non-registered employees of member
organizations. Both rules also require that the board be appointed
annually and serve at the pleasure of the Board, so there will be no
change in the frequency of appointment.
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\23\ 15 U.S.C. 78f(b)(5).
\24\ See note 3, supra.
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Moreover, the Exchange believes that as a practical matter the
proposed change is consistent with current practice, as the board to
whom authority has been delegated pursuant to Rule 308(c) is the Board
itself, and as a result the Board appoints both the Hearing Board and
the Acceptability Board. The Exchange believes that having the full
Board make appointments is the more
[[Page 19338]]
conservative option for appointing Hearing Board members, who serve at
the pleasure of the Board. For this reason, the Exchange believes that
the proposed change would be beneficial to both investors and the
public interest, thereby promoting the maintenance of a fair and
orderly market and the protection of investors and the public interest.
In addition, because the substance and process set forth in Rule 308
would remain unchanged, the Exchange believes that the proposed changes
would continue to provide fair procedures for the denial of membership
to any person seeking Exchange membership, the barring of any person
from becoming associated with a member, and the prohibition or
limitation by the Exchange of any person with respect to access to
services offered by the Exchange or a member thereof consistent with
the objectives of section 6(b)(7) \25\ and section 6(d)(2) \26\ of the
Act.
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\25\ 15 U.S.C. 78f(b)(7).
\26\ 15 U.S.C. 78f(d)(2).
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Finally, the Exchange believes that deletion and, where applicable,
replacement of the obsolete references in its rules and the Listed
Company Manual to superseded membership categories (allied members) and
market participants (specialists), and the outdated reference to the
Exchange's medical clinic, would increase the clarity and transparency
of the Exchange's rules and remove impediments to and perfect the
mechanism of a free and open market by ensuring that persons subject to
the Exchange's jurisdiction, regulators, and the investing public could
more easily navigate and understand the Exchange Bylaws and rules. The
Exchange further believes that the proposed amendments would not be
inconsistent with the public interest and the protection of investors
because investors will not be harmed and in fact would benefit from
increased transparency and clarity, thereby reducing potential
confusion.
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 rather is concerned
solely with streamlining the process of appointing individuals to
boards charged with specific functions under the Exchange's rules and
eliminating duplication in the appointment of Exchange boards and with
deleting and, where applicable, replacing, references to obsolete
references in its 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) of the Act \27\ and Rule 19b-4(f)(6) \28\ thereunder.
Because the foregoing proposed rule change does not: (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
section 19(b)(3)(A) of the Act \29\ and Rule 19b-4(f)(6) \30\
thereunder.
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\27\ 15 U.S.C. 78s(b)(3)(A).
\28\ 17 CFR 240.19b-4(f)(6).
\29\ 15 U.S.C. 78s(b)(3)(A).
\30\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSE-2023-19 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2023-19. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are 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-2023-19 and should be
submitted on or before April 21, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06657 Filed 3-30-23; 8:45 am]
BILLING CODE 8011-01-P
