Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Harmonize NYSE Rule 4530, 45712-45715 [2024-11269]
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Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Notices
The Board will be conducting
a virtual public forum on July 11th,
2024 on the role of artificial intelligence
(AI) in counterterrorism and related
national security programs, and privacy
and civil liberties issues associated with
these uses of AI. More information
about this online forum will be posted
at www.pclob.gov as it becomes
available. The Board seeks public
comments in advance of the forum to
help inform the discussion and future
Board deliberations.
DATES: Public comments may be
submitted any time prior to the closing
of the docket at 11:59 p.m., Eastern
Daylight Time (EDT) on Monday, July 1,
2024.
ADDRESSES: You may submit comments
responsive to notice PCLOB–2024–01
via https://www.regulations.gov. Please
search by Notice PCLOB–2024–01 and
follow the on-line instructions for
submitting comments. Responsive
comments received generally will be
posted without change to
regulations.gov, including any personal
and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check regulations.gov approximately
two-to-three business days after
submission to verify posting.
FOR FURTHER INFORMATION CONTACT:
Alan Silverleib, Legislative and Public
Affairs Officer, at 202–997–7719 or
pao@pclob.gov.
SUPPLEMENTARY INFORMATION: The Board
seeks public comments regarding topics
it should explore in both its public
forum and future oversight regarding the
role of artificial intelligence in the
federal government’s counterterrorism
efforts.
In both the forum and public
comments, the Board seeks to cover
questions including but not limited to
the following: How is the federal
government using AI in current efforts
to combat terrorism and protect national
security? How can or should AI be used
for targeting, behavioral profiling,
signals analysis, intelligence analysis,
and prediction? What should effective
performance metrics look like for the
use of AI by the Intelligence Community
(IC)? What standards does the IC use in
evaluating whether IC tools are ready to
deploy in operational contexts? Are
those the right standards? What new
threats are created by AI’s use by
adversaries or malicious actors? What
privacy or civil liberties risks does the
use of AI exacerbate? How might bias,
non-transparency, or unreliability in AI
systems harm individuals? How can that
harm be detected or mitigated? What
recourse do people or agencies have if
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SUMMARY:
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AI malfunctions or is otherwise proven
unreliable? Can IC analysts ever be sure
that AI augmented analysis is correct?
PCLOB invites input from all
stakeholders including members of the
public, representing a variety of
backgrounds and perspectives. If a
comment is submitted on behalf of an
organization, the individual
respondent’s role in the organization
may also be provided on a voluntary
basis.
Alan Silverleib,
PCLOB Legislative and Public Affairs Officer.
[FR Doc. 2024–11317 Filed 5–22–24; 8:45 am]
BILLING CODE 6820–B3–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100168; File No. SR–NYSE–
2024–28]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Harmonize
NYSE Rule 4530
May 17, 2024.
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 May 9,
2024, 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, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to harmonize
NYSE Rule 4530 (Reporting
Requirements) with certain changes by
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) to FINRA
Rule 4530. 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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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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 harmonize
NYSE Rule 4530 (Reporting
Requirements) with certain changes by
FINRA to FINRA Rule 4530.
Background and Proposed Rule Change
NYSE Rule 4530 requires member
organizations to promptly report to the
Exchange specified events, such as
statutory disqualifications and quarterly
statistical and summary information
regarding written customer complaints.
The Exchange adopted the text of
FINRA Rule 4530 in 2011 to replace
comparable provisions in its legacy
reporting Rule 351.4
In 2013, FINRA amended Rule
4530(e) to provide an exception from
the reporting requirement for
information disclosed on the Form U4
(Uniform Application for Securities
Industry Registration or Transfer) in
order to avoid duplicative reporting.5 In
addition, in 2013, FINRA added
Supplementary Material .10 to FINRA
Rule 4530 to provide that, for purposes
of FINRA Rules 4530(a)(1)(A), (C) and
(D) only, members are not required to
report findings and actions by FINRA.6
4 See Securities Exchange Act Release No. 64785
(June 30, 2011), 76 FR 39946 (July 7, 2011) (SR–
NYSE–2011–27). FINRA Rule 4530, adopted in
2010, was modeled after NYSE Rule 351(a)–(d) and
NASD Rule 3070. See Securities Exchange Act
Release No. 63260 (November 5, 2010), 75 FR 69508
(November 12, 2010) (SR–FINRA–2010–034). See
also Securities Exchange Act Release No. 64560
(May 27, 2011), 76 FR 32246 (June 3, 2011) (SR–
FINRA–2011–024).
5 See Securities Exchange Act Release No. 68701
(January 18, 2013), 78 FR 5532 (January 25, 2013)
(SR–FINRA–2013–006) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
Relating to FINRA Rule 4530 (Reporting
Requirements)).
6 See id. FINRA Rule 4530(a)(1)(A) requires a
member to report external findings regarding the
member or an associated person. FINRA Rules
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Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Notices
In 2015, FINRA again amended
FINRA Rule 4530 to provide an
exception from the reporting
requirements of paragraph (a)(1)(H) of
the rule for dealings with a member or
associated person subject to statutory
disqualification, if that member or
associated person has been approved (or
is otherwise permitted pursuant to
FINRA rules and the federal securities
laws) to be a member or to be associated
with a member.7
The Exchange proposes to incorporate
each of these amendments into NYSE
Rule 4530, as follows.
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NYSE Rule 4530(a)(1)(H)
NYSE Rule 4530(a)(1)(H) requires
member organizations to promptly
report whenever the member
organization or an associated person of
the member organization is subject to a
‘‘statutory disqualification’’ as defined
in the Act.8 The rule also requires a
member organization to report
whenever the member organization or
an associated person thereof is involved
in the sale of any financial instrument,
the provision of any investment advice
or the financing of any such activities
with any person that is subject to a
‘‘statutory disqualification’’ as defined
in the Act. The report must include the
name of the person subject to the
statutory disqualification and details
concerning the disqualification.
The Exchange proposes, consistent
with current FINRA Rule 4530(a)(1)(H),
to exclude activities with a disqualified
member or associated person that has
been approved (or is otherwise
permitted pursuant to FINRA rules and
the federal securities laws) to be a
member organization or associated with
a member organization. To effectuate
this change, the Exchange proposes to
add the following deletions (bracketed)
and additions (italicized) to NYSE Rule
4530(a)(1)(H):
(H) is (i) subject to a ‘‘statutory
disqualification’’ as that term is defined
in the Exchange Act[,] or [is](ii)
involved in the sale of any financial
instrument, the provision of any
investment advice or the financing of
any such activities with any person
4530(a)(1)(C) and (D) require a member to report
regulatory actions against the member or an
associated person. FINRA Rules 4530(a)(1)(A), (C)
and (D) do not expressly exclude findings and
actions by FINRA. See generally id. NYSE Rules
4530(a)(1)(A), (C) and (D) are virtually identical to
the FINRA rules.
7 See Securities Exchange Act Release No. 74953
(May 13, 2015), 80 FR 28740 (May 19, 2015) (SR–
FINRA–2015–011) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change Relating to
the Reporting Requirements of FINRA Rule
4530(a)(1)(H)).
8 See 15 U.S.C. 78c(a)(39).
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[who]that is[,] subject to a ‘‘statutory
disqualification’’ as that term is defined
in the Exchange Act, provided, however,
that this requirement shall not apply to
activities with a member organization or
an associated person that has been
approved (or is otherwise permitted
pursuant to Exchange rules and the
federal securities laws) to be a member
organization or to be associated with a
member organization. The report shall
include the name of the person subject
to the statutory disqualification and
details concerning the disqualification;
or
With the exception of conforming
changes reflecting the Exchange’s
membership. the proposed text is
identical to FINRA’s counterpart rule.
NYSE Rule 4530(e)
NYSE Rule 4530(e) currently provides
that a member organization is not
required to report a specified event
under the rule if it reports that event on
the Form U5 (Uniform Termination
Notice for Securities Industry
Registration), consistent with the
requirements of that form. The
exception does not extend to the
reporting of quarterly statistical and
summary customer complaint
information under the rule. In order to
eliminate duplicative reporting of
information disclosed on a Form U4,
and consistent with FINRA’s current
rule, the Exchange proposes to provide
a similar exception for certain specified
events reported on the Form U4. To
effectuate this change, the Exchange
proposes to add the following deletions
(bracketed) and additions (italicized) to
NYSE Rule 4530(e):
(e) Nothing contained in this Rule shall
eliminate, reduce or otherwise abrogate the
responsibilities of a member organization or
person associated with a member
organization to promptly disclose required
information on the Forms BD, U4 or U5, as
applicable, to make any other required filings
or to respond to the Exchange with respect
to any customer complaint, examination or
inquiry. In addition, member organizations
are required to comply with the reporting
obligations under paragraphs (a), (b) and (d)
of this Rule, regardless of whether the
information is reported or disclosed pursuant
to any other rule or requirement, including
the requirements of the Form[s] BD [or U4].
However, a member organization need not
report an event otherwise required to be
reported under (1) paragraph (a)(1) of this
Rule if the member organization discloses the
event on the Form U4, consistent with the
requirements of that form, and indicates, in
such manner and format that the Exchange
may require, that such disclosure satisfies the
requirements of paragraph (a)(1) of this Rule,
as applicable; or (2) paragraphs (a) or (b) of
this Rule if the member organization
discloses the event on the Form U5,
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45713
consistent with the requirements of that
form.
With the exception of conforming
changes reflecting the Exchange’s
membership, the proposed text is
identical to FINRA’s counterpart rule.
NYSE Rule 4530, Supplementary
Material .11
Finally, the Exchange proposes to
adopt the text of FINRA Rule 4530,
Supplementary Material .10, as new
NYSE Rule 4530, Supplementary
Material .11.
NYSE Rule 4530(a)(1)(A) requires a
member organization to report that the
member organization or an associated
person has been found to have violated
any securities-, insurance-,
commodities-, financial- or investmentrelated laws, rules, regulations or
standards of conduct of any domestic or
foreign regulatory body, self-regulatory
organization or business or professional
organization.
NYSE Rule 4530(a)(1)(C) requires a
member organization to report that the
member organization or an associated
person thereof has been named as a
defendant or respondent in any
proceeding brought by a domestic or
foreign regulatory body or selfregulatory organization alleging the
violation of any provision of the Act, or
of any other federal, state or foreign
securities, insurance or commodities
statute, or of any rule or regulation
thereunder, or of any provision of the
by-laws, rules or similar governing
instruments of any securities, insurance
or commodities domestic or foreign
regulatory body or self-regulatory
organization.
Finally, NYSE Rule 4530(a)(1)(D)
requires a member organization to
report that the member organization or
associated person thereof has been
denied registration or is expelled,
enjoined, directed to cease and desist,
suspended or otherwise disciplined by
any securities, insurance or
commodities industry domestic or
foreign regulatory body or selfregulatory organization or is denied
membership or continued membership
in any such self-regulatory organization;
or is barred from becoming associated
with any member organization of any
such self-regulatory organization.
Since NYSE Rules 4530(a)(1)(A), (C)
and (D) do not expressly exclude
findings and actions by the Exchange or
FINRA, the Exchange proposes to add
the following new Supplementary
Material .11 to NYSE Rule 4530
(additions italicized):
.11 For purposes of paragraphs
(a)(1)(A), (C) and (D) of this Rule only,
member organizations are not required
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Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Notices
to report findings and actions by the
Exchange or by FINRA.
With the exception of adding findings
and actions by the Exchange, the
proposed Supplementary Material .11 to
NYSE Rule 4530 is identical to FINRA
Rule 4530.10.
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2. Statutory Basis
The proposed rule change is
consistent with section 6(b) of the Act,9
in general, and furthers the objectives of
section 6(b)(5),10 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.
The Exchange believes that the
proposed rule changes support the
objectives of the Act by eliminating
unnecessary reporting of information to
the Exchange and allowing the
Exchange to use its resources more
efficiently. The Exchange believes that
harmonizing Exchange rules modeled
on FINRA’s rules would result in less
burdensome and more efficient
regulatory compliance without
compromising the regulatory
information available to the Exchange.
As previously noted, except for changes
reflecting the Exchange’s membership,
the proposed additional text for Rule
4530 is identical to the text in FINRA
Rule 4530. As such, the proposed rule
change would facilitate rule
harmonization among self-regulatory
organizations with respect to the
reporting requirements, thereby
fostering cooperation and coordination
with persons engaged in facilitating
transactions in securities and will
remove impediments to and perfect the
mechanism of a free and open market
and a national market system.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change is
consistent with section 6(b) of the Act,11
in general, and furthers the objectives of
section 6(b)(5),12 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
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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.
The Exchange believes that the
proposed rule changes support the
objectives of the Act by eliminating
unnecessary reporting of information to
the Exchange and allowing the
Exchange to use its resources more
efficiently. The Exchange believes that
harmonizing Exchange rules modeled
on FINRA’s rules would result in less
burdensome and more efficient
regulatory compliance without
compromising the regulatory
information available to the Exchange.
As previously noted, except for changes
reflecting the Exchange’s membership,
the proposed additional text for Rule
4530 is identical to the text in FINRA
Rule 4530. As such, the proposed rule
change would facilitate rule
harmonization among self-regulatory
organizations with respect to the
reporting requirements, thereby
fostering 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.
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 13 and Rule
19b–4(f)(6) thereunder.14 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.
10 15
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18:47 May 22, 2024
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),16 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
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) 17 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–2024–28 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–2024–28. 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
15 17
13 15
U.S.C. 78s(b)(3)(A)(iii).
14 17 CFR 240.19b–4(f)(6).
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CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
17 15 U.S.C. 78s(b)(2)(B).
16 17
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Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Notices
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–NYSE–2024–28 and should be
submitted on or before June 13, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–11269 Filed 5–22–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
35197; File No. 812–15520]
TCW Direct Lending LLC, et al.
May 20, 2024.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
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AGENCY:
Notice of an application for an order
(‘‘Order’’) under sections 17(d) and 57(i)
of the Investment Company Act of 1940
(the ‘‘Act’’) and rule 17d–1 under the
Act to permit certain joint transactions
otherwise prohibited by sections 17(d)
and 57(a)(4) and Rule 17d–1 under the
Act.
SUMMARY OF APPLICATION: Applicants
request an order to amend a previous
order granted by the Commission that
permits certain business development
companies (‘‘BDCs’’) and closed-end
management investment companies to
co-invest in portfolio companies with
each other and with certain affiliated
investment entities.
APPLICANTS: TCW Direct Lending LLC,
TCW Direct Lending VII LLC, TCW
Direct Lending VIII LLC, TCW Star
Direct Lending LLC, TCW Direct
Lending Private Fund VIII LP, TCW
Direct Lending Strategic Ventures LLC,
TCW Brazos Fund LLC, NJ/TCW Direct
18 17
Lending LLC, West Virginia Direct
Lending LLC, TCW Skyline Lending,
L.P., TCW Direct Lending Structured
Solutions 2019 LLC, TCW Direct
Lending Structure Solutions 2022 LLC,
and TCW Asset Management Company
LLC.
The application was filed
on November 9, 2023.
18:47 May 22, 2024
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For the Commission, by the Division of
Investment Management, under delegated
authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–11352 Filed 5–22–24; 8:45 am]
BILLING CODE 8011–01–P
FILING DATES:
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on June 14, 2024, and
should be accompanied by proof of
service on Applicants, in the form of an
affidavit or, for lawyers, a certificate of
service. Pursuant to rule 0–5 under the
Act, hearing requests should state the
nature of the writer’s interest, any facts
bearing upon the desirability of a
hearing on the matter, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov.
The Commission:
Secretarys-Office@sec.gov. Applicants:
Applicants: Kevin Finch, Senior Vice
President, Kevin.Finch@tcw.com.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Chris Chase, Senior Counsel, or Terri
Jordan, Branch Chief, at (202) 551–6825
(Division of Investment Management,
Chief Counsel’s Office).
For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ application, dated
November 9, 2023, which may be
obtained via the Commission’s website
by searching for the file number at the
top of this document, or for an
Applicant using the Company name
search field, on the SEC’s EDGAR
system. The SEC’s EDGAR system may
be searched at https://www.sec.gov/
edgar/searchedgar/legacy/
companysearch.html. You may also call
the SEC’s Public Reference Room at
(202) 551–8090.
SUPPLEMENTARY INFORMATION:
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100181]
Order Granting a Temporary
Conditional Exemption Pursuant to
Section 36(a)(1) of the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) and Rule 608(e) of Regulation
NMS Under the Exchange Act, Relating
to the Reporting of Responses to
Requests for Quotes and Other
Solicitation Responses Provided in a
Standard Electronic Format, as
Required by Section 6.4(d) of the
National Market System Plan
Governing the Consolidated Audit Trail
May 20, 2024.
I. Introduction
By letter dated February 13, 2024,1
BOX Exchange LLC; Cboe BYX
Exchange, Inc., Cboe BZX Exchange,
Inc., Cboe EDGA Exchange, Inc., Cboe
EDGX Exchange, Inc., Cboe C2
Exchange, Inc., and Cboe Exchange,
Inc.; Financial Industry Regulatory
Authority, Inc.; Investors Exchange LLC;
Long-Term Stock Exchange, Inc.; MEMX
LLC; Miami International Securities
Exchange LLC, MIAX Emerald, LLC,
and MIAX PEARL, LLC; NASDAQ BX,
Inc., Nasdaq GEMX, LLC, Nasdaq ISE,
LLC, Nasdaq MRX, LLC, NASDAQ
PHLX LLC, and The NASDAQ Stock
Market LLC; and New York Stock
Exchange LLC, NYSE American LLC,
NYSE Arca, Inc., NYSE Chicago, Inc.,
and NYSE National, Inc. (collectively,
the ‘‘Participants’’ or ‘‘SROs’’) requested
that the Securities and Exchange
Commission (‘‘Commission’’) grant
temporary exemptive relief to the
Participants from the National Market
System Plan Governing the
Consolidated Audit Trail (‘‘CAT NMS
Plan’’),2 pursuant to its authority under
Section 36(a)(1) of the Exchange Act 3
1 See letter from the Participants to Vanessa
Countryman, Secretary, Commission, dated Feb. 13,
2024 (the ‘‘Exemption Request’’). Unless otherwise
noted, capitalized terms are used as defined in the
CAT NMS Plan.
2 The CAT NMS Plan was approved by the
Commission, as modified, on Nov. 15, 2016. See
Securities Exchange Act Release No. 79318 (Nov.
15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘CAT NMS
Plan Approval Order’’).
3 15 U.S.C. 78mm(a)(1).
E:\FR\FM\23MYN1.SGM
23MYN1
]]>Agencies
[Federal Register Volume 89, Number 101 (Thursday, May 23, 2024)]
[Notices]
[Pages 45712-45715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11269]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100168; File No. SR-NYSE-2024-28]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Harmonize NYSE Rule 4530
May 17, 2024.
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 May 9, 2024, 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, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to harmonize NYSE Rule 4530 (Reporting
Requirements) with certain changes by the Financial Industry Regulatory
Authority, Inc. (``FINRA'') to FINRA Rule 4530. The proposed rule
change is available on the Exchange's website at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to harmonize NYSE Rule 4530 (Reporting
Requirements) with certain changes by FINRA to FINRA Rule 4530.
Background and Proposed Rule Change
NYSE Rule 4530 requires member organizations to promptly report to
the Exchange specified events, such as statutory disqualifications and
quarterly statistical and summary information regarding written
customer complaints. The Exchange adopted the text of FINRA Rule 4530
in 2011 to replace comparable provisions in its legacy reporting Rule
351.\4\
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\4\ See Securities Exchange Act Release No. 64785 (June 30,
2011), 76 FR 39946 (July 7, 2011) (SR-NYSE-2011-27). FINRA Rule
4530, adopted in 2010, was modeled after NYSE Rule 351(a)-(d) and
NASD Rule 3070. See Securities Exchange Act Release No. 63260
(November 5, 2010), 75 FR 69508 (November 12, 2010) (SR-FINRA-2010-
034). See also Securities Exchange Act Release No. 64560 (May 27,
2011), 76 FR 32246 (June 3, 2011) (SR-FINRA-2011-024).
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In 2013, FINRA amended Rule 4530(e) to provide an exception from
the reporting requirement for information disclosed on the Form U4
(Uniform Application for Securities Industry Registration or Transfer)
in order to avoid duplicative reporting.\5\ In addition, in 2013, FINRA
added Supplementary Material .10 to FINRA Rule 4530 to provide that,
for purposes of FINRA Rules 4530(a)(1)(A), (C) and (D) only, members
are not required to report findings and actions by FINRA.\6\
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\5\ See Securities Exchange Act Release No. 68701 (January 18,
2013), 78 FR 5532 (January 25, 2013) (SR-FINRA-2013-006) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to FINRA Rule 4530 (Reporting Requirements)).
\6\ See id. FINRA Rule 4530(a)(1)(A) requires a member to report
external findings regarding the member or an associated person.
FINRA Rules 4530(a)(1)(C) and (D) require a member to report
regulatory actions against the member or an associated person. FINRA
Rules 4530(a)(1)(A), (C) and (D) do not expressly exclude findings
and actions by FINRA. See generally id. NYSE Rules 4530(a)(1)(A),
(C) and (D) are virtually identical to the FINRA rules.
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[[Page 45713]]
In 2015, FINRA again amended FINRA Rule 4530 to provide an
exception from the reporting requirements of paragraph (a)(1)(H) of the
rule for dealings with a member or associated person subject to
statutory disqualification, if that member or associated person has
been approved (or is otherwise permitted pursuant to FINRA rules and
the federal securities laws) to be a member or to be associated with a
member.\7\
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\7\ See Securities Exchange Act Release No. 74953 (May 13,
2015), 80 FR 28740 (May 19, 2015) (SR-FINRA-2015-011) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to the Reporting Requirements of FINRA Rule 4530(a)(1)(H)).
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The Exchange proposes to incorporate each of these amendments into
NYSE Rule 4530, as follows.
NYSE Rule 4530(a)(1)(H)
NYSE Rule 4530(a)(1)(H) requires member organizations to promptly
report whenever the member organization or an associated person of the
member organization is subject to a ``statutory disqualification'' as
defined in the Act.\8\ The rule also requires a member organization to
report whenever the member organization or an associated person thereof
is involved in the sale of any financial instrument, the provision of
any investment advice or the financing of any such activities with any
person that is subject to a ``statutory disqualification'' as defined
in the Act. The report must include the name of the person subject to
the statutory disqualification and details concerning the
disqualification.
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\8\ See 15 U.S.C. 78c(a)(39).
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The Exchange proposes, consistent with current FINRA Rule
4530(a)(1)(H), to exclude activities with a disqualified member or
associated person that has been approved (or is otherwise permitted
pursuant to FINRA rules and the federal securities laws) to be a member
organization or associated with a member organization. To effectuate
this change, the Exchange proposes to add the following deletions
(bracketed) and additions (italicized) to NYSE Rule 4530(a)(1)(H):
(H) is (i) subject to a ``statutory disqualification'' as that term
is defined in the Exchange Act[,] or [is](ii) involved in the sale of
any financial instrument, the provision of any investment advice or the
financing of any such activities with any person [who]that is[,]
subject to a ``statutory disqualification'' as that term is defined in
the Exchange Act, provided, however, that this requirement shall not
apply to activities with a member organization or an associated person
that has been approved (or is otherwise permitted pursuant to Exchange
rules and the federal securities laws) to be a member organization or
to be associated with a member organization. The report shall include
the name of the person subject to the statutory disqualification and
details concerning the disqualification; or
With the exception of conforming changes reflecting the Exchange's
membership. the proposed text is identical to FINRA's counterpart rule.
NYSE Rule 4530(e)
NYSE Rule 4530(e) currently provides that a member organization is
not required to report a specified event under the rule if it reports
that event on the Form U5 (Uniform Termination Notice for Securities
Industry Registration), consistent with the requirements of that form.
The exception does not extend to the reporting of quarterly statistical
and summary customer complaint information under the rule. In order to
eliminate duplicative reporting of information disclosed on a Form U4,
and consistent with FINRA's current rule, the Exchange proposes to
provide a similar exception for certain specified events reported on
the Form U4. To effectuate this change, the Exchange proposes to add
the following deletions (bracketed) and additions (italicized) to NYSE
Rule 4530(e):
(e) Nothing contained in this Rule shall eliminate, reduce or
otherwise abrogate the responsibilities of a member organization or
person associated with a member organization to promptly disclose
required information on the Forms BD, U4 or U5, as applicable, to
make any other required filings or to respond to the Exchange with
respect to any customer complaint, examination or inquiry. In
addition, member organizations are required to comply with the
reporting obligations under paragraphs (a), (b) and (d) of this
Rule, regardless of whether the information is reported or disclosed
pursuant to any other rule or requirement, including the
requirements of the Form[s] BD [or U4]. However, a member
organization need not report an event otherwise required to be
reported under (1) paragraph (a)(1) of this Rule if the member
organization discloses the event on the Form U4, consistent with the
requirements of that form, and indicates, in such manner and format
that the Exchange may require, that such disclosure satisfies the
requirements of paragraph (a)(1) of this Rule, as applicable; or (2)
paragraphs (a) or (b) of this Rule if the member organization
discloses the event on the Form U5, consistent with the requirements
of that form.
With the exception of conforming changes reflecting the Exchange's
membership, the proposed text is identical to FINRA's counterpart rule.
NYSE Rule 4530, Supplementary Material .11
Finally, the Exchange proposes to adopt the text of FINRA Rule
4530, Supplementary Material .10, as new NYSE Rule 4530, Supplementary
Material .11.
NYSE Rule 4530(a)(1)(A) requires a member organization to report
that the member organization or an associated person has been found to
have violated any securities-, insurance-, commodities-, financial- or
investment-related laws, rules, regulations or standards of conduct of
any domestic or foreign regulatory body, self-regulatory organization
or business or professional organization.
NYSE Rule 4530(a)(1)(C) requires a member organization to report
that the member organization or an associated person thereof has been
named as a defendant or respondent in any proceeding brought by a
domestic or foreign regulatory body or self-regulatory organization
alleging the violation of any provision of the Act, or of any other
federal, state or foreign securities, insurance or commodities statute,
or of any rule or regulation thereunder, or of any provision of the by-
laws, rules or similar governing instruments of any securities,
insurance or commodities domestic or foreign regulatory body or self-
regulatory organization.
Finally, NYSE Rule 4530(a)(1)(D) requires a member organization to
report that the member organization or associated person thereof has
been denied registration or is expelled, enjoined, directed to cease
and desist, suspended or otherwise disciplined by any securities,
insurance or commodities industry domestic or foreign regulatory body
or self-regulatory organization or is denied membership or continued
membership in any such self-regulatory organization; or is barred from
becoming associated with any member organization of any such self-
regulatory organization.
Since NYSE Rules 4530(a)(1)(A), (C) and (D) do not expressly
exclude findings and actions by the Exchange or FINRA, the Exchange
proposes to add the following new Supplementary Material .11 to NYSE
Rule 4530 (additions italicized):
.11 For purposes of paragraphs (a)(1)(A), (C) and (D) of this Rule
only, member organizations are not required
[[Page 45714]]
to report findings and actions by the Exchange or by FINRA.
With the exception of adding findings and actions by the Exchange,
the proposed Supplementary Material .11 to NYSE Rule 4530 is identical
to FINRA Rule 4530.10.
2. Statutory Basis
The proposed rule change is consistent with section 6(b) of the
Act,\9\ in general, and furthers the objectives of section 6(b)(5),\10\
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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule changes support the
objectives of the Act by eliminating unnecessary reporting of
information to the Exchange and allowing the Exchange to use its
resources more efficiently. The Exchange believes that harmonizing
Exchange rules modeled on FINRA's rules would result in less burdensome
and more efficient regulatory compliance without compromising the
regulatory information available to the Exchange. As previously noted,
except for changes reflecting the Exchange's membership, the proposed
additional text for Rule 4530 is identical to the text in FINRA Rule
4530. As such, the proposed rule change would facilitate rule
harmonization among self-regulatory organizations with respect to the
reporting requirements, thereby fostering cooperation and coordination
with persons engaged in facilitating transactions in securities and
will remove impediments to and perfect the mechanism of a free and open
market and a national market system.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change is consistent with section 6(b) of the
Act,\11\ in general, and furthers the objectives of section
6(b)(5),\12\ 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.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule changes support the
objectives of the Act by eliminating unnecessary reporting of
information to the Exchange and allowing the Exchange to use its
resources more efficiently. The Exchange believes that harmonizing
Exchange rules modeled on FINRA's rules would result in less burdensome
and more efficient regulatory compliance without compromising the
regulatory information available to the Exchange. As previously noted,
except for changes reflecting the Exchange's membership, the proposed
additional text for Rule 4530 is identical to the text in FINRA Rule
4530. As such, the proposed rule change would facilitate rule
harmonization among self-regulatory organizations with respect to the
reporting requirements, thereby fostering 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.
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 \13\ and Rule 19b-4(f)(6) thereunder.\14\
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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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \17\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\17\ 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-2024-28 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-2024-28. 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
[[Page 45715]]
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 a.m. and 3 p.m. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. Do not include personal identifiable
information in submissions; you should submit only information that you
wish to make available publicly. We may redact in part or withhold
entirely from publication submitted material that is obscene or subject
to copyright protection. All submissions should refer to file number
SR-NYSE-2024-28 and should be submitted on or before June 13, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-11269 Filed 5-22-24; 8:45 am]
BILLING CODE 8011-01-P
