Notice2022-18500
Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule To Change the Name of Its Business Conduct Committee
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Published
August 29, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 166 (Monday, August 29, 2022)</title>
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[Federal Register Volume 87, Number 166 (Monday, August 29, 2022)]
[Notices]
[Pages 52823-52825]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-18500]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95579; File No. SR-NYSENAT-2022-15]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule To Change the Name
of Its Business Conduct Committee
August 23, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on August 8, 2022, NYSE National, Inc. (``NYSE National'' 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 change the name of its ``Business Conduct
Committee'' to the ``Hearing Board.'' The proposed rule change is
available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a>, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to change the name of its ``Business Conduct
Committee'' (``BCC'') to the ``Hearing Board.'' The change will require
amendments to the Sixth Amended and Restated Bylaws of the Exchange
(``Bylaws'') and Rules 10.9120(v) (Definitions), 10.9217(b) (Violations
Appropriate for Disposition Under Rule 10.9216(b)), and 10.9232
(Criteria for Selection of Panelists and Replacement Panelists). Only
the committee's name would change, and there would be no other change
to the Bylaws and rules with respect to the committee.
Pursuant to the Bylaws, the BCC is a committee of the Board and
presides over all disciplinary proceedings in accordance with the rules
and as may be specified in its charter. In turn, the rules mandate that
the Board appoint the BCC annually and set the requirements for the
BCC's composition.\4\ The rule further provide that the Chief Hearing
Officer selects the members of hearing panels from the BCC, and the
role of the hearing panels in adjudicating individual disciplinary
proceedings.\5\
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\4\ See Rule 10.9232.
\5\ See, e.g., Rules 10.9231 (Appointment by the Chief Hearing
Officer of Hearing Panel or Extended Hearing Panel or Replacement
Hearing Officer), 10.9232, and 10.9268 (Decision of Hearing Panel or
Extended Hearing Panel). Chief Hearing Officer is defined in Rule
10.9120(c).
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Starting in 2013, the Exchange and its self-regulatory organization
affiliates (together with the Exchange, the ``NYSE Exchanges'') \6\
have adopted rules relating to investigation, discipline, and
sanctions, and other procedural rules, based on the rules of the
Financial
[[Page 52824]]
Industry Regulatory Authority.\7\ As a result, the NYSE Exchanges all
have disciplinary committees that play substantially the same role and
are subject to the same or substantially similar rules as the BCC.\8\
The Exchange now proposes to conform the legacy name of its
disciplinary committee with such other committees.
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\6\ The other NYSE Exchanges are the New York Stock Exchange LLC
(``NYSE''), NYSE American LLC (``NYSE American''), NYSE Arca, Inc.
(``NYSE Arca'') and NYSE Chicago, Inc. (``NYSE Chicago'').
\7\ See Exchange Act Release Nos. 69045 (March 5, 2013), 78 FR
15394 (March 11, 2013) (SR-NYSE-2013-02); 77241 (February 26, 2016),
81 FR 11311 (March 3, 2016) (SR-NYSEMKT-2016-30); 83289 (May 17,
2018), 83 FR 23968 (May 23, 2018) (SR-NYSENat-2018-02); 85639 (April
12, 2019), 84 FR 16346 (April 18, 2019) (SR-NYSEArca-2019-15); and
95020 (June 1, 2020), 87 FR 35034 (June 8, 2022) (SR-NYSECHX-2022-
10).
\8\ The differences between the rules are largely attributable
to the NYSE Exchanges' distinct membership structures and use of
terminology, as well as the fact that not all of the NYSE Exchanges
have a trading floor. See 83 FR 23968, supra note 7, at 23973; see,
e.g., NYSE Rule 9231; NYSE American Rule 9231; NYSE Arca Rule
10.9231; and NYSE Chicago Rule 9231.
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In order to implement the change, the Exchange proposes to amend
the Exchange Bylaws as follows.
<bullet> The first sentence of Article V, Section 5.1 (Number of
Committees) lists the committees of the Board. The Exchange proposes to
exchange the reference to the BCC with a reference to the Hearing
Board, in alphabetical order, as follows (deletion in brackets,
addition in italics):
The committees of the Board shall consist of [a Business Conduct
Committee,] a Committee for Review, a Hearing Board, a Nominating
Committee, a Regulatory Oversight Committee, and such other committees
as may be from time to time established by the Board.
<bullet> In Section 5.9 (Business Conduct Committee), ``Business
Conduct Committee'' would be replaced with ``Hearing Board'' in the
title and body of the section.
<bullet> In a non-substantive change, the Exchange proposes to
amend the title of the Bylaws to reflect that they are the ``Seventh
Amended and Restated Bylaws of NYSE National, Inc.''
In addition, the Exchange proposes to amend the rules of the
Exchange as follows.
<bullet> The Exchange proposes to delete the final sentence of the
definition of ``Panelist'' in Rule 10.9120(v). The text of the sentence
states that Hearing Panel members will be drawn from the BCC. Under the
proposed change, that sentence would not be required, because revised
Rule 10.9232 would state that each Panelist ``shall be a member of the
Exchange Hearing Board,'' making the previous statement redundant. The
proposed deletion would make the definition the same as the definition
of ``Panelist'' in the rules of the NYSE Arca and NYSE Chicago,\9\ and,
apart from the cross references, the same as the definition in the
rules of the NYSE and NYSE American.\10\
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\9\ See NYSE Arca Rule 10.9120(v) (Definitions) and NYSE Chicago
Rule 9120(v) (Definitions).
\10\ The NYSE and NYSE American definitions reference the Rule
9200 Series, Rule 9550 Series, and Rule 9800 Series instead of the
Rule 10.9200 Series, the Rule 10.9550 Series, and the Rule 10.9800
Series. See NYSE Rule 9120(v) (Definitions) and NYSE American Rule
9120(v) (Definitions). See also 83 FR 23968, supra note 7, at 23973
(noting the difference between the Exchange and NYSE American
rules).
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<bullet> Current Rule 10.9217(b) (Violations Appropriate for
Disposition Under Rule 10.9216(b)) would be amended to replace the
reference to the BCC with a reference to the Hearing Board.\11\
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\11\ Rule 10.9217(b) incorporates the requirement in previous
Rule 8.15(c) that if a person or organization fined pursuant to the
Rule pays the fine, such payment is deemed a waiver of any right to
a disciplinary proceeding under the Rule 10.9000 Series and of any
right to review of the matter by the BCC, Committee for Review, or
the Board. See id., at 23973 (noting that Rule 10.9217 is a merger
of NYSE American Rule 9217 and Rule 8.15).
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<bullet> ``BCC'' would be replaced with ``Hearing Board'' in Rule
10.9232. The other NYSE Exchanges use ``hearing board,'' but
capitalizing ``Hearing Board'' would be consistent with proposed
Article V, Section 5.1 of the Bylaws, which would capitalize the name
of the committee. Otherwise, the revised text would be consistent with
the same provision in the rules of the NYSE, NYSE American, NYSE Arca,
and NYSE Chicago.\12\
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\12\ See NYSE Rule 9232 (Criteria for Selection of Panelists and
Replacement Panelists); NYSE American Rule 9232 (Criteria for
Selection of Panelists and Replacement Panelists); NYSE Arca Rule
10.9232 (Criteria for Selection of Panelists and Replacement
Panelists); and NYSE Chicago Rule 10.9232 (Criteria for Selection of
Panelists and Replacement Panelists).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Exchange Act,\13\ in general, and furthers the
objectives of Section 6(b)(1) \14\ 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 Exchange Act and to comply, and to
enforce compliance by its exchange members and persons associated with
its exchange members, with the provisions of the Exchange 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 Exchange Act,\15\ in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(1).
\15\ 15 U.S.C. 78f(b)(5).
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Changing the name of the BCC to ``Hearing Board'' would make the
name of the Exchange's disciplinary committee consistent with those of
the other NYSE Exchanges, each of which has a hearing board with the
same responsibilities and functions. The Exchange believes that this
change would contribute to the orderly operation of the Exchange and
would enable the Exchange to be so organized as to have the capacity to
carry out the purposes of the Exchange Act and comply with the
provisions of the Exchange Act by its members and persons associated
with members, because the BCC plays substantially the same role, and is
subject to the same or substantially similar rules, as the other NYSE
Exchanges' hearing boards.\16\ The proposed name change therefore would
increase conformity in the committee names, reflecting the similarity
among the committees themselves. For the same reason, the Exchange
believes that the proposed change would protect investors and the
public interest.
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\16\ Starting in 2013, the NYSE Exchanges have adopted rules
relating to investigation, discipline, and sanctions, and other
procedural rules, based on the rules of the Financial Industry
Regulatory Authority. See note 7, supra.
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The Exchange also believes that the greater consistency among the
names of the NYSE Exchanges' hearing boards would promote the
maintenance of a fair and orderly market and the protection of
investors and the public interest by removing any confusion that may
result from the Exchange's disciplinary committee being called the BCC,
given that NYSE Arca has a business conduct committee, also referred to
as the ``BCC,'' that is subject to different rules and has a distinct
function and authority than the NYSE National BCC.\17\
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\17\ See, e.g., NYSE Arca Rules 3.2(B)(2) (Exchange Committees),
10.3 (Ex Parte Communications), 10.4 (Complaints), and 10.12 (Minor
Rule Plan). See also 84 FR 16346, supra note 7, at 16356.
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The proposed change would reduce redundancy by deleting the final
sentence of the definition of ``Panelist'' in Rule 10.9120(v), which
states that Hearing Panel members will be drawn from the BCC. Under the
proposed change, that sentence would not be
[[Page 52825]]
required, because revised Rule 10.9232 would state that each Panelist
``shall be a member of the Exchange Hearing Board,'' thereby making any
previous statement redundant. The change would streamline and increase
the clarity of the rules, which would contribute to the orderly
operation of the Exchange and be beneficial to both investors and the
public interest.
For the same reasons, the proposed amendments would 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 Exchange Act. The proposed rule
change is not intended to address competitive issues but rather is
concerned solely with the name of the disciplinary committee of the
Exchange. Because the only proposed change would be to the name of the
committee, there would be no other change to the Bylaws and rules
governing the BCC, including those regarding its appointment,
composition, or jurisdiction.
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 \18\ and Rule 19b-4(f)(6) thereunder.\19\
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.\20\
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\18\ 15 U.S.C. 78s(b)(3)(A)(iii).
\19\ 17 CFR 240.19b-4(f)(6).
\20\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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 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) \21\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\21\ 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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#483a3d242d652b2725252d263c3b083b2d2b662f273e"><span class="__cf_email__" data-cfemail="4230372e276f212d2f2f272c3631023127216c252d34">[email protected]</span></a>. Please include
File Number SR-NYSENAT-2022-15 on the subject line.
Paper Comments
<bullet> 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-NYSENAT-2022-15. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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-NYSENAT-2022-15 and should be submitted
on or before September 19, 2022.
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\22\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-18500 Filed 8-26-22; 8:45 am]
BILLING CODE 8011-01-P
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