Notice2022-20036
Order Granting Application by NYSE Chicago, Inc., for an Exemption, Pursuant to Section 36(a) of the Exchange Act, From the Rule Filing Requirements of Section 19(b) of the Exchange Act With Respect to Certain Rules Incorporated by Reference
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 16, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 179 (Friday, September 16, 2022)</title>
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[Federal Register Volume 87, Number 179 (Friday, September 16, 2022)]
[Notices]
[Pages 56995-56996]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-20036]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95738]
Order Granting Application by NYSE Chicago, Inc., for an
Exemption, Pursuant to Section 36(a) of the Exchange Act, From the Rule
Filing Requirements of Section 19(b) of the Exchange Act With Respect
to Certain Rules Incorporated by Reference
September 12, 2022.
NYSE Chicago, Inc. (``Exchange'' or ``NYSE Chicago'') filed with
the Securities and Exchange Commission (``Commission'' or ``SEC'') an
application \1\ for an exemption under Section 36(a) of the Securities
Exchange Act of 1934 (``Exchange Act'') \2\ and Rule 0-12 thereunder
\3\ from the rule filing requirements of Section 19(b) of the Exchange
Act \4\ with respect to the rules of the Exchange governing its
members' communications with the public. Section 36 of the Exchange Act
authorizes the Commission to conditionally or unconditionally exempt
any person, security, or transaction, or any class or classes of
persons, securities, or transactions, from any provision or provisions
of the Exchange Act, or of any rule or regulation thereunder, to the
extent that such exemption is necessary or appropriate in the public
interest, and is consistent with the protection of investors.
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\1\ See letter from David De Gregorio, Associate General
Counsel, New York Stock Exchange, to Vanessa Countryman, Secretary,
SEC, dated June 7, 2022 (``Exemptive Request'').
\2\ 15 U.S.C. 78mm.
\3\ 17 CFR 240.0-12 (Commission procedures for filing
applications for orders for exemptive relief under Section 36 of the
Exchange Act).
\4\ 15 U.S.C. 78s(b).
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NYSE Chicago has requested that the Commission grant the Exchange
an exemption from the rule filing requirements of Section 19(b) of the
Exchange Act for a change to NYSE Chicago Rule 11.2210 governing its
members' communications with the public that are effected solely by
virtue of a change to Rule 2210 (Communications with the Public) of the
Financial Industry Regulatory Authority, Inc. (``FINRA''), which is
incorporated by reference into NYSE Chicago Rule 11.2210. Specifically,
the Exchange requests that it be permitted to incorporate by reference
a change made to FINRA Rule 2210 without the need for the Exchange to
separately file a similar proposed rule change pursuant to Section
19(b) of the Exchange Act. The Exchange states that this exemption is
appropriate because it would result in NYSE Chicago Rule 11.2210 being
consistent with the relevant incorporated FINRA rule at all times, thus
helping ensure identical regulation of joint members of NYSE Chicago
and FINRA with respect to the rule, which is regulatory in nature, and
not a trading rule.\5\ The Exchange further states that without such an
exemption, joint members of NYSE Chicago and FINRA could be subject to
two different standards regarding their communications with the public
and that, by helping ensure consistency between NYSE Chicago and FINRA
rules of same purpose, the exemption
[[Page 56996]]
would facilitate FINRA's provision of regulatory services to the
Exchange.\6\
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\5\ See Exemptive Request at 2. A self-regulatory organization
(``SRO'') wishing to incorporate rules of another SRO by reference
may submit a written request for an order exempting it from the
requirement in Section 19(b) of the Exchange Act to file proposed
rule changes relating to the rules incorporated by reference, if,
among other things, the rules to be incorporated are categories of
rules (rather than individual rules within a category) that are not
trading rules (e.g., the SRO has requested incorporation of rules
such as margin, suitability, or arbitration). See also Exchange Act
Release No. 49260 (Feb. 17, 2004), 69 FR 8500 (Feb. 24, 2004).
\6\ See Exemptive Request at 2.
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As a condition of the requested exemption, the Exchange has agreed
to provide written notice to its members whenever FINRA proposes a
change to FINRA Rule 2210 that is incorporated by reference into NYSE
Chicago Rule 11.2210.\7\ Such notice would alert the Exchange's members
to the FINRA proposed rule change and give them an opportunity to
comment on it.\8\ The Exchange would similarly inform members in
writing when the Commission approves any such proposed rule change.\9\
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\7\ See Exemptive Request at 2-3. The Exchange will provide such
notice via a posting on the same website location where the Exchange
posts its own rule filings pursuant to and within the timeframe
required by Rule 19b-4(1) under the Exchange Act. The website
posting will include a link to the location on FINRA's website where
the applicable proposed rule change is posted. Id. at n.6.
\8\ See Exemptive Request at 3.
\9\ Id. at 3
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The Commission has issued exemptions similar to the Exchange's
request.\10\ In granting one such exemption in 2022, the Commission
repeated an earlier Commission statement that it would consider similar
future exemption requests from other SROs, provided that:
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\10\ See, e.g., Exchange Act Release No. 94707 (Apr. 12, 2022),
87 FR 22962 (Apr. 18, 2022) (order granting The Nasdaq Stock Market
LLC and five affiliated national securities exchanges an exemption
under Section 36(a) of the Exchange Act from the rule filing
requirements of Section 19(b) of the Exchange Act with respect to
certain of its rules incorporating by reference rules of FINRA)
(``Nasdaq Order''); Exchange Act Release No. 83040 (Apr. 12, 2018),
83 FR 17198 (Apr. 18, 2018) (order granting MIAX PEARL, LLC, an
exemption under Section 36(a) of the Exchange Act from the rule
filing requirements of Section 19(b) of the Exchange Act with
respect to certain of its rules incorporating by reference rules of
the Miami International Securities Exchange, LLC); and Exchange Act
Release No. 61534 (Feb. 18, 2010), 75 FR 8760 (Feb. 25, 2010) (order
granting BATS Exchange, Inc., an exemption under Section 36(a) of
the Exchange Act from the rule filing requirements of Section 19(b)
of the Exchange Act with respect to certain of its rules
incorporating by reference rules of the Chicago Board Options
Exchange, Incorporated, FINRA, and the New York Stock Exchange,
LLC).
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<bullet> An SRO wishing to incorporate rules of another SRO by
reference has submitted a written request for an order exempting it
from the requirement in Section 19(b) of the Exchange Act to file
proposed rule changes relating to the rules incorporated by reference,
has identified the applicable originating SRO(s), together with the
rules it wants to incorporate by reference, and otherwise has complied
with the procedural requirements set forth in the Commission's release
governing procedures for requesting exemptive orders pursuant to Rule
0-12 under the Exchange Act;
<bullet> The incorporating SRO has requested incorporation of
categories of rules (rather than individual rules within a category)
that are not trading rules (e.g., the SRO has requested incorporation
of rules such as margin, suitability, or arbitration); and
<bullet> The incorporating SRO has reasonable procedures in place
to provide written notice to its members each time a change is proposed
to the incorporated rules of another SRO.\11\
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\11\ See Nasdaq Order at 22962 (footnotes omitted).
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The Exchange has satisfied each of these conditions. Moreover,
granting the Exchange an exemption from the rule filing requirements
under Section 19(b) of the Exchange Act will promote efficient use of
Commission and Exchange resources by avoiding duplicative rule filings
based on simultaneous changes to identical rule text sought by more
than one SRO. The Commission therefore finds it appropriate in the
public interest, and consistent with the protection of investors, to
exempt the Exchange from the rule filing requirements under Section
19(b) of the Exchange Act with respect to the above-described rule the
Exchange has incorporated by reference.
Accordingly, it is ordered, pursuant to Section 36 of the Exchange
Act,\12\ that the Exchange is exempt from the rule filing requirements
of Section 19(b) of the Exchange Act with respect to a change to NYSE
Chicago Rule 11.2210 resulting solely from a change made to FINRA Rule
2210 without the need for the Exchange to separately file, pursuant to
Section 19(b) of the Exchange Act, a proposed rule change similar to
the one filed by FINRA, provided that the Exchange promptly provides
written notice to its members whenever a change is proposed to FINRA
Rule 2210, and provided that the Exchange informs its members in
writing when the Commission approves any such proposed rule change.
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\12\ 15 U.S.C. 78mm.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(76).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-20036 Filed 9-15-22; 8:45 am]
BILLING CODE 8011-01-P
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