Notice2022-27791
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change To Make Certain Amendments to the Preamble to Rule 9217 and To Add Rule 2.1210 to the Exchange's Minor Rule Violation Plan for Equities and Options
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
December 22, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 245 (Thursday, December 22, 2022)</title>
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[Federal Register Volume 87, Number 245 (Thursday, December 22, 2022)]
[Notices]
[Pages 78724-78728]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-27791]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96524; File No. SR-NYSEAMER-2022-13]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Order Granting Accelerated Approval of a Proposed Rule
Change To Make Certain Amendments to the Preamble to Rule 9217 and To
Add Rule 2.1210 to the Exchange's Minor Rule Violation Plan for
Equities and Options
December 16, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on December 8, 2022, NYSE American LLC (``NYSE American''
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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons and approving the proposal
on an accelerated basis.
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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 (1) certain amendments to the preamble to
Rule 9217; (2) to add Rule 2.1210 (Registration Requirements) of the
Office Rules to the list of minor rule violations in Rule 9217 for both
the equities and options markets; and (3) certain non-substantive
clarifying changes to the list of eligible equities and options rules.
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 III 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 (1) certain amendments to the preamble to
Rule 9217; (2) to add Rule 2.1210 (Registration Requirements) of the
Office Rules to the list of minor rule violations in Rule 9217 for both
the equities and options markets; and (3) certain non-substantive
clarifying changes to the list of eligible equities and options rules.
Preamble to Rule 9217
The preamble to current Rule 9217 consists of two paragraphs. The
first provides that any member organization or covered person \4\ may
be subject to a fine under Rule 9216(b) with respect to any rules
listed therein and that the fine amounts and fine levels set forth
therein shall apply to the fines imposed. The second paragraph provides
that nothing in the rule requires the Exchange to impose a fine for a
violation of any rule under the Minor Rule Plan and that if the
Exchange determines that any violation is not minor in nature, the
Exchange may, at its discretion, proceed under the Rule 9000 Series
rather than under Rule 9217.
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\4\ For purposes of the Exchange's rules, the term member
organization encompasses both equity permit holders (ETP Holders)
and options permit holders (ATP Holders). See Rule 1.1E(n) (ETP
Holder ``means a member organization that has been issued an ETP'');
Rule 900.2NY(5) (ATP Holder refers to a natural person, sole
proprietorship, partnership, corporation, limited liability company
or other organization, in good standing, that has been issued an
ATP, and references to member, member organization and 86 Trinity
Permit Holder as those terms are used in the Rules of the Exchange
are deemed to be references to ATP Holders. ATP Holders have status
as a ``member'' of the Exchange as that term is defined in Section 3
of the Act). Rule 9120(g) defines covered person to mean a member,
principal executive, approved person, registered or non-registered
employee of a member organization or an ATP Holder, or other person
(excluding a member organization) subject to the jurisdiction of the
Exchange.
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The Exchange proposes to add two additional paragraphs to the
preamble based on the preamble to the version of Rule 9217 adopted by
the Exchange's affiliate NYSE Arca, Inc. (``NYSE Arca'') and to reorder
the paragraphs as subsections (a) through (d), as follows.
The current first paragraph of the preamble to Rule 9217 would
become new subsection (a). The text would be unchanged except that the
Exchange would add ``, not to exceed $5,000,''
[[Page 78725]]
after fine to clarify that a minor rule fine on the Exchange cannot
exceed $5,000.\5\
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\5\ See Securities Exchange Act Release No. 77241 (February 26,
2016), 81 FR 11311, 11325 n.50 (March 3, 2016) (SR-NYSEMKT-2016-30)
(Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Adopting Investigation, Disciplinary, Sanction, and Other
Procedural Rules Modeled on the Rules of the New York Stock Exchange
LLC and Certain Conforming and Technical Changes) (noting that
proposed NYSE American Rule 9216(b) would retain the Exchange's
maximum fine for minor rule violations of $5,000).
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The Exchange would add a new subsection (b) that would provide that
Regulatory Staff designated by the Exchange shall have the authority to
impose a fine pursuant to this Rule. Proposed Rule 9217(b) is identical
to NYSE Arca Rule 10.9217(b).
The Exchange would also add the following text as new subsection
(c) to Rule 9217:
Any member organization or covered person found in violation of
a minor rule is not required to report such violation on SEC Form BD
or Form U-4 if the sanction imposed consists of a fine not exceeding
$2,500 and the sanctioned member organization or covered person has
not sought an adjudication, including a hearing, or otherwise
exhausted the administrative remedies available with respect to the
matter. Any fine imposed in excess of $2,500 is subject to current
rather than quarterly reporting to the Commission pursuant to Rule
19d-1 under the Act.
Except for substituting ``member organization or covered person''
for ``person or organization,'' proposed subsection (c) is identical to
NYSE Arca Rule 10.9217(c).
Finally, the current second paragraph of the preamble to Rule 9217
would become new subsection (d). The text of proposed Rule 9217(d)
would be unchanged.
Addition of Rule 2.1210 to the List of Rules Eligible for a Minor Fine
The Exchange proposes to add Rule 2.1210 the list of rules in Rule
9217 eligible for disposition pursuant to a minor fine under Rule
9216(b) for its equities and options markets.
Rule 2.1210, which was adopted in 2018,\6\ sets forth the
requirements for persons engaged in the investment banking or
securities business of a member organization or ETP Holder \7\ to be
registered with the Exchange as a representative or principal in each
category of registration appropriate to his or her functions and
responsibilities as specified in Rule 2.1220.
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\6\ See Securities Exchange Act Release No. 84388 (October 10,
2018), 83 FR 52287 (October 16, 2018) (SR-NYSEAmer-2018-46) (Notice
of Filing and Immediate Effectiveness of Amendments to Rules
Regarding Qualification, Registration and Continuing Education
Applicable to Member Organizations, Equity Trading Permit Holders,
and American Trading Permit Holders).
\7\ Since member organizations encompass ETP Holders, the
current formulation in Rule 2.1210 is redundant. See note 4, supra.
The Exchange will submit a proposed rule change to clarify Rule
2.1210. The Exchange also notes that persons engaged in the
investment banking or securities business of a member organization
or ETP Holder would also be covered persons for purposes of the
Exchange's disciplinary rules.
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The Exchange proposes to add Rule 2.1210 to the list of rules in
Rule 9217 eligible for disposition pursuant to a fine under Rule
9216(b). Specifically, the Exchange proposes to add Rule 2.1210 to the
``List of Equities Rule Violations and Fines Applicable Thereto'' under
current subsection (b), titled ``Record Keeping and Other Minor Rule
Violations,'' and to the ``List of Options Rule Violations and Fines
Applicable Thereto'' under current subsection (ii) titled ``List of
Options Rule Violations and Fines Applicable Thereto.'' The
substantially similar version of Rule 2.1210 was adopted by the
Exchange's affiliate New York Stock Exchange LLC (``NYSE'') in 2018 \8\
and is currently eligible for minor rule fines under the NYSE's version
of Rule 9217.\9\ The Exchange believes that having the ability to issue
a minor rule fine for failing to comply with the registration
requirements of Rule 2.1210 would be consistent with and complement the
Exchange's current ability to issue minor rule fines for other
registration violations (e.g., Rule 2.21E (Employees of ETP Holders
Registration) and Rule 341 (Approval of Registered Employees and
Officers)). The Exchange further believes that the violations of the
registration requirements are particularly suited to minor rule fines
because minor fines provide a reasonable means of addressing violations
that do not rise to the level of requiring formal disciplinary
proceedings, while providing greater flexibility in handling certain
violations.
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\8\ See Securities Exchange Act Release No. 84336 (October 2,
2018), 83 FR 50727 (October 9, 2018) (SR-NYSE-2018-44) (Notice of
Filing and Immediate Effectiveness of Amendments To Rules Regarding
Qualification, Registration and Continuing Education Applicable to
Members and Member Organizations).
\9\ See NYSE Rule 9217.
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The Exchange further proposes to add fine levels for violations of
Rule 2.1210 to both the equities and the options fine schedules. First,
the Exchange would add proposed first, second and third level fines for
violations of Rule 2.1210 to the equities fine schedule of $1,000 for
the first violation, $2,500 for the second violation and $3,500 for the
third and subsequent violations. The proposed fine levels would be the
same as those in the Exchange's current Rule 10.9217(d)(2)(3) for
violations of Rule 2.21E. Second, the Exchange would add proposed
first, second and third level fines for violations of Rule 2.1210 to
the options fine schedule of $1,000 for the first violation, $2,500 for
the second violation and $3,500 for the third and subsequent
violations. The proposed fine levels would be the same as those in the
Exchange's current Rule 10.9217(ii)(11) for violations of Rule 341.
The Exchange believes that the proposed change would strengthen the
Exchange's ability to carry out its oversight and enforcement
responsibilities in cases where full disciplinary proceedings are
unwarranted in view of the minor nature of the particular violation.
Non-Substantive Clarifying Changes
The Exchange also proposes the following non-substantive clarifying
changes to the list equities and options rules eligible for a minor
fine.
Equities Rules and Applicable Fines
<bullet> Under the heading ``List of Equities Rule Violations and
Fines Applicable Thereto,'' the Exchange would delete ``(a)'', ``(b)'',
``(c),'' ``(d)'' and ``(e)''.
<bullet> When the Exchange added the Rule 6800 Series to the list
of minor rule violations, violations of the Rule 6800 Series and the
corresponding fine levels were inadvertently placed under the legacy
minor rules sections of Rule 9217 and omitted from current Rule 9217(b)
(Record Keeping and Other Minor Rule Violations) and (d) (Fine
Schedule).\10\ To address this oversight, the Exchange would amend
current Rules 9217(b) and (d) as follows.
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\10\ See Securities Exchange Act Release No. 89402 (July 27,
2020), 85 FR 46203 (July 31, 2020) (SR-NYSEAMER-2020-52) (Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule
Change Adding the Consolidated Audit Trail Industry Member
Compliance Rules to the List of Minor Rule Violations in Rule 9217).
Rules 9217(c) and (e) relate to legacy minor rules and associated
fine levels.
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First, the following bullet would be added under to current Rule
9217(b) immediately after the newly added violations of Rule 2.1210:
``Rule 6800--Series of the Office Rules--Failure to comply with the
Consolidated Audit Trail Compliance Rule requirements.''
Second, the following bullet would be added at the end of current
Rule 9217(d)(2): ``Failure to comply with the Consolidated Audit Trail
Compliance Rule requirements set forth in the Rule 6800 Series of the
Office Rules.\2\'' Proposed footnote 2 would read ``For failures to
comply with the Consolidated Audit Trail Compliance Rule requirements
of the Rule 6800 Series, the Exchange may impose a
[[Page 78726]]
minor rule violation fine of up to $2,500. For more serious violations,
other disciplinary action may be sought.''
The proposed changes to current Rules 9217(b) and (d) are not
intended to make substantive changes. Violations of the CAT Compliance
Rules are currently eligible for minor rule fines and $2,500 is
currently the maximum eligible fine. The text proposed to be added to
Rules 9217(b) and (d) is identical to text in current Rules 9217(c) and
(e). Proposed footnote 2 is identical to text at the end of current
Rule 9217(e) (Legacy Minor Rules Fine Schedule) as well as that adopted
by the Exchange's affiliates NYSE and NYSE Chicago, Inc.\11\ As
discussed below, the same footnote would be added to the options list
of minor rule violations as new footnote 4.
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\11\ See NYSE Rule 9217(d) (``For failures to comply with the
Consolidated Audit Trail Compliance Rule requirements of the Rule
6800 Series, the Exchange may impose a minor rule violation fine of
up to $2,500. For more serious violations, other disciplinary action
may be sought.''); NYSE Chicago 10.9217(f), n. ** (same).
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<bullet> Under the first paragraph in current Rule 9217(d) (Fine
Schedule), the Exchange proposes to add the clause ``, with the
exception of fines pursuant to the Rule 6800 Series'' to the first
sentence. As proposed, the sentence would read ``These fines are
intended to apply to minor violations, with the exception of fines
pursuant to the Rule 6800 Series.'' The proposed change would render
the sentence in current subsection (d) identical to the sentence at the
end of current subsection (c). In addition to making the Exchange's
rules more internally consistent and more like those of its
affiliates,\12\ the proposed change would clarify that minor rule fines
for violations of the Rule 6800 Series cannot exceed $2,500. As
discussed below, the Exchange would add the same clause to the same
sentence that appears in the options rules section.
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\12\ See, e.g., NYSE Rule 9217.
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<bullet> The Exchange proposes the following additional change to
the equities fine schedule set forth in current Rule 9217(d):
[cir] The number ``1'' would be deleted from the first heading
``Trading Rule Violations Fine Levels.'' Underneath that heading,
numbering would be replaced with bullets to conform with current
subsections (a), (b) and (c) of Rule 9217 governing equities rules
violations.
[cir] The number ``2'' would be deleted from the second heading
``Record Keeping and Other Minor Rule Violations Fine Levels.''
Underneath that heading, the Exchange would similarly replace numbering
with bullets to conform with current subsections (a), (b) and (c) of
Rule 9217 governing equities rules violations.
Options Rules and Applicable Fines
<bullet> Under the heading ``List of Options Rule Violations and
Fines Applicable Thereto,'' the Exchange would delete ``(i),'' ``(ii)''
and ``(iii)''. The Exchange would also replace all numbering and
lettering with bullets in the list of eligible options rules and
recommended fine levels.
<bullet> Current subsection (i) would be renamed ``Trading Rule
Violations and Options Floor Decorum'' to more accurately reflect the
eligible listed rules.
<bullet> Under current subsection (ii) (Minor Rule Plan: Record
Keeping and Other Minor Rule Violations), the Exchange would add a new
footnote 4 at the end of current item 13 that relates to failure to
comply with the Consolidated Audit Trail Compliance Rule requirements
set forth in the Rule 6800 Series of the Office Rules. Proposed
footnote 4 would be identical to footnote 2 described above that the
Exchange would add to Rule 9217(d)(2) in the equities rules section.
<bullet> Similar to the change described above for the equities
list, the Exchange would add the clause ``, with the exception of fines
pursuant to the Rule 6800 Series'' to the first sentence in the second
paragraph under current subsection (iii) (Minor Rule Plan: Recommended
Fine Schedule).
<bullet> The Exchange would move footnote 1 that appears in the
Options Floor Decorum and Minor Trading Rule Violations fine levels
under current subsection (iii) to the end of the options list rule with
the other footnotes.
<bullet> The Exchange would delete ``(ii)'' before ``Record Keeping
and Other Minor Rule Violations.''
<bullet> Finally, the Exchange would add a reference to proposed
footnote 4 at the end of current item 13 under ``Record Keeping and
Other Minor Rule Violations.'' In addition, ``Up to $2,500.00'' would
be deleted from the chart as redundant of proposed footnote 4.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\13\ in general, and furthers the objectives of Section
6(b)(5),\14\ 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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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
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Preamble to Rule 9217
The Exchange believes that harmonizing the preamble to Rule 9217
with that of its affiliates would remove impediments to and perfect the
mechanism of a free and open market and a national market system by a
providing greater harmonization between Exchange rules and those of its
affiliates in connection with minor rule fines, 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.
Moreover, by adopting the same applicable minor rule standards for
violations of those standards as its affiliates, the Exchange would
promote regulatory consistency.
Addition of Rule 2.1210 to the List of Eligible Rules
Minor rule fines provide a meaningful sanction for minor or
technical violations of rules when the conduct at issue does not
warrant stronger, immediately reportable disciplinary sanctions. The
inclusion of a rule in Rule 9217 does not minimize the importance of
compliance with the rule, nor does it preclude the Exchange from
choosing to pursue violations of eligible rules through formal
disciplinary action if the nature of the violations or prior
disciplinary history warrants more significant sanctions. Rather, the
Exchange believes that the proposed rule change will strengthen the
Exchange's ability to carry out its oversight and enforcement
responsibilities in cases where full disciplinary proceedings are
unwarranted in view of the minor nature of the particular violation.
The option to impose a minor rule sanction gives the Exchange
additional flexibility to administer its enforcement program in the
most effective and efficient manner while still fully meeting the
Exchange's remedial objectives in addressing violative conduct. The
proposed rule change is thus designed to prevent fraudulent and
manipulative acts and practices because it will provide the Exchange
the ability to issue a minor rule fine for violations of the
[[Page 78727]]
registration requirements set forth in Rule 2.1210 where a more formal
disciplinary action may not be warranted or appropriate. In addition,
the Exchange believes that adding rules based on the rules of its
affiliate to the Exchange's minor rule plan would promote fairness and
consistency in the marketplace by permitting the Exchange to issue a
minor rule fine for violations of substantially similar rules that are
already eligible for minor rule treatment, thereby harmonizing rules
eligible for minor rule fines across affiliated exchanges.
The Exchange further believes that the proposed amendments to Rule
9217 are consistent with Section 6(b)(6) of the Act,\15\ which provides
that members and persons associated with members shall be appropriately
disciplined for violation of the provisions of the rules of the Act,
the rules and regulations thereunder, and the rules of the exchange, by
expulsion, suspension, limitation of activities, functions, and
operations, fine, censure, being suspended or barred from being
associated with a member, or any other fitting sanction. As noted, the
proposed rule change would provide the Exchange ability to sanction
minor or technical violations of proposed Rule 2.1210 pursuant to the
Exchange's rules. Finally, the Exchange also believes that the proposed
changes are designed to provide a fair procedure for the disciplining
of members and persons associated with members, consistent with
Sections 6(b)(7) and 6(d) of the Act.\16\ Rule 9217 does not preclude a
member organization or covered person from contesting an alleged
violation and receiving a hearing on the matter with procedural rights
through a litigated disciplinary proceeding.
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\15\ 15 U.S.C. 78f(b)(6).
\16\ 15 U.S.C. 78f(b)(7) and 78f(d).
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Non-Substantive Clarifying Changes
The Exchange believes that the proposed reorganization, renaming
and replacement of numbers with bullets in Rule 9217 and related
changes described above would add clarity and consistency to the
Exchange's rules. The Exchange believes that adding such clarity would
also be consistent with the public interest and the protection of
investors because investors will not be harmed and in fact would
benefit from increased clarity, thereby reducing potential confusion.
In addition, the Exchange believes that moving text to achieve internal
consistency and address inadvertent errors relating to violations of
the CAT Compliance Rules also adds clarity to the Exchange's rules.
Finally, the Exchange believes that harmonizing the preamble to Rule
9217 with that of its affiliates would promote fairness and consistency
in the marketplace by eliminating differences and harmonizing language
related to minor rule treatment of similar rule violations across
affiliates. The proposed change is not intended to make any substantive
change to the applicability of minor rule fines to violations of the
CAT Compliance Rules or the amount of those fines.
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 change is not
designed to address any competitive issue but rather to update the
Exchange's rules to strengthen the Exchange's ability to carry out its
oversight and enforcement functions and deter potential violative
conduct and to align the Exchange's rule setting forth violations
eligible for a minor rule fine more closely with that of its
affiliates.
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. 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#7200071e175f111d1f1f171c0601320117115c151d04"><span class="__cf_email__" data-cfemail="96e4e3faf3bbf5f9fbfbf3f8e2e5d6e5f3f5b8f1f9e0">[email protected]</span></a>. Please include
File Number SR-NYSEAMER-2022-13 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-NYSEAMER-2022-13. 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-NYSEAMER-2022-13 and should be submitted
on or before January 12, 2023.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\17\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\18\ which requires that the
rules of an exchange be designed to promote just and equitable
principles of trade, to remove impediments and to 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 Commission
also believes that the proposal is consistent with Sections 6(b)(1) and
6(b)(6) of the Act \19\ which require that the rules of an exchange
enforce compliance with, and provide appropriate discipline for,
violations of Commission and Exchange rules. Finally, the Commission
finds that the
[[Page 78728]]
proposal is consistent with the public interest, the protection of
investors, or otherwise in furtherance of the purposes of the Act, as
required by Rule 19d-1(c)(2) under the Act,\20\ which governs minor
rule violation plans.
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\17\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\18\ 15 U.S.C. 78f(b)(5).
\19\ 15 U.S.C. 78f(b)(1) and 78f(b)(6).
\20\ 17 CFR 240.19d-1(c)(2).
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As stated above, the Exchange proposes to (1) make certain
revisions to the preamble to Rule 9217 (Violations Appropriate for
Disposition Under Rule 9216(b)); (2) add Rule 2.1210 (Registration
Requirements) to the list of minor rule violations in Rule 9217 and
associated fine levels for its equities and options markets; and (3)
make certain non-substantive clarifying changes to Rule 9217.
The Commission believes that Rules 9216(b) and 9217 are an
effective way to discipline a member for a minor violation of a rule.
More specifically, the Commission believes that the proposed revisions
to the preamble of Rule 9217 are consistent with the Act because they
would add clarity to the Exchange's rules and may help the Exchange's
ability to better carry out its oversight and enforcement
responsibilities. The proposed revisions to the preamble of Rule 9217
also would align Rule 9217 with the rules of the Exchange's affiliates.
The Commission believes that the proposed addition of Rule 2.1210
(Registration Requirements) to the Exchange's list of current minor
rule violations provides a reasonable means of addressing violations
that do not rise to the level of requiring formal disciplinary
proceedings, while providing greater flexibility in handling certain
violations. Furthermore, the Commission believes that amending the
associated fine schedule is consistent with the Act because it may help
the Exchange's ability to better carry out its oversight and
enforcement responsibilities by levying appropriate fines for minor
violations of the rules included in Rule 9217, including minor
violations of Rule 2.1210. Finally, the Commission believes that the
Exchange's proposal to make certain non-substantive changes to Rule
9217 are consistent with the Act because these changes will add clarity
to the Exchange's rules.
In approving the proposed rule change, the Commission in no way
minimizes the importance of compliance with the Exchange's rules and
all other rules subject to fines under Rules 9216(b) and 9217. The
Commission believes that a violation of any self-regulatory
organization's rules, as well as Commission rules, is a serious matter.
However, Rules 9216(b) and 9217 provide a reasonable means of
addressing rule violations that may not rise to the level of requiring
formal disciplinary proceedings, while providing greater flexibility in
handling certain violations. The Commission expects that the Exchange
will continue to conduct surveillance with due diligence and make a
determination based on its findings, on a case-by-case basis, whether a
fine of more or less than the recommended amount is appropriate for a
violation under Rules 9216(b) and 9217 or whether a violation requires
formal disciplinary action.
For the same reasons as discussed above, the Commission finds good
cause, pursuant to Section 19(b)(2) of the Act,\21\ for approving the
proposed rule change prior to the thirtieth day after the date of
publication of the notice of the filing thereof in the Federal
Register. The proposal will assist the Exchange in preventing
fraudulent and manipulative practices by allowing the Exchange to
adequately enforce compliance with, and provide appropriate discipline
for, violations of Exchange rules. Moreover, the proposed changes raise
no new or novel issues. Accordingly, the Commission believes that a
full notice-and-comment period is not necessary before approving the
proposal.
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\21\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\22\ and Rule 19d-1(c)(2) thereunder,\23\ that the proposed rule change
(SR-NYSEAMER-2022-13) be, and hereby is, approved on an accelerated
basis.
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\22\ 15 U.S.C. 78s(b)(2).
\23\ 17 CFR 240.19d-1(c)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27791 Filed 12-21-22; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on December 22, 2022.
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