Notice2022-28598
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Permanent the Temporary Rule Relief in Rule 36.30
Primary source
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Published
January 5, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 3 (Thursday, January 5, 2023)</title>
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[Federal Register Volume 88, Number 3 (Thursday, January 5, 2023)]
[Notices]
[Pages 894-896]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-28598]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96591; File No. SR-NYSE-2022-58]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Make Permanent the Temporary Rule Relief in Rule 36.30
December 29, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 23, 2022, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 make permanent the temporary rule relief
in Rule 36.30 to allow DMM units to maintain a telephone line at its
trading post location, which relief expires on the earlier of a full
reopening of the Trading Floor facilities to DMMs or after the Exchange
closes on December 31, 2022. 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 make permanent the temporary rule relief
to Rule 36.30 to allow a DMM unit may maintain a telephone line at its
trading post location, which relief expires on the earlier of a full
reopening of the Trading Floor facilities to DMMs or after the Exchange
closes on December 31, 2022.\3\
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\3\ See Securities Exchange Act Release No. 88933 (May 22,
2020), 85 FR 32059 (May 28, 2020) (SR-NYSE-2020-47) (Notice of
filing and immediate effectiveness of proposed rule change).
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Background
In connection with its response to COVID-19 and its impact on the
Trading Floor, the Exchange modified certain of its rules to provide
temporary relief,\4\ certain of which relief was extended several
times.\5\ In particular, the Exchange modified Rule 36 to adopt rule
text allowing DMMs to use telephones installed at the DMM unit trading
post to communicate with personnel not assigned to the Trading Floor
but working in locations other than the off-Floor offices of the DMM
unit; provided, however, that the telephone numbers of such off-Floor
personnel are provided to the Exchange in advance.\6\ The temporary
relief afforded in Rule 36.30 is set to expire on the earlier of a full
reopening of the Trading Floor facilities to DMMs or after the Exchange
closes on December 31, 2022. Although the Exchange no longer requires
DMM firms to operate with reduced staff, DMM firms have chosen to
continue to operate with a mix of employees working remotely and others
physically present on the Trading Floor.
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\4\ See, e.g., Securities Exchange Act Release Nos. 89086 (June
17, 2020), 85 FR 37712 (SR-NYSE-2020-52) (amending Rules 7.35A to
add Commentary .06, 7.35B to add Commentary .03, 76 to add
Supplementary Material 20, and Supplementary Material .30 to Rule
36).
\5\ See, e.g., Securities Exchange Act Release No. 94585 (April
1, 2022) 87 FR 20479 (April 7, 2022) (SR-NYSE-2022-18) (Notice of
filing and immediate effectiveness of proposed rule change to extend
the temporary period for specified Commentaries to Rules 7.35A and
7.35C and temporary rule relief in Rule 36.30 to end on the earlier
of a full reopening of the Trading Floor facilities to DMMs or after
the Exchange closes on July 31, 2022).
\6\ See NYSE Rule 36.30.
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Proposed Rule Change
In order to address the technological shift in how business
communications are conducted in the wake of the pandemic, and how
business communications will likely continue
[[Page 895]]
even after the pandemic ends, the Exchange proposes to make permanent
the amendments to Rule 36.30. To effectuate this change, the Exchange
proposes to eliminate language regarding the temporary nature of the
relief.\7\
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\7\ See proposed NYSE Rule 36.30 (providing that ``[a] DMM unit
may maintain a telephone line at its trading post location to
communicate with DMM unit personnel working in locations other than
the off-Floor offices of the DMM unit, provided that the telephone
numbers of such persons are provided to the Exchange in advance.'').
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The Exchange believes this proposed rule change would continue to
provide DMMs with flexibility to communicate with staff not assigned to
the Trading Floor, but who are working remotely. The Exchange believes
that remote work options for employees--whether full or part-time--have
become a permanent feature of the modern workplace and are likely to
persist once the pandemic fully subsides. As such, the Exchange
believes that allowing DMM units to continue communicating with
employees working off-site (at designated phone numbers shared with the
Exchange) would continue to provide flexibility to DMMs to maintain
necessary communication with staff at the DMM firm with whom they would
otherwise communicate if such staff were physically present at an
office. As a result, the Exchange believes the proposed change would
enable DMM units to continue to efficiently allocate resources and
permit Floor-based staff to communicate more easily and seamlessly with
off-Floor staff whether such off-Floor staff are working at an office
or remotely.
As is the case today, Rule 36.30 telephones installed at the DMM
unit trading post ``shall not be used for the purpose of transmitting
to the Floor orders for the purchase or sale of securities.'' \8\
Moreover, the (continued) requirement that DMM units provide the
Exchange with the telephone numbers of the permitted contacts working
remotely is an additional safeguard that would provide the Exchange
with information that may be important in determining whether DMM units
are only communicating with personnel from their off-Floor offices in a
manner permitted under Rule 98.\9\
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\8\ See NYSE Rule 36.30.
\9\ Communications by DMM staff on the Trading Floor are
governed by NYSE Rule 98.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\10\ in general, and furthers the objectives of Section 6(b)(5) of
the Act,\11\ in particular, 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, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because the proposed rule change would
continue to provide DMMs with flexibility to communicate with staff not
assigned to the Trading Floor, but who are working remotely. The
Exchange believes that remote work options for employees--whether full
or part-time--have become a permanent feature of the modern workplace
and are likely to persist once the pandemic fully subsides. As such,
the Exchange believes that allowing DMM units to communicate with
employees working remotely would continue to enhance communications and
ease the logistical burdens associated with operating with staff
working on the Trading Floor and staff working remotely and provide
DMMs with needed flexibility in managing their operations. As a result,
the Exchange believes the proposed change would enable DMM units to
more efficiently allocate resources and permit Floor-based staff to
communicate more easily and seamlessly with off-Floor staff whether
such off-Floor staff are working at an office or remotely.
The Exchange also believes that the proposal is designed to prevent
fraudulent and manipulative acts and practices and would be consistent
with the public interest and the protection of investors because DMM
units would continue to need to identify the persons working in
locations other than the DMM unit's off-Floor offices and submit the
telephone numbers of such persons to the Exchange in advance. This
additional safeguard would provide the Exchange with information that
may be important to determining whether DMM units are only
communicating with personnel from their off-Floor offices in a manner
permitted under Rule 98. As such, the Exchange believes that the
continuation of the existing safeguards are appropriate for supervising
and monitoring use of telephones on the Exchange's Trading Floor
consistent with the objectives of Section 6(b)(5) of the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not designed to address any competitive issues but rather would make
permanent amendments to Rule 36.30 that enhance a DMM unites ability to
communicate with staff working remotely (i.e., not on the Trading
Floor).
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 \12\ and Rule 19b-4(f)(6) thereunder.\13\
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 \14\ and Rule 19b-
4(f)(6)(iii) thereunder.\15\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). 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, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may
[[Page 896]]
become operative immediately upon filing.
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to it will allow the rules discussed
above to remain in effect for DMM firms to continue to operate with a
mix of employees working remotely and others physically present on the
Trading Floor. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposal operative upon filing.\18\
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\18\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\19\ 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#047671686129676b6969616a7077447761672a636b72"><span class="__cf_email__" data-cfemail="453730292068262a2828202b3136053620266b222a33">[email protected]</span></a>. Please include
File Number SR-NYSE-2022-58 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-NYSE-2022-58. 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-NYSE-2022-58 and should be submitted on
or before January 26, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12), (59).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-28598 Filed 1-4-23; 8:45 am]
BILLING CODE 8011-01-P
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