Notice2023-21952
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 0
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
October 4, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 191 (Wednesday, October 4, 2023)</title>
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[Federal Register Volume 88, Number 191 (Wednesday, October 4, 2023)]
[Notices]
[Pages 68837-68839]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-21952]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98620; File No. SR-NYSEARCA-2023-66]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 0
September 28, 2023.
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 September 27, 2023, NYSE Arca, Inc. (``NYSE Arca'' 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\ 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 amend Rule 0 (Regulation of the Exchange,
OTP Holders, OTP Firms and ETP Holders) to adopt new rule text based on
based on [sic] Rule 0 (Regulation of the Exchange and its Member
Organizations) of its affiliate New York Stock Exchange LLC. 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 amend Rule 0 (Rule 0 [sic] (Regulation of
the Exchange, OTP Holders, OTP Firms and ETP Holders) to adopt new rule
text based on Rule 0 (Regulation of the Exchange and its Member
Organizations) of its affiliate New York Stock Exchange LLC (``NYSE'').
Specifically, the Exchange proposes a new subsection (b) in conformity
with NYSE Rule 0(b). NYSE Rule 0(b) is in turn based on FINRA Rule
0140(a) (Applicability), Nasdaq Stock Market LLC (``Nasdaq'') General 2
(Organization and Administration), Section 6(a), and Nasdaq BX, Inc.
(``Nasdaq BX'') General 2 (Organization and Administration), Section
6(a).\4\
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\4\ For purposes of this filing, Nasdaq and Nasdaq BX are
referred to collectively as the ``Nasdaq Exchanges.'' Nasdaq General
2, Section 6(a) and Nasdaq BX General 2, Section 6(a) are referred
to collectively as the ``Nasdaq Exchanges' Rules.''
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NYSE Rule 0(b) provides that the NYSE's rules apply to all member
organizations and persons associated
[[Page 68838]]
with a member organization and that persons associated with a member
organization shall have the same duties and obligations as a member
organization under the NYSE's rules. NYSE Rule 0(b) mirrors FINRA Rule
0140(a) and the versions of FINRA Rule 0140(a) adopted by the Nasdaq
Exchanges, which similarly provide that the rules of those self-
regulatory organizations, as applicable, apply to all members and
persons associated with a member and that persons associated with a
member shall have the same duties and obligations as a member under
such rules.\5\ Proposed Rule 0(d) [sic] is substantively identical to
NYSE Rule 0(b).
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\5\ An ``ETP Holder'' means a sole proprietorship, partnership,
corporation, limited liability company or other organization in good
standing that is a registered broker-dealer and has been issued an
Equity Trading Permit (``ETP'') by the Exchange. See Rules 1.1(n)
and (o). ``OTP'' means an Options Trading Permit issued by the
Exchange for effecting approved securities transactions on the
Exchange's Trading Facilities. An OTP may be issued to a sole
proprietor, partnership, corporation, limited liability company or
other organization that is a registered broker-dealer pursuant to
Section 15 of the Act, and which has been approved by the Exchange.
See Rule 1.1(mm). ``OTP Holder'' means a natural person, in good
standing, who has been issued an OTP, or has been named as a
Nominee. An OTP Holder must be a registered broker or dealer
pursuant to Section 15 of the Act, or a nominee or an associated
person of a registered broker or dealer that has been approved by
the Exchange to conduct business on the Exchange's Trading
Facilities. An OTP Holder has status as a ``member'' of the NYSE
Arca, Inc. as that term is defined in Section 3 of the Act. See Rule
1.1(nn). ``OTP Firm'' means a sole proprietorship, partnership,
corporation, limited liability company, or other organization in
good standing that holds an OTP or upon whom an individual OTP
Holder has conferred trading privileges on the Exchange's Trading
Facilities. An OTP Firm must be a registered broker-dealer pursuant
to Section 15 of the Act. An OTP Firm also has status as a
``member'' of the Exchange, as that term is defined in Section 3 of
the Act. See Rule 1.1(oo). By way of comparison, FINRA uses the term
``member'' in its rules and NYSE uses the term ``member
organization.''
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The Exchange believes that the proposed rule change would improve
the clarity of the Exchange's rules by reflecting that the Exchange's
rules apply to persons associated with an ETP Holder, OTP Holder or OTP
Firm and that such persons have the same duties and obligations as
their Exchange ETP Holder, OTP Holder or OTP Firm employer. An ETP
Holder's, OTP Holder's or OTP Firm's compliance with Exchange rules may
depend on the actions of persons associated with the ETP Holder, OTP
Holder or OTP Firm. Accordingly, the Exchange believes that the
proposed rule, which mirrors the rules of its affiliate NYSE, FINRA and
the Nasdaq Exchanges, would promote consistency in the Exchange's rules
by expressly providing that the Exchange may enforce its rules with
respect to persons associated with an ETP Holder, OTP Holder or OTP
Firm, including by taking appropriate disciplinary action against such
persons for their ETP Holder's, OTP Holder's or OTP Firm's violation of
NYSE Arca rules. The Exchange notes that the proposed rule does not
contemplate disciplinary action against individuals not involved in
violations of Exchange rules.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\6\ in general, and furthers the objectives of Section 6(b)(5),\7\
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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\6\ 15 U.S.C. 78f(b).
\7\ 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 and, in general, protect investors and the
public interest because the proposed changes would add clarity to the
Exchange's rules. As previously noted, the proposed rule text conforms
to current NYSE Rule 0(b) without change. The Exchange believes that
adopting separate rule text expressly providing that all Exchange rules
apply to persons associated with an ETP Holder, OTP Holder or OTP Firm
and that such persons have the same duties and obligations as their
Exchange ETP Holder, OTP Holder or OTP Firm employer would benefit
market participants by providing increased clarity regarding the
Exchange's ability to enforce compliance with its rules by persons
associated with an ETP Holder, OTP Holder or OTP Firm, thereby reducing
any potential confusion with respect to the Exchange's interpretation
or application of its rules. Adding these clarifying statements to the
Exchange's rules would also further the goals of transparency and
consistency across the Exchange's rules and would provide greater
harmonization between Exchange rules and the rules of NYSE, FINRA and
the Nasdaq Exchanges, resulting in less burdensome and more efficient
regulatory compliance. For the same reasons, the addition of the
proposed rule text would protect investors and the public interest and
would therefore be consistent with Section 6(b)(5) \8\ of the Act. The
proposed rule change would accordingly foster 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.
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\8\ 15 U.S.C. 78f(b)(5).
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Finally, the Exchange believes that the proposed change would be
consistent with Section 6(b)(1) \9\ of the Act because it would provide
increased clarity regarding the Exchange's ability to enforce
compliance with its rules by persons associated with an ETP Holder, OTP
Holder or OTP Firm, thereby reducing any potential confusion with
respect to the Exchange's interpretation or application of its rules.
As such, the proposed change would enable the Exchange to be so
organized as to have the capacity to be able to enforce compliance by
its exchange members and persons associated with its exchange members
with the provisions of the Act, the rules and regulations thereunder,
and the rules of the Exchange, consistent with Section 6(b)(1) \10\ of
the Act.
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\9\ 15 U.S.C. 78f(b)(1).
\10\ 15 U.S.C. 78f(b)(1).
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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 rule change is
not intended to address competitive issues but rather is concerned
solely with adding clarity and transparency to the Exchange's rules and
providing greater harmonization with the rules of its affiliate NYSE
and the approved rules of FINRA and the Nasdaq Exchanges.
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 \11\ and Rule
[[Page 68839]]
19b-4(f)(6) \12\ thereunder. 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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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 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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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) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0e7c7b626b236d6163636b607a7d4e7d6b6d20696178"><span class="__cf_email__" data-cfemail="285a5d444d054b4745454d465c5b685b4d4b064f475e">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2023-66 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-NYSEARCA-2023-66. 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="https://www.sec.gov/rules/sro.shtml">https://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
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-NYSEARCA-2023-66 and should
be submitted on or before October 25, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21952 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P
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