Notice2024-27617
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules 3170, 9120, 9522, 9523, and 9524
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
November 26, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 228 (Tuesday, November 26, 2024)</title>
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[Federal Register Volume 89, Number 228 (Tuesday, November 26, 2024)]
[Notices]
[Pages 93379-93381]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27617]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101670; File No. SR-NYSE-2024-76]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rules 3170, 9120, 9522, 9523, and 9524
November 20, 2024.
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 November 12, 2024, 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, 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 amend certain rules to replace
``Department of Member Regulation'' and ``Member Regulation'' with
``Exchange'' and make related changes. 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 certain rules to replace
``Department of Member Regulation'' and ``Member Regulation'' with
``Exchange'' and make related changes. Specifically, the Exchange would
amend Rule 3170 (Tape Recording of Registered Persons by Certain Firms)
and the following rules from the Rule 9000 Series (Code of Procedure):
Rule 9120 (Definitions); Rule 9522 (Initiation of Eligibility
Proceeding; Member Regulation Consideration); Rule 9523 (Acceptance of
Member Regulation Recommendations and Supervisory Plans by Consent
Pursuant to SEA Rule 19h-1); and Rule 9524 (Exchange Board of Directors
Consideration).
Background
Rule 3170 governs the tape recording of registered persons by
certain firms and requires certain notifications to be made to the
Exchange's Department of Member Regulation.
Rule 9120(j) defines ``Department of Member Regulation'' to mean
the Department of Member Regulation of the Financial Industry
Regulatory Authority (``FINRA'') for purposes of the Exchange's
disciplinary rules set forth in the Rule 8000 and Rule 9000 Series.
The Rule 9520 Series governs eligibility proceedings for persons
subject to statutory disqualifications.\4\
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\4\ The Exchange's 2013 filing adopting the FINRA disciplinary
rules represented that the proposed Rule 9520 Series would govern
eligibility proceedings for persons subject to statutory
disqualifications that are not FINRA members. See Securities
Exchange Act Release Nos. 68678 (January 16, 2013), 78 FR 5213, 5230
(January 24, 2013) (SR-NYSE-2013-02) (Notice); 69045 (March 5,
2013), 78 FR 15394, 15399 (March 11, 2013) (SR-NYSE-2013-02)
(Order). At the time, there were several member organizations that
were not FINRA members. Today, only a single member organization is
also not a FINRA member. All FINRA members are subject to the FINRA
Rule 9520 Series, which is substantively the same as the Exchange's
version. Hence, as a practical matter, all member organizations
would be subject to the same Rule 9520 standards.
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Rule 9522 governs the initiation of an eligibility proceeding by
the Exchange and the member organization's obligation to file an
application to initiate an eligibility proceeding if it has been
subject to certain disqualifications. Further, the rule provides that
Member Regulation could approve a written request for relief from the
eligibility requirements under certain circumstances.
Rule 9523 allows Member Regulation to recommend a supervisory plan
to which the disqualified member organization, sponsoring member
organization, and/or disqualified person, as the case may be, may
consent and by doing so, waive the right to hearing or appeal if the
plan is accepted and the right to claim bias or prejudgment, or
prohibited ex parte communications.
Rule 9524 governs requests for review by the Exchange Board of
Directors of a decision to reject a supervisory plan under Rule 9523.
Finally, Rule 0 provides, among other things, that Exchange Rules
that refer to Exchange staff or Exchange departments should be
understood as also referring to FINRA staff and FINRA departments
acting on behalf of the Exchange pursuant to the Regulatory Services
Agreement (``RSA'') in existence between the Exchange and FINRA, as
applicable.
Proposed Rule Change
The Exchange proposes to replace all references to ``Department of
Member Regulation'' and ``Member Regulation'' in Rules 3170, 9522, 9523
and 9524 with ``Exchange'' or ``the Exchange.'' Consistent with Rule 0,
references to the Exchange encompass FINRA staff and departments acting
on the Exchange's behalf pursuant to the RSA. The proposed change would
simplify the Exchange's rules by eliminating specific references that
could change over time, thereby eliminating the need for additional
rule changes in the future.\5\
[[Page 93380]]
The proposed change is also consistent with the rules of other
exchanges that have adopted FINRA's disciplinary rules and have omitted
specific references to FINRA departments in their Rule 9520 Series.\6\
Moreover, the proposed change would correct the reference in Rule 3170
since the Exchange does not have a Department of Member Regulation. The
Exchange would also delete Rule 9120(i) consisting of the word
``Reserved,'' as well as Rule 9120(j) defining Department of Member
Regulation for purposes of the Exchange's disciplinary rules as
unnecessary. The remaining definitions would be renumbered.
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\5\ See, e.g., Securities Exchange Act Release No. 98874
(November 7, 2023), 88 FR 78071 (November 14, 2023) (SR-NYSE-2023-
39) (Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend Rules 9521 and 9522 To Correct Obsolete References
to a FINRA Department). The current rule filing was made to avoid
having Exchange rules contain similar outdated or incorrect
references and avoid similar future rule filings.
\6\ See, e.g., Investor Exchange Rule Series 9.520 (Eligibility
Proceedings).
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In addition, the Exchange proposes to delete references to
``Department of Member Regulation'' in subsections (a)(1)(B), (a)(3),
and (a)(4)(b)(1)(B) of Rule 9523 without inserting a reference to the
Exchange where the deletion will clarify that the Exchange is intended.
Further, in Rule 9524(b), the Exchange would delete the reference to
``CRO'' (Chief Regulatory Officer) as redundant. The Exchange would
also delete the last sentence of Rule 9524(a) stating that the Exchange
Secretary will provide notice of a request to review a decision to
reject a supervisory plan under Rule 9523 to the CRO and Department of
Member Regulation as redundant.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5) of the Act,\7\ 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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\7\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed changes, taken together,
would increase the clarity and transparency of the Exchange's rules and
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 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 Act. The proposed rule change is
not intended to address competitive issues but rather is concerned
solely with deleting and, where applicable, replacing, specific
references to FINRA departments in its rules and otherwise adding
clarity and transparency to the Exchange's rules. Since the proposal
does not substantively modify system functionality or processes on the
Exchange, the proposed changes will not impose any burden on
competition.
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 \8\ and Rule 19b-4(f)(6) thereunder.\9\
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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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 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#81f3f4ede4ace2eeecece4eff5f2c1f2e4e2afe6eef7"><span class="__cf_email__" data-cfemail="7c0e091019511f1311111912080f3c0f191f521b130a">[email protected]</span></a>. Please include
file number SR-NYSE-2024-76 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-2024-76. 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
[[Page 93381]]
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-NYSE-2024-76 and should be submitted on or before December 17, 2024.
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)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-27617 Filed 11-25-24; 8:45 am]
BILLING CODE 8011-01-P
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