Notice2024-27618
Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Harmonize NYSE Rule 3110.19(d)
Primary source
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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 93385-93388]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27618]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101671; File No. SR-NYSE-2024-73]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Harmonize NYSE Rule 3110.19(d)
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 13, 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 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 harmonize NYSE Rule 3110.19(d) (Obligation
to Provide List of RSLs) with certain recent changes by the Financial
Industry Regulatory Authority, Inc. (``FINRA'') to FINRA Rule
3110.19(d). 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.
[[Page 93386]]
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 harmonize NYSE Rule 3110.19(d) (Obligation
to Provide List of RSLs \4\) to harmonize the rule with certain recent
changes by FINRA. Specifically, the Exchange would remove the reference
to a list of RSLs and the quarterly timeframe for member firms to
provide the list to FINRA and replace it with the requirement that
member firms provide current information identifying all locations
designated as RSLs in the frequency, manner and format as FINRA may
prescribe. The proposed rule change would harmonize the Exchange's
residential supervisory location rule with FINRA and thus promote
uniform inspection standards across the securities industry.
Additionally, because the proposed changes to NYSE Rule 3110.19(d)
would be substantially similar to FINRA Rule 3110.19(d), this rule
change enables NYSE Rule 3110 to continue to be incorporated into the
agreement between NYSE and FINRA to allocate regulatory responsibility
for common rules (the ``17d-2 Agreement'').
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\4\ ``RSL'' stands for Residential Supervisory Location.
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Background and Proposed Rule Change
The NYSE recently adopted NYSE Rule 3110.19, which permits a member
organization to designate a private residence at which an associated
person engages in specified supervisory activities, subject to certain
safeguards and limitations, as an RSL, a non-registered location.\5\
NYSE Rule 3110 is based on FINRA Rule 3110.\6\
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\5\ See Securities Exchange Act Release No. 101325 (October 15,
2024), 89 FR 84221 (October 21, 2024) (SR-NYSE-2024-64) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Harmonize NYSE Rule 3110).
\6\ See id., 89 FR at 84221. See generally Securities Exchange
Act Release No. 73554 (November 6, 2014), 79 FR 67508 (November 13,
2014) (SR-NYSE-2014-56).
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Currently, NYSE Rule 3110.19(d) requires a member organization that
elects to designate any of its offices or locations as an RSL to
provide FINRA with a current list of those offices or locations by the
15th day of the month following each calendar quarter in the manner and
format (e.g., through an electronic process or such other process) as
FINRA may prescribe.
Recently, FINRA amended its Rule 3110.19(d) to replace the
requirement for member firms to provide to FINRA a quarterly list of
RSLs in the manner and format prescribed by FINRA with the requirement
for member firms to provide to FINRA current information identifying
their RSLs in the frequency, manner and format prescribed.\7\ In this
regard, the locations or offices that member firms have designated as
RSLs would be reported to FINRA on a rolling basis, consistent with the
requirements to keep information current on the Form U4, rather than
only four times per year.
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\7\ See Securities Exchange Act Release No. 101052 (September
17, 2024), 89 FR 77567 (September 23, 2024) (SR-FINRA-2024-015). As
explained in its filing, FINRA amended the Form U4 Instructions to
include a new question requiring FINRA member firms to indicate
whether a non-registered (i.e., non-branch) location that is
identified on Form U4 as a private residence is an RSL by responding
``Yes'' or ``No'' (the ``RSL Question''). According to FINRA, this
change rendered the requirement for FINRA member firms to provide
information to FINRA identifying RSLs in a quarterly list set forth
in FINRA Rule 3110.19(d) unnecessary. Moreover, the FINRA By-Laws
impose a 30-day timeframe upon FINRA members to keep Form U4 current
at all times, and because the RSL Question would be part of the Form
U4, FINRA maintained that the 30-day updating requirement makes
unnecessary the quarterly timeframe for firms to provide FINRA a
list of RSLs as currently required under Rule 3110.19(d). See id.,
89 FR at 77569. The implementation date for these changes is
November 26, 2024.
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To harmonize NYSE Rule 3110.19(d) with these recent FINRA changes,
the Exchange would make conforming changes to its rule, including the
heading. The Exchange would also delete a stray ``the'' before FINRA in
the last sentence of NYSE Rule 3110.19(d), as follows (deleted text in
brackets, new text italicized):
(d) Obligation To Provide Information Identifying [List of] RSLs
A member organization that elects to designate any office or
location of the member organization as an RSL pursuant to this
Supplementary Material shall provide FINRA with [a] current information
identifying [list of] all locations designated as RSLs [by the 15th day
of the month following each calendar quarter] in the frequency, manner
and format (e.g., through an electronic process or such other process)
as [the] FINRA may prescribe.
No other changes to NYSE Rule 3110.19(d) are proposed.
In conformity with the FINRA rule change, the Exchange proposes a
November 26, 2024 implementation date for the proposed rule change. The
Exchange believes that a waiver of the operative delay so that the
proposal can be operative at the same time as the FINRA change will be
implemented supports the waiver and would permit Exchange member
organizations to rely on the same implementation date for the same
changes.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\8\ in general, and furthers the objectives of Section 6(b)(5),\9\
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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change furthers the
objectives of the Act by harmonizing Exchange rules modeled on FINRA
rules with respect to how member organizations that elect to designate
any offices or locations as an RSL must provide information identifying
such offices or locations to FINRA, resulting in less burdensome and
more efficient regulatory compliance. As previously noted, the proposed
changes are the same as those recently made by FINRA to FINRA Rule
3110.19(d). As such, the proposed rule change would facilitate rule
harmonization among self-regulatory organizations with respect to
regulatory reporting requirements, 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.
[[Page 93387]]
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 intended
solely to reduce potential compliance burdens on member organizations
by aligning NYSE Rule 3110.19(d) with FINRA Rule 3110.19(d) to
facilitate designation of certain offices or locations as RSLs, thereby
providing greater harmonization with FINRA rules.
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 \10\ and Rule 19b-4(f)(6) thereunder.\11\
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. In addition, the Exchange provided the
Commission with 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.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\14\ 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 become operative immediately upon filing.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange stated that this proposed rule change is non-
controversial because it does not present any new or novel issues. In
particular, NYSE is harmonizing its supervision rules with those of
FINRA, on which they are based and which have been previously approved
by the Commission. By conforming the Exchange's rules to FINRA's, the
proposed rule change would promote the application of consistent
regulatory standards with respect to rules that FINRA enforces pursuant
to the 17d-2 Agreement. As such, the Exchange believes that the
proposed rule change would foster cooperation and coordination with
persons engaged in facilitating transactions in securities and would
remove impediments to and perfect the mechanism of a free and open
market and a national market system in accordance with Exchange Act
Section 6(b)(5).
In addition, the Exchange stated that since FINRA implementation of
its rule change will be November 26, 2024, waiving the 30-day operative
delay would provide Exchange member organizations the ability to rely
on the same implementation date for the same changes. Further, the
Exchange stated that waiver of the operative delay should reduce any
potential confusion that may otherwise occur on the part of joint
members of the Exchange and FINRA as to the applicable rules governing
the obligation to provide information identifying RSLs to FINRA. For
these reasons, the Commission believes that waiver of the 30-day
operative delay for this proposed rule change is consistent with the
protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\15\
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\15\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 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) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 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#b2c0c7ded79fd1dddfdfd7dcc6c1f2c1d7d19cd5ddc4"><span class="__cf_email__" data-cfemail="8ffdfae3eaa2ece0e2e2eae1fbfccffceaeca1e8e0f9">[email protected]</span></a>. Please include
file number
SR-NYSE-2024-73 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-2024-73. 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-NYSE-2024-73 and should be
submitted on or before December 17, 2024.
[[Page 93388]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-27618 Filed 11-25-24; 8:45 am]
BILLING CODE 8011-01-P
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