Notice2026-10835
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change of Amendments to Rule 10.8000 and Rule 10.9000 Series
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
June 1, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 104 (Monday, June 1, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 104 (Monday, June 1, 2026)]
[Notices]
[Pages 32478-32483]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10835]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105564; File No. SR-NYSEARCA-2026-55]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change of Amendments to
Rule 10.8000 and Rule 10.9000 Series
May 27, 2026.
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 May 19, 2026, 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, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amendments to the Rule 10.8000 and Rule
10.9000 Series to harmonize the Exchange's disciplinary rules with
recent changes to the disciplinary rules of the Financial Industry
Regulatory Authority (``FINRA'') on which the Exchange disciplinary
rules are modeled. The proposed rule change is available on the
Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a> and at the principal office of the
Exchange.
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 amendments to the Rule 10.8000
(Investigations and Sanctions) and Rule 10.9000 Series (Code of
Procedure) to (i) automatically stay effectiveness of specified
expulsions of permit holders, membership cancellations, and denials of
applications for continued membership of disqualified permit holders to
allow for Securities and Exchange Commission (``Commission'' or
``SEC'') review under Section 19 of the Act,\4\ and (ii) provide
authority for Exchange staff and adjudicators to grant respondents and
applicants the opportunity to seek a stay or take other appropriate
action before certain sanctions or regulatory measures (other than the
above-mentioned expulsions, membership cancellations, or denials of
continued membership applications) take effect.
---------------------------------------------------------------------------
\4\ See, e.g., 15 U.S.C. 78s(e) & (f). FINRA sought to align its
disciplinary rules relating to the effectiveness of expulsions in
expedited proceedings with the ruling of the United States Court of
Appeals for the D.C. Circuit in Alpine Securities Corp. v. FINRA,
121 F.4th 1314 (D.C. Cir. 2024), cert. denied (June 2, 2025) (No.
24-904) (remanding to the district court with instructions to enter
a limited preliminary injunction enjoining FINRA from expelling
Alpine Securities until the Commission has reviewed any expulsion
that FINRA may order in the pending expedited proceeding against
Alpine Securities or the time for Alpine Securities to seek SEC
review of an expulsion has passed). See Securities Exchange Act
Release No. 103228 (June 11, 2025), 90 FR 25689 (June 17, 2025) (SR-
FINRA-2025-004) (``Release 103228''). In its filing, FINRA noted
that this litigation is ongoing and that FINRA does not waive any
rights or arguments it may have in connection with this or any other
pending or future matter. See id., 90 FR at 25690, n.7. The Exchange
similarly notes that by harmonizing its rules with FINRA, it
similarly does not waive any rights or arguments it may make in
connection with matters relating to these rules or to the issues
presented in the Alpine litigation in any pending or future matter.
See also note 7, infra.
---------------------------------------------------------------------------
The proposed rule change would harmonize the Exchange's
disciplinary rules with those of FINRA, and would apply to decisions
issued in expedited proceedings under the Rule 10.9550 Series
(Expedited Proceedings), disciplinary proceedings under the Rule
10.9300 Series (Review of Disciplinary Proceeding by Exchange Board of
Directors), eligibility proceedings under the Rule 10.9520 Series
(Eligibility Proceedings), and cease and desist orders under the Rule
10.9800 series (Temporary and Permanent Cease and Desist Orders), as
well as expulsions of permit holders under Rule 10.8320 (Payment of
Fines, Other Monetary Sanctions, or Costs; Summary Action for Failure
to Pay).
The proposed rule change would not apply to any other sanction or
Exchange action against an ETP Holder, OTP Holder or OTP Firm,
associated person, or other person subject to the Exchange's
jurisdiction.
Background and Proposed Rule Change
In 2019, the Exchange adopted rules relating to investigation,
discipline, and sanctions, and other procedural rules based on the
rules of its affiliate NYSE American LLC and FINRA.\5\ Rules 10.8320,
10.9269, 10.9310, 10.9524, 10.9527, 10.9557, 10.9558, 10.9559, 10.9840,
10.9850 and 10.9870 are based on, and are substantively similar to,
each respective FINRA rule.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 85639 (April 12,
2019), 84 FR 16346 (April 18, 2019) (SR-NYSEArca-2019-15).
---------------------------------------------------------------------------
Recently, FINRA amended its disciplinary rules to provide that
specified expulsions of member firms, cancellations of membership, and
denials of applications for continued membership of disqualified member
firms would not become effective until the time for filing an
application for review with the SEC has expired and no such application
is filed or, if such an
[[Page 32479]]
application is timely filed, until the SEC completes its review under
Section 19 of the Act.\6\ FINRA's changes applied to decisions issued
in expedited proceedings under the FINRA Rule 9550 Series, disciplinary
proceedings under the FINRA Rule 9300 Series, and eligibility
proceedings under the FINRA Rule 9520 Series and Funding Portal Rule
900(b), as well as expulsions of member firms under FINRA Rule 8320
(for failure to pay fines, monetary sanctions, and costs),
cancellations of membership, and denials of applications for continued
membership.\7\ In addition, FINRA also amended provisions of the FINRA
Rule 9000 Series (Code of Procedure) that require or allow for a
sanction (e.g., a suspension or bar) or other regulatory measure (such
as a denial of a statutory disqualification application, imposition of
a cease and desist order, or imposition of conditions, requirements or
restrictions) to take effect immediately. The amendments provided FINRA
staff and adjudicators authority to grant respondents and applicants,
where appropriate, the opportunity to seek a stay from the SEC or take
other appropriate action before the sanction or other regulatory
measure takes effect, and in certain instances, would expressly
prescribe such amount of time by rule.\8\
---------------------------------------------------------------------------
\6\ See Release 103228, 90 FR at 25689 and 15 U.S.C. 78s(e) &
(f). Pursuant to the Act, an application for review of a
determination by FINRA or the Exchange, such as the imposition of a
final disciplinary sanction or denial of membership, must be filed
with the SEC within 30 days after notice is filed with the SEC and
received by the aggrieved person applying for review. See 15 U.S.C.
78s(d). See also SEC Rule of Practice 420(b), 17 CFR 201.420(b)
(providing that the SEC will not extend this 30-day period absent a
showing of extraordinary circumstances).
\7\ FINRA proposed to stay the effectiveness of actions against
member firms that could result in a sanction or action that shares
the relevant characteristics of the sanction at issue in the Alpine
matter, specifically expulsions imposed in full disciplinary
proceedings and under FINRA Rule 8320 (for failure to pay fines,
monetary sanctions, and costs), cancellations of membership, and
denials of applications for continued membership. See Release
103228, 90 FR at 25690. Like expulsions in expedited proceedings,
these latter FINRA actions are not currently stayed under FINRA
rules by the filing of an application for SEC review, and once the
FINRA action becomes final and effective, the firm is no longer a
FINRA member. However, unlike an expulsion, if a member firm's
membership has been cancelled, the firm can reapply for FINRA
membership by submitting a new Form BD and Form NMA as part of the
new member application process. See id., at n.8.
\8\ See Securities Exchange Act Release No. 103285 (June 17,
2025), 90 FR 26667 (June 23, 2025) (SR-FINRA-2025-006) (``Release
103285'').
---------------------------------------------------------------------------
The Exchange proposes to harmonize its disciplinary rules with the
recent changes by FINRA. To effectuate these changes, the Exchange
would make the following changes to Rules 10.8320, 10.9269, 10.9310,
10.9524, 10.9527, 10.9557, 10.9558, 10.9559, 10.9840, 10.9850, and
10.9870, as follows.
<bullet> Rule 10.8320(b) provides for a summary suspension until a
fine or monetary sanction is paid to the Exchange consistent with
subsection (a). A subsection (2) would be added to Rule 10.8320(b) that
would provide that an expulsion under paragraph (b)(1) of the Rule
would not become effective until the time for filing an application for
review with the SEC has expired and no such application is filed or, if
such an application is timely filed, until the SEC either completes its
review under Exchange Act Section 19 or otherwise orders. The existing
text of Rule 10.8320(b) would become Rule 10.8320(b)(1) and existing
subsections (1) and (2) would become subsections 10.8320(b)(1)(A) and
(B), respectively. The text of the current rule would remain unchanged.
The proposed rule change is substantively the same as rule text added
to FINRA Rule 8320(b)(2) with one difference. The Exchange proposes to
add the phrase ``or otherwise orders'' to the proposed language to
reflect the fact that the Commission retains authority over its own
proceedings, including the authority to determine, either on its own
motion or by motion of a party to the respective proceeding, when an
expulsion should become effective.
<bullet> Rule 10.9269(d) provides that in the case of default
decisions issued by a Hearing Officer, unless otherwise provided in the
default decision, the sanctions shall become effective on a date to be
determined by the Exchange's regulatory staff, except that a bar or
expulsion becomes effective immediately upon the default decision
becoming the final disciplinary action of the Exchange. The Exchange
would restructure Rule 10.9269(d) into three subparagraphs. New
subparagraphs (d)(1) and (3) would contain existing rule text. New
subparagraph (d)(2)(A) would be amended to provide that unless
otherwise provided in the default decision, ``a sanction (other than a
bar or expulsion) specified in a decision constituting final
disciplinary action of Exchange for purposes of SEA Rule 19d-1(c)(1)
shall become effective on a date to be determined by Regulatory Staff''
and new subparagraph (d)(2)(B) amended to provide that ``a bar or
expulsion specified in a decision shall become effective immediately
upon the default decision becoming the final disciplinary action of the
Exchange for purposes of SEA Rule 19d-1(c)(1).'' As FINRA noted, this
proposed amendment would achieve consistency with the structure of Rule
9268(f), which governs the effectiveness of sanctions in other
disciplinary decisions.\9\
---------------------------------------------------------------------------
\9\ See Release 103285, 90 FR at 26669.
---------------------------------------------------------------------------
<bullet> The following new subsection (e) would be added to Rule
10.9310, which governs review of disciplinary proceedings by the
Exchange's Board of Directors (the ``Board''): ``Unless the Exchange
Board of Directors otherwise specifically directs, a sanction (other
than a bar, an expulsion, or a permanent cease and desist order)
specified in a decision constituting final disciplinary action of the
Exchange for purposes of SEA Rule 19d-1(c)(1) shall become effective on
a date to be determined by the Exchange. A bar or a permanent cease and
desist order shall become effective upon service of the decision
constituting final disciplinary action of the Exchange, unless
otherwise specified therein. An expulsion shall not become effective
until the time for filing an application for review with the SEC has
expired and no such application is filed or, if such an application is
timely filed, until the SEC either completes its review under Exchange
Act Section 19 or otherwise orders.'' The proposed text is
substantively the same as FINRA Rule 9360 (Effectiveness of Sanctions),
including the text FINRA added, except for the phrase ``or otherwise
orders'' that the Exchange proposes to include for the reasons
discussed above.\10\
---------------------------------------------------------------------------
\10\ The Exchange notes that pursuant to Rule 10.9310(a), any
party may require a review by the Exchange Board of Directors of any
determination or penalty imposed by a Hearing Panel or Extended
Hearing Panel under the Rule 10.9200 Series. Pursuant to Rule
10.9268(e), if a request for review is not timely filed pursuant to
Rule 10.9310, a Hearing Panel decision shall constitute final
disciplinary action of the Exchange for purposes of Exchange Act
Rule 19d-1(c)(1), at which time all bars or expulsions shall become
immediately effective pursuant to Rule 10.9268(f). Further, Rule
10.8310(b) provides that each party to a proceeding resulting in a
sanction (sanctions are defined in Rule 10.8310(a)(4) and include
expulsions) shall be deemed to have assented to the imposition of
the sanction unless such party files a written application for
review or relief pursuant to the Rule 10.9000 Series. Accordingly,
consistent with amended FINRA Rule 9370, the proposed rule changes
do not provide a stay where a member firm has defaulted or has
failed to exhaust its administrative remedies through the Exchange's
appellate process. See Release 103228, 90 FR at 25691 n.17.
---------------------------------------------------------------------------
<bullet> Rule 10.9524(a), governing requests for Board review,
would be amended by adding the following clause in the first sentence
of the Rule: ``an application for relief from eligibility requirements
pursuant to Rule 10.9522(e)(2) or.'' The proposed language has no
analogue in the FINRA rule. The Exchange would add the proposed
language to provide clarity and internal consistency to its rule since
an application for relief
[[Page 32480]]
pursuant to Rule 10.9522(e)(2) would also be eligible for Board review
pursuant to Rule 10.9524.
In addition, the Exchange would add the following new sentence to
the end of Rule 10.9524(b), which governs reviews of eligibility
proceedings by the Board: ``A decision to deny an application for a
disqualified ETP Holder's, OTP Holder's or OTP Firm's continued
membership shall not become effective until the time for filing an
application for review with the SEC has expired and no such application
is filed or, if such an application is timely filed, until the SEC
either completes its review under Exchange Act Section 19 or otherwise
orders.'' The proposed language is substantively similar to the rule
language FINRA added to its Rule 9524 with the exception of the phrase
``or otherwise orders,'' which the Exchange proposes to include for the
reasons described above.\11\
---------------------------------------------------------------------------
\11\ Rule 10.9524 is similar to FINRA Rule 9524 except for,
among other things, the fact that the Exchange's Board reviews
disciplinary appeals and the Exchange does not utilize FINRA's
National Adjudicatory Council (``NAC'') for this purpose.
---------------------------------------------------------------------------
<bullet> Rule 10.9527 governs applications to the SEC for review of
eligibility proceedings and would be amended by adding the following
third sentence to the Rule: ``Pursuant to Rule 10.9524(b), a decision
to deny an application for a disqualified member's continued membership
shall not become effective until the time for filing an application for
review with the SEC has expired and no such application is filed or, if
such an application is timely filed, until the SEC either completes its
review under Exchange Act Section 19 or otherwise orders.'' The
proposed rule change is substantively the same as rule text FINRA added
to its Rule 9527 with the exception of the phrase ``or otherwise
orders,'' which the Exchange proposes to include for the reasons
described above.
<bullet> The Rule 10.9550 Series provides for the initiation and
prosecution of expedited proceedings, including, among others,
proceedings under Rule 10.9557 for ETP Holders, OTP Holders or OTP
Firms experiencing operational or financial difficulties that may have
led to noncompliance with provisions of Rules 4.1-E, 4.4-E, 4.1-O and
4.3-O.
Pursuant to Rule 10.9557(a) and (c), the Exchange will issue a
notice setting forth the specific grounds and factual basis for the
action and the requirements or restrictions being imposed. Under
current Rule 10.9557(d), such requirements or restrictions are
immediately effective. Pursuant to Rule 10.9557(f), the failure to
comply with these requirements or restrictions shall be deemed to
``result in automatic and immediate suspension'' without further
notice, unless Exchange staff issues a letter of withdrawal of the
requirements or restrictions. A ETP Holder, OTP Holder or OTP Firm
served with a Rule 10.9557 notice may file a written request for a
hearing with the Office of Hearing Officers, and under Rule 10.9557(d),
a timely request for a hearing stays the effectiveness of the notice,
unless the Exchange's Chief Executive Officer (``CEO'') (or such other
senior officer as the CEO may designate) determines otherwise. Under
current Rule 10.9559(n)(3), if a Hearing Panel approves the
requirements or restrictions imposed in the Rule 10.9557 notice and
finds that the respondent has not complied with them, the Hearing Panel
must impose an immediate suspension. Under current Rule
10.9559(o)(4)(A), the Hearing Panel's written order is effective when
issued.
Rule 10.9557(d) would be amended to provide that the requirements
and restrictions imposed by a notice under Rule 10.9557(a) are
immediately effective ``[u]nless otherwise specified therein.''
Consistent with FINRA's filing, the proposed rule change would give
Exchange staff authority to afford the member an opportunity to take
action before a requirement or restriction takes effect.\12\ Like
FINRA, the Exchange also proposes a conforming change to Rule
10.9557(c)(3), which addresses the contents of a notice issued under
Rule 10.9557, to reflect amended paragraph (d).
---------------------------------------------------------------------------
\12\ See Release 103285, 90 FR at 26670.
---------------------------------------------------------------------------
Rule 10.9557(f) would be amended to provide that Exchange staff
will issue a notice of suspension in the event the member fails to
comply with the requirements or restrictions imposed under the Rule.
Following FINRA, the Exchange proposes that such suspension would be
effective five business days after service of the notice pursuant to
paragraph (b).\13\ Rule 10.9557(f) also would be amended to include
certain procedural requirements for issuance and service of a notice of
suspension and would, like the FINRA rule, comprise five new
subparagraphs, as follows:
---------------------------------------------------------------------------
\13\ According to FINRA, five business days is a reasonable and
sufficient amount of time for a firm to take action (such as comply
with the original notice of requirements or restrictions, or file a
notice of appeal and request a stay with the SEC) without
undermining the purpose of Rule 10.9557, which is designed to ensure
that FINRA can respond to emergency circumstances, such as when a
firm is experiencing financial or operational difficulty. See
Release 103285, 90 FR at 26670.
---------------------------------------------------------------------------
<bullet> Rule 10.9557(f)(1) would be titled ``Notice of
Suspension'' and the phrases ``without further notice from FINRA
staff'' and ``and immediately'' would be removed and the phrase
``effective five business days after service of a notice of suspension
issued by FINRA staff'' would be added.
<bullet> Rule 10.9557(f)(2) would be titled ``Service of Notice of
Suspension.'' The proposed rule text provides that Exchange staff shall
serve the member subject to a notice of suspension issued under new
paragraph (f) in accordance with the service provisions in Rule
10.9557(b).
<bullet> Rule 10.9557(f)(3) would be titled ``Contents of Notice of
Suspension'' and would provide that ``[a] notice of suspension issued
and served under this paragraph (f) shall identify the requirements and
restrictions with which the member is alleged to have not complied and
shall contain a statement of facts specifying the alleged failure. The
notice of suspension shall state when Exchange action will take effect
and explain what the respondent must do to avoid such action.''
According to FINRA, the proposed provision is substantially similar to
the requirements relating to the contents of notices relating to
disciplinary proceedings and other expedited proceedings under existing
rules.\14\
---------------------------------------------------------------------------
\14\ See id.
---------------------------------------------------------------------------
<bullet> Rule 10.9557(f)(4) would be titled ``Effective Date'' and
would state that the effective date for a notice of suspension issued
and served under new Rule 10.9557(f) shall become effective five
business days after service of such notice.
<bullet> Rule 10.9557(f)(5) would be titled ``Application to SEC
for Review'' and would provide that ``[a] notice of suspension issued
and served under this paragraph (f) constitutes final action by the
Exchange. The right to have any action under this paragraph reviewed by
the SEC is governed by Section 19 of the Exchange Act.''
The Exchange would make conforming changes to Rule 10.9557(c)(5)
relating to contents of a notice to reflect amended paragraph (f) to
remove ``without further notice from FINRA staff'' and add ``effective
five business days after service of a notice of suspension.''
Finally, following FINRA, the Exchange proposes several additional
conforming and clarifying changes to Rule 10.9557.\15\ First, the
Exchange would add ``of requirements or restrictions'' to the title and
introductory text and ``paragraph a'' to
[[Page 32481]]
the introductory text of Rule 10.9557(c) in order to clarify that this
paragraph addresses the initial notice issued under Rule 10.9557
prescribing the requirements or restrictions imposed under the Rule.
Second, the Exchange would remove ``immediate'' from Rule 10.9557(c)(9)
to reflect proposed amendments to Rule 10.9559(n) discussed below.
Third, in Rule 10.9557(e), the Exchange would add ``other than a notice
of suspension under paragraph (f)'' to clarify that paragraph (e) does
not apply to notices of suspension. Fourth, Rule 10.9557(g)(2)(B) would
be amended to remove ``by a notice'' and ``immediately'' and to add
``in accordance with this Rule'' to account for the two types of
notices that can be issued under proposed Rule 10.9557(f) and the
revisions throughout Rule 10.9557 that will provide a brief period of
time for respondents to seek a stay before a suspension takes effect.
---------------------------------------------------------------------------
\15\ See Release 103285, 90 FR at 26669-70.
---------------------------------------------------------------------------
The proposed changes to Rule 10.9557 are substantively the same as
rule text added to FINRA Rule 9557.
<bullet> Rule 10.9558 authorizes the Exchange's CEO or such other
senior officer as the CEO may designate to provide written
authorization to Exchange staff to issue on a case-by-case basis
written notices that ``summarily'' suspends a ETP Holder, OTP Holder or
OTP Firm or covered person who has been and is expelled or suspended
from any self-regulatory organization or barred or suspended from being
associated with a ETP Holder, OTP Holder or OTP Firm of any self-
regulatory organization; suspends a ETP Holder, OTP Holder or OTP Firm
that is in such financial or operating difficulty that Exchange staff
determines and so notifies the Commission that the ETP Holder, OTP
Holder or OTP Firm cannot be permitted to continue to do business with
safety to investors, creditors, other ETP Holders, OTP Holders or OTP
Firms, or the Exchange; or limits or prohibits any person with respect
to access to services offered by the Exchange if paragraphs (a)(1) or
(2) of the Rule or the provisions of Section 6(d)(3) of the Act applies
to such person or, in the case of a person who is not a ETP Holder, OTP
Holder or OTP Firm or covered person, if the Exchange's CRO or such
other senior officer as the CRO may designate determines that such
person does not meet the qualification requirements or other
prerequisites for such access and such person cannot be permitted to
continue to have such access with safety to investors, creditors, ETP
Holders, OTP Holders or OTP Firms, or the Exchange, and so notifies the
SEC. Under current Rule 10.9558(d), a prohibition or suspension set
forth in the notice is immediately effective. Under Rule 10.9558(e), a
ETP Holder, OTP Holder or OTP Firm or person served with a notice may
file a written request for a hearing with the Office of Hearing
Officers. A timely request for a hearing shall not stay the
effectiveness of a Rule 10.9558 notice, unless the Chief Hearing
Officer or the Hearing Officer assigned to the matter otherwise orders
for good cause shown, and the ETP Holder, OTP Holder or OTP Firm or
person must separately request a stay. The Exchange proposes to amend
Rule 10.9558(d) to add ``unless otherwise specified therein'' to
provide the Exchange with the authority to afford respondents an
opportunity to take appropriate action before the requirements or
restrictions imposed in the notice take effect. The proposed change to
Rule 10.9558(d) is substantively the same as rule text added to FINRA
Rule 10.9558(d).
<bullet> The Exchange would make the following changes to Rules
10.9559(n)(3), (o)(4)(a), (p)(6) and 10.9559(r).
Rule 10.9559 sets forth uniform hearing procedures for expedited
proceedings under the Rule 10.9550 Series. In conformity with the
proposed amendments to Rule 10.9557, the Exchange would remove
``immediate'' from Rule 10.9559(n)(3) and add ``unless otherwise
specified therein'' to Rule 10.9559(o)(4)(A) to provide adjudicators
authority to grant respondents a brief amount of time to seek a stay
from the SEC before a suspension becomes effective.
Subsection (p) governs the contents of the written decision under
10.9559(o)(4)(B) issued under the Rule, and subsection (p)(6) provides
that it must include a ``statement describing any sanction,
requirement, restriction or limitation imposed, the reasons therefore,
and the date upon which such sanction, requirement, restriction or
limitation \16\ shall become effective.'' The Exchange would add the
following clause after ``effective'': ``, except that an expulsion or
cancellation of membership shall not become effective until the time
for filing an application for review with the SEC has expired and no
such application is filed or, if such an application is timely filed,
until the SEC either completes its review under Exchange Act Section 19
or otherwise orders.''
---------------------------------------------------------------------------
\16\ As adopted, Rule 10.9559(p)(6) does not also contain a
reference to ``obligation'' like the FINRA rule. The Exchange does
not propose to add the term at this time.
---------------------------------------------------------------------------
Rule 10.9559(r) governs applications to the SEC for review and
provides that the ``right to have any action pursuant to this Rule
reviewed by the SEC is governed by Section 19 of the Exchange Act. The
filing of an application for review by the SEC shall not stay the
effectiveness of final Exchange action, unless the SEC otherwise
orders.'' The Exchange would add the following sentence at the end of
subsection (r): ``Pursuant to paragraph (p)(6) of this Rule, an
expulsion or cancellation of membership shall not become effective
until the time for filing an application for review with the SEC has
expired and no such application is filed or, if such an application is
timely filed, until the SEC either completes its review under Exchange
Act Section 19 or otherwise orders.''
The proposed changes to Rule 10.9559(p)(6) and (r) are
substantively the same as rule text added to FINRA Rule 10.9559(p)(6)
and (r) with the exception of the phrase ``or otherwise orders,'' which
the Exchange proposes to include for the reasons described above.
<bullet> The Rule 10.9800 Series sets forth procedures for issuing
temporary and permanent cease and desist orders. Pursuant to Rule
10.9870, temporary and permanent cease and desist orders issued
pursuant to the Rule 10.9800 Series constitute final and immediately
effective disciplinary sanctions imposed by the Exchange. Under current
Rule 10.9840(d),\17\ temporary and permanent cease and desist orders
are effective when service of the Hearing Panel's written decision is
complete. At any time after the Office of Hearing Officers serves the
order, a party may apply under Rule 10.9850 to have the order modified,
set aside, limited or suspended. Under Rule 10.9850, the filing of an
application for review of a temporary or permanent cease and desist
order with a Hearing Panel shall not stay the effectiveness of the
order. Under Rule 10.9870, the filing of an application for review of a
temporary or permanent cease and desist order with the SEC shall not
stay the effectiveness of the order unless the SEC otherwise orders.
---------------------------------------------------------------------------
\17\ The FINRA analogue to NYSE Arca Rule 10.9840(d) is FINRA
Rule 9840(f).
---------------------------------------------------------------------------
The Exchange proposes to add ``unless otherwise specified therein''
to Rules 10.9840(d) and 10.9870 to provide adjudicators under the rules
the authority to grant applicants an opportunity to seek a stay from
the SEC or take other appropriate action before the temporary or
permanent cease and desist order takes effect. In addition, the
[[Page 32482]]
Exchange would add ``unless the Chief Hearing Officer or the Deputy
Hearing Officer assigned to the matter otherwise orders for good cause
shown'' to Rule 10.9850 to provide authority to stay the effectiveness
of a temporary or permanent cease and desist order upon the filing of
an application for review by the Hearing Panel, where appropriate. The
proposed changes to Rule 10.9840(d), 10.9850 and 10.9870 are
substantively the same as rule text added to FINRA Rule 9840(f),\18\
9850 and 9870.
---------------------------------------------------------------------------
\18\ See note 16, supra.
---------------------------------------------------------------------------
No other changes to the NYSE Arca disciplinary rules are proposed.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\19\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\20\ 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 by strengthening the
Exchange's ability to oversee and police its marketplace. In addition,
the Exchange believes that the proposed rule change is designed to
provide a fair procedure for prohibiting or limiting any person with
respect to access to services offered by the Exchange or a member
thereof consistent with the objectives of Section 6(b)(7).\21\
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ 15 U.S.C. 78f(b)(7).
---------------------------------------------------------------------------
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 the effectiveness of expulsions in expedited
proceedings, and other Exchange actions against permit holders that may
result in a sanction or action that shares the relevant characteristics
of such expulsions, to allow for Commission review under Section 19 of
the Act.\22\ As previously noted, the proposed changes are
substantively the same as those recently made to the FINRA disciplinary
rules. As such, the proposed rule change would facilitate rule
harmonization among self-regulatory organizations with respect to the
effectiveness of expulsions in certain types of Exchange actions,
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.
---------------------------------------------------------------------------
\22\ See, e.g., 15 U.S.C. 78s(e) & (f).
---------------------------------------------------------------------------
Like FINRA, the Exchange believes that any potential risk to
investor protection posed by aligning the Exchange's rules with FINRA
could be mitigated by several factors. In cases where an expulsion,
cancellation of membership, or denial of an application for continued
membership has been appealed to the SEC, the Exchange will seek
expeditious resolution and, where appropriate, may take additional
steps to prevent customer harm during the pendency of an appeal of a
disciplinary decision imposing an expulsion or cancellation of
membership. The Exchange also notes that information about disciplinary
proceedings and sanctions against permit holders is available on the
Exchange's website and through FINRA's BrokerCheck, which would enable
investors to obtain information regarding whether an ETP Holder, OTP
Holder or OTP Firm is subject to any adverse regulatory action that is
the subject of a pending application for SEC review.\23\
---------------------------------------------------------------------------
\23\ Rule 10.8313(d) provides that the Exchange shall provide
notice to the public if a disciplinary decision of the Exchange is
appealed to the SEC and the notice shall state whether the
effectiveness of the decision has been stayed pending the outcome of
proceedings before the SEC.
---------------------------------------------------------------------------
Further, the Exchange believes that the proposed rule change will
provide ETP Holders, OTP Holders or OTP Firms and interested parties
notice and clarity regarding the effectiveness of expulsions,
membership cancellations, and denials of applications for continued
membership under Exchange rules. The Exchange accordingly believes that
the proposed rule change will enable the Exchange to continue to
administer a fair procedure for disciplining ETP Holders, OTP Holders
and OTP Firms consistent with the goals of investor protection.
Finally, the Exchange believes that the proposed rule changes to
the Rule 10.9000 Series, i.e., the proposed changes to Rules
10.9269(d), 10.9557(c), (d) & (f), 10.9559(n)(3), (o)(4)(a), 10.9558,
10.9840(a) and 10.9870, would further the goal of providing a fair
process for ETP Holders, OTP Holders and OTP Firms and associated
persons because it would provide Exchange staff and adjudicators
authority to grant respondents and applicants an opportunity to seek a
stay from the Commission or take other appropriate action before a
sanction (e.g., a suspension or a bar) or other regulatory measure
(such as a statutory disqualification denial, imposition of a cease and
desist order or imposition of conditions, requirements or restrictions)
takes effect. In addition, the proposed changes to Rule 10.9557(f) and
conforming changes to Rule 10.9559 provide a fair process for issuing a
notice of suspension to members experiencing financial or operational
difficulties in the event that they fail to comply with restrictions or
requirements imposed by Exchange staff. Like FINRA, the Exchange
believes the proposed amendments will not impede the prompt resolution
of cases and the remediation of issues the rules are designed to
address because the proposed rule change provides Exchange staff and
adjudicators authority to briefly delay the effectiveness of sanctions
and other regulatory measures and does not mandate a delay in every
case. Hence, where appropriate, the Exchange, like FINRA, would have
authority under the amended rules to allow the sanctions or other
regulatory measures to take effect immediately in accordance with
Exchange protocol and precedent. Further, the Exchange believes that
the proposed changes to Rule 10.9557 and conforming changes to Rule
10.9559 provide a streamlined process for suspending members, if
necessary, to address the potential risks posed by members experiencing
financial or operational difficulties.\24\
---------------------------------------------------------------------------
\24\ See Release 103285, 90 FR at 26672-73.
---------------------------------------------------------------------------
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 stay the effectiveness of specified Exchange actions to
permit Commission review, thereby providing greater harmonization with
FINRA rules. In so doing, the Exchange is not imposing new or
additional costs or impacts on permit holders or investors while
allowing the Exchange to administer a fair procedure for disciplining
permit holders consistent with the goals of investor protection.
[[Page 32483]]
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 \25\ and Rule 19b-4(f)(6) thereunder.\26\
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.
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78s(b)(3)(A)(iii).
\26\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \27\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\28\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
---------------------------------------------------------------------------
\27\ 17 CFR 240.19b-4(f)(6).
\28\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
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) \29\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\29\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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#cfbdbaa3aae2aca0a2a2aaa1bbbc8fbcaaace1a8a0b9"><span class="__cf_email__" data-cfemail="394b4c555c145a5654545c574d4a794a5c5a175e564f">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2026-55 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-2026-55. 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 filing 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-2026-55 and should be submitted
on or before June 22, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
---------------------------------------------------------------------------
\30\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-10835 Filed 5-29-26; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on June 1, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.