Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delete the Approved Person Registration Category and Adopt a New Definition of Associated Person

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<title>Federal Register, Volume 91 Issue 192 (Tuesday, October 6, 2026)</title>
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[Federal Register Volume 91, Number 192 (Tuesday, October 6, 2026)]
[Notices]
[Pages 63616-63623]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20408]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106566; File No. SR-NYSE-2026-47]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Delete the Approved Person Registration Category and Adopt a New 
Definition of Associated Person

October 1, 2026.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 18, 2026, 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 Exchange. The 
Exchange filed the proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to (1) delete the ``approved person'' 
registration category as no longer necessary; (2) adopt a new 
definition of ``associated person'' based on the definition of 
associated person in Rule 1011(b) of the Financial Industry Regulatory 
Authority, Inc., and elements of the current definition of approved 
person; and (3) make related technical and conforming changes. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to (1) delete the ``approved person'' 
registration category as no longer necessary; (2) adopt a new 
definition of ``associated person'' based on the definition of 
associated person in Rule 1011(b) of the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') and elements of the current definition of 
approved person; and (3) make related technical and conforming changes.
    The proposal is not intended to effect any substantive change to 
the scope of the Exchange's jurisdiction. The Exchange will continue to 
exercise general supervision over, and retain jurisdiction over, the 
same categories of persons as currently set forth in Rule 2A 
(Jurisdiction). The persons currently encompassed by the ``approved 
person'' category would be captured by the proposed definition of 
``associated person'' for jurisdictional and all other applicable 
Exchange rules on that basis.
    Separately, the principal basis for the approved person category--
identifying persons who directly or indirectly control a member 
organization--is already addressed through existing disclosure 
infrastructure. Member organization are required to identify such 
persons in Schedules A and B of the Form BD in the Central Registration 
Depository (``CRD''). Because control relationships of the kind that 
gave rise to the approved person category are already documented 
through that mechanism, a separate Exchange-specific registration 
category serves no independent regulatory purpose, and its elimination 
will not create any gap in oversight.
    Finally, replacing the approved person category with a definition 
of associated person that aligns with FINRA's corresponding rule (and, 
by extension, with the statutory definition in the Act, as discussed 
below) will provide greater harmonization between Exchange rules and 
FINRA rules of similar purpose, resulting in less burdensome and more 
efficient regulatory compliance.
Background
    The ``approved person'' designation is an NYSE-specific regulatory 
category for certain persons or entities that have a

[[Page 63617]]

controlling interest in a member organization. The rules governing the 
definition and application process for approved persons are Rules 2 and 
304.\5\
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    \5\ The Exchange notes that the approved person definition is an 
Exchange convention that is not intended to be identical to the 
definition of ``associated person of a broker or dealer'' pursuant 
to Section 3(a)(18) of the Act. See 15 U.S.C. 78c(a)(18).
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    The approved person category was adopted when Exchange membership 
was organized around individual seat-holders. Under that structure, 
certain individuals, including major shareholders, holding company 
executives, technology, and operations leaders, exercised significant 
control over member organizations without being registered 
representatives or principals, and therefore fell outside the 
Exchange's formal oversight reach. The approved person category was 
designed to close that potential gap by extending the Exchange's 
supervisory jurisdiction to those controlling persons who would 
otherwise escape review, thus enabling the Exchange to assess the 
fitness and background of individuals in a position to affect how a 
member organization conducted its business. That structural rationale 
no longer carries the same force. As described below, the Exchange 
proposed definition of ``associated person'' would capture the same 
individuals within the Exchange's regulatory framework without 
requiring a separate registration category and without the associated 
administrative burdens that the separate registration category imposes 
on the Exchange and member organizations.
    Rule 2(c) defines ``approved person'' as a person, other than a 
member, principal executive or employee of a member organization, or 
governmental entity, who controls a member organization, is engaged in 
a securities or kindred business that is controlled by a member or 
member organization, or is a U.S.-registered broker-dealer under common 
control with a member organization. Rule 2(c) defines ``governmental 
entity'' to mean a sovereign nation, state, or territory, or other 
political subdivision, agency, or instrumentality thereof.
    Rule 2(d) defines ``person'' as a natural person, corporation, 
limited liability company, partnership, association, joint stock 
company, trust, fund or any organized group of persons whether 
incorporated or not.
    Under Rule 2(e), ``control'' means the power to direct or cause the 
direction of the management or policies of a person whether through 
ownership of securities, by contract or otherwise. A person is presumed 
to control another person if such person, directly or indirectly, has 
the right to vote 25 percent or more of the voting securities, is 
entitled to receive 25 percent or more of the net profits, or is a 
director, general partner or principal executive (or person occupying a 
similar status or performing similar functions) of the other person.
    Rule 304 provides that a member organization must identify each 
approved person to the Exchange. Pursuant to the rule, each approved 
person must execute a written consent to the jurisdiction of the 
Exchange and agree to (1) supply the Exchange with information relating 
to the existence of any statutory disqualification to which the 
approved person or any person associated with the approved person may 
be subject, as defined in the Act; (2) abide by such provisions of the 
rules of the Exchange relating to approved persons as shall from time 
to time be in effect; and (3) permit examination by the Exchange, or 
any person designated by it, at any time or from time to time, of its 
books and records to verify the accuracy of the information required to 
be supplied herein and by the rules of the Exchange.
    Supplementary Material .10 to Rule 304 sets forth certain 
additional requirements for approved persons domiciled outside the 
United States.
    Supplemental Material .20 to Rule 304 provides that a member 
organization that is directly or indirectly controlled by a 
governmental entity as defined in Rule 2(c) shall be required to 
identify such governmental entity to the Exchange.
    Form BD is the Uniform Application for Broker-Dealer Registration. 
Broker-Dealers are required to file this form to register with the 
Commission, the self-regulatory organizations, and jurisdictions 
through the CRD system operated by FINRA.
    Schedule A to Form BD requires broker-dealers to provide detailed 
information about their direct owners and executive officers, 
including:
    <bullet> Names and addresses of all direct owners (individuals or 
entities) and executive officers;
    <bullet> Ownership percentages for each direct owner;
    <bullet> Type of ownership (e.g., partnership, corporation, trust); 
and
    <bullet> Control relationships, indicating whether the owner or 
officer has control over the firm.
    Schedule A assists regulators in the assessment of a broker-
dealer's ownership structure and in the identification of individuals 
or entities with influence or control of the broker-dealer's 
activities.
    Schedule B to Form BD requires broker-dealers to disclose 
information about their indirect owners, i.e., those who own or control 
the firm through intermediary entities, and requires:
    <bullet> Identification of Indirect Owners: List all individuals or 
entities that have indirect ownership or control over the broker-dealer 
through one or more layers of ownership.
    <bullet> Ownership Structure: Provide details on how ownership is 
held, including the names of intermediary entities and the percentage 
of ownership at each level.
    <bullet> Control Relationships: Indicate whether any indirect owner 
exercises control over the broker-dealer, as defined by the SEC (e.g., 
voting rights, capital contributions).
    <bullet> Personal Information: For individuals, include identifying 
details such as name, address, and employment history (via Form U-4 if 
applicable).
    Schedule B complements Schedule A, which covers direct owners and 
executive officers, and helps regulators understand the full ownership 
and control structure of a broker-dealer.
    Broker-dealers are required to keep Form BD current and promptly 
amend or update the information reported in Schedules A and B using 
Schedule C.
Proposed Rule Change
    The Exchange proposes to eliminate the approved person registration 
category and delete the concept from its rules while simultaneously 
adopting a definition of associated person that incorporates elements 
of the current definition of approved persons and the FINRA definition 
of associated person in FINRA Rule 1011(b).
    To effectuate these changes, the Exchange proposes the following 
amendments to its Rules.
Rule 2(c) (Definition of Approved Person)
    The Exchange proposes the following changes to Rule 2(c). First, 
the Exchange would delete the definition of approved person in the 
first sentence of the Rule in its entirety. Second, the Exchange would 
adopt a new definition of associated persons based on FINRA Rule 
1011(b) and the current approved person definition. As proposed, the 
Exchange would define ``Associated Person,'' ``associated person,'' and 
``person associated with a member organization'' to mean
    (1) a natural person registered under Exchange rules or who has 
applied for registration under Exchange rules. Proposed Rule 2(c)(1) 
would be substantially the same as FINRA Rule

[[Page 63618]]

1011(b)(1) except for the reference to registration under NYSE rules;
    (2) any partner, officer, director, or branch manager of a member 
organization (or any person occupying a similar status or performing 
similar functions). Once again, this provision would be substantially 
similar to FINRA Rule 1011(b)(2) except that the Exchange would omit 
the reference to ``sole proprietor,'' which does not exist in the 
Exchange's rules; \6\
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    \6\ Prior to de-mutualization, a sole proprietor was the 
equivalent to a ``member'' under Exchange rules. Rule 2(a) provides 
that the term ``member,'' when used to denote a natural person 
approved by the Exchange, means a natural person associated with a 
member organization who has been approved by the Exchange and 
designated by such member organization to effect transactions on the 
floor of the Exchange or any facility thereof.
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    (3) any person (excluding a government entity) directly or 
indirectly controlling or controlled by a member organization, or a 
U.S. registered broker-dealer under common control with a member 
organization. This proposed definition would encompass the current 
``approved person'' category in Rule 2(c), including persons that 
control a member organization, are engaged in a securities or kindred 
business controlled by a member or member organization, or are U.S. 
registered broker-dealers under common control with a member 
organization. The Exchange would also include members, principal 
executives,\7\ or employees of member organizations to the extent such 
persons are identified as control persons on Form BD. The proposed 
definition is derived from Rule 346 (Statutory Disqualification--
Association of Member Organizations and Persons Associated with Member 
Organizations) and is similar to FINRA Rule 1011(b)(5). Consistent with 
the existing definition of ``approved person'' in Rule 2(c), the 
proposal uses the term ``governmental entity,'' and the related 
provision is substantially similar to FINRA Rule 1011(b)(3). In 
addition, a member organization that is directly or indirectly 
controlled by a governmental entity would be required to identify that 
governmental entity to the Exchange. This requirement is substantially 
the same as Supplementary Material .20 to current Rule 304; or
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    \7\ The Exchange notes that, although principal executives are 
encompassed within the proposed definition of ``associated person,'' 
it is nonetheless proposing to retain separate references to 
principal executives throughout its rules. Retaining these 
references will preserve existing rule text and avoid any potential 
ambiguity regarding the continued application of those provisions to 
principal executives.
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    (4) any employee of such member organization. The provision is 
substantially the same as FINRA Rule 1011(b)(4), except that the 
Exchange would not, consistent with Section 3(a)(18) of the Act, 
exclude any person whose functions are solely clerical or 
ministerial.\8\
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    \8\ See note 13, infra and Rule 1230.
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    The Exchange also proposes to add a new Supplementary Material .30 
that would provide that ``Control Persons'' as defined in subsection 
(c) of this Rule include both direct and indirect owners identified on 
Schedules A and B of Form BD. Proposed Supplementary Material .30 would 
further provide that each Control Person agrees to submit to the 
jurisdiction of the Exchange and to comply with any provisions of the 
Exchange Rules applicable to Control Persons, as such term is defined 
in the Rules of the Exchange.
    Because proposed Supplemental Material would encompass the 
substance of FINRA Rules 1011(b)(5) and (b)(6), the Exchange does not 
propose to adopt those provisions separately. Specifically, FINRA Rule 
1011(b)(5) includes within the definition of an associated person any 
individual or entity that directly or indirectly controls an applicant 
for FINRA membership, regardless of whether that person is registered 
with or exempt from registration under the FINRA By-Laws or FINRA 
Rules. FINRA Rule 1011(b)(6), in turn, includes any person engaged in 
the investment banking or securities business that is directly or 
indirectly controlled by the applicant, regardless of whether such 
person is registered with or exempt from registration under the FINRA 
By-Laws or FINRA Rules.\9\
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    \9\ The Exchange does not propose to adopt FINRA Rule 
1011(b)(7), which extends the definition of an associated person to 
include any individual or entity that will be, or is anticipated to 
become, a person described in paragraphs (1) through (6) of the 
FINRA rule. Unlike FINRA, the Exchange's jurisdiction does not 
extend to applicants for membership, prospective principal 
executives, or other persons who have not yet become subject to 
Exchange jurisdiction. See Rule 2A(f). Accordingly, the Exchange is 
not proposing to expand the scope of its jurisdiction to encompass 
such persons.
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    The approved person category and Form BD's Schedules A and B are, 
in material respects, duplicative. Both focus on the concept of 
control, that is, the power to direct management or policies, and both 
presume control at the 25% ownership or voting rights threshold. 
Schedule A captures direct owners and executive officers; Schedule B 
captures indirect owners, including entities exercising control through 
means other than direct equity ownership. Taken together, the Schedules 
require disclosure of substantially the same universe of individuals 
and entities that the approved person category was designed to identify 
persons who directly or indirectly control a member organization, 
affiliates engaged in securities or kindred businesses under common 
control, and U.S. registered broker-dealers under common control. 
Because those relationships are already documented through Form BD--a 
disclosure mechanism applicable across all FINRA members and Exchange 
member organizations--the approved person category no longer performs a 
disclosure function that is not already performed elsewhere. 
Elimination of separate Exchange-specific registration requirements 
would therefore remove a layer of redundant reporting without 
diminishing the Exchange's ability to identify and exercise 
jurisdiction over the controlling persons that the category was 
designed to reach. Member organizations would benefit from a 
corresponding reduction in the administrative obligations associated 
with maintaining a parallel, Exchange-only disclosure track.
Rule 2A (Jurisdiction)
    The Exchange proposes conforming amendments to Rule 2A(c), (d), (e) 
and (f) to replace references to ``employees of member organizations,'' 
``registered and non-registered employees of member organizations,'' 
``registered or non-registered employees of members or member 
organizations'' and ``approved persons'' with the term ``associated 
persons, whether or not such person is registered or exempt from 
registration under Exchange rules.'' \10\
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    \10\ The Exchange also proposes several non-substantive 
technical and grammatical changes. First, in Rule 2A(c), the 
Exchange would replace ``members organizations'' with ``member 
organizations'' to correct a typographical error. Second, in Rule 
2A(f), the Exchange would lowercase the term ``self-regulatory 
organization'' to conform to standard drafting conventions. Finally, 
in Supplementary Material .01(b) of Rule 5.2, Rule 8.300(e)(2), and 
Rule 8.400(e)(2), the Exchange would lowercase the ``s'' in ``See'' 
or consistency with the formatting used throughout the Exchange's 
rules.
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    These amendments are designed to align the text of Rule 2A with the 
proposed definition of ``associated person'' and to ensure consistent 
terminology throughout the Exchange's rulebook. As revised, the 
provisions would continue to apply to the same categories of 
individuals currently subject to the Exchange's jurisdiction, including 
employees of member organizations and Control Persons, regardless of 
whether such individuals are registered, exempt from registration, or 
otherwise not required to be registered under Exchange rules. The 
proposed references to associated

[[Page 63619]]

persons ``whether or not such person is registered or exempt from 
registration'' are consistent with both the breadth of the proposed 
definition of ``associated person'' and the scope of the existing 
provisions relating to approved persons that these amendments would 
replace. As discussed above, the approved person framework was intended 
to extend the Exchange's regulatory authority beyond registered persons 
and principals to encompass other individuals associated with a member 
organization whose conduct may appropriately be subject to Exchange 
oversight. Accordingly, the proposed amendments do not expand or narrow 
the substantive scope of the rules, but instead update the terminology 
to reflect the Exchange's revised definitional framework and preserve 
the Exchange's existing jurisdiction over the relevant persons.
    The Exchange would also add a new subsection (g) to Rule 2A based 
on Supplemental Material .10 of Rule 304, replacing ``approved person'' 
with ``associated person'' throughout. As proposed, an associated 
person domiciled outside the United States would not be required to 
permit the Exchange or its designee to examine its books and records at 
its domicile if, in the opinion of an independent attorney or 
government official, such examination would violate local law or 
conflict with generally accepted customs or business practices in that 
jurisdiction.
    To invoke this exemption, the associated person must, at its own 
expense, obtain a written certification from either an attorney or 
counselor at law independent of both the associated person and its 
affiliated member organization and authorized to practice in the 
relevant jurisdiction, or from an appropriate governmental official of 
that jurisdiction confirming that the on-site examination would violate 
local law or generally accepted customs or business practices. 
Separately, while the exemption remains in effect, the associated 
person must annually provide its affiliated member organization with a 
certification from an independent attorney, counselor at law, or 
auditor authorized to practice in the jurisdiction. That annual 
certification must confirm, based on a reasonable examination conducted 
under generally accepted local practices, two things: first, with 
respect to any omnibus account carried by the affiliated member 
organization for the associated person (but not for its benefit), that 
the certifier has no reason to believe that any transaction beneficiary 
was a person associated with the associated person or its affiliated 
member organization under the Exchange Act; and second, with respect to 
any account carried in the name and for the benefit of the associated 
person reflecting transactions under Section 11(a)(1)(G) of the Act and 
Rule 11a1-2, that the associated person derived more than 50% of its 
gross revenues during the preceding fiscal year from the sources 
specified in Section 11(a)(1)(G)(i) of the Act.
    Proposed subsection (g) to Rule 2A is substantively identical to 
current Supplementary Material .10 to Rule 304, except that it would 
require an associated person relying on the exemption to provide the 
annual written certification to the affiliated member organization 
rather than directly to the Exchange. This change is administrative in 
nature and relates solely to the maintenance of the certification 
records. It does not alter the substantive requirements of the 
exemption, the persons eligible to rely on it, or the content and 
frequency of the certification. Moreover, the Exchange retains the 
authority to request and review such certifications from member 
organizations as part of its regulatory and surveillance activities.
Conforming Changes
    The Exchange proposes conforming changes to the following rules. 
Unless otherwise indicated, the Exchange would replace ``approved 
person'' and/or references to ``employees'' or ``registered or non-
registered employee affiliated with such entity'' with ``associated 
person'':
    <bullet> Supplementary Material .01(b) to Rule 5.2 provides that 
member organizations acting as a registered market maker in Commodity-
Linked Securities, Currency-Linked Securities, Futures-Linked 
Securities or Multifactor Index-Linked Securities must provide the 
Exchange with access to books, records, or other information related 
to, among other things, transactions made by the firm or any limited 
partner, officer or approved person thereof, or registered or 
nonregistered employee affiliated with such entity, for its or their 
own accounts in the Index Asset components, the underlying commodities, 
currencies, or futures, or in derivatives based on any of the above;
    <bullet> Rule 8.204(f)(2) (Commodity Futures Trust Shares) provides 
that a member organization acting as a registered market maker in 
Commodity Futures Trust Shares will make available to the Exchange such 
books, records or other information pertaining to transactions by such 
entity or any limited partner, officer or approved person thereof, or 
registered or non-registered employee affiliated with such entity for 
its or their own accounts in the underlying commodity, related futures 
or options on futures, or any other related derivatives, as may be 
requested by the Exchange;
    <bullet> Rule 8.300(e)(2) (Partnership Units) provides that a 
member organization acting as a registered market maker in Partnership 
Units will make available to the Exchange such books, records or other 
information pertaining to transactions by such entity or any limited 
partner, officer or approved person thereof, or registered or non-
registered employee affiliated with such entity for its or their own 
accounts in the underlying asset or commodity, related futures or 
options on futures, or any other related derivatives, as may be 
requested by the Exchange;
    <bullet> Rule 8.400(e)(2) (Paired Trust Shares) provides that a 
member organization acting as a registered market maker in Paired Trust 
Shares will make available to the Exchange such books, records or other 
information pertaining to transactions by such entity or any limited 
partner, officer or approved person thereof, registered or non-
registered employee affiliated with such entity for its or their own 
accounts in the asset, commodity or other economic interest underlying 
the Reference Price, related options, related futures or options on 
futures, or any other related derivatives, as may be requested by the 
Exchange;
    <bullet> Rule 8.700(f)(2) (Managed Trust Securities) provides that 
a member organization acting as a registered market maker in Managed 
Trust Securities will make available to the Exchange such books, 
records or other information pertaining to transactions by such entity 
or any limited partner, officer or approved person thereof, or 
registered or non-registered employee affiliated with such entity for 
its or their own accounts in the underlying commodity or applicable 
currency, related futures or options on futures, or any other related 
derivatives, as may be requested by the Exchange;
    <bullet> Rule 21 (Disqualification of Directors on Listing of 
Securities) prohibits Board members or any authorized committee from 
participating in decisions related to the listing or distribution of 
securities if they have a substantial interest in the security or 
related plan. A Board member is deemed to have such an interest if, 
among other things, the Board member or any member, principal 
executive, approved person in their member organization is an officer 
or director (or person occupying a similar status or performing similar 
functions) or a

[[Page 63620]]

voting trustee of the issuer of such security or of any corporation 
which to his knowledge controls or is controlled by the issuer or such 
security (Rule 21(2)); the Board member or their member organization or 
any member, affiliate, principal executive, or approved person of such 
member organization owns directly or indirectly more than 1% of such 
security or of any class of stock of the issuer, or of any corporation 
which to his knowledge controls the issuer of such security (Rule 
21(3)); or the Board member or their member organization or any member, 
affiliate, principal executive, or approved person of such member 
organization to his knowledge holds directly or indirectly any 
substantial contract, option, or other privilege to purchase such 
security; or within six months prior thereto has directly or indirectly 
purchased (other than through the exercise of a right to subscribe) 
such security from the issuer or an underwriter thereof at a price 
below the market price (Rule 21(4)). The Exchange would replace 
approved person with associated person in subsections (2), (3) and (4);
    <bullet> Rule 22(a) (Disqualification Because of Personal Interest) 
provides that the individuals specified therein shall not participate 
in the investigation or consideration of any matter relating to any 
member, principal executive, approved person, or member organization or 
affiliate of such member organization with knowledge that such member, 
principal executive, approved person, member organization or affiliate 
is indebted to such director or committee member, or to their member 
organization or any participant therein, or that they, their member 
organization or any participant therein is indebted to such member, 
principal executive, approved person, member organization, or 
affiliate, excluding, however, any indebtedness arising in the ordinary 
course of business out of transactions on any exchange, out of 
transactions in the over-the-counter markets, or out of the lending and 
borrowing of securities;
    <bullet> Rule 91 (Taking or Supplying Securities Named in Order) 
provides that an Exchange member, including DMMs, may not execute a 
client's buy or sell order by trading from an account in which they or 
their member organization, or any member, principal executive, approved 
person or officer of such member organization, have a direct or 
indirect interest, if they know or should know about that interest 
unless specific exceptions apply;
    <bullet> Rule 96 (Limitation on Members' Trading Because of 
Options) prohibits members while on the trading Floor form trading a 
stock for their own or affiliated accounts if they or their member 
organization or any member, principal executive, or approved person of 
such member organization is directly or indirectly interested, if any 
stock in which the member holds or has granted options (e.g., puts, 
calls, straddles) on that stock unless those options are listed on a 
national exchange;
    <bullet> Rule 98 (Operation of a DMM Unit) governs the operations 
of DMM units and restricts DMMs on the trading Floor to trading only 
their assigned DMM securities at their designated post and prohibits 
them from trading related derivative products or accessing related 
customer or position information while on the Floor. The Exchange would 
replace approved person with ``Control Person'' in subsections (a)(1), 
(c)(3)(D), (c)(7), (e)(1), (f)(1), and (f)(4)). The Exchange believes 
that Control Persons as defined in proposed Rule 2(c) would most 
closely align with the persons covered by the current Rule;
    <bullet> Rule 98A (Restrictions on Persons or Parties Affiliated 
with A DMM Unit), prohibits, among other things, a DMM from being 
registered in a stock of an issuer, or a partner or subsidiary thereof, 
if such entity is an approved person or affiliate of the DMM unit's 
member organization. The Exchange would replace approved person in this 
sentence with ``Control Person.'' As previously noted, the Exchange 
believes that Control Persons as defined in proposed Rule 2(c) would 
most closely align with the persons covered by the current Rule;
    <bullet> Rule 112 (Orders initiated ``Off the Floor.'') restricts 
certain trading activity by members on the Exchange's Trading Floor. 
Subsection (a) provides that orders for the account of a member 
organization or any member, principal executive, approved person, 
officer, or employee of such organization or a discretionary account 
serviced by the member or member organization must be routed to the 
trading Floor through standard customer order transmission channels, 
such as a clearing firm's order room. Subsection (d) provides that 
orders placed after a conversation with a Floor-based employee for any 
account in which a member organization, or any member, principal 
executive, approved person, or officer, or employee of such 
organization is directly or indirectly interested, or for any 
discretionary account serviced by the member organization, are 
considered off-Floor orders if sent through standard public order 
channels with a time-stamped record, unless an exception applies. 
Finally, subsection (e) provides that members and member organizations 
are prohibited from executing trades on the Exchange for any account in 
which such member, member organization, or any member, principal 
executive, approved person, officer or employee of such organization is 
directly or indirectly interested, or for any discretionary account 
serviced by the member or member organization, if doing so violates 
Exchange front-running policies related to block transactions. The 
Exchange would replace approved person with associated person and 
delete ``or employee of such organization'' in subsections (a), (d), 
and (e) as duplicative, and replace the reference to ``employee'' in 
that organization who is on the trading Floor with ``associated 
person'' in subsection (d));
    <bullet> Supplementary Material .20 of Rule 113 (DMM Unit's Public 
Customers) provides that it is contrary to good business practice for a 
DMM, ``his or her'' DMM unit or any other member or principal executive 
in such organization or any officer or employee to ``popularize'' 
either orally or in writing any security in which ``he or she'' is 
registered. The second sentence makes an exception for approved persons 
or member organizations associated with the DMM unit provided that 
certain disclosures are made. The Exchange would replace approved 
person in the second sentence with ``Control Person'' to reflect that 
associated persons who are Control Persons outside the DMM unit are the 
intended associated persons for the exception and not associated 
persons within the DMM. The Exchange would also replace gender-based 
references with references to the DMM;
    <bullet> Rule 304 governing Approved Persons would be deleted in 
its entirety and marked ``Reserved''; \11\
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    \11\ Supplementary Material .90T(a) to Rule 304A (Member 
Examination Requirements) provides that it only applies to approved 
persons of a member organization who (i) have been designated by 
such member organization to effect transactions on the Floor of 
Exchange; and (ii) held a valid 86 Trinity Permit at the time they 
were designated to effect transactions on the Floor of the Exchange. 
Subsection (b) to Supplementary Material .90T provides that approved 
persons who satisfy the conditions in subsection (a) have six months 
from the date of such designation to meet the requirements contained 
in Rule 304A. Further, if an approved person who has been designated 
to effect transactions on the Floor of the Exchange fails to meet 
the requirements of Rule 304A by the end of the grace period, the 
rule provides that such approved person shall not be permitted to 
effect trades on the Floor until such approved person shall have 
satisfied the requirements of Rule 304A. This temporary provision 
was added in 2008 to facilitate the relocation of all equities 
trading conducted on or through the existing systems and facilities 
of the American Stock Exchange LLC (``Amex'') located at 86 Trinity 
Place to trading systems and facilities operated by the NYSE located 
at 11 Wall Street. See Securities Exchange Act Release No. 58706 
(Oct. 1, 200), 73 FR 59019 (Oct. 8, 2008) (SR-NYSE-2008-70) (Order 
Granting Approval of Proposed Rule Change Amending Rules Governing 
Membership in Order To Waive-In Members in Good Standing of the 
American Stock Exchange LLC as Members and Member Organizations of 
the Exchange). The Exchange proposes to delete Supplementary 
Material .90T(a) to Rule 304A as obsolete.

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[[Page 63621]]

    <bullet> Rule 311 (Formation and Approval of Member Organizations) 
sets forth the requirements to form a NYSE member organization. The 
Exchange proposes to delete the second sentence of Rule 311(a), which 
currently requires that all approved persons execute agreements with 
the Exchange under Rule 304 as a condition of a member organization 
becoming or remaining a member organization. This requirement 
originated from the Exchange's approved person registration framework, 
which was designed to extend the Exchange's supervisory and 
disciplinary jurisdiction to controlling persons who might otherwise 
fall outside the scope of regulatory oversight. The framework enabled 
the Exchange to assess the fitness, qualifications, and disciplinary 
history of individuals in positions to direct or influence a member 
organization's business and affairs. Because such persons are now 
visible to the Exchange through CRD, the Exchange believes this 
agreement requirement is no longer necessary and proposes its removal. 
The Exchange would also remove Rule 311(b)(5), which requires every 
approved person of the member organization to meet the requirements of 
Rule 304. Rule 311.12 setting forth a required Authorization and 
Statement of Understanding for each natural person who is an approved 
person under Rule 2(c) would also be deleted as no longer necessary 
given the information available in CRD. The remaining subsections would 
be renumbered. Given the elimination of the approved person category 
and the Exchange's jurisdiction over individuals previously classified 
as approved persons, these provisions are obsolete. References to 
approved person would be changed to associated person with the 
exception of subsection (b)(1), which would be changed to Control 
Person which would most closely align with the persons covered by the 
current Rule. Subsection (c) would be deleted in its entirety as 
unnecessary since this information is currently available in CRD;
    <bullet> Rule 312 (Changes Within Member Organizations) requires 
member organizations to provide notice to the Exchange of certain 
changes and actions. Rule 312(b)(1) requires written notice of any 
material change in the stockholdings of any member, principal executive 
or approved person of such member corporation. Rule 312(c) requires 
each member, principal executive and approved person of a member 
corporation to promptly notify his member corporation of any material 
acquisition or disposition of shares of stock of such corporation. 
Finally, Rule 312(d) requires a member corporation to take certain 
actions whenever a person who is required to be approved by the Board 
as a member, principal executive or approved person fails or ceases to 
be so approved. The Exchange would replace approved person with Control 
Person which would most closely align with the persons covered by the 
current Rule;
    <bullet> Rule 313 (Submission of Partnership Articles, Corporate 
Documents and Limited Liability Company Documents) provides for the 
submission of certain documents to the Exchange prior to becoming 
effective, including agreements between a member organization and, 
among others, any approved person (subsection (b)) and provides for 
submission of a certified list of members, principal executives and 
approved persons showing the number of shares of each class of stock of 
the member organization held of record or beneficially or both by each 
such party (subsection (e)). The Exchange would replace approved person 
with Control Person in each subsection;
    <bullet> Rule 346 (Statutory Disqualification--Association of 
Member Organizations, and Persons Associated With Member Organizations) 
provides that no member organization, principal executive, approved 
person, person associated with a member organization or any person 
directly or indirectly controlling, controlled by or under common 
control with a member organization shall have associated with it any 
person who is known, or in the exercise of reasonable care should be 
known, to be subject to any ``statutory disqualification'' as defined 
in Section 3(a)(39) of the Act. Supplementary Material .01 provides for 
waiver of this provision when there is a pending proceeding before 
another self-regulatory organization to determine whether to permit a 
member or associated person of a member to become or continue 
membership or association notwithstanding a statutory disqualification. 
The Exchange proposes to replace ``approved person, person associated 
with a member organization or any person directly or indirectly 
controlling, controlled by or under common control with a member 
organization'' with associated person in both sections. The Exchange 
believes that the proposed change would not alter the scope or 
operation of this rule. The terms ``person associated with a member 
organization'' and ``associated person'' are substantively equivalent, 
as the proposed definition of ``associated person'' encompasses the 
categories of individuals currently captured by the term ``person 
associated with a member organization.''
    <bullet> Rule 402(4) (Customer Protection--Reserves and Custody of 
Securities) provides for customers to withdraw uncalled fully paid 
securities from a firm at any time prior to a partial call and to 
withdraw excess margin securities under certain circumstances. The 
Exchange would replace approved persons with associated persons.''
    <bullet> Rule 422 (Loans of and to Directors, etc.) restricts 
directors, officers, and employees of ICE, ICE Holdings, NYSE Holdings, 
and the Exchange from making or receiving loans involving, among 
others, approved persons, without prior Board approval unless the loan 
is either fully secured by marketable collateral or made within the 
same member organization. The Exchange would replace approved person 
and three references to ``employee'' of a member organization with 
associated person. The Exchange would also add a missing ``the'' before 
the word Exchange in the first sentence of the Rule.
    <bullet> Rule 460.30 (DMMs Participating in Contests) provides that 
approved persons or a member organization associated with a DMM unit 
must notify the Exchange of its participation in any distribution or 
tender or exchange offer of any security covered by paragraph (b) of 
the rule and shall provide the information required therein. The 
Exchange would replace approved person with ``Control Person'' in order 
to most closely align with the persons covered by the current Rule.
    <bullet> Rule 619(h) of the Arbitration Rules (General Provision 
Governing Subpoenas, Production of Documents, etc.) provides that it 
may be deemed conduct or proceeding inconsistent with just and 
equitable principles of trade for purposes of Rule 2050(6) or Rule 
8210, as applicable, for a member, member organization, principal 
executive, approved person, registered or non-registered employee of a 
member or member organization or person otherwise subject to the 
jurisdiction of the Exchange to fail to appear or to produce any 
document in their possession or control as directed pursuant to 
provisions of the NYSE Arbitration Rules. The Exchange would replace 
``approved person, registered or

[[Page 63622]]

non-registered employee of a member or member organization'' with 
associated person.
    <bullet> Subsection (a) of Rule 6140 (Other Trading Practices) 
prohibits a member, member organization, principal executive, approved 
person, registered or non-registered employee of a member or member 
organization or person otherwise subject to the jurisdiction of the 
Exchange from executing or participating in trades that involves 
successively higher purchases or successively lower sales of a 
designated security, are intended to create a false or misleading 
appearance of market activity, or are meant to manipulate the market 
price or establish an artificial price that does not reflect the true 
market conditions. Rule 6140(b) prohibits the same persons from 
engaging in actions that create a false or misleading appearance of 
market activity or creating or inducing a false or misleading 
appearance with respect to the market in such security. The Exchange 
would replace approved person with associated person and delete 
``registered or non-registered employee of a member or member 
organization'' in both subsections as redundant.
    <bullet> Finally, Rule 9120 (Definitions) sets forth definitions 
applicable to the Exchange's disciplinary rules in the Rule 9000 
Series. Subsection (g) defines ``covered person'' to mean a member, 
principal executive, approved person, registered or non-registered 
employee of a member organization, or other person (excluding a member 
organization) subject to the jurisdiction of the Exchange. The Exchange 
would replace approved person with associated person and delete 
``registered or non-registered employee of a member organization,'' as 
redundant.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\13\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and protect investors and the public interest.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes that the proposal to eliminate 
the approved person category would eliminate a registration category 
that has no analogue under the membership scheme of FINRA or any other 
national securities exchange, thereby harmonizing the Exchange's rules 
with those of FINRA and other exchanges and resulting in less 
burdensome and more efficient regulatory compliance for member 
organizations. The Exchange accordingly believes that the proposal 
would remove impediments to and perfecting the mechanism of a free and 
open market and a national market system, consistent with the 
objectives of Section 6(b)(5) of the Act.\14\
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    \14\ 15 U.S.C. 78f(b)(5).
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    The Exchange further believes that elimination of the approved 
person category would not diminish the scope of its jurisdiction. The 
principal function of the approved person category is identifying 
persons who directly or indirectly control a member organization, and 
this is already addressed through the disclosure infrastructure of the 
CRD, which captures controlling relationships through Form BD's 
Schedules A and B. Moreover, the proposed sub-definition of ``Control 
Person'' within the proposed definition of ``associated person'' would 
include persons who control a member organization, persons engaged in a 
securities or kindred business controlled by a member or member 
organization, and U.S. registered broker-dealers under common control 
with a member organization, the same three categories of persons 
encompassed by the current ``approved person'' definition. The Exchange 
thus believes that the proposal would thereby preserve the substantive 
coverage of the current approved person category within the Exchange's 
broader jurisdictional framework. For the foregoing reasons, the 
Exchange believes the proposed change is consistent with preserving the 
current scope of Exchange jurisdiction while eliminating a separate, 
Exchange-specific registration category that is no longer necessary to 
achieve that purpose.
    Each of the individuals and entities that would be encompassed in 
the proposed definition of ``associated person'' would fall within the 
definition of ``associated person of a broker or dealer'' in Section 
3(a)(18) of the Act.\15\ The Exchange notes that the definition of 
associated person in the Act is broader in scope than the individuals 
and entities currently subject to the Exchange's jurisdiction since the 
Act's definition of associated person includes any person under common 
control with a broker-dealer, while the current definition of approved 
person in Rule 2(c) does not include all affiliates; rather, it 
includes only affiliates engaged in a securities or kindred business 
that is controlled by a member or member organization or a U.S. 
registered broker-dealer under common control with a member 
organization. The Exchange thus believes that harmonizing its 
definition of associated person with FINRA's definition would also 
harmonize its rules with Section 3(a)(18) of the Act.\16\ As noted, the 
Exchange believes that providing greater harmonization between Exchange 
and FINRA rules of similar purpose would result in less burdensome and 
more efficient regulatory compliance for Exchange member organizations. 
As such, the proposed rule change will 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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    \15\ See 15 U.S.C. 78c(a)(18). Under Section 3(a)(18), 
``associated person'' means any partner, officer, director, or 
branch manager of a broker-dealer (or any person occupying a similar 
status or performing similar functions), any person directly or 
indirectly controlling, controlled by, or under common control with 
a broker-dealer, or any employee of such broker-dealer, excluding 
for certain purposes any person whose functions are solely clerical 
or ministerial.
    \16\ See 15 U.S.C. 78c(a)(18). Under Section 3(a)(18), 
``associated person'' means any partner, officer, director, or 
branch manager of a broker-dealer (or any person occupying a similar 
status or performing similar functions), any person directly or 
indirectly controlling, controlled by, or under common control with 
a broker-dealer, or any employee of such broker-dealer, excluding 
for certain purposes any person whose functions are solely clerical 
or ministerial. See also Rule 1230 (Associated Persons Exempt from 
Registration), which provides that persons associated with a member 
organization whose functions are solely and exclusively clerical or 
ministerial are not required to be registered with the Exchange.
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    For the foregoing reasons, the Exchange believes that the proposal 
is consistent with the Act.

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 designed to address any competitive issues, but rather would remove 
a registration category from the Exchange's rules that is no longer 
necessary and adopt a new definition of ``associated person'' based on 
the definition in FINRA Rule 1011(b). The proposed amendments are thus 
intended to encourage less burdensome and more efficient regulatory 
compliance and will not impose any burden on competition. Further, the 
proposed changes would

[[Page 63623]]

apply to all member organizations in the same manner and therefore 
would not impose any unnecessary intramarket burdens.

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

    Pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) \18\ thereunder, the Exchange has designated this proposal as 
one that effects a change that: (i) does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.\19\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ 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 the 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 will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

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#3644435a531b55595b5b535842457645535518515940"><span class="__cf_email__" data-cfemail="85f7f0e9e0a8e6eae8e8e0ebf1f6c5f6e0e6abe2eaf3">[email&#160;protected]</span></a>. Please include 
file number SR-NYSE-2026-47 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-2026-47. 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-NYSE-2026-47 and should be submitted on 
or before October 27, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-20408 Filed 10-5-26; 8:45 am]
BILLING CODE 8011-01-P


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