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[Federal Register Volume 89, Number 228 (Tuesday, November 26, 2024)]
[Notices]
[Pages 93379-93381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27617]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101670; File No. SR-NYSE-2024-76]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rules 3170, 9120, 9522, 9523, and 9524

November 20, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on November 12, 2024, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend certain rules to replace 
``Department of Member Regulation'' and ``Member Regulation'' with 
``Exchange'' and make related changes. The proposed rule change is 
available on the Exchange's website at www.nyse.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend certain rules to replace 
``Department of Member Regulation'' and ``Member Regulation'' with 
``Exchange'' and make related changes. Specifically, the Exchange would 
amend Rule 3170 (Tape Recording of Registered Persons by Certain Firms) 
and the following rules from the Rule 9000 Series (Code of Procedure): 
Rule 9120 (Definitions); Rule 9522 (Initiation of Eligibility 
Proceeding; Member Regulation Consideration); Rule 9523 (Acceptance of 
Member Regulation Recommendations and Supervisory Plans by Consent 
Pursuant to SEA Rule 19h-1); and Rule 9524 (Exchange Board of Directors 
Consideration).
Background
    Rule 3170 governs the tape recording of registered persons by 
certain firms and requires certain notifications to be made to the 
Exchange's Department of Member Regulation.
    Rule 9120(j) defines ``Department of Member Regulation'' to mean 
the Department of Member Regulation of the Financial Industry 
Regulatory Authority (``FINRA'') for purposes of the Exchange's 
disciplinary rules set forth in the Rule 8000 and Rule 9000 Series.
    The Rule 9520 Series governs eligibility proceedings for persons 
subject to statutory disqualifications.\4\
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    \4\ The Exchange's 2013 filing adopting the FINRA disciplinary 
rules represented that the proposed Rule 9520 Series would govern 
eligibility proceedings for persons subject to statutory 
disqualifications that are not FINRA members. See Securities 
Exchange Act Release Nos. 68678 (January 16, 2013), 78 FR 5213, 5230 
(January 24, 2013) (SR-NYSE-2013-02) (Notice); 69045 (March 5, 
2013), 78 FR 15394, 15399 (March 11, 2013) (SR-NYSE-2013-02) 
(Order). At the time, there were several member organizations that 
were not FINRA members. Today, only a single member organization is 
also not a FINRA member. All FINRA members are subject to the FINRA 
Rule 9520 Series, which is substantively the same as the Exchange's 
version. Hence, as a practical matter, all member organizations 
would be subject to the same Rule 9520 standards.
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    Rule 9522 governs the initiation of an eligibility proceeding by 
the Exchange and the member organization's obligation to file an 
application to initiate an eligibility proceeding if it has been 
subject to certain disqualifications. Further, the rule provides that 
Member Regulation could approve a written request for relief from the 
eligibility requirements under certain circumstances.
    Rule 9523 allows Member Regulation to recommend a supervisory plan 
to which the disqualified member organization, sponsoring member 
organization, and/or disqualified person, as the case may be, may 
consent and by doing so, waive the right to hearing or appeal if the 
plan is accepted and the right to claim bias or prejudgment, or 
prohibited ex parte communications.
    Rule 9524 governs requests for review by the Exchange Board of 
Directors of a decision to reject a supervisory plan under Rule 9523.
    Finally, Rule 0 provides, among other things, that Exchange Rules 
that refer to Exchange staff or Exchange departments should be 
understood as also referring to FINRA staff and FINRA departments 
acting on behalf of the Exchange pursuant to the Regulatory Services 
Agreement (``RSA'') in existence between the Exchange and FINRA, as 
applicable.
Proposed Rule Change
    The Exchange proposes to replace all references to ``Department of 
Member Regulation'' and ``Member Regulation'' in Rules 3170, 9522, 9523 
and 9524 with ``Exchange'' or ``the Exchange.'' Consistent with Rule 0, 
references to the Exchange encompass FINRA staff and departments acting 
on the Exchange's behalf pursuant to the RSA. The proposed change would 
simplify the Exchange's rules by eliminating specific references that 
could change over time, thereby eliminating the need for additional 
rule changes in the future.\5\

[[Page 93380]]

The proposed change is also consistent with the rules of other 
exchanges that have adopted FINRA's disciplinary rules and have omitted 
specific references to FINRA departments in their Rule 9520 Series.\6\ 
Moreover, the proposed change would correct the reference in Rule 3170 
since the Exchange does not have a Department of Member Regulation. The 
Exchange would also delete Rule 9120(i) consisting of the word 
``Reserved,'' as well as Rule 9120(j) defining Department of Member 
Regulation for purposes of the Exchange's disciplinary rules as 
unnecessary. The remaining definitions would be renumbered.
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    \5\ See, e.g., Securities Exchange Act Release No. 98874 
(November 7, 2023), 88 FR 78071 (November 14, 2023) (SR-NYSE-2023-
39) (Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend Rules 9521 and 9522 To Correct Obsolete References 
to a FINRA Department). The current rule filing was made to avoid 
having Exchange rules contain similar outdated or incorrect 
references and avoid similar future rule filings.
    \6\ See, e.g., Investor Exchange Rule Series 9.520 (Eligibility 
Proceedings).
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    In addition, the Exchange proposes to delete references to 
``Department of Member Regulation'' in subsections (a)(1)(B), (a)(3), 
and (a)(4)(b)(1)(B) of Rule 9523 without inserting a reference to the 
Exchange where the deletion will clarify that the Exchange is intended. 
Further, in Rule 9524(b), the Exchange would delete the reference to 
``CRO'' (Chief Regulatory Officer) as redundant. The Exchange would 
also delete the last sentence of Rule 9524(a) stating that the Exchange 
Secretary will provide notice of a request to review a decision to 
reject a supervisory plan under Rule 9523 to the CRO and Department of 
Member Regulation as redundant.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Act,\7\ in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system and, in general, to protect 
investors and the public interest.
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    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed changes, taken together, 
would increase the clarity and transparency of the Exchange's rules and 
remove impediments to and perfect the mechanism of a free and open 
market by ensuring that persons subject to the Exchange's jurisdiction, 
regulators, and the investing public could more easily navigate and 
understand the Exchange rules. The Exchange further believes that the 
proposed amendments would not be inconsistent with the public interest 
and the protection of investors because investors will not be harmed 
and in fact would benefit from increased transparency and clarity, 
thereby reducing potential confusion.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not intended to address competitive issues but rather is concerned 
solely with deleting and, where applicable, replacing, specific 
references to FINRA departments in its rules and otherwise adding 
clarity and transparency to the Exchange's rules. Since the proposal 
does not substantively modify system functionality or processes on the 
Exchange, the proposed changes will not impose any burden on 
competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
Because the proposed rule change does not: (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSE-2024-76 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-NYSE-2024-76. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public

[[Page 93381]]

Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. Do not include personal identifiable 
information in submissions; you should submit only information that you 
wish to make available publicly. We may redact in part or withhold 
entirely from publication submitted material that is obscene or subject 
to copyright protection. All submissions should refer to file number 
SR-NYSE-2024-76 and should be submitted on or before December 17, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-27617 Filed 11-25-24; 8:45 am]
BILLING CODE 8011-01-P
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