4982 Federal Register / Vol. 87, No. 20 / Monday, January 31, 2022 / Notices 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

10 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Rule 1.1(l) defines ‘‘Exchange Traded Product’’ 

as a security that meets the definition of ‘‘derivative 

securities product’’ in Rule 19b–4(e) under the Act. 

ETPs include, for example, securities listed and 

traded on the Exchange pursuant to the following 

Exchange rules: Rule 5.2(j)(3) (Investment Company 

Units); Rule 5.2(j)(5) (Equity Gold Shares); Rule 5.2 

(j)(6)(Equity Index-Linked Securities); Rule 8.100 

(Portfolio Depositary Receipts); Rule 8.200 (Trust 

Issued Receipts) (‘‘TIR’’)); Rule 8.201 (CommodityBased Trust Shares); Rule 8.202 (Currency Trust 

Shares); Rule 8.203 (Commodity Index Trust 

Shares); Rule 8.204 (Commodity Futures Trust 

Shares); Rule 8.600 (Managed Fund Shares); and 

Rule 8.700 (Managed Trust Securities). 

5The term ‘‘Trading Floor’’ is defined in Rule 6A 

to mean the restricted-access physical areas 

designated by the Exchange for the trading of 

securities, commonly known as the ‘‘Main Room’’ 

and the ‘‘Buttonwood Room.’’ 

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 

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 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSENAT–2022–01 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–NYSENAT–2022–01. 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 (http://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 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSENAT–2022–01 and 

should be submitted on or before 

February 22, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01853 Filed 1–28–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94053; File No. SR–NYSE– 

2022–04] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change To 

Amend Rules 5P, 5.2(j)(8)(e), 8P, and 

98 

January 25, 2022. 

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 January 

14, 2022, New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rules 5P, 5.2(j)(8)(e), 8P, and 98 to 

permit the listing and trading of certain 

Exchange Traded Products that have a 

component NMS Stock listed on the 

Exchange or that are based on, or 

represent an interest in, an underlying 

index or reference asset that includes an 

NMS Stock listed on the Exchange. 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 

Rules 5P, 8P, 5.2(j)(8)(e) and 98 to 

permit the listing of certain Exchange 

Traded Products (‘‘ETPs’’) 4 that have a 

component NMS Stock listed on the 

Exchange or that are based on, or 

represent an interest in, an underlying 

index or reference asset that includes an 

NMS Stock listed on the Exchange (an 

‘‘NYSE Component Security’’ or, 

collectively, ‘‘NYSE Component 

Securities’’). The amendments would 

also permit the trading of those ETPs on 

the NYSE Trading Floor (‘‘Trading 

Floor’’ or ‘‘Floor’’).5

Currently, Exchange rules do not 

permit the listing of an ETP that has 

underlying NYSE Component 

Securities. The proposed changes would 

permit the listing of ETPs that satisfy 

the composition and concentration 

requirements for equity-based products 

set forth in the listing criteria of (1) 

current Rules 5.2(j)(3) (Investment 

Company Units), 5.2(j)(6) (Equity IndexLinked Securities), 8.100 (Portfolio 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 20 / Monday, January 31, 2022 / Notices 4983 

6 ‘‘UTP Security’’ is defined as a security that is 

listed on a national securities exchange other than 

the Exchange and that trades on the Exchange 

pursuant to unlisted trading privileges. See Rule 

1.1. 

7See Securities Exchange Act Release No. 82945 

(March 26, 2018), 83 FR 13553, 13568 (March 29, 

2018) (SR–NYSE–2017–36) (approving Exchange 

rules to trade securities on a UTP basis on the Pillar 

trading platform). 

8ETPs listed under NYSE Rules 8.601 (Active 

Proxy Portfolio Shares) and 8.900 (Managed 

Portfolio Shares) are not subject to the prohibition 

in the preamble to Rule 8P. See Securities Exchange 

Act Release No. 90091 (October 5, 2020), 85 FR 

64194, 64211 (October 9, 2020) (SR–NYSE–2020– 

77) (Notice); Securities Exchange Act Release No. 

90526 (November 27, 2020), 85 FR 78157 

(December 3, 2020) (SR–NYSE–2020–77) (Notice of 

Deemed Approval). 

9See Securities Exchange Act Release No. 87056 

(September 23, 2019), 84 FR 51205 (September 27, 

2019) (SR–NYSE–2019–34) (order approving 

amendments to Rule 104 to specify DMM 

requirements for ETPs listed on the Exchange 

pursuant to Rules 5P and 8P). 

10See Securities Exchange Act Release No. 91029 

(February 1, 2021), 86 FR 8420 (February 5, 2021) 

(SR–NYSE–2020–86) (approval order). 

11See Release Nos. 33–10695; IC–33646; File No. 

S7–15–18 (ETFs) (September 25, 2019), 84 FR 

57162 (October 24, 2019) (the ‘‘Rule 6c–11 

Release’’). 

12 ‘‘Side-by-side trading’’ refers to the trading of 

an equity security and its related derivative product 

at the same physical location, though ‘‘not 

necessarily by the same specialist or specialist 

firm.’’ See Securities Exchange Act Release No. 

46213 (July 16, 2002), 67 FR 48232, 48233 (July 23, 

2002) (SR–Amex–2002–21) (‘‘Release No. 46213’’) 

(order approving side-by-side trading and integrated 

market making of broad index-based ETFs and 

related options); see also Securities Exchange Act 

Release No. 45454 (February 15, 2002), 67 FR 8567, 

8568 n. 7 (February 25, 2002) (SR–NYSE–2001–43) 

(‘‘Release No. 45454’’) (order approving approved 

person of a specialist to act as a specialist or 

primary market maker with respect to an option on 

a stock in which the NYSE specialist is registered 

on the Exchange). 

13 ‘‘Integrated market making’’ refers to the 

practice of the same person or firm making markets 

in an equity security and its related option. See 

Release No. 45454, 67 FR at 8568 n. 7. 

14See Release No. 46213, 67 FR at 48232 

(approving side-by-side trading and integrated 

market making for certain ETFs and TIRs and 

related options); see also Securities Exchange Act 

Release No. 62479 (July 9, 2010), 75 FR 41264 (July 

15, 2010) (SR–Amex–2010–31) (‘‘Release No. 

62479’’) (order approving side-by-side trading and 

integrated market making in the QQQ ETF and 

certain of its component securities where the QQQs 

met the composition and concentration measures to 

be classified as a broad-based ETF). 

15See Release No. 62479, 75 FR at 41272. The 

Commission has expressed its belief ‘‘that, when 

the securities underlying an ETF consist of a 

number of liquid and well-capitalized stocks, the 

likelihood that a market participant will be able to 

manipulate the price of the ETF is reduced.’’ See 

id. See generally Securities Exchange Act Release 

Nos. 56633 (October 9, 2007), 72 FR 58696 (October 

16, 2007) (SR–ISE–2007–60) (order approving 

generic listing standards for ETFs based on both 

U.S. and international indices, noting they are 

‘‘sufficiently broad-based in scope to minimize 

potential manipulation.’’); 55621 (April 12, 2007), 

72 FR 19571 (April 18, 2007) (SR–NYSEArca–2006– 

86) (same); 54739 (November 9, 2006), 71 FR 66993 

(November 17, 2006) (SR–Amex–2006–78) (same); 

57365 (February 21, 2008), 73 FR 10839 (February 

28, 2008) (SR–CBOE–2007–109) (order approving 

generic listing standards for ETFs based on 

international indices, noting they are ‘‘sufficiently 

broad-based in scope to minimize potential 

manipulation.’’); 56049 (July 11, 2007), 72 FR 39121 

(July 17, 2007) (SR–Phlx–2007–20) (same); 55113 

(January 17, 2007), 72 FR 3179 (January 24, 2007) 

(SR–NYSE–2006–101) (same); and 55269 (February 

9, 2007), 72 FR 7490 (February 15, 2007) (SR– 

Nasdaq–2006–50) (same). 

16The American Stock Exchange LLC is now 

NYSE American, LLC. 

17Release No. 46213, 67 FR at 48235. 

18 Id. 

Depositary Receipts), 8.600 (Managed 

Fund Shares), and (2) Rule 5.2(j)(8) as 

proposed to be amended to include 

requirements to ensure diversification, 

non-concentration, liquidity and 

capitalization. 

Accordingly, these ETPs would not be 

covered by the restrictions associated 

with the listing of ETPs that have an 

NYSE Component Security. 

Background 

Current Listing Rules 

Currently, the Exchange trades 

securities, including ETPs, on its Pillar 

trading platform on an unlisted trading 

privileges (‘‘UTP’’) basis, subject to 

Pillar Platform Rules 1P—13P.6 ETPs 

traded on a UTP basis on the Exchange 

are not assigned to a Designated Market 

Maker (‘‘DMM’’) and are available for 

Floor brokers to trade in Floor-based 

crossing transactions.7 The Exchange 

does not have any restrictions on which 

ETPs may trade on a UTP basis on the 

Exchange. 

The Exchange’s rules permit it to list 

ETPs under Rules 5P and 8P. 

Specifically, Rules 5P (Securities 

Traded) and 8P (Trading of Certain 

Exchange Traded Products) provide for 

the listing of certain ETPs on the 

Exchange that (1) meet the applicable 

requirements set forth in those rules, 

and (2) do not hold NYSE Component 

Securities.8 ETPs listed under Rules 5P 

and 8P are ‘‘Tape A’’ listings and are 

traded pursuant to the rules applicable 

to NYSE-listed securities. Accordingly, 

once an ETP is listed, it is assigned to 

a DMM pursuant to Rule 103B and the 

assigned DMM has obligations vis-a`-vis 

such securities as specified in Rule 104, 

including facilitating the opening, 

reopening, and closing of, and trading 

in, such securities.9

The Exchange recently adopted a new 

Rule 5.2(j)(8) 10 establishing generic 

listing standards allowing the Exchange 

to list and trade Exchange-Traded Fund 

Shares.11

Relevant Commission Precedent 

While the trading of an equity 

security and its related derivative 

product at the same physical location 

(‘‘side-by-side trading’’) 12 and the 

practice of the same person or firm 

making markets in an equity security 

and its related option (‘‘integrated 

market making’’ 13) has generally not 

been permitted, the Commission has 

approved integrated market making and 

side-by-side trading for ‘‘broad-based’’ 

exchange traded funds (‘‘ETF’’) and 

Trust-Issued Receipts (‘‘TIR’’) and 

related options.14 The test for whether a 

product is ‘‘broad-based,’’ and therefore 

not readily susceptible to manipulation, 

is whether the individual components 

of the ETP are sufficiently liquid and 

well-capitalized and the product is not 

over-concentrated.15 When these criteria 

are met, and the product can therefore 

can be considered ‘‘broad-based,’’ the 

Commission has explicitly permitted 

integrated market making and side-byside trading in both the ETP and related 

options, with no additional requirement 

for information barriers or physical or 

organizational separation. 

In making a determination of whether 

an ETP is broad-based, the Commission 

has relied on an exchange’s listing 

standards. For instance, in permitting 

integrated market making and side-byside trading for two types of ETPs and 

their related options, the Commission 

looked to the then-American Stock 

Exchange LLC’s listing standards that, 

as described below, are very similar to 

the Exchange’s current listing 

standards.16

In particular, the Commission 

observed that the ETPs at issue, an ETF 

and a TIR, were securities based on 

‘‘groups of stocks’’ whose prices were 

based on the prices of their component 

securities. As such, the Commission was 

of the view that a market participant’s 

ability to manipulate the price of the 

ETPs or the related options would be 

‘‘limited.’’ 17 Moreover, the Commission 

noted that the listing standards required 

(1) each product to have a minimum of 

13 securities in the underlying portfolio, 

(2) that the most heavily weighted 

component securities could not exceed 

25% of the weight of the portfolio, and 

(3) that the five most heavily weighted 

component securities could not exceed 

65% of the weight of the portfolio. As 

the Commission concluded, 

[b]y limiting the proposal to broad-based 

ETFs and TIRs, concerns regarding 

informational advantages about individual 

securities are lessened.18

Finally, the Commission noted that 

the capitalization and liquidity 

requirements imposed by the listing 

standards—for example, the component 

securities that in the aggregate account 

for at least 90% of the weight of the 

portfolio must have a minimum market 


khammond on DSKJM1Z7X2PROD with NOTICES
4984 Federal Register / Vol. 87, No. 20 / Monday, January 31, 2022 / Notices 

19 Id. 

20See NYSE Rule 5.2(j)(6)(B)(I)(1)(a). The rule 

provides that there shall be no minimum of 

component securities if one or more issues of 

Derivative Securities Products (i.e., Investment 

Company Units (as described in Rule 5.2(j)(3)) and 

securities described in Section 2 of Rule 8P) or 

Index-Linked Securities (as described in Rule 

5.2(j)(6)), constitute, at least in part, component 

securities underlying an issue of Equity IndexLinked Securities. 

21See NYSE Rule 5.2(j)(6)(B)(I)(1)(b)(i). For each 

of the lowest dollar weighted component securities 

in the index that in the aggregate account for no 

more than 10% of the dollar weight of the index 

(excluding Derivative Securities Products and 

Index-Linked Securities), the rule provides that the 

market value can be at least $50 million. 

22See NYSE Rule 5.2(j)(6)(B)(I)(1)(b)(ii). 

23See NYSE Rule 5.2(j)(6)(B)(I)(1)(b)(iii). 

24See Rule 5.2(j)(3), Supp. Material .01(a)(A); 

Rule 8.100, Supp. Material .01(a)(A)(1)–(3) & Rule 

8.600, Supp. Material .01 (a)(1)(A)–(C). 

25See Securities Exchange Act Release No. 80189 

(March 9, 2017), 82 FR 13889, 13892 (March 15, 

2017) (SR–NYSEArca–2017–01) (order approving 

amendment of NYSE Arca Rule 5 and 8 Series to 

add specific continued listing standards for ETPs 

and to specify the delisting procedures for these 

products). See generally id. n. 28 & authorities cited 

therein. 

value of at least $75 million and the 

component securities representing 90% 

of the weight of the portfolio each must 

have a minimum trading volume during 

each of the last six month of at least 

250,000 shares—‘‘should reduce the 

likelihood that any market participant 

has an unfair information advantage 

about the ETF, TIR, its related options, 

or its component securities, or that a 

market participant would not be able to 

manipulate the prices of the ETFs, TIRs, 

or their related options.’’ 19

Proposed Rule Change 

The Exchange proposes to list and 

trade certain ETPs that include one or 

more underlying NYSE Component 

Securities. Because listed securities are 

assigned to DMMs, trading is on the 

Floor of the Exchange and thus a listed 

ETP with an underlying NYSE 

Component Security could be assigned 

to a DMM that is also assigned one or 

more NYSE Component Securities 

forming part of the underlying ETP 

index or portfolio. The Exchange 

believes that it would be consistent with 

the Exchange Act and with prior 

Commission actions with respect to 

both integrated market making and sideby-side trading for the Exchange to list 

an ETP that also includes NYSE 

Component Securities based on the 

broad-based listing criteria contained in 

the relevant listing rules. 

Current Generic Listing Standards 

The Exchange believes that certain of 

its existing listing rules, together with 

proposed additional criteria for ETPs 

that meet the criteria for listing under 

Rule 5.2(j)(8), incorporate salient 

composition and concentration criteria 

designed to ensure that listed ETPs with 

an NYSE Component Security would be 

sufficiently broad-based to address 

potential manipulation concerns. 

Specifically, the Exchange believes that 

ETPs with underlying NYSE Component 

Securities that would qualify for listing 

under the current criteria in Rules 

5.2(j)(3), Supplementary Material .01(a); 

5.2(j)(6)(B)(I); 8.100, Supplementary 

Material .01(a)(A); and 8.600, 

Supplementary Material .01(a), would 

satisfy the type of broad-based listing 

criteria previously identified by the 

Commission to address potential 

manipulation concerns. The Exchange 

believes that such ETPs could 

accordingly list and trade on the 

Exchange with no additional 

requirement for information barriers or 

physical or organizational separation 

based on the broad-based nature of the 

current listing criteria. 

The current listing standards for these 

Rules incorporate composition and 

concentration criteria that includes 

market cap, volume, weighting and 

minimum number of components 

requirements. For instance, the generic 

listing requirements for Equity IndexLinked Securities Listing Standards 

(‘‘ETN’’) under Rule 5.2(j)(6)(B)(I) 

require that, among other things, 

• each underlying index have at least 

ten (10) component securities; 20 that 

each component security (excluding 

Derivative Securities Products and 

Index-Linked Securities) have a 

minimum market value of at least $75 

million; 21

• component stocks (excluding 

Derivative Securities Products and 

Index-Linked Securities) that in the 

aggregate account for at least 90% of the 

weight of the index (excluding 

Derivative Securities Products and 

Index-Linked Securities) each have a 

minimum global monthly trading 

volume of 1,000,000 shares, or 

minimum global notional volume traded 

per month of $25,000,000, averaged over 

the last six months; 22 and 

• no underlying component security 

(excluding Derivative Securities 

Products and Index-Linked Securities) 

represent more than 25% of the dollar 

weight of the index, and, to the extent 

applicable, the five highest dollar 

weighted component securities in the 

index (excluding Derivative Securities 

Products and Index-Linked Securities) 

do not in the aggregate account for more 

than 50% of the dollar weight of the 

index (60% for an index consisting of 

fewer than 25 component securities).23

The generic listing standards for 

equities-based Investment Company 

Units under Rule 5.2(j)(3), equitiesbased Portfolio Depositary Receipts 

under Rule 8.600, and equities-based 

Managed Fund Shares under Rule 8.601 

contain comparable requirements.24

By virtue of the composition and 

concentration requirements in the 

Exchange’s generic listing standards for 

equities-based products relating to 

market cap, trading volume, and 

diversity requirements, among others, 

that the underlying components must 

meet to list on the Exchange, the generic 

listing standards are, among other 

things, 

• intended to reduce the potential for 

manipulation by assuring that the ETP 

is sufficiently broad-based, and that the 

components of an index or portfolio 

underlying an ETP are adequately 

capitalized, sufficiently liquid, and that 

no one stock dominates the index.25

The Exchange believes that ETPs 

meeting these existing listing criteria 

would be sufficiently broad-based to 

allow integrated market making and 

side-by-side trading in both the ETP and 

the NYSE Component Securities 

without more, and therefore should be 

excluded from the preambles to Rules 

5P and 8P. 

Proposed Broad-Based Generic Listing 

Standards for Exchange Traded Fund 

Shares 

The Exchange further believes that 

Exchange Traded Fund Shares eligible 

to list under Rule 5.2(j)(8) that have 

underlying NYSE Component Securities 

should be eligible to list and trade on 

the Exchange if such Exchange Traded 

Fund Shares meet similar broad-based 

requirements as those specified in Rules 

5.2(j)(3), 5.2(j)(6), 8.100, and 8.600 

described above. To allow for listing of 

Exchange Traded Fund Shares with 

NYSE Component Securities, the 

Exchange proposes to add a new 

subsection e.1.B. to Rule 5.2(j)(8) to 

provide for additional listing 

requirements for such Exchange Traded 

Fund Shares. As with the ETPs 

discussed above, Exchange-Traded 

Fund Shares with NYSE Component 

Securities meeting the proposed 

composition and concentration 

measures proposed in Rule 

5.2(j)(8)(e)(1)(B) would be permitted to 

list with no additional requirement for 

information barriers or physical or 

organizational separation, and would be 

excluded from the preamble to Rule 5P. 

As proposed, Rule 5.2(j)(8)(e)(1)(B) 

would provide that if a portfolio of a 

series of Exchange-Traded Fund Shares 

has NYSE Component Securities, the 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 20 / Monday, January 31, 2022 / Notices 4985 

26The term ‘‘US Component Stock’’ means an 

equity security that is registered under Sections 

12(b) or 12(g) of the Securities Exchange Act of 

1934 or an American Depositary Receipt, the 

underlying equity security of which is registered 

under Sections 12(b) or 12(g) of the Securities 

Exchange Act of 1934. See Rule 5.2(j)(3). 

27The term ‘‘Non-US Component Stock’’ means 

an equity security that is not registered under 

Sections 12(b) or 12(g) of the Securities Exchange 

Act of 1934 and that is issued by an entity that (a) 

is not organized, domiciled or incorporated in the 

United States, and (b) is an operating company 

(including Real Estate Investment Trusts (REITS) 

and income trusts, but excluding investment trusts, 

unit trusts, mutual funds, and derivatives). See Rule 

5.2(j)(3). 

28See Rule 5.2(j)(3), Supp. Material .01(a)(A)(4). 

There is no minimum number of component stocks 

if (a) one or more series of Units or Portfolio 

Depositary Receipts (as defined in Section 2 of Rule 

8P) constitute, at least in part, components 

underlying a series of Managed Fund Units, or (b) 

one or more series of such ETPs account for 100% 

of the US Component Stocks portion of the weight 

of the index or portfolio. See id. 

29See Rule 8.100, Supp. Material .01(a)(A)(4) & 

Rule 8.600, Supp. Material .01(a)(1)(D). 

30See Rule 8.100, (a)(A)(3). 

31See Rule 8.100, Supp. Material .01(a)(A)(1)–(3) 

& Rule 8.600, Supp. Material .01 (a)(1)(A)–(C). 

32See Rule 5.2(j)(3), Supp. Material .01(a)(A)(1). 33See Rule 5.2(j)(3), Supp. Material .01(a)(A)(2). 

component securities of the equity 

portion of such portfolio or index must 

satisfy specified requirements upon 

initial listing and on a continuing basis 

that would be designed to ensure that 

broad-based Exchange Traded Fund 

Shares with underlying NYSE 

Component Securities would be listed 

and traded on the Exchange. 

First, proposed Rule 

5.2(j)(8)(e)(1)(B)(1) would provide that 

the portfolio or index must include a 

minimum of 13 equity component 

securities. This proposed requirement is 

substantively the same as listing rules 

for ETPs that similarly require a 

minimum of 13 equity component 

securities. For example, as set forth in 

Supplementary Material .01 of Rule 

5.2(j)(3), the index components for 

investment company units (‘‘Units’’) 

consisting solely of US Component 

Stocks 26 or US Component Stocks and 

cash—i.e., where the equity portion of 

the portfolio does not include Non-US 

Component Stocks 27—must include a 

minimum of 13 component stocks.28 In 

addition, actively managed funds under 

Rule 8.600 and Rule 8.100 (Portfolio 

Depositary Receipts) also require a 

minimum of 13 component securities if 

the equity portion of the portfolio does 

not include Non-U.S. Component 

Stocks.29 The Exchange believes that the 

proposed 13 equity component 

requirement for a series of Exchange 

Traded Fund Shares with an NYSE 

Component Securities would similarly 

ensure significant portfolio breadth such 

that the potential for manipulation or 

coordinated trading is significantly 

attenuated. 

Second, proposed Rule 

5.2(j)(8)(e)(1)(B)(2) provides that no one 

single component security may exceed 

30% of the equity weight of the 

portfolio or index. Third, proposed Rule 

5.2(j)(8)(e)(1)(B)(3) would provide that 

the five most heavily weighted 

component securities may not exceed 

65% of the equity weight of the 

portfolio or index. Both of these 

proposed requirements are substantively 

identical to current generic listing 

requirements for Investment Company 

Units under Supplementary Material .01 

of Rule 5.2(j)(3), which provides that the 

most heavily weighted component stock 

(excluding Investment Company Units 

and securities defined in Section 2 of 

Rule 8P) cannot exceed 30% of the 

equity weight of the portfolio, and, to 

the extent applicable, the five most 

heavily weighted component stocks 

(excluding Units and securities defined 

in Section 2 of Rule 8P) cannot exceed 

65% of the equity weight of the 

portfolio.30 Portfolio Depositary 

Receipts and Managed Fund Shares 

have similar requirements.31

Fourth, proposed Rule 

5.2(j)(8)(e)(1)(B)(4) provides that 

component securities that in the 

aggregate account for at least 90% of the 

equity weight of the portfolio or index 

each must have a minimum market 

value of at least $75 million. The 

proposed requirements are substantively 

identical to the current generic listing 

requirements for Units under 

Supplementary Material .01 of Rule 

5.2(j)(3), which provides that 

component stocks in the aggregate 

account for at least 90% of the weight 

of the US Component Stocks portion of 

the index or portfolio (excluding 

Derivative Securities Products) each 

shall have a minimum market value of 

at least $75 million.32

Finally, proposed Rule 

5.2(j)(8)(e)(1)(B)(5) would provide that 

component securities that in the 

aggregate account for at least 70% of the 

equity weight of the index or portfolio 

each must have a minimum monthly 

trading volume of 250,000 shares, or 

minimum notional volume traded per 

month of $25,000,000, averaged over the 

last six months. The proposed 

requirement is also substantively 

identical to Supplementary Material .01 

of Rule 5.2(j)(3), which provides that 

component stocks (excluding Derivative 

Securities Products) that in the 

aggregate account for at least 70% of the 

US Component Stocks portion of the 

weight of the index or portfolio 

(excluding Derivative Securities 

Products) each shall have a minimum 

monthly trading volume of 250,000 

shares, or minimum notional volume 

traded per month of $25,000,000, 

averaged over the last six months.33

The Exchange believes that these 

proposed additional initial and 

continued listed requirements for a 

series of Exchange Traded Fund Shares 

with one or more NYSE Component 

Securities mirror existing generic listing 

standards for equities-based products 

and are consistent with the listing 

requirements described above that the 

Commission determined were 

sufficiently broad-based to address 

potential manipulation concerns. 

Accordingly, the Exchange believes that 

the proposed requirements would 

ensure that a portfolio of a series of 

Exchange Traded Fund Shares listed 

under Rule 5.2(j)(8) with one or more 

NYSE Component Securities would not 

be unduly concentrated. 

The Exchange believes that requiring 

Exchange Traded Fund Shares with 

underlying NYSE Component Securities 

to meet enhanced criteria is designed to 

ensure that the Exchange Traded Fund 

Shares listed on the Exchange would be 

broad-based and would mitigate 

potential issues raised by the trading of 

Exchange Traded Fund Shares on the 

same physical trading floor as one or 

more component securities. 

Proposed Changes to Rules 5P and 8P 

To effect the above-described changes, 

the Exchange proposes to amend the 

preambles following both Rule 5P and 

Rule 8P. 

For Rule 5P, the Exchange proposes to 

add ‘‘Listed and’’ before ‘‘Traded’’ in the 

heading. The Exchange also proposes to 

add the defined term ‘‘NYSE 

Component Securities,’’ which would 

mean the existing Rule 5P definition of 

‘‘any component NMS Stock that is 

listed on the Exchange or that is based 

on, or represents an interest in, an 

underlying index or reference asset that 

includes an NMS Stock on the 

Exchange.’’ The Exchange further 

proposes to amend Rule 5P to exclude 

from the listing prohibition an Exchange 

Traded Product listed under NYSE 

Rules 5.2(j)(3), Supplementary Material 

.01(a); 5.2(j)(6)(B)(I); or 5.2(j)(8)(e)(1)(B). 

Finally, for the avoidance of doubt, the 

Exchange proposes to add text to the 

heading of Rule 5P providing that the 

Exchange may submit a rule filing 

pursuant to Section 19(b) of the 

Securities Exchange Act of 1934 to 

permit the listing and trading of an ETP 

that does not otherwise meet the above 

standards. 


khammond on DSKJM1Z7X2PROD with NOTICES
4986 Federal Register / Vol. 87, No. 20 / Monday, January 31, 2022 / Notices 

34See Securities Exchange Act Release No. 58328 

(August 7, 2008), 73 FR 48260 (August 18, 2008) 

(SR–NYSE–2008–45) (order approving amendments 

to Rule 98 that permit specialist firms to integrate 

with off-Trading Floor trading desks that trade in 

‘‘related products,’’ as that term is defined in Rule 

98). 

35Under Rule 98(b)(7), derivative instruments 

include options, warrants, hybrid securities, singlestock futures, security-based swap agreement, a 

forward contract, or ‘‘any other instrument that is 

exercisable into or whose price is based upon or 

derived from a security traded at the Exchange.’’ 

36See note 7, supra. 

37Rule 98(c)(2) provides examples of conduct 

that would constitute the misuse of material, nonpublic information, including, but not limited to: 

(1) Trading in any securities issued by a 

corporation, or in any related product, while in 

possession of material-non-public information 

concerning the issuer; or (2) trading in a security 

or related product, while in possession of material 

non-public information concerning imminent 

transactions in the security or related product; or 

(3) disclosing to another person or entity any 

material, non-public information involving a 

corporation whose shares are publicly traded or an 

imminent transaction in an underlying security or 

related product for the purpose of facilitating the 

possible misuse of such material, non-public 

information. See Rule 98(c)(2)(A)–(C). 

The Exchange similarly proposes to 

amend the heading of Rule 8P to add 

‘‘Listing and’’ before ‘‘Trading.’’ The 

Exchange also proposes to replace the 

text ‘‘component NMS Stock that is 

listed on the Exchange or that is based 

on, or represents an interest in, an 

underlying index or reference asset that 

includes an NMS Stock listed on the 

Exchange’’ with the proposed newly 

defined term of ‘‘NYSE Component 

Securities.’’ Use of this new defined 

term would not make any substantive 

changes to the Rule and is designed to 

streamline the rule text. Finally, the 

Exchange would amend Rule 8P to add 

language similar to that proposed for 

Rule 5P that would exclude from the 

listing prohibition an Exchange Traded 

Product listed under Rules 8.100, 

Supplementary Material .01(a)(A) or 

8.600, Supplementary Material .01(a). 

Proposed Changes to Rule 98 

Rule 98 governs the operation of 

DMM units and imposes certain 

restrictions on DMM trading. With 

respect to integrated market making, the 

Commission has approved changes to 

Rule 98 that permit a DMM unit to 

engage in integrated market making 

with off-Floor market making units in 

related products.34 Rule 98(c)(6) 

prohibits DMM units from operating as 

a specialist or market maker on the 

Exchange in related products, unless 

specifically permitted in Exchange 

rules. Rule 98(b)(7) defines ‘‘related 

products’’ as ‘‘any derivative instrument 

that is related to a DMM security.’’ 35

Accordingly, consistent with the 

proposal, the Exchange proposes to 

amend Rule 98(b)(7) to specifically 

exclude from the definition of ‘‘related 

products’’ the ETPs that are excluded 

from the listing prohibition set forth in 

the preamble to Rule 5P or to Rule 8P. 

With the proposed changes above, the 

Exchange would be able to list ETPs that 

include NYSE Component Securities 

and are listed under Rules 5.2(j)(3), 

Supplementary Material .01(a); 

5.2(j)(6)(B)(I); 5.2(j)(8)(e)(1)(B); 8.100, 

Supplementary Material .01(a)(A); or 

8.600 Supplementary Material .01(a). 

The proposed change would also 

provide that ETPs listed under these 

rules would be excluded from the Rule 

98 definition of ‘‘related products.’’ In 

addition, this proposed change would 

clarify that ETPs listed under Rules 

8.601 (Active Proxy Portfolio Shares) 

and 8.900 (Managed Portfolio Shares), 

which are currently excluded from the 

preamble to Rule 8P, would also be 

excluded from the Rule 98 definition of 

‘‘related products.’’ 36

As discussed above, for each of the 

ETPs proposed to be excluded from the 

definition of ‘‘related security,’’ 

integrated market making and side-byside trading in both the ETP and any 

underlying NYSE Component Securities 

would be appropriate with no 

additional requirement for information 

barriers or physical or organizational 

separation. 

In addition to the reasons why 

specific products present a reduced risk 

of manipulation, the Exchange believes 

that there are significant safeguards in 

place to prohibit the misuse of material 

nonpublic information by a member 

organization that operates a DMM unit. 

Specifically, Rule 98 contains narrowly 

tailored restrictions to address that 

DMMs while on the Floor may have 

access to certain Floor-based non-public 

information and requires DMM units to 

maintain procedures and controls to 

prevent the misuse of material, nonpublic information that are effective and 

appropriate for that member 

organization. 

Specifically, under Rule 98(c)(2), a 

member organization seeking approval 

to operate a DMM unit pursuant to Rule 

98 must maintain and enforce written 

policies and procedures reasonably 

designed, taking into consideration the 

nature of such member organization’s 

business, (1) to prevent the misuse of 

material, non-public information by 

such member organizations or persons 

associated with such member 

organization, and (2) to ensure 

compliance with applicable federal laws 

and regulations and with Exchange 

rules.37 Further, Rule 98(c)(3)(A) 

provides that a member organization 

shall protect against the misuse of Floorbased non-public order information and 

that only the Trading Floor-based 

employees of the DMM unit and 

individuals responsible for the direct 

supervision of the DMM unit’s Floorbased operations may have access (as 

permitted pursuant to Rule 104) to 

Floor-based non-public order 

information. Rule 98(c)(3)(B) specifies 

the restrictions applicable to employees 

of the DMM unit while on the Trading 

Floor. 

Rule 98(c)(3)(C) also provides that a 

Floor-based employee of a DMM unit 

who moves to a location off the trading 

floor of the Exchange, or any person 

who provides risk management 

oversight or supervision of the Floorbased operations of the DMM unit and 

becomes aware of Floor-based nonpublic order information, shall not (1) 

make such information available to 

customers, (2) make such information 

available to individuals or systems 

responsible for making trading decisions 

in DMM securities in away markets or 

related products, or (3) use any such 

information in connection with making 

trading decisions in DMM securities in 

away markets or related products. The 

rule covers an individual that leaves the 

Floor, as well as a manager providing 

oversight or supervision of the Floorbased operations of the DMM unit. 

Submission and approval of a DMM 

unit’s written policies and procedures 

addressing the requirements of Rule 98 

is a prerequisite to operating a DMM 

unit on the Floor. The Exchange notes 

that all member organizations currently 

operating DMM units already have in 

place written policies and procedures to 

comply with Rule 98. 

The significant safeguards must be 

viewed in the context of the evolution 

of equities markets away from manual 

executions toward an electronic market 

that automates executions and in many 

cases hard codes the rule requirements 

into the execution logic. Over the years 

the Exchange has enhanced the 

transparency of its marketplace and 

significantly reduced the amount of 

material, non-public information 

available to DMMs. For instance, the 

Exchange disseminates Closing Auction 

Imbalance Information beginning 10 

minutes before the scheduled end of 

Core Trading Hours, which provides 

updated imbalance information and 

indicative closing prices. Moreover, the 

Commission recently approved a rule 

filing to make permanent a rule change 

that Floor brokers would no longer be 

permitted to represent verbal interest 

intended for the Closing Auction, as 

defined in Rule 7.35, and require all 

Floor brokers to enter orders for the 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 20 / Monday, January 31, 2022 / Notices 4987 

38See Securities Exchange Act Release No. 92480 

(July 23, 2021), 86 FR 40885 (July 29, 2021) (SR– 

NYSE–2020–95) (Notice of Filing of Amendment 

No. 2 and Order Granting Accelerated Approval of 

Proposed Rule Change, as Modified by Amendment 

No. 2, To Make Permanent Commentaries to Rule 

7.35A and Commentaries to Rule 7.35B and To 

Make Related Changes to Rules 7.32, 7.35C, 46B, 

and 47). 

39 DMM unit algorithms, however, are not 

provided aggregated buying and selling interest for 

the Closing Auction until after the end of Core 

Trading Hours. 

40 15 U.S.C. 78f(b). 

41 15 U.S.C. 78f(b)(5). 42 15 U.S.C. 78f(b)(8). 

Closing Auction electronically during 

Core Trading Hours.38 This proposed 

change permanently eliminated one of 

the few remaining pieces of information 

available only to Floor-based DMMs. 

Moreover, since Floor broker verbal 

interest had to be entered manually by 

the DMM, this rule change also 

eliminated one of the only significant 

remaining manual trading opportunities 

for DMMs. DMMs continue to have 

benefits in connection with their unique 

role. For example, at the point of sale, 

DMMs have access to aggregated buying 

and selling interest that is eligible to 

participate in the Closing Auction.39

However, pursuant to current Rule 

104(h)(ii), a DMM may not use any 

information provided by Exchange 

systems in a manner that would violate 

Exchange rules or federal securities laws 

or regulations. In addition, pursuant to 

current Rule 104(h)(iii), Floor brokers 

may request that a DMM provide them 

with the information that is available to 

the DMM at the post, including such 

aggregated buying and selling interest 

for the Closing Auction. 

Finally, trading on the Exchange is 

subject to a comprehensive regulatory 

program that includes a suite of 

surveillances that review trading by 

DMMs and other market participants on 

the Floor, including surveillances 

designed to monitor for trading ahead 

and manipulative activity. To assist 

Exchange surveillance of DMM trading 

activity, a member organization 

operating a DMM unit must daily 

provide the Exchange with net position 

information in DMM securities by the 

DMM unit and any independent trading 

unit of which it is part for such times 

and in the manner prescribed by the 

Exchange pursuant to Rule 98(c)(5). In 

addition, routine examinations are 

conducted consistent with the current 

exam-based regulatory program 

associated with Rule 98 that reviews 

member organizations operating DMM 

units for compliance with the abovedescribed policies and procedures to 

protect against the misuse of material 

nonpublic information. Based on the 

foregoing, and because the Exchange 

believes that DMM market-making 

activity is not materially different from 

market-making on other exchanges, the 

Exchange believes that these existing 

programs are reasonably designed to 

address any concerns that may be raised 

by the trading of the specified listed 

ETPs that have underlying NYSE 

Component Securities. 

For all of the reasons stated above, the 

proposal is therefore consistent with the 

requirements of the Act. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act,40 in general, and furthers the 

objectives of Sections 6(b)(5) of the 

Act,41 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to, and perfect the 

mechanisms of, a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest and because it is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

Specifically, the Exchange believes 

that listing and trading ETPs that have 

underlying NYSE Component Securities 

and that also meet the composition and 

concentration requirements set forth in 

the listing criteria of Rules 5.2(j)(3), 

Supplementary Material .01(a); 

5.2(j)(6)(B)(I); 8.100, Supplementary 

Material .01(a)(A); and 8.600, 

Supplementary Material .01(a) as well 

as those proposed under Rule 

5.2(j)(8)(e)(1)(B), would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

facilitating the of listing and trading a 

broader range of ETPs consistent with 

the Exchange’s current structure to trade 

listed securities. The Exchange believes 

that permitting the ETPs with 

underlying NYSE Component Securities 

that meet the criteria of the specified 

listing rules (including as amended) 

would meet the type of listing criteria 

previously identified by the 

Commission as sufficiently broad-based 

and well-diversified to protect against 

potential manipulation. The Exchange 

believes that these safeguards would 

continue to serve to prevent fraudulent 

and manipulative acts and practices, as 

well as to protect investors and the 

public interest from concerns that may 

be associated with integrated market 

making and any possible misuse of nonpublic information. Accordingly, the 

Exchange believes that integrated 

market making and side-by-side trading 

in both the listed ETP and underlying 

listed NMS stock components is 

appropriate with no additional 

requirement for information barriers or 

physical or organizational separation. 

The Exchange believes that the 

proposed changes to Rule 98 to exclude 

any ETPs listed on the Exchange from 

the definition of ‘‘related products’’ 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system because it would facilitate the 

assignment of listed ETPs, which would 

include ETPs with underlying NYSE 

Component Securities that meet the 

specified listing rules in Rules 5P and 

8P, to DMMs and permit DMMs to trade 

such listed ETPs consistent with 

existing Rules governing DMM trading, 

including, for example, Rule 104. 

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 

In accordance with Section 6(b)(8) of 

the Act,42 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Instead, the 

Exchange believes that the proposed 

rule change would facilitate the listing 

of additional ETPs on the Exchange by 

allowing such securities to trade no 

differently than other securities listed 

on the Exchange, including assigning 

such securities to a DMM, which would 

enable the Exchange to further compete 

with unaffiliated exchange competitors 

that also list and trade ETPs. The 

proposed rule changes would also 

provide issuers with greater choice in 

potential listing venues for their ETP 

products to include an exchange model 

that includes a DMM assigned to their 

security and related benefits to an issuer 

as a result of the Exchange’s high-touch 

trading model. The Exchange 

accordingly believes that the proposed 

change would promote competition by 

facilitating the listing and trading of a 

broader range of ETPs on the Exchange. 


khammond on DSKJM1Z7X2PROD with NOTICES
4988 Federal Register / Vol. 87, No. 20 / Monday, January 31, 2022 / Notices 

43 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 77241 

(February 26, 2016), 81 FR 11311 (March 3, 2016) 

(SR–NYSEMKT–2016–30). 

5See ‘‘FINRA Announces Enforcement Structure, 

Senior Leadership Team,’’ July 26, 2018, available 

at https://www.finra.org/media-center/newsreleases/2018/finra-announces-enforcementstructure-senior-leadership-team. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2022–04 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–2022–04. 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 (http://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 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSE–2022–04 and should 

be submitted on or before February 22, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.43

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01851 Filed 1–28–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94048; File No. SR– 

NYSEAMER–2022–01] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change of Non-Substantive 

Conforming Changes to Rule 9120 and 

Rule 9560 

January 25, 2022. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on January 

10, 2022, NYSE American LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes nonsubstantive conforming changes to Rule 

9120 and Rule 9560. 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 

Exchange 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 nonsubstantive conforming changes to Rule 

9120 (Definitions) and Rule 9560 

(Expedited Suspension Proceeding) of 

the Exchange’s disciplinary rules. 

In 2016, the Exchange adopted rules 

relating to investigation, discipline, 

sanction, and other procedural rules 

based on the rules of its affiliate New 

York Stock Exchange LLC and the 

Financial Industry Regulatory Authority 

(‘‘FINRA’’).4 Rule 9120 defines certain 

terms used in the Exchange’s 

disciplinary rules, including 

‘‘Department of Market Regulation’’ in 

paragraph (i) and ‘‘Enforcement’’ in 

paragraph (m). The definition of 

Enforcement in Rule 9120(m) includes 

the Department of Market Regulation of 

FINRA as defined in Rule 9120(i). 

In 2018, FINRA created a unified 

enforcement function and eliminated 

the separate enforcement function in the 

Department of Market Regulation.5 In 

order to reflect FINRA’s revised 

organizational structure, the Exchange 

accordingly proposes to delete the 

definition of Department of Market 

Regulation in Rule 9120(i) and mark 

paragraph (i) ‘‘Reserved’’ in order to 

maintain the Rule’s sequencing. In 

addition, the Exchange proposes to 

delete Department of Market Regulation 


khammond on DSKJM1Z7X2PROD with NOTICES