Federal Register / Vol. 89, No. 239 / Thursday, December 12, 2024 / Notices 100567 

20See, e.g., ISE Rulebook Options 3, Section 

11(d)(3) (permissible execution prices for orders 

submitted into the solicited order mechanism 

(comparable to SAM) do not take into account 

prices of away markets); and Section 13(d) 

(permissible execution prices for orders submitted 

into the price improvement mechanism 

(comparable to AIM) do not take into account prices 

of away markets). 

21 15 U.S.C. 78s(b)(3)(A). 

22 17 CFR 240.19b–4(f)(6). 

23 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. 

or between the BBO at the conclusion of 

the Auction, thus respecting prices from 

away markets while providing an 

Agency Order with the opportunity to 

benefit from any market changes that 

occur during an auction. Additionally, 

customers will continue to never receive 

an execution at a price worse than the 

auction/stop price. 

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 

Exchange does not believe the proposed 

rule change will impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, because it 

will apply uniformly to AIM and SAM 

orders and responses of all TPHs. 

Additionally, the Exchange notes that 

participation in the AIM and SAM 

Auctions is completely voluntary. The 

Exchange believes all market 

participants may benefit from any 

additional price improvement in the 

AIM and SAM Auctions that may result 

from the proposed rule change. The 

Exchange does not believe the proposed 

rule change will impose any burden on 

intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as the 

proposed rule change relates to 

Exchange-specific auction mechanisms 

and, as noted above, will continue to 

ensure that execution prices occur in a 

manner consistent with linkage rules 

and protect customers on the book. As 

noted above, at least one other options 

exchange with similar auction 

mechanisms does not limit executions 

prices to being at or better than the 

Initial NBBO.20

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

A. significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 21 and Rule 19b–4(f)(6) 22

thereunder. 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 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CBOE–2024–052 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–CBOE–2024–052. 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 

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–CBOE–2024–052 and should be 

submitted on or before January 2, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29147 Filed 12–11–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101838; File No. SR–NYSE– 

2024–77] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

346 

December 6, 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 December 

3, 2024, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 


ddrumheller on DSK120RN23PROD with NOTICES1
100568 Federal Register / Vol. 89, No. 239 / Thursday, December 12, 2024 / Notices 

4 15 U.S.C. 78c(a)(39). 

5See FINRA Regulatory Notice 09–19 

(‘‘Amendments to FINRA Rule 9520 Series to 

Establish Procedures Applicable to Firms and 

Associated Persons Subject to Certain Statutory 

Disqualifications’’). 

6 17 CFR 240.19h–1. 

7 Id. at (a)(3). 

8The processing of new membership applications 

at the Exchange includes statutory disqualification 

disclosures and background investigations. Review, 

assessment, and processing of these membership 

applications has been conducted on behalf of the 

Exchange by FINRA pursuant to a regulatory 

services agreement. 

9See Cboe EDGX Exchange, Inc. (‘‘Cboe EDGX’’) 

Rule 2.5(a) & Interpretation and Policies .04; Cboe 

BZX Exchange, Inc. (‘‘Cboe BZX’’) Rule 2.5(a) & 

Interpretation and Policies .04; Cboe BYX 

Exchange, Inc. (‘‘Cboe BYX’’) Rule 2.5(a) & 

Interpretation and Policies .04; Cboe EDGA 

Exchange, Inc. (‘‘Cboe EDGA’’) Rule 2.5(a) & 

Interpretation and Policies .04; and BOX Options 

Exchange LLC (‘‘BOX’’) Rule 2040(a) & IM–2040–08. 

10See Securities Exchange Act Release No. 78449 

(August 1, 2016), 81 FR 51947 (August 5, 2016) 

(SR–BOX–2016–26); Securities Exchange Act 

Release No. 79229 (November 3, 2016), 81 FR 78875 

(November 9, 2016) (SR–BatsBZX–2016–67); 

Securities Exchange Act Release No. 79233 

(November 3, 2016), 81 FR 78869 (November 9, 

2016) (SR–BatsBYX–2016–28); Securities Exchange 

Act Release No. 79234 (November 3, 2016), 81 FR 

78867 (November 9, 2016) (SR–BatsEDGA–2016– 

23); Securities Exchange Act Release No. 79236 

(November 3, 2016), 81 FR 78878 (November 9, 

2016) (SR–BatsEDGX2016–59). 

11The 2016 rule filings also added some other 

conditions for eligibility for exchange membership 

such as adding a restriction that members must 

meet any condition the exchange placed on such 

member, which the Exchange believes are 

adequately addressed in other Exchange rules. See, 

e.g., Rule 301 (Qualifications for Membership); Rule 

311 (Formation and Approval of Member 

Organizations). Moreover, the Rule 9520 Series sets 

forth procedures for a covered person (defined in 

Rule 9120(g) as 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) to become or remain 

associated with a member organization 

notwithstanding the existence of a statutory 

disqualification as defined in Section 3(a)(39) of the 

Act, and for a current member organization or 

covered person to obtain relief from the eligibility 

or qualification requirements of the Exchange’s 

Rules, referred to in the Rule as ‘‘eligibility 

proceedings.’’ 

12The proposed changes mirror the language in 

the following rules: BOX Rule 2040(a) and IM– 

2040–08; Cboe BZX Rule 2.5(a) and Interpretation 

and Policies .04; Cboe BYX Rule 2.5(a) and 

Interpretation and Policies .04; Cboe EDGA Rule 

2.5(a) and Interpretation and Policies .04; and Cboe 

EDGX Rule 2.5(a) and Interpretation and Policies 

.04. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 346 to add clarity to the process for 

a broker-dealer to become or remain a 

member organization notwithstanding a 

statutory disqualification. 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 

Rule 346 to add clarity to the process to 

permit a member organization to 

become or remain a member 

organization notwithstanding a statutory 

disqualification. 

Background and Proposed Rule Filing 

Section 3(a)(39) of the Act defines the 

term ‘‘statutory disqualification’’ and 

the circumstances that can cause a 

person (either a Member, or a person 

associated with a Member) to be subject 

to a statutory disqualification.4 Absent 

relief, a statutory disqualification would 

preclude a broker-dealer or person 

associated with a broker-dealer from 

certain activities, including membership 

in a self-regulatory organization 

(‘‘SRO’’). 

There is, however, a well-established 

process through which a broker-dealer 

(or a person associated with a brokerdealer) may continue to operate in the 

securities industry (and either become a 

member of, or continue as a member of, 

one or more SROs) despite being subject 

to a statutory disqualification.5 In 

particular, SEC Rule 19h–1 6 describes 

several ways an SRO may seek relief for 

a member (or prospective member) that 

is subject to a statutory disqualification, 

including whether an SRO must file a 

notice with the Commission in order to 

allow the disqualified firm to become or 

continue as a member with the SRO (a 

‘‘19h–1 Notice’’). A 19h–1 Notice does 

not, for instance, need to be filed by an 

SRO if the firm subject to a statutory 

disqualification is a member of at least 

one other SRO, and that SRO intends to 

file a 19h–1 Notice for the firm.7

Rule 346 (Statutory Disqualification— 

Association of Member Organizations, 

and Persons Associated With Member 

Organizations) provides that, except as 

otherwise permitted by the Exchange, 

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 

him or it any person who is known, or 

in the exercise of reasonable care should 

be known, to be subject to any 

‘‘statutory disqualification’’ defined in 

Section 3(a)(39) of the Act. 

Recently, a non-member broker-dealer 

firm subject to a statutory 

disqualification that is currently under 

review by the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

applied for Exchange membership.8 In 

reviewing this application, the 

Exchange determined that this situation 

is not explicitly addressed in its rules as 

it is in the rules of other exchanges.9

Specifically, BOX, Cboe BZX, Cboe 

BYX, Cboe EDGX, and Cboe EDGA each 

amended their respective rules in 2016 

to provide more clarity as to the 

authority of each exchange to determine 

whether to admit a prospective member 

that is subject to a statutory 

disqualification.10 The 2016 rule change 

filings of these exchanges also amended 

several other aspects of their application 

procedures, but the Exchange only seeks 

to harmonize its rules insofar as they 

apply to member organizations and 

prospective member organizations (and 

associated persons of member 

organizations) that are subject to a 

statutory disqualification in order to 

address the membership application 

described herein.11

The Exchange accordingly proposes to 

align its rule with these other exchanges 

specifically with respect to the process 

of assessing an applicant for 

membership that is subject to a statutory 

disqualification.12 As discussed below, 

the Exchange is making the proposed 

rule changes and seeks waiver of the 30- 

day operative delay in order to address 

an unusual and time sensitive situation 

in which a firm subject to a statutory 

disqualification seeks to become an 

Exchange member organization during 

the pendency of the process by which 

the firm is seeking relief from the 

statutory disqualification. 

To effectuate these changes, the 

Exchange proposes to add 

Supplementary Material .01 to Rule 346 

to provide that the Exchange could 

approve an applicant for membership 

(or association with a member 

organization) that is subject to a 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 239 / Thursday, December 12, 2024 / Notices 100569 

13 15 U.S.C. 78f(b)(5). 

14See note 11, supra. 

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

16 15 U.S.C. 78f(b)(5). 

17 15 U.S.C. 78s(b)(3)(A). 

18 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. NYSE has 

satisfied this requirement. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6)(iii). 

statutory disqualification when a 

proceeding is pending before another 

SRO to determine whether to permit a 

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 to become or continue 

membership or association 

notwithstanding a statutory 

disqualification. This provision, which 

is consistent with SEC Rule 19h–1(a)(3), 

would provide as follows (additions 

italicized): 

.01 Statutory Disqualification 

Proceedings Pending Before Another 

SRO. The Exchange may waive the 

provisions of this Rule when a 

proceeding is pending 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. In the event the 

Exchange determines to waive the 

provisions of this Rule with respect to 

an existing or prospective 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, the 

Exchange shall determine whether it 

will concur in any Exchange Act Rule 

19h–1 filing made by another selfregulatory organization with respect to 

such person. 

This Supplementary Material is 

substantively identical to IM–2040–8 to 

BOX Rule 2040 and Interpretation and 

Policies .04 to Cboe BZX, BYX, EDGX, 

and EDGA Rules 2.5, except for 

language clarifying that the new 

supplementary material would apply to 

both prospective and existing member 

organizations, principal executives, 

approved persons, persons associated 

with a member organization or any 

person directly or indirectly controlling, 

controlled by or under common control 

with a member organization. 

The Exchange believes that the 

proposed rule change would 

appropriately align its rules with the 

Commission’s rules regarding statutory 

disqualifications and harmonize the 

Exchange’s process with several other 

SROs. The Exchange notes that in 

assessing the statutory disqualification 

of a member organization or prospective 

member organization, it must act 

consistent with the protection of 

investors and in the public interest and 

cannot unfairly discriminate against 

existing or prospective member 

organizations.13 Moreover, as noted 

above, a current member organization or 

covered person can seek relief from the 

Exchange’s eligibility or qualification 

requirements pursuant to the Rule 9520 

Series.14 In addition, any prospective 

member organization that has been 

denied membership in the Exchange or 

barred from becoming associated with a 

member organization is entitled to 

certain due process pursuant to the Rule 

308 (Acceptability Proceedings), which 

includes, but is not limited to, potential 

review by the Commission. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the Act 15

in general, and furthers the objectives of 

Section 6(b)(5),16 in particular, because 

it is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

The Exchange believes that the 

proposed rule change would better align 

the Exchange’s rules with the 

Commission’s rules regarding statutory 

disqualifications and enable a consistent 

process across the Exchange and several 

other SROs to make appropriate filings 

with respect to persons subject to a 

statutory disqualification, thereby 

protecting investors and the public 

interest by providing more clarity and 

consistency with respect to the process 

of seeking relief from a statutory 

disqualification and in general enabling 

the Exchange to more efficiently 

administer membership applications 

involving statutory disqualifications. 

The Exchange further believes that the 

proposed change would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest, and add clarity, transparency 

and consistency to the Exchange’s 

disciplinary rules. The Exchange 

believes that market participants would 

benefit from the increased 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 aligning the 

Exchange’s rules with those of other 

exchanges and with the Commission’s 

approach to handling firms that are 

subject to statutory disqualification. 

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 

Because the foregoing 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 for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 17 and Rule 19b– 

4(f)(6) thereunder.18

A proposed rule change filed under 

Rule 19b–4(f)(6) 19 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),20 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. 

NYSE has asked the Commission to 

waive the 30-day operative delay so that 

the proposed rule change may become 

operative upon filing. NYSE states that 

waiving the 30-day delay in this manner 

would allow the Exchange to address an 

unusual and time sensitive situation in 

which a firm subject to a statutory 

disqualification seeks to become an 

Exchange member organization during 

the pendency of the process by which 

the firm is seeking relief from the 


ddrumheller on DSK120RN23PROD with NOTICES1
100570 Federal Register / Vol. 89, No. 239 / Thursday, December 12, 2024 / Notices 

21 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. 

4 15 U.S.C. 78c(a)(39). 

5See FINRA Regulatory Notice 09–19 

(‘‘Amendments to FINRA Rule 9520 Series to 

Establish Procedures Applicable to Firms and 

Associated Persons Subject to Certain Statutory 

Disqualifications’’). 

6 17 CFR 240.19h–1. 

statutory disqualification. For this 

reason, the Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Therefore, the Commission hereby 

waives the operative delay and 

designates the proposal operative upon 

filing. 

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 shall institute proceedings 

to determine whether the proposed rule 

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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSE–2024–77 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–2024–77. 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 

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–2024–77 and should be 

submitted on or before January 2, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29150 Filed 12–11–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101833; File No. SR– 

NYSENAT–2024–32] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 2.4(a) 

December 6, 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 December 

3, 2024, NYSE National, Inc. (‘‘NYSE 

National’’ 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 substantially 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 

Rule 2.4(a) to add clarity to the process 

for a broker-dealer to become an ETP 

Holder or remain an ETP Holder on the 

Exchange notwithstanding the existence 

of a statutory disqualification. 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 

Rule 2.4(a) to add clarity to the process 

for a broker-dealer to become an ETP 

Holder or remain an ETP Holder on the 

Exchange notwithstanding the existence 

of a statutory disqualification. 

Background and Proposed Rule Filing 

Section 3(a)(39) of the Act defines the 

term ‘‘statutory disqualification’’ and 

the circumstances that can cause a 

person (either a Member, or a person 

associated with a Member) to be subject 

to a statutory disqualification.4 Absent 

relief, a statutory disqualification would 

preclude a broker-dealer or person 

associated with a broker-dealer from 

certain activities, including membership 

in a self-regulatory organization 

(‘‘SRO’’). 

There is, however, a well-established 

process through which a broker-dealer 

(or a person associated with a brokerdealer) may continue to operate in the 

securities industry (and either become a 

member of, or continue as a member of, 

one or more SROs) despite being subject 

to a statutory disqualification.5 In 

particular, SEC Rule 19h–1 6 describes 

several ways an SRO may seek relief for 

a member (or prospective member) that 

is subject to a statutory disqualification, 

including whether an SRO must file a 

notice with the Commission in order to 

allow the disqualified firm to become or 

continue as a member with the SRO (a 

‘‘19h–1 Notice’’). A 19h–1 Notice does 


ddrumheller on DSK120RN23PROD with NOTICES1