33542 Federal Register / Vol. 87, No. 106 / Thursday, June 2, 2022 / Notices 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

57 15 U.S.C. 78s(b)(2). 

58 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 SR–NYSECHX–2022–10. 

5 In 2013, the Commission approved the New 

York Stock Exchange LLC’s (‘‘NYSE’’) adoption of 

FINRA’s disciplinary rules. See Securities Exchange 

Act Release No. 69045 (March 5, 2013), 78 FR 

15394 (March 11, 2013) (SR–NYSE–2013–02). In 

2016, NYSE American LLC (‘‘NYSE American’’) 

adopted its Rule 8000 and Rule 9000 Series based 

on the NYSE and FINRA Rule 8000 and Rule 9000 

Series. See Securities Exchange Act Release Nos. 

77241 (February 26, 2016), 81 FR 11311 (March 3, 

2016) (SR–NYSEMKT–2016–30). In 2018, the 

Commission approved NYSE National, Inc.’s 

(‘‘NYSE National’’) adoption of the NYSE National 

Rule 10.8000 and Rule 10.9000 Series based on the 

NYSE American and FINRA Rule 8000 and Rule 

9000 Series. See Securities Exchange Act Release 

No. 83289 (May 17, 2018), 83 FR 23968 (May 23, 

2018) (SR–NYSENat–2018–02). In 2019, NYSE 

Arca, Inc. (‘‘NYSE Arca’’) adopted the NYSE Arca 

Rule 10.8000 and 10.9000 Series based on the NYSE 

American Rule 8000 and Rule 9000 Series. See 

Securities Exchange Act Release No. 85639 (April 

12, 2019), 84 FR 16346 (April 18, 2019) (SR– 

NYSEArca–2019–15). 

6See note 4, supra. 

7The Exchange adopted its current MRVP in 

1996. See Securities Exchange Act Release No. 

37255 (May 30, 1996), 61 FR 28918 (June 6, 1996) 

(SR–CHX–95–25) (Order). The original procedure 

authorizing the Exchange, in lieu of commencing 

disciplinary proceeding, to impose a fine, not to 

exceed $2,500, on any member, member 

organization, associated person or registered or 

nonregistered employee of a member or member 

organization for any violation of an Exchange rule 

which the Exchange determines to be minor in 

nature was contained in as Article 12, Rule 9, now 

Article 12, Rule 8. The recommended dollar 

amounts for the first, second, third and subsequent 

violations, as calculated on a twelve-month rolling 

basis, of a rule designated as a minor rule violation 

was contained in a separate Recommended Fine 

Schedule in the Fee Schedule. See id., 61 FR at 

28918–19 & n. 10. 

In 2011, the Exchange increased the maximum 

fine pursuant to the MRVP from $2,500 to $5,000 

and also increased the recommended fines from 

$100/$500/$1,000 for 1st, 2nd and 3rd tier fines, 

respectively, to $250/$750/$1,500. The Exchange 

also recommended fines of $500/$1,000/$2,500 for 

other, more serious trading rule violations (i.e., ones 

involving the potential for customer harm), as well 

as violations of the obligation to establish, maintain 

and enforce written supervisory procedures, and to 

provide information to the Exchange in connection 

with regulatory inquiries or other matters. 

Recommended fines of $1,000/$2,500/$5,000 were 

reserved for Trading Ahead violations. The 

Exchange also expanded the rolling time period in 

which violations would result in escalation to the 

next highest tier from 12 to 24 months. See 

Securities Exchange Act Release No. 64370 (April 

29, 2011), 76 FR 25727, 25727 (May 5, 2011) (SR– 

CHX–2011–07) (Notice); Securities Exchange Act 

Release 64686 (June 16, 2011), 76 FR 36596 (June 

22, 2011) (SR–CHX–2011–07) (Order). See also text 

accompanying note 20, infra. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,57

that the Proposed Rule Change (SR– 

OCC–2022–002) be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.58

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11784 Filed 6–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94987; File No. SR– 

NYSECHX–2022–08] 

Self-Regulatory Organizations; NYSE 

Chicago, Inc.; Notice of Filing and 

Order Granting Accelerated Approval 

of a Proposed Rule Change To Adopt 

Rules 10.9216(b) and 10.9217 in 

Connection With a Companion Filing 

To Adopt Investigation, Disciplinary, 

Sanction, and Other Procedural Rules 

Modeled on the Rules of Its Affiliates 

May 26, 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 May 13, 

2022, the NYSE Chicago, Inc. (‘‘NYSE 

Chicago’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons and 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes, in 

connection with a companion filing to 

adopt investigation, disciplinary, 

sanction, and other procedural rules 

modeled on the rules of its affiliates, to 

(1) adopt new Rules 10.9216(b) and 

10.9217 governing minor rule violations 

and fines; (2) add additional rules to the 

Exchange’s list of current minor rule 

violations that would be transposed to 

proposed Rule 10.9217; and (3) move 

the Recommended Fine Schedule for 

minor rule violations from the Fee 

Schedule to proposed Rule 10.9217 and 

make certain amendments and 

corrections. The proposed 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 III 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 

In connection with a companion filing 

to adopt investigation, disciplinary, 

sanction, and other procedural rules 

modeled on the rules of its affiliates,4

the Exchange proposes to (1) adopt new 

Rules 10.9216(b) and 10.9217 governing 

minor rule violations and fines; (2) add 

additional rules to the Exchange’s list of 

current minor rule violations that would 

be transposed to proposed Rule 10.9217; 

and (3) move the Recommended Fine 

Schedule for minor rule violations from 

the Fee Schedule to proposed Rule 

10.9217and make certain amendments 

and corrections. 

Background 

Beginning in 2013, each of the 

Exchange’s affiliates have adopted rules 

relating to investigation, discipline, 

sanction, and other procedural rules 

based on the rules of the Financial 

Industry Regulatory Authority 

(‘‘FINRA’’).5 To facilitate rule 

harmonization among the Exchange’s 

affiliates, the Exchange has separately 

proposed the NYSE Chicago Rule 

10.8000 and 10.9000 Series based on the 

text of the NYSE Arca Rule 10.8000 and 

Rule 10.9000 Series, with certain 

changes, as described in its companion 

filing. In connection with adoption of 

the proposed NYSE Chicago Rule 

10.8000 and 10.9000 Series,6 the 

Exchange proposes to adopt NYSE Arca 

rules related to issuance of minor rule 

fines that would replace the Exchanges 

current Article 12, Rule 8 which sets 

forth the Exchange’s Minor Rules 

Violation Plan (‘‘MRVP’’).7

Under current Article 12, Rule 8, in 

lieu of commencing a ‘‘disciplinary 

proceeding’’ as that term is used in 

Article 12 of the Exchange Rules, the 

Exchange may, subject to the 

requirements set forth in this Rule, 

impose a censure or fine, not to exceed 


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8Proposed Rule 10.9217 would retain the 

Exchange’s maximum $5,000 fine for minor rule 

violations under current Article 12, Rule 8. While 

proposed Rule 10.9217 would allow the Exchange 

to administer fines up to $5,000, the Exchange is 

only seeking relief from the reporting requirements 

of paragraph (c)(1) of Rule 19d–1 for fines 

administered under proposed Rule 10.9217 that do 

not exceed $2,500. 

9As set forth in Article 12, Rule 8(f), the 

Exchange is not required to impose a censure or 

fine with respect to the violation of any rule or 

policy included in any such listing and the 

Exchange shall be free, whenever it determines that 

any violation is not minor in nature, to proceed 

under other provisions of Article 12 rather than 

under Article 12, Rule 8. 

10Proposed subsection (a) would establish the 

procedures by which a Participant, Participant Firm 

or covered person, prior to the issuance of a 

complaint, could execute a letter of acceptance, 

waiver, and consent accepting a finding of 

violation, consenting to the imposition of sanctions 

and waiving the right to a hearing or appeal. 

Proposed Rule 10.9216(a) would be adopted as part 

of the Exchange’s companion filing. See note 4, 

supra. 

11Proposed Rule 10.9211 (Authorization of 

Complaint) would be adopted as part of the 

Exchange’s companion filing and would permit 

Enforcement to request the authorization from the 

Chief Regulatory Officer (‘‘CRO’’) to issue a 

complaint against any Participant, Participant Firm 

and covered persons of a Participant or Participant 

Firm, thereby commencing a disciplinary 

proceeding. 

$5,000,8 on any Participant, Associated 

Person, or registered or non-registered 

employee of a Participant, for any 

violation of a rule of the Exchange, 

which violation the Exchange shall have 

determined is minor in nature.9 For 

failures to comply with the 

Consolidated Audit Trail Compliance 

Rule requirements of the Rule 6.6800 

Series, the Exchange may impose a 

minor rule violation fine of up to 

$2,500. For more serious violations, 

other disciplinary action may be sought. 

Any censure or fine imposed pursuant 

to Article 12, Rule 8 and not contested 

shall not be publicly reported, except as 

may be required by Rule 19d–1 under 

the Exchange Act, and as may be 

required by any other regulatory 

authority. Any censure or fine that is 

contested may be publicly reported to 

the same extent that Exchange 

disciplinary proceedings may be 

publicly reported. Any fine imposed 

pursuant to Article 12, Rule 8 that (1) 

does not exceed $2,500 and (2) is not 

contested, shall be reported by the 

Exchange to the Securities and 

Exchange Commission (the 

‘‘Commission’’) on a periodic, rather 

than a current, basis, except as may 

otherwise be required by Exchange Act 

Rule 19d–1 and by any other regulatory 

authority. Under Article 12, Rule 8(b), 

the Chief Enforcement Counsel or Chief 

Regulatory Officer (‘‘CRO’’) have the 

authority to impose a fine pursuant to 

the rule. 

Under Article 12, Rule 8(c), in any 

action taken by the Exchange pursuant 

to the rule, the person against whom a 

censure or fine is imposed shall be 

served as provided in Article 12, Rule 

1(c) with a written statement, signed by 

an Exchange officer setting forth (1) the 

rule(s) or policy(ies) alleged to have 

been violated; (2) the act or omission 

constituting each violation; (3) the 

sanctions imposed for each violation; (4) 

the date on which such action is taken; 

and (5) the date on which such 

determination becomes final and such 

fine, if any, becomes due and payable to 

the Exchange, or on which such action 

must be contested as provided in 

paragraph (e) of Article 12, Rule 8, such 

date to be not less than 15 days after the 

date of service of the written statement. 

Pursuant to Article 12, Rule 8(d), if the 

person fined pursuant to the rule pays 

the fine, such payment is deemed a 

waiver of any right to a disciplinary 

proceeding under Article 12 and any 

right to review or appeal. Commentary 

.01 to Article 12, Rule 8 provides that, 

with respect to subsection (d), a failure 

to pay a fine imposed Article 12, Rule 

8 by the time it is due, without timely 

contesting the action upon which such 

fine was based pursuant to Article 12, 

Rule 8(e), shall be deemed a waiver by 

the person against whom the fine is 

imposed of such person’s right to a 

disciplinary proceeding under Article 

12 and any right to review or appeal. 

Under Article 12, Rule 8(e), any 

person censured or fined pursuant to 

the rule may contest such censure or 

fine by filing with the Secretary a 

written response meeting the 

requirements of an Answer as provided 

in Article 12, Rule 4(b) no later than the 

date by which such determination must 

be contested. The Secretary may deny 

the answer if such answer is untimely 

or the answer fails to meet the standards 

of Article 12, Rule 4(b). If the Secretary 

denies the answer without leave to 

amend and refile, the sanction imposed 

by the Exchange pursuant to Article 12, 

Rule 8(b) shall become final and the 

censure shall be imposed and/or fine 

become due and payable. Unless denied 

by the Secretary, an answer filed by 

respondent is deemed accepted, at 

which point the matter shall become a 

‘‘Disciplinary Proceeding’’ subject to the 

provisions of Article 12 applicable to 

disciplinary proceedings. 

Pursuant to Article 12, Rule 8(f), the 

Exchange must prepare and announce to 

its Participants from time to time a 

listing of the Exchange rules and 

policies as to which the Exchange may 

impose censures or fines as provided in 

this Rule that must also indicate the 

specific or recommended dollar amount 

that may be imposed as a fine hereunder 

with respect to any violation of such 

rule or policy, or may indicate the 

minimum and maximum dollar amount 

that may be imposed by the Exchange 

with respect to any such violation. In 

applying the current Recommended 

Fine Schedule set forth in the Fee 

Schedule, the Exchange considers a 

violation as having occurred at the time 

that the underlying conduct of the 

Participant occurred. Nothing in Article 

12, Rule 8 requires the Exchange to 

impose a censure or fine pursuant to the 

Rule with respect to the violation of any 

rule or policy included in any such 

listing and the Exchange shall be free, 

whenever it determines that any 

violation is not minor in nature, to 

proceed under other provisions of 

Article 12 rather than under Rule 8. 

Under Article 12, Rule 8(g), any fine 

assessed under Rule 8 cannot be 

deemed to satisfy any damages or 

liability incurred from the violation. 

Article 12, Rule 8(h) sets forth the 

Exchange rules and policies that are 

subject to the MRVP. 

Proposed Rule Change 

The Exchange proposes to adopt new 

Rules 10.9216(b) and 10.9217 based on 

NYSE Arca Rules 10.9216(b) and 

10.9217. The Exchange would retain the 

text of the Exchange’s currently 

applicable list of minor rule violations 

in proposed Rule 10.9217 and make 

certain corrections and additions, as 

described below. In addition, the 

Exchange would move the 

Recommended Fine Schedule for minor 

rule violations from the Fee Schedule to 

proposed Rule 10.9217 and make 

certain amendments and corrections. 

The Exchange proposes to add Rules 

10.9216(b) and 10.9217 to Rule 10 

governing disciplinary proceedings, 

other hearings and appeals that will 

house the proposed Rule 10.8000 and 

10.9000 Series based on the text of the 

NYSE Arca Rule 10.8000 and Rule 

10.9000 Series that is the subject of the 

Exchange’s companion immediately 

effective filing. 

Proposed Rule 10.9216(b) 

Subsection (b) of proposed Rule 

10.9216 (Acceptance, Waiver, and 

Consent; Procedure for Imposition of 

Fines for Minor Violation(s) of Rules) 

would set forth the procedure for the 

imposition of fine for minor rule 

violations under the Exchange’s new 

disciplinary rules based on NYSE Arca 

Rule 10.9216(b).10 Proposed Rule 

10.9216(b)(1) would provide that, 

notwithstanding Rule 10.9211,11 the 

Exchange may, subject to the 


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12The term ‘‘Participant’’ is defined in Article 1, 

Rule 1(s) to mean, among other things, any 

Participant Firm that holds a valid Trading Permit 

and that a Participant shall be considered a 

‘‘member’’ of the Exchange for purposes of the Act. 

If a Participant is not a natural person, the 

Participant may also be referred to as a Participant 

Firm, but unless the context requires otherwise, the 

term Participant shall refer to an individual 

Participant and/or a Participant Firm. For the 

avoidance of doubt, this rule filing and the 

proposed disciplinary rules will use the phrase 

Participant and/or Participant Firm. 

13 ‘‘Covered person’’ would be defined in 

proposed Rule 10.9120(g) in the companion filing 

as an Associated Person as defined in Article 1, 

Rule 1(d) and any other person subject to the 

jurisdiction of the Exchange. 

14 ‘‘Hearing Panel’’ and ‘‘Extended Hearing 

Panel’’ would be defined in proposed Rule 

10.9120(s) and (p), respectively, in the companion 

filing. The term ‘‘Hearing Panel’’ would mean an 

Adjudicator that is constituted under proposed Rule 

10.9231 to conduct a disciplinary proceeding 

governed by the proposed Rule 10.9200 Series, that 

is constituted under the proposed Rule 10.9520 

Series or the proposed Rule 10.9550 Series to 

conduct a proceeding, or that is constituted under 

the Rule 10.9800 Series to conduct a temporary 

cease and desist proceeding. The term ‘‘Extended 

Hearing Panel’’ would mean an Adjudicator that is 

constituted under proposed Rule 10.9231(c) to 

conduct a disciplinary proceeding that is classified 

as an ‘‘Extended Hearing’’ and is governed by the 

proposed Rule 10.9200 Series. 

15 ‘‘Regulatory Staff’’ would be defined in 

proposed Rule 10.9120(x) in the companion filing 

as (1) any officer or employee reporting, directly or 

indirectly, to the CRO of the Exchange; and (2) 

FINRA staff acting on behalf of the Exchange in 

connection with the proposed Rule 10.8000 Series 

and Rule 10.9000 Series. 

16Rule 10.9143 (Ex Parte Communications) 

would prohibit certain ex parte communications. 

Proposed 10.9144 (Separation of Functions) would 

establish separation of functions and provide for 

waivers. 17See note 8, supra. 

requirements set forth in paragraphs 

(b)(2) through (b)(4), impose a fine in 

accordance with the fine amounts and 

fine levels set forth in proposed Rule 

10.9217 and/or a censure on any 

Participant,12 Participant Firm or 

covered person 13 with respect to any 

rule listed in Rule 10.9217. If 

Enforcement has reason to believe a 

violation has occurred and if the 

Participant, Participant Firm or covered 

person does not dispute the violation, 

Enforcement may prepare and request 

that the Participant, Participant Firm or 

covered person execute a minor rule 

violation letter accepting a finding of 

violation, consenting to the imposition 

of sanctions, and agreeing to waive such 

Participant’s, Participant Firm’s or 

covered person’s right to a hearing 

before a Hearing Panel or, if applicable, 

an Extended Hearing Panel,14 and any 

right of review by the Exchange Board 

of Directors (‘‘Board’’), the Commission, 

and the courts, or to otherwise challenge 

the validity of the letter, if the letter is 

accepted. The letter would describe the 

act or practice engaged in or omitted, 

the rule, regulation, or statutory 

provision violated, and the sanction or 

sanctions to be imposed. Unless the 

letter states otherwise, the effective date 

of any sanction(s) imposed would be a 

date to be determined by Regulatory 

Staff.15

Proposed Rule 10.9216(b)(2)(A)(i) 

would provide that if a Participant, 

Participant Firm or covered person 

submits an executed minor rule 

violation letter, the submission of such 

a letter by the Participant, Participant 

Firm or covered person also waives any 

right to claim bias or prejudgment of the 

CRO, the Board, Counsel to the Board, 

or any Director, in connection with such 

person’s or body’s participation in 

discussions regarding the terms and 

conditions of the minor rule violation 

letter or other consideration of the 

minor rule violation letter, including 

acceptance or rejection of such minor 

rule violation letter. 

Proposed Rule 10.9216(b)(2)(A)(ii) 

would provide that if a Participant, 

Participant Firm or covered person 

submits an executed minor rule 

violation letter, by the submission such 

Participant, Participant Firm or covered 

person also waives any right to claim 

that a person violated the ex parte 

prohibitions of proposed Rule 10.9143 

or the separation of functions 

prohibitions of proposed Rule 10.9144, 

in connection with such person’s or 

body’s participation in discussions 

regarding the terms and conditions of 

the minor rule violation letter or other 

consideration of the minor rule 

violation letter, including acceptance or 

rejection of such minor rule violation 

letter.16

Proposed Rule 10.9216(b)(2)(B) would 

provide that if a minor rule violation 

letter is rejected, the Participant, 

Participant Firm or covered person 

would be bound by the waivers made 

under proposed paragraphs (b)(1) and 

(b)(2)(A) for conduct by persons or 

bodies occurring during the period 

beginning on the date the minor rule 

violation letter was executed and 

submitted and ending upon the 

rejection of the minor rule violation 

letter. 

Proposed Rule 10.9216(b)(3) would 

provide that if the Participant, 

Participant Firm or covered person 

executes the minor rule violation letter, 

it would be submitted to the CRO. The 

CRO, on behalf of the SRO Board, may 

accept or reject such letter. 

Proposed Rule 10.9216(b)(4) would 

provide that if the letter is accepted by 

the CRO, it would be deemed final and 

that any fine imposed pursuant to the 

proposed Rule and not contested would 

not be publicly reported, except as may 

be required by Rule 19d–61 under the 

Act, and as may be required by any 

other regulatory authority. 

Proposed Rule 10.9216(b)(4) would 

further provide that if the letter is 

rejected by the CRO, the Exchange may 

take any other appropriate disciplinary 

action with respect to the alleged 

violation or violations. Subsection (b)(4) 

would also provide that if the letter is 

rejected, the Participant, Participant 

Firm or covered person would not be 

prejudiced by the execution of the 

minor rule violation letter under 

proposed paragraph (b)(1) and that the 

letter may not be introduced into 

evidence in connection with the 

determination of the issues set forth in 

any complaint or in any other 

proceeding. 

As noted above, proposed Rule 

10.9216(b) is substantially the same as 

NYSE Arca Rule 10.9216(b). 

Proposed Rule 10.9217 

The Exchange also proposes to adopt 

Rule 10.9217 based on NYSE Arca Rule 

10.9217, which would be titled 

‘‘Violations Appropriate for Disposition 

Under Rule 10.9216(b)’’. 

Proposed Rule 10.9217(a) would 

provide that any Participant, Participant 

Firm or covered person may be subject 

to a fine, not to exceed $5,000,17 under 

Rule 10.9216(b) with respect to any 

rules listed below and that the fine 

amounts and fine levels set forth below 

would apply to the fines imposed. 

Proposed Rule 10.9217(b) would 

provide that Regulatory Staff designated 

by the Exchange would have the 

authority to impose a fine pursuant to 

the proposed Rule. 

Proposed Rule 10.9217(c) would 

provide that any person or organization 

found in violation of a minor rule would 

not be required to report such violation 

on SEC Form BD or Form U–4 if the 

sanction imposed consists of a fine not 

exceeding $2,500 and the sanctioned 

person or organization has not sought an 

adjudication, including a hearing, or 

otherwise exhausted the administrative 

remedies available with respect to the 

matter. Subsection (c) would further 

provide that any fine imposed in excess 

of $2,500 would be subject to current 

rather than quarterly reporting to the 

Commission pursuant to Rule 19d–1 

under the Act. 

Proposed Rule 10.9217(d) would 

provide that nothing in the proposed 

Rule would require the Exchange to 

impose a fine for a violation of any rule 

under this Minor Rule Plan and that if 

the Exchange determines that any 

violation is not minor in nature, the 


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18See, e.g., NYSE National Rules 2.2(c) 

(Obligations of ETP Holders and the Exchange) and 

10.9217(f). The entirety of NYSE National Rule 2.2 

is eligible for minor rule treatment; registration of 

principals under NYSE Nationals’ rules is governed 

by subsection (c). 

19See NYSE Arca Rule 11.18(a) (Supervision) and 

10.9217(g)(8). 

20See NYSE Arca Rule 11.18(b)(2) & (4) 

(Supervision) and 10.9217(g)(8). 

21See Securities Exchange Act Release No. 64370 

(April 29, 2011), 76 FR 25727, 25727 (May 5, 2011) 

(SR–CHX–2011–07) (Notice); Securities Exchange 

Act Release 64686 (June 16, 2011), 76 FR 36596 

(June 22, 2011) (SR–CHX–2011–07) (Order). See 

generally note 7, supra. 

22See Securities Exchange Act Release No. 70597 

(October 2, 2013), 78 FR 62728, 62732 (October 22, 

2013) (SR–CHX–2013–14) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change). 

23See NYSE Arca Rule 11.18(c) (Supervision) and 

10.9217(g)(8). 

24 Immediately before the new sub-heading, the 

Exchange would include the following text based 

on NYSE Arca Rule 10.9217: ‘‘These fines are 

intended to apply to minor violations. For more 

serious violations, other disciplinary action may be 

sought.’’ 

Exchange may, at its discretion, proceed 

under the proposed Rule 10.9000 Series 

rather than under proposed Rule 

10.9217. 

The next section would be titled ‘‘List 

of Rule Violations and Fines Applicable 

Thereto’’ and would provide that any 

Participant, Participant Firm or covered 

person may be subject to a fine under 

proposed Rule 10.9216(b) with respect 

to any rules listed below. 

Proposed Rule 10.9217(e) would be 

titled ‘‘Exchange Rules and Policies 

subject to a Minor Rule Violation’’ and 

would set forth the list of rules under 

which a Participant, Participant Firm or 

covered person may be subject to a fine 

under a minor rule violation letter as 

described in proposed Rule 10.9216(b). 

The Exchange would retain the list of 

rules currently set forth in Article 12, 

Rule 8(h) under the existing headings 

for ‘‘Reporting and Record Retention 

Violations’’ and ‘‘Minor Trading Rule 

Violations’’ with the following additions 

and changes. 

First, the Exchange would add 

subsection (b) of Article 6, Rule 2 

(Registration and Approval of 

Participant Personnel) to proposed Rule 

10.9217(e)(13). 

Article 6, Rule 2 currently sets forth 

certain employee registration, approval 

and other exchange requirements. 

Specifically, Article 6, Rule 2(a) governs 

registration of representatives, as 

defined in Article 6, Rule 14(b)(1), with 

the Exchange and is currently eligible 

for a minor rule fine under Article 12, 

Rule 8(h). Article 6, Rule 2(b) provides 

for the registration of principals, as 

defined in Article 6, Rule 14(a)(1). The 

Exchange proposes that the registration 

requirements of principals set forth in 

Article 6, Rule 2(b) be eligible for a 

minor rule fine. The proposed change 

would be consistent with the practice 

on the Exchange’s affiliates whose 

comparable rule requiring the 

registration of principals is eligible for 

a minor rule fine.18

Second, the Exchange would add 

subsections (a) and (b) of Article 6, Rule 

5 (Supervision of Representatives and 

Branch and Resident Offices) to 

proposed Rule 10.9217(e)(14). As 

discussed below, the Exchange’s current 

minor rule incorrectly references Article 

6, Rule 5(b) for violations relating to 

written supervisory procedures. The 

correct reference should be to Article 6, 

Rule 5(c), which the Exchange proposes 

to retain as proposed Rule 

10.9217(e)(15). 

Article 6, Rule 5(a) (Adherence to 

Law) provides that no Participant shall 

engage in conduct in violation of the 

Act, as amended, rules or regulations 

thereunder, the Bylaws or the Rules of 

the Exchange, or any written 

interpretation thereof and that every 

Participant is responsible for reasonably 

supervising its associated persons to 

prevent such violations. The 

requirement to reasonably supervise 

individuals to ensure compliance with 

applicable laws, rules and regulations, 

is currently eligible for minor rule fines 

in the rules of the Exchange’s affiliate 

NYSE Arca.19

Article 6, Rule 5(b) (Designation of 

persons with supervisory authority) 

provides that each Participant Firm 

must designate a principal executive 

officer, general partner or managing 

partner to hold overall authority and 

responsibility for the firm’s internal 

supervision and compliance with 

securities laws and regulations. This 

designated supervisor may formally 

delegate his or her supervisory duties 

and authority to other persons within 

the firm. The Rule further provides that 

Participants must maintain, for a period 

of not less than six years (the first two 

years in an easily accessible place), 

records of the names of all persons who 

are designated as supervisory personnel 

and the dates for which those 

designations are effective. In the 

absence of such designation by a 

Participant Firm, the Firm’s General 

Partner(s), President, Chief Executive 

Officer or other principal executive 

officer shall be deemed to be 

responsible for a Firm’s internal 

supervision and compliance function. In 

addition, each Participant Firm shall 

designate and specifically identify to the 

Exchange on Schedule A of Form BD 

one or more principals to serve as a 

Chief Compliance Officer. The 

requirement in Article 6, Rule 5(b) to 

designate and specifically identify 

persons with supervisory responsibility 

is currently eligible for minor rule fines 

in the rules of the Exchange’s affiliate 

NYSE Arca.20 The Exchange 

accordingly proposes to permit minor 

rule fines for violations of Article 6, 

Rule 5(b). 

As noted, Article 12, Rule 8(h)(1)(N) 

of the Exchange’s current minor rule 

plan makes failure to establish, maintain 

and enforce written supervisory 

procedures under Article 6, Rule 5(b) 

eligible for a minor rule fine. However, 

as described above Article 6, Rule 5(b) 

relates to the designation of persons 

with supervisory authority and not 

written supervisory procedures, which 

is governed by Article 6, Rule 5(c). In 

2011, Article 12, Rule 8 was amended 

to include, among other things, new 

reporting and recordkeeping provisions, 

which included ‘‘written supervisory 

procedures (Article 6, Rule 5(b)).’’ 21 At 

the time, Article 6, Rule 5(b) was titled 

‘‘Written supervisory procedures’’ and 

contained the text of current subsection 

(c). In 2013, the Exchange filed to 

amend Article 6, Rule 5. As part of that 

filing, subsection (a), which was titled 

‘‘Designation of persons with 

supervisory authority,’’ became new 

subsection (b), and old subsection (b), 

which was titled ‘‘Written supervisory 

procedures,’’ became current subsection 

(c).22 The Exchange did not, however, 

update Article 12, Rule 8 to reflect that 

Article 6, Rule 5(b) had become Article 

6, Rule 5(c). The Exchange proposes to 

make that correction in the text of 

proposed Rule 10.9217(e)(15). The 

Exchange notes that the requirement to 

establish, maintain and enforce written 

procedures is also currently eligible for 

minor rule fines in the rules of the 

Exchange’s affiliate NYSE Arca.23

Finally, the Exchange proposes a new 

subsection (f) titled ‘‘Recommended 

Fine Schedule’’ that would reproduce 

the current Recommended Fine 

Schedule from the Fee Schedule with 

the following changes and corrections. 

The Recommended Fine Schedule in 

the Fee Schedule would be deleted: 

• The Exchange would add a new 

sub-heading titled ‘‘Reporting and 

Record Retention Violations’’ 24 that 

would set forth the corresponding fines 

for first, second and third and 

subsequent violations for the rules set 

forth under the heading ‘‘Reporting and 

Record Retention Violations’’ in 

proposed Rule 10.9217(e). 

• The first 12 entries as well as 

entries 16 through 23 would be 

reproduced without change from the 


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33546 Federal Register / Vol. 87, No. 106 / Thursday, June 2, 2022 / Notices 

25 In 2020, the Exchange added the Consolidated 

Audit Trail (‘‘CAT’’) industry member compliance 

rules to the list of minor rule violations in Article 

12, Rule 8 and the corresponding fine up to $2,500. 

At the time, the Exchange inadvertently did not 

amend the Recommended Fine Schedule in the Fee 

Schedule. See Securities Exchange Act Release No. 

89410 (July 28, 2020), 85 FR 46741 (August 3, 2020) 

(SR–CHX–2020–21). 

26See Securities Exchange Act Release No. 87264 

(October 9, 2019), 84 FR 55345, 55349 (October 16, 

2019) (SR–CHX–2019–08). 

27See id. 

28See NYSE Arca Rule 7.16–E (Short Sales) & 

10.9217(i)(1)1. 

29See Securities Exchange Act Release No. 87264 

(October 9, 2019), 84 FR 55345, 55349 (October 16, 

2019) (SR–CHX–2019–08). 

30See NYSE Arca Rule 7.30–E (Authorized 

Traders) & 10.9217(i)(1)5. 

31See note 8, supra. 

32See proposed Rule 10.9216(b)(4). 33 15 U.S.C. 78f(b). 34 15 U.S.C. 78f(b)(5). 35See NYSE Arca Rule 10.9216(b), NYSE Rule 

9216(b), & NYSE American Rule 9216(b). See also 

generally FINRA Rule 9216(b). 

current Recommended Fine Schedule in 

the Fee Schedule. 

• Item 13 would be ‘‘Registration and 

Approval of Participant Personnel 

(Article 6, Rule 2(a) & (b))’’. The 

proposed first, second and third level 

fines for violations of Article 6, Rule 

2(b) of $250 for the first violation, $750 

for the second violation and $1,500 for 

the third and subsequent violations 

would be the same as those in the 

Exchange’s current Recommended Fine 

Schedule in the Fee Schedule for 

violations of Article 6, Rule 2(a). 

• Items 14 and 15—‘‘Failure to 

Comply with Supervision Requirements 

(Article 6, Rule 5(a) & (b))’’ and ‘‘Written 

Supervisory Procedures (Article 6, Rule 

5(c)),’’ respectively—would be added to 

proposed Rule 10.9271(f) consistent 

with the changes to proposed Rule 

10.9217(e)(14) and (15) described above. 

The proposed first, second and third 

level fines for violations of Article 6, 

Rule 5(a) and (b) in proposed Rule 

10.9217(e)(14) and Article 6, Rule 5(c) 

in proposed Rule 10.9217(e)(15) would 

be $500 for the first violation, $1,000 for 

the second violation and $2,500 for the 

third and subsequent violations. These 

fine levels would be the same as the 

current fines in the Recommended Fine 

Schedule in the Fee Schedule for 

violations of Article 6, Rule 5(b). 

• Finally, item 24 would be 

‘‘Consolidated Audit Compliance Rule 

(Rule 6.6800 Series).’’ The 

corresponding fine ‘‘Up to $2,500.00’’ 

would be transposed from current 

Article 12, Rule 8 to new footnote ** 

following ‘‘Rule 6.6800 Series.’’ 25 The 

Exchange would also add the current 

text from Article 12, Rule 8(a) providing 

that ‘‘For failures to comply with the 

Consolidated Audit Trail Compliance 

Rule requirements of the Rule 6.6800 

Series, the Exchange may impose a 

minor rule violation fine of up to 

$2,500. For more serious violations, 

other disciplinary action may be 

sought’’ to new footnote **. 

• The Exchange would add a new 

second sub-heading titled ‘‘Minor 

Trading Rule Violations’’ that would set 

forth the corresponding fines for first, 

second and third and subsequent 

violations for the 11 rules set forth 

under the heading ‘‘Minor Trading Rule 

Violations’’ in proposed Rule 

10.9217(e), with the following changes 

and corrections: 

Æ The entry for ‘‘Failure to clear the 

Matching System (Article 20, Rule 7)’’ 

and corresponding fines would not be 

included. This rule was deleted from 

Article 12, Rule 8 8(h)(2)(F) in 2019 as 

part of the transition of trading on the 

Exchange to the Pillar trading platform 

but the Exchange inadvertently failed to 

update the Recommended Fine 

Schedule in the Fee Schedule.26

Æ The Exchange would include 

‘‘Short Sales (Rule 7.16)’’ as item 10. 

Rule 7.16 was added to Article 12, Rule 

8 in 2019 as part of the transition of 

trading on the Exchange to the Pillar 

trading platform but the Exchange 

inadvertently failed to update the 

Recommended Fine Schedule in the Fee 

Schedule.27 The proposed first, second 

and third level fines for violations of 

Rule 7.16 of $500 for the first violation, 

$1,000 for the second violation and 

$2,500 for the third and subsequent 

violations are the same as those in 

NYSE Arca Rule 10.9217(i)(1)1. for 

violations of NYSE Arca Rule 7.16–E.28

Æ Finally, the Exchange would 

include ‘‘Failure to comply with 

Authorized Trader requirements (Rule 

7.30)’’ as item 11. Rule 7.30 was also 

added to Article 12, Rule 8 as part of the 

transition to Pillar in 2019 but the 

Exchange inadvertently failed to update 

the Recommended Fine Schedule in the 

Fee Schedule.29 The proposed first, 

second and third level fines for 

violations of Rule 7.30 of $1,000 for the 

first violation, $2,500 for the second 

violation and $3,500 for the third and 

subsequent violations are the same as 

those in NYSE Arca Rule 10.9217(i)(1)5. 

for violations of NYSE Arca Rule 7.30– 

E.30

As noted, proposed subsection (a) of 

proposed Rule 10.9217 is substantially 

the same as NYSE Arca Rule 10.9217(a) 

except for changes reflecting the 

Exchange’s membership. The Exchange 

proposes that a fine thereunder would 

not exceed $5,000 (the amount reflected 

in current Article 12, Rule 8).31

Proposed subsections (b), (c) and (d) 

are also substantially the same as NYSE 

Arca Rule 10.9217(b), (c) and (d) with 

the only changes reflecting the 

Exchange’s membership. 

Unlike current Article 12, Rule 8(e) 

described above, proposed Rule 

10.9216(b) and Rule 10.9217 would not 

permit a Respondent to contest a minor 

rule violation letter. Rather, as 

proposed, if the Respondent rejects the 

minor rule violation letter, then a 

complaint must be filed under proposed 

Rule 10.9211, and the minor rule 

violation letter may not be introduced 

into evidence.32 The Exchange believes 

the proposed rule is appropriate because 

it will harmonize the Exchange’s minor 

rule violation process with its affiliates’ 

rules. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Act,33 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,34

in particular, 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. 

Minor rule fines provide a meaningful 

sanction for minor or technical 

violations of rules. The Exchange 

believes that the proposed rule change 

will strengthen the Exchange’s ability to 

carry out its oversight and enforcement 

responsibilities in cases where full 

disciplinary proceedings are 

unwarranted in view of the minor 

nature of the particular violation. 

Specifically, the proposed rule change is 

designed to prevent fraudulent and 

manipulative acts and practices because 

it will provide the Exchange the ability 

to issue a minor rule fine for violations 

of its rules governing reporting, record 

retention and trading in situations 

where either a cautionary action letter 

or a more formal disciplinary action 

may not be warranted or appropriate. 

As noted, the Exchange would retain 

its list of minor rule violations with 

certain technical and conforming 

amendments, while adopting its 

affiliates’ process for imposing minor 

rule violation fines.35 In addition, as set 

forth in the Exchange’s companion 

filing and herein, the Exchange believes 

that adding certain rules to its list of 

eligible minor rule violations based on 


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Federal Register / Vol. 87, No. 106 / Thursday, June 2, 2022 / Notices 33547 

36See text accompanying notes 18–23, supra. 

37 15 U.S.C. 78f(b)(6). 

38See notes 27–29, supra. 

39 15 U.S.C. 78f(b)(7) & 78f(d). 

the rules of its affiliate will strengthen 

the Exchange’s ability to carry out its 

oversight and enforcement 

responsibilities in cases where full 

disciplinary proceedings are 

unwarranted in view of the minor 

nature of the particular violation. 

Specifically, the proposed additions 

are designed to prevent fraudulent and 

manipulative acts and practices because 

it will provide the Exchange the ability 

to issue a minor rule fine for violations 

of its rules governing general 

registration and supervision 

requirements in situations where a more 

formal disciplinary action may not be 

warranted or appropriate. As provided 

for in proposed Rule 10.9217(d), 

nothing in proposed Rule 10.9217 

would require the Exchange to impose 

a minor rule fine for a violation of any 

eligible rule and that if the Exchange 

determines that any violation is not 

minor in nature, the Exchange may, at 

its discretion, proceed with formal 

disciplinary action rather than under 

proposed Rule 10.9217. 

The Exchange also believes that 

adding rules based on the rules of its 

affiliate to its list of eligible minor rule 

violations would promote fairness and 

consistency in the marketplace by 

permitting the Exchange to issue a 

minor rule fine for violations of 

substantially similar rules that are 

eligible for minor rule treatment on the 

Exchange’s affiliate, thereby 

harmonizing minor rule plan fines 

across affiliated exchanges for the same 

conduct. As noted above, Article 6, Rule 

2(b), 5(a) and 5(b) are substantially 

similar to NYSE National and NYSE 

Arca rules of similar purpose, which are 

each separately eligible for a minor rule 

fine under the respective market’s 

version of proposed Rule 10.9217.36

Further, the Exchange believes that 

the proposed additions to its list of rules 

eligible for minor rule fines based on the 

rules of its affiliate are consistent with 

Section 6(b)(6) of the Act,37 which 

provides that members and persons 

associated with members shall be 

appropriately disciplined for violation 

of the provisions of the rules of the 

exchange, by expulsion, suspension, 

limitation of activities, functions, and 

operations, fine, censure, being 

suspended or barred from being 

associated with a member, or any other 

fitting sanction. As noted, the proposed 

rule change would provide the 

Exchange ability to sanction minor or 

technical violations pursuant to the 

Exchange’s rules and would increase the 

amounts of fines in order for the 

Exchange to better deter violative 

activity and to harmonize its rules with 

that of its affiliates. 

The Exchange believes that moving 

the Recommended Fine Schedule for 

minor rule violations from the Fee 

Schedule to proposed Rule 10.9217 and 

removing it from the Fee Schedule 

would add clarity and transparency to 

the Exchange’s rules by reflecting the 

recommended fines for minor rule 

violations in the same place in the 

Exchange’s rules. Similarly, updating 

the Recommended Fine Schedule to 

delete obsolete rules and add 

recommended fines for rules that were 

added to the list of minor rules but 

inadvertently omitted from the 

Recommended Fine Schedule would 

also add clarity and transparency to the 

Exchange’s rules. The Exchange believes 

that adding such clarifying language 

would also be consistent with the public 

interest and the protection of investors 

because investors will not be harmed 

and in fact would benefit from increased 

transparency, thereby reducing potential 

confusion. 

Further, the Exchange believes that 

adding recommended fines for Rule 7.16 

and Rule 7.30 that were inadvertently 

omitted from the current Recommended 

Fine Schedule based on the fines for the 

same rules set forth in the rules of its 

affiliate would promote fairness and 

consistency in the marketplace by 

permitting the Exchange to issue a 

minor rule fine for violations of 

substantially similar rules that are 

eligible for minor rule treatment on the 

Exchange’s affiliate, thereby 

harmonizing minor rule plan fines 

across affiliated exchanges for the same 

conduct. As noted above, the proposed 

first, second and third level fines for 

violations of Rule 7.16 are the same as 

those in NYSE Arca Rule 10.9217(i)(1)1. 

for violations of NYSE Arca Rule 7.16– 

E, and the proposed first, second and 

third level fines for violations of Rule 

7.30 are the same as those in NYSE Arca 

Rule 10.9217(i)(1)5. for violations of 

NYSE Arca Rule 7.30–E.38

Finally, the Exchange also believes 

that the proposed changes are designed 

to provide a fair procedure for the 

disciplining of members and persons 

associated with members consistent 

with Sections 6(b)(7) and 6(d) of the 

Act.39 Proposed Rules 10.9216(b) and 

10.9217 would not preclude a 

Participant, Participant Firm or covered 

person from rejecting an alleged 

violation and receiving a hearing on the 

matter with the same procedural rights 

through a litigated disciplinary 

proceeding. 

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 change is not designed to 

address any competitive issue but rather 

to update the Exchange’s rules to 

strengthen the Exchange’s ability to 

carry out its oversight and enforcement 

functions and deter potential violative 

conduct and to harmonize its rules with 

the rules of its affiliate. 

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. 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– 

NYSECHX–2022–08 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–NYSECHX–2022–08. 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 


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33548 Federal Register / Vol. 87, No. 106 / Thursday, June 2, 2022 / Notices 

40 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

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

42 15 U.S.C. 78f(b)(1) and 78f(b)(6). 

43 17 CFR 240.19d–1(c)(2). 

44 15 U.S.C. 78s(b)(2). 

45As stated above, the Commission notes that the 

proposed rule change was submitted in connection 

with an immediately effective companion filing, 

SR–NYSECHX–2022–10, adopting investigation, 

disciplinary, sanction and other procedural rules 

modeled on the rules of the Exchange’s affiliates. 

See supra note 4 and accompanying text. In SR– 

NYSECHX–2022–10, the Exchange states that it 

intends to announce by Information Memorandum 

with at least 30 days advance notice the operative 

date of the rules proposed in SR–NYSECHX–2022– 

10, which also includes proposed Rules 10.9216(b) 

and 10.9217. Thus, proposed Rules 10.9216(b) and 

10.9217 will be operative at the same time as all the 

rules proposed in SR–NYSECHX–2022–10. 

46 15 U.S.C. 78s(b)(2). 

47 17 CFR 240.19d–1(c)(2). 

48 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 93171 

(Sept. 29, 2021), 86 FR 55073 (Oct. 5, 2021) 

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–NYSECHX–2022–08 and 

should be submitted on or before June 

23, 2022. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.40 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,41 which requires that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to remove impediments and to 

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 

Commission also believes that the 

proposal is consistent with Sections 

6(b)(1) and 6(b)(6) of the Act 42 which 

require that the rules of an exchange 

enforce compliance with, and provide 

appropriate discipline for, violations of 

Commission and Exchange rules. 

Finally, the Commission finds that the 

proposal is consistent with the public 

interest, the protection of investors, or 

otherwise in furtherance of the purposes 

of the Act, as required by Rule 19d– 

1(c)(2) under the Act,43 which governs 

minor rule violation plans. 

The Commission believes that Rules 

10.9216(b) and 10.9217, which are 

based on the rules of an affiliate 

exchange, are an effective way to 

discipline a member for a minor 

violation of a rule. The Commission also 

believes that the proposed addition of 

certain rules to the Exchange’s list of 

current minor rule violations provides a 

reasonable means of addressing 

violations that do not rise to the level of 

requiring formal disciplinary 

proceedings, while providing greater 

flexibility in handling certain violations. 

In addition, the Commission believes 

that the Exchange’s proposal to move 

the Recommended Fine Schedule for 

minor rule violations from the Fee 

Schedule to proposed Rule 10.9217 and 

make certain amendments and 

corrections are consistent with the Act 

because these changes will add clarity 

to the Exchange’s rules. 

In approving the propose rule change, 

the Commission in no way minimizes 

the importance of compliance with the 

Exchange’s rules and all other rules 

subject to fines under Rules 10.9216(b) 

and 10.9217. The Commission believes 

that a violation of any self-regulatory 

organization’s rules, as well as 

Commission rules, is a serious matter. 

However, Rules 10.9216(b) and 10.9217 

provide a reasonable means of 

addressing rule violations that may not 

rise to the level of requiring formal 

disciplinary proceedings, while 

providing greater flexibility in handling 

certain violations. The Commission 

expects that the Exchange will continue 

to conduct surveillance with due 

diligence and make a determination 

based on its findings, on a case-by-case 

basis, whether a fine of more or less 

than the recommended amount is 

appropriate for a violation under Rules 

10.9216(b) and 10.9217 or whether a 

violation requires formal disciplinary 

action. 

For the same reasons as discussed 

above, the Commission finds good 

cause, pursuant to Section 19(b)(2) of 

the Act,44 for approving the proposed 

rule change prior to the thirtieth day 

after the date of publication of the 

notice of the filing thereof in the 

Federal Register.45 The proposal will 

assist the Exchange in preventing 

fraudulent and manipulative practices 

by allowing the Exchange to adequately 

enforce compliance with, and provide 

appropriate discipline for, violations of 

Exchange rules. Moreover, the proposed 

changes raises no new or novel issues. 

Accordingly, the Commission believes 

that a full notice-and-comment period is 

not necessary before approving the 

proposal. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 46 and Rule 

19d–1(c)(2) thereunder,47 that the 

proposed rule change (SR–NYSECHX– 

2022–08) be, and hereby is, approved on 

an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.48

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11789 Filed 6–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94999; File No. SR– 

NYSEArca–2021–67] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Disapproving a 

Proposed Rule Change To List and 

Trade Shares of the One River Carbon 

Neutral Bitcoin Trust Under NYSE Arca 

Rule 8.201–E (Commodity-Based Trust 

Shares) 

May 27, 2022. 

I. Introduction 

On September 20, 2021, NYSE Arca, 

Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to list and trade 

shares (‘‘Shares’’) of the One River 

Carbon Neutral Bitcoin Trust (‘‘Trust’’) 

under NYSE Arca Rule 8.201–E 

(Commodity-Based Trust Shares). The 

proposed rule change was published for 

comment in the Federal Register on 

October 5, 2021.3


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