Document ID: SEC-2018-1429-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2018-09-17T04:00Z

[Federal Register Volume 83, Number 180 (Monday, September 17, 2018)]
[Notices]
[Pages 46975-46976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20076]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84077; File No. SR-NYSE-2018-33]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving a Proposed Rule Change To Amend Rule 2 To Remove Requirement 
That a Registered Broker-Dealer Be a Member of the Financial Industry 
Regulatory Authority, Inc. or Another National Securities Exchange

September 11, 2018.

I. Introduction

    On July 25, 2018, the New York Stock Exchange LLC (``Exchange'' or 
``NYSE'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Rule 2, ``Member,'' ``Membership,'' 
``Member Firm,'' etc., to remove the requirement that a registered 
broker-dealer be a member of the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') or another national securities exchange. 
The proposed rule change was published for comment in the Federal 
Register on August 3, 2018.\3\ The Commission received one comment 
letter on the proposed rule change.\4\ This order approves the proposed 
rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 83740 (July 30, 
2018), 83 FR 38195 (August 3, 2018) (``Notice'').
    \4\ See Letter from Ray Delao, The Michael's Copanys.Inc [sic], 
dated August 15, 2018. The letter does not address the change that 
the NYSE is proposing to make to Rule 2.
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II. Description of the Proposed Rule Change

    As described in more detail in the Notice,\5\ the Exchange proposes 
to amend Rule 2 to remove a requirement that a registered broker-dealer 
be a member of FINRA or another national securities exchange to become 
a member of the Exchange. The Exchange proposes to amend Rule 2(b)(i) 
to define ``member organization'' as a ``registered broker or dealer 
(unless exempt pursuant to the Securities Exchange Act of 1934) . . . , 
including sole proprietors, partnerships, limited liability 
partnerships, corporations, and limited liability corporations, 
approved by the Exchange pursuant to Rule 311. A registered broker or 
dealer must also be approved by the Exchange and authorized to 
designate an associated natural person to effect transactions on the 
floor of the Exchange or any facility thereof.'' Furthermore, the 
Exchange proposes to amend Rule 2(b)(ii) to state: ``[t]he term `member 
organization' also includes any registered broker or dealer which does 
not own a trading license and agrees to be regulated by the Exchange as 
a member organization and which the Exchange has agreed to regulate.'' 
The Exchange noted that this proposed change will not result in ``any 
regulatory impact because member organizations will continue to be 
subject to a comprehensive regulatory regime regardless of whether they 
are a member of another [self-regulatory organization] or not'' and 
that the Exchange ``performs the necessary regulatory oversight of 
member organizations.'' \6\
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    \5\ See Notice, supra note 3.
    \6\ Id. at 38196.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act \7\ and the rules 
and regulations thereunder applicable to a national

[[Page 46976]]

securities exchange.\8\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(2) of the Act,\9\ 
which states that ``any registered broker or dealer or natural person 
associated with a registered broker or dealer may become a member of 
such exchange and any person may become associated with a member 
thereof.'' The rule, as revised, is consistent with the statutory 
requirement. Thus, the Commission finds that the proposed amendment to 
Rule 2 is consistent with the Act.
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    \7\ 15 U.S.C. 78f.
    \8\ 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).
    \9\ 15 U.S.C. 78f(b)(2).
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IV. Conclusion

    It is therefor ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NYSE-2018-33) be, and hereby 
is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20076 Filed 9-14-18; 8:45 am]
BILLING CODE 8011-01-P