Document ID: SEC-2022-1463-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2022-11-14T05:00Z

[Federal Register Volume 87, Number 218 (Monday, November 14, 2022)]
[Notices]
[Pages 68208-68210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24648]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96247; File No. SR-NYSE-2022-48]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Delete Legacy Disciplinary Rules 475, 476, 476A, and 477; Adopt New 
Rule 2050; and Make Conforming Changes to Rules 2A, 27, 36, 600A, 619, 
637, 3170, 8001, 8130, 8320, 9001 and 9217

November 7, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 27, 2022, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to (1) delete legacy disciplinary Rules 475, 
476, 476A, and 477 as obsolete and make conforming changes to Rules 2A, 
36, 600A(c), 637, 8001, 8130(d), 8320(d) and 9001, and (2) adopt a new 
Rule 2050 incorporating the substantive violations currently in Rule 
476(a) without change and make conforming changes to Rules 27, 619(h), 
3170(C)(3) and 9217. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to (1) delete legacy disciplinary Rules 475, 
476, 476A, and 477 as obsolete and make conforming changes to Rules 2A, 
36, 600A(c), 637, 8001, 8130(d), 8320(d) and 9001, and (2) adopt a new 
Rule 2050 incorporating the substantive violations currently in Rule 
476(a) without change and make conforming changes to Rules 27, 619(h), 
3170(C)(3) and 9217.
Background and Proposed Rule Change
    In 2013, the Commission approved the Exchange's adoption of rules 
relating to investigation, discipline, and sanctions, and other 
procedural rules, based on the rules of the Financial Industry 
Regulatory Authority (``FINRA'').\3\ The Exchange represented in that 
filing that when the transition to the new disciplinary rules was 
complete and there are no longer any member organizations or persons 
subject to Rules 475, 476, 476A, and 477, the Exchange would submit a 
proposed rule change that would delete such rules (except for the 
listed offenses under NYSE Rule 476(a)).\4\ The Exchange represents 
that the transition to the new disciplinary rules is complete and there 
are no longer any member organizations or persons \5\ subject to Rules 
475, 476,

[[Page 68209]]

476A, and 477, and that those rules can therefore be deleted as 
obsolete.
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    \3\ See Securities Exchange Act Release No. 69045 (March 5, 
2013), 78 FR 15394 (March 11, 2013) (SR-NYSE-2013-02) (Order 
Approving Proposed Rule Change Adopting Investigation, Disciplinary, 
Sanction, and Other Procedural Rules That Are Modeled on the Rules 
of the Financial Industry Regulatory Authority and To Make Certain 
Conforming and Technical Changes). Beginning in 2016, the Exchange's 
affiliates have each in turn adopted the FINRA disciplinary rules. 
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). Most 
recently, NYSE Chicago also adopted investigation, disciplinary, 
sanction, and other procedural rules modeled on the rules of its 
affiliates. See Securities Exchange Act Release No. 95020 (June 1, 
2022), 87 FR 35034 (June 8, 2022) (SR-NYSECHX-2022-10).
    \4\ See Securities Exchange Act Release No. 68678 (January 16, 
2013), 78 FR 5213, 5219 (January 24, 2013) (SR-NYSE-2013-02) (Notice 
of Filing of Proposed Rule Change Adopting Investigation, 
Disciplinary, Sanction, and Other Procedural Rules That Are Modeled 
on the Rules of the Financial Industry Regulatory Authority and To 
Make Certain Conforming and Technical Changes) (``Release No. 
68678'').
    \5\ The Exchange no longer has allied members. The references to 
``allied member'' in Rules 476 and 476A should be to ``principal 
executive.'' In 2008, the Exchange replaced the term ``allied 
member'' with the newly defined category of ``principal executive'' 
but did not make corresponding technical changes to Rules 476 and 
476A. See Securities Exchange Act Release No. 58549 (September 15, 
2008), 73 FR 54444, 54445 (September 19, 2008) (SR-NYSE-2008-80) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change and Amendment No. 1 Thereto Conforming Certain NYSE Rules to 
Changes to NYSE Incorporated Rules Recently Filed by the Financial 
Industry Regulatory Authority, Inc.); Rule 311.18 (defining 
``principal executive''). See generally Securities and Exchange Act 
Release No. 58103 (July 3, 2008), 73 FR 40403, 40403-04 (July 14, 
2008) (SR-FINRA-2008-036) (Notice of Filing of a Proposed Rule 
Change Relating to the Incorporated NYSE Rules) (proposing in part 
to substitute ``principal executive'' for ``allied member'' in the 
Incorporated NYSE Rules); Securities and Exchange Act Release No. 
58533 (September 12, 2008), 73 FR 54652 (September 22, 2008) (SR-
FINRA-2008-036) (Order Approving Proposed Rule Change Relating to 
Incorporated NYSE Rules). The Exchange will be submitting a separate 
rule filing to replace the remaining references to ``allied member'' 
in its rules with ``principal executive.''
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    The Exchange proposes conforming changes to Rules 2A 
(Jurisdiction), 36 (Communications Between Exchange and Members' 
Offices), 600A(c), and 637 (Failure to Honor Award) that contain 
references to one or more of the rules proposed to be deleted. The 
following rules reflecting the transition from the legacy disciplinary 
rules to the current rule set would be deleted in their entirety: Rule 
8130(d) (Retention of Jurisdiction); Rule 8320(d) (Payment of Fines, 
Other Monetary Sanctions, or Costs; Summary Action for Failure to Pay); 
Rule 8001 (Effective Date of Rule 8000 Series); and Rule 9001 
(Effective Date of Rule 9000 Series).
    In connection with the deletion of Rule 476, the Exchange also 
proposes a new Rule 2050 titled ``Other Offenses'' that would, 
consistent with its filing adopting the FINRA disciplinary rules, 
retain the listed offenses in Rule 476(a)(1)-(11) without substantive 
change. Proposed Rule 2050 would provide that a member organization or 
covered person \6\ violates the provisions of the Rule if it commits 
any of the enumerated offenses, which would be transposed from Rule 
476(a) in the same order and without changes except for Rule 476(a)(8), 
which is marked ``Reserved.'' The Exchange further proposes conforming 
changes to the following rules to replace references to Rule 476(a) 
with Rule 2050: Rule 27 (Regulatory Cooperation); Rule 619(h) (General 
Provision Governing Subpoenas, Production of Documents, etc.); Rule 
3170(C)(3) (Tape Recording of Registered Persons by Certain Firms); and 
Rule 9217 (Violations Appropriate for Disposition Under Rule 9216(b)).
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    \6\ NYSE Rule 9120(g) defines ``covered person'' to mean 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.'' The term was drafted to appropriately capture all 
persons subject to the legacy disciplinary rules and preserve the 
Exchange's scope of jurisdiction at the time the Rule 8000 and Rule 
9000 Series were adopted. See Release No. 68678, 78 FR 5213 at 5219. 
Under NYSE Rule 2(a), the term ``member'' means a natural person 
associated with a member organization who has been approved by the 
Exchange and designated by such member organization to effect 
transactions on the floor of the Exchange or any facility thereof. 
See id.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Exchange Act,\7\ in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
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    \7\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that deletion of the obsolete 
legacy disciplinary rules now that there are no longer any member 
organizations or persons subject to those rules, and making conforming 
changes to the rules referencing those legacy disciplinary rules, would 
increase the clarity and transparency of the Exchange's rules and 
remove impediments to and perfect the mechanism of a free and open 
market by ensuring that persons subject to the Exchange's jurisdiction, 
regulators, and the investing public could more easily navigate and 
understand the Exchange Bylaws and rules. The Exchange further believes 
that the proposed amendments would not be inconsistent with the public 
interest and the protection of investors because investors will not be 
harmed and in fact would benefit from increased transparency and 
clarity, thereby reducing potential confusion.
    The Exchange further believes that retaining the substantive 
offenses in Rule 476(a) without change is designed to prevent 
fraudulent and manipulative acts and practices by permitting the 
Exchange to continue to carry out its oversight and enforcement 
responsibilities with respect to the substantive provisions currently 
enumerated in Rule 476(a). For the same reasons, retention of those 
provisions would not be inconsistent with the public interest and the 
protection of investors.

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 Exchange Act. The proposed rule 
change is not intended to address competitive issues but rather is 
concerned solely with deleting obsolete rules and making related and 
conforming changes.

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 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 \8\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule19b-4(f)(6)(iii) 
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. 
The Exchange has satisfied this requirement.
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    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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2022-48.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2022-48. 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

[[Page 68210]]

post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent 
amendments, all written statements with respect to the proposed rule 
change that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSE-2022-48, and should be submitted on or before December 5, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-24648 Filed 11-10-22; 8:45 am]
BILLING CODE 8011-01-P