Document ID: SEC-2023-0009-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2023-01-05T05:00Z

[Federal Register Volume 88, Number 3 (Thursday, January 5, 2023)]
[Notices]
[Pages 894-896]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28598]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96591; File No. SR-NYSE-2022-58]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Make Permanent the Temporary Rule Relief in Rule 36.30

December 29, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on December 23, 2022, 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.
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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 make permanent the temporary rule relief 
in Rule 36.30 to allow DMM units to maintain a telephone line at its 
trading post location, which relief expires on the earlier of a full 
reopening of the Trading Floor facilities to DMMs or after the Exchange 
closes on December 31, 2022. 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 make permanent the temporary rule relief 
to Rule 36.30 to allow a DMM unit may maintain a telephone line at its 
trading post location, which relief expires on the earlier of a full 
reopening of the Trading Floor facilities to DMMs or after the Exchange 
closes on December 31, 2022.\3\
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    \3\ See Securities Exchange Act Release No. 88933 (May 22, 
2020), 85 FR 32059 (May 28, 2020) (SR-NYSE-2020-47) (Notice of 
filing and immediate effectiveness of proposed rule change).
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Background

    In connection with its response to COVID-19 and its impact on the 
Trading Floor, the Exchange modified certain of its rules to provide 
temporary relief,\4\ certain of which relief was extended several 
times.\5\ In particular, the Exchange modified Rule 36 to adopt rule 
text allowing DMMs to use telephones installed at the DMM unit trading 
post to communicate with personnel not assigned to the Trading Floor 
but working in locations other than the off-Floor offices of the DMM 
unit; provided, however, that the telephone numbers of such off-Floor 
personnel are provided to the Exchange in advance.\6\ The temporary 
relief afforded in Rule 36.30 is set to expire on the earlier of a full 
reopening of the Trading Floor facilities to DMMs or after the Exchange 
closes on December 31, 2022. Although the Exchange no longer requires 
DMM firms to operate with reduced staff, DMM firms have chosen to 
continue to operate with a mix of employees working remotely and others 
physically present on the Trading Floor.
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    \4\ See, e.g., Securities Exchange Act Release Nos. 89086 (June 
17, 2020), 85 FR 37712 (SR-NYSE-2020-52) (amending Rules 7.35A to 
add Commentary .06, 7.35B to add Commentary .03, 76 to add 
Supplementary Material 20, and Supplementary Material .30 to Rule 
36).
    \5\ See, e.g., Securities Exchange Act Release No. 94585 (April 
1, 2022) 87 FR 20479 (April 7, 2022) (SR-NYSE-2022-18) (Notice of 
filing and immediate effectiveness of proposed rule change to extend 
the temporary period for specified Commentaries to Rules 7.35A and 
7.35C and temporary rule relief in Rule 36.30 to end on the earlier 
of a full reopening of the Trading Floor facilities to DMMs or after 
the Exchange closes on July 31, 2022).
    \6\ See NYSE Rule 36.30.
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Proposed Rule Change
    In order to address the technological shift in how business 
communications are conducted in the wake of the pandemic, and how 
business communications will likely continue

[[Page 895]]

even after the pandemic ends, the Exchange proposes to make permanent 
the amendments to Rule 36.30. To effectuate this change, the Exchange 
proposes to eliminate language regarding the temporary nature of the 
relief.\7\
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    \7\ See proposed NYSE Rule 36.30 (providing that ``[a] DMM unit 
may maintain a telephone line at its trading post location to 
communicate with DMM unit personnel working in locations other than 
the off-Floor offices of the DMM unit, provided that the telephone 
numbers of such persons are provided to the Exchange in advance.'').
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    The Exchange believes this proposed rule change would continue to 
provide DMMs with flexibility to communicate with staff not assigned to 
the Trading Floor, but who are working remotely. The Exchange believes 
that remote work options for employees--whether full or part-time--have 
become a permanent feature of the modern workplace and are likely to 
persist once the pandemic fully subsides. As such, the Exchange 
believes that allowing DMM units to continue communicating with 
employees working off-site (at designated phone numbers shared with the 
Exchange) would continue to provide flexibility to DMMs to maintain 
necessary communication with staff at the DMM firm with whom they would 
otherwise communicate if such staff were physically present at an 
office. As a result, the Exchange believes the proposed change would 
enable DMM units to continue to efficiently allocate resources and 
permit Floor-based staff to communicate more easily and seamlessly with 
off-Floor staff whether such off-Floor staff are working at an office 
or remotely.
    As is the case today, Rule 36.30 telephones installed at the DMM 
unit trading post ``shall not be used for the purpose of transmitting 
to the Floor orders for the purchase or sale of securities.'' \8\ 
Moreover, the (continued) requirement that DMM units provide the 
Exchange with the telephone numbers of the permitted contacts working 
remotely is an additional safeguard that would provide the Exchange 
with information that may be important in determining whether DMM units 
are only communicating with personnel from their off-Floor offices in a 
manner permitted under Rule 98.\9\
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    \8\ See NYSE Rule 36.30.
    \9\ Communications by DMM staff on the Trading Floor are 
governed by NYSE Rule 98.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\10\ in general, and furthers the objectives of Section 6(b)(5) of 
the Act,\11\ 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because the proposed rule change would 
continue to provide DMMs with flexibility to communicate with staff not 
assigned to the Trading Floor, but who are working remotely. The 
Exchange believes that remote work options for employees--whether full 
or part-time--have become a permanent feature of the modern workplace 
and are likely to persist once the pandemic fully subsides. As such, 
the Exchange believes that allowing DMM units to communicate with 
employees working remotely would continue to enhance communications and 
ease the logistical burdens associated with operating with staff 
working on the Trading Floor and staff working remotely and provide 
DMMs with needed flexibility in managing their operations. As a result, 
the Exchange believes the proposed change would enable DMM units to 
more efficiently allocate resources and permit Floor-based staff to 
communicate more easily and seamlessly with off-Floor staff whether 
such off-Floor staff are working at an office or remotely.
    The Exchange also believes that the proposal is designed to prevent 
fraudulent and manipulative acts and practices and would be consistent 
with the public interest and the protection of investors because DMM 
units would continue to need to identify the persons working in 
locations other than the DMM unit's off-Floor offices and submit the 
telephone numbers of such persons to the Exchange in advance. This 
additional safeguard would provide the Exchange with information that 
may be important to determining whether DMM units are only 
communicating with personnel from their off-Floor offices in a manner 
permitted under Rule 98. As such, the Exchange believes that the 
continuation of the existing safeguards are appropriate for supervising 
and monitoring use of telephones on the Exchange's Trading Floor 
consistent with the objectives of Section 6(b)(5) of the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
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 designed to address any competitive issues but rather would make 
permanent amendments to Rule 36.30 that enhance a DMM unites ability to 
communicate with staff working remotely (i.e., not on the Trading 
Floor).

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
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 prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6)(iii) thereunder.\15\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may

[[Page 896]]

become operative immediately upon filing.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiver of the operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to it will allow the rules discussed 
above to remain in effect for DMM firms to continue to operate with a 
mix of employees working remotely and others physically present on the 
Trading Floor. Accordingly, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\18\
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    \18\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \19\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \19\ 15 U.S.C. 78s(b)(2)(B).
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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-2022-58 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2022-58. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2022-58 and should be submitted on 
or before January 26, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12), (59).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-28598 Filed 1-4-23; 8:45 am]
BILLING CODE 8011-01-P