Document ID: SEC-2018-2011-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2018-12-27T05:00Z

[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Notices]
[Pages 66824-66825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28004]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84857; File No. SR-NYSEARCA-2018-97]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change of Amendments to 
Delete References to the Term ``Allied Person'' From Exchange Rules

December 19, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19bd-4 thereunder,\3\ notice is hereby 
given that, on December 18, 2018, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III 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\ 15 U.S.C. 78a.
    \3\ 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 amendments to delete references to the term 
``allied person'' from Exchange rules. The proposed rule change is 
intended to harmonize Exchange rules with the rules of the Exchange's 
affiliates and the Financial Regulatory Authority, Inc. (``FINRA'') and 
thus promote consistency within the securities industry. The proposed 
rule change is available on the Exchange's website at www.nyse.com, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its rules to delete the term 
``allied person'' from its rules. The ``allied person'' designation is 
a regulatory category based on a person's control of an OTP Firm or ETP 
Holder.\4\ The Exchange's affiliate New York Stock Exchange LLC (the 
``NYSE'') no longer has allied members.\5\ More recently, another 
affiliate of the Exchange, NYSE American LLC (``NYSE American''), 
deleted the term ``allied member'' from its rules.\6\ FINRA has also 
deleted the term from its Incorporated NYSE Rules.\7\ In order to 
harmonize with the rules of the NYSE, NYSE American and FINRA, the 
Exchange accordingly proposes to delete reference to ``allied person'' 
from the following Exchange rules: Rule 1.1(c), Rule 1.1(qq), Rule 
1.1(aaa), Rule 2.14, Rule 2.21, Rule 2.23, Commentary .01, Rule 2.24, 
Commentary .01, Rule 3.2, Rule 4.2-O(a), Rule 4.2-O(b), Rule 4.2-O(e), 
Rule 4.2-O(g), Rule 4.2-O(h), Rule 4.16-O(b), Rule 4.16-O(c), Rule 
4.16-O(d), Rule 6.2-O, Rule 9.1-O(c), Rule 9.2-O(c), Commentary .01, 
Rule 9.3-O(b), Rule 9.6-O(a), Rule 4.3-E(a), Rule 4.3-E(b), Rule 4.3-
E(e), Rule 4.3-E(h), Rule 4.3-E(i), Rule 4.15-E(b), Rule 4.15-E(c), 
Rule 4.15-E(d), Rule 7.3-E, Rule 9.1-E(c), Rule 9.2-E(c), Commentary 
.01, Rule 9.3-E(b) and Rule 9.6-E(a). The Exchange also proposes to 
delete Rule 1.1(b), which defines the term allied person, in its 
entirety.
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    \4\ See current Rule 1.1(b), defining Allied Person.
    \5\ See Securities Exchange Act Release No. 58549 (September 15, 
2008), 73 FR 54444 (September 19, 2008) (SR-NYSE-2008-80) (Notice).
    \6\ See Securities Exchange Act Release No. 84724 (December 6, 
2018), 83 FR 63960 (December 12, 2018) (SR-NYSEAmer-2018-54) 
(Notice).
    \7\ See Securities Exchange Act Release No. 58533 (September 12, 
2008), 73 FR 54652 (September 22, 2008) (SR-FINRA-2008-036) (Order).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\8\ in general, and 
furthers the objectives of Section 6(b)(5),\9\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system and, 
in general, to protect investors and the public interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change will harmonize 
its rules with NYSE, NYSE American and FINRA rules, thus assisting ETP 
Holders, OTP Holders and OTP Firms in complying with those rules and 
thereby enhancing regulatory efficiency. In addition, the Exchange 
believes that providing greater harmonization between the Exchange and 
NYSE, NYSE American and FINRA rules would result

[[Page 66825]]

in less burdensome and more efficient regulatory compliance for ETP 
Holders, OTP Holders and OTP Firms that are subject to regulatory 
examination and oversight, thereby removing impediments to and 
perfecting the mechanism of a free and open market and a national 
market system, consistent with the objectives of Section 6(b)(5) of the 
Act. Additionally, the Exchange believes that deletion of the term 
``allied person'' is consistent with the Act because the Exchange no 
longer recognizes allied person as a registration category and no ETP 
Holder, OTP Holder or OTP Firm is currently registered as an allied 
person. Accordingly, deletion of the term from the Exchange's rules 
will provide clarity and remove any potential confusion among potential 
ETP Holders, OTP Holders or OTP Firms as to the category of memberships 
and registration requirements on the Exchange.

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 amendments are 
intended to promote clarity to the Exchange's rules applicable to ETP 
Holders, OTP Holders and OTP Firms and their registered personnel. 
Further, the proposed changes would apply to all ETP Holders, OTP 
Holders and OTP Firms in the same manner and therefore would not impose 
any unnecessary intramarket burdens.

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 \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
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 and Rule 19bd-
4(f)(6)(iii) thereunder.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii). 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 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 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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEARCA-2018-97 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEARCA-2018-97. 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-NYSEARCA-2018-97 and should be submitted 
on or before January 17, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2018-28004 Filed 12-26-18; 8:45 am]
BILLING CODE 8011-01-P