Document ID: SEC-2016-2237-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-12-20T05:00Z

[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)]
[Notices]
[Pages 92892-92897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30553]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79547; File No. SR-NYSEARCA-2016-161]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Rule 10.17 and NYSE Arca Equities Rule 10.15

December 14, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on December 8, 2016, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') 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 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 to amend NYSE Arca Rule 10.17 and NYSE Arca 
Equities Rule 10.15 governing the release of disciplinary information 
based on rules of the Exchange's affiliates New York Stock Exchange, 
LLC and NYSE MKT LLC. The proposed rule change is available on the 
Exchange's Web site 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 NYSE Arca Rule 10.17 (Release of 
Disciplinary Information through the Public Disclosure Program) and 
NYSE Arca Equities Rule 10.15 (Release of Disciplinary Information 
through the Public Disclosure Program) based on Rule 8313 (Release of 
Disciplinary Complaints, Decisions and Other Information) of the 
Exchange's affiliates New York Stock Exchange, LLC (``NYSE'') and NYSE 
MKT LLC (``NYSE MKT'').
Background
    In 2013, the NYSE adopted disciplinary rules that are, with certain 
exceptions, substantially the same as the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') Rule 8000 Series and Rule 9000 Series, and 
which set forth rules for conducting investigations and enforcement 
actions.\4\ The NYSE disciplinary rules were implemented on July 1, 
2013.\5\ In 2016, NYSE MKT also adopted the Rule 8000 Series and Rule 
9000 Series, which rules are, with certain exceptions, substantially 
the same as those of NYSE and FINRA.\6\ The NYSE MKT

[[Page 92893]]

disciplinary rules were implemented on April 15, 2016.\7\
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    \4\ See Securities Exchange Act Release Nos. 68678 (January 16, 
2013), 78 FR 5213 (January 24, 2013) (SR-NYSE-2013-02) (``2013 
Notice''), 69045 (March 5, 2013), 78 FR 15394 (March 11, 2013) (SR-
NYSE-2013-02) (``2013 NYSE Approval Order''), and 69963 (July 10, 
2013), 78 FR 42573 (July 16, 2013) (SR-NYSE-2013-49).
    \5\ See NYSE Information Memorandum 13-8 (May 24, 2013).
    \6\ See Securities Exchange Act Release Nos. 77241 (February 26, 
2016), 81 FR 11311 (March 3, 2016) (SR-NYSEMKT-2016-30) (``2016 MKT 
Notice'').
    \7\ See NYSE MKT Information Memorandum 16-02 (March 14, 2016).
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    In August 2016, the NYSE amended its Rule 8313 based on the text of 
FINRA Rule 8313, which provides that disciplinary complaints and 
decisions that meet certain criteria will be either published or made 
available upon request.\8\ In September 2016, NYSE MKT also amended its 
version of Rule 8313 to adopt the text of FINRA Rule 8313.\9\
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    \8\ See Securities Exchange Act Release Nos. 78664 (August 24, 
2016), 81 FR 59678 (August 30, 2016) (SR-NYSE-2016-40). In adopting 
the FINRA disciplinary rules in 2013, the NYSE retained its long-
standing practice of publishing all final disciplinary decisions, 
other than minor rule violations, on its Web site and did not adopt 
the text of FINRA Rule 8313. See 2013 NYSE Approval Order, 78 FR at 
15395.
    \9\ See Securities Exchange Act Release Nos. 78959 (September 
28, 2016), 81 FR 68481 (October 4, 2016) (SR-NYSEMKT-2016-71). In 
adopting its disciplinary rules in 2016, NYSE MKT also did not adopt 
the text of FINRA Rule 8313. See 2016 MKT Notice, 81 FR at 11321.
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    Current NYSE Arca Rule 10.17 and NYSE Arca Equities Rule 10.15 
provide for the release to the public of certain disciplinary 
information concerning OTP Holders and ETP Holders and associated 
persons, respectively. Specifically, current NYSE Arca Rule 10.17 and 
NYSE Arca Equities Rule 10.15 provide for release of any identified 
disciplinary decision in response to a request. Rule 10.17(b)(1) 
provides for release of information to the public with respect to 
disciplinary decisions that: (i) Impose a suspension, cancellation or 
expulsion upon an OTP Holder or OTP Firm; (ii) impose the suspension or 
revocation of the registration of an associated person of an OTP Holder 
or OTP Firm; (iii) impose the suspension or barring of an OTP Holder, 
OTP Firm, or associated person from association with all OTP Holders or 
OTP Firms; (iv) impose monetary sanctions of $10,000 or more upon an 
OTP Holder, OTP Firm, or associated person; or (v) contain an 
allegation of a violation of a Designated Rule, defined as (i) 
Commission Rule 10b-5 under the Act, (ii) NYSE Arca Rule 11.5 
(Manipulation), or (iii) NYSE Arca Rule 11.2 (Prohibited Acts). See 
NYSE Arca Rule 10.17(b)(1).
    Similarly, under NYSE Arca Equities Rule 10.15, NYSE Arca Equities 
releases information to the public with respect to disciplinary 
decisions that: (i) Impose a suspension, cancellation or expulsion upon 
an ETP Holder; (ii) impose the suspension or revocation of the 
registration of an associated person of an ETP Holder; (iii) impose the 
suspension or barring of an ETP Holder or associated person from 
association with all ETP Holders; (iv) impose monetary sanctions of 
$10,000 or more upon an ETP Holder or associated person; or (v) contain 
an allegation of a violation of a Designated Rule, defined as (i) 
Commission Rule 10b-5 under the Act, (ii) NYSE Arca Equities Rule 6.5 
(Manipulation), or (iii) NYSE Arca Equities Rule 6.2 (Prohibited Acts). 
See NYSE Arca Equities Rule 10.15(b)(1).
    Current NYSE Arca and NYSE Arca Equities Rules also permit release 
of information to the public concerning disciplinary decisions that 
involve significant policy or enforcement determinations where the 
release of such information is deemed by the President of the Exchange 
to be in the public interest.\10\ Further, the current Rules permit 
waiving the requirement to release information with respect to a 
disciplinary decision under extraordinary circumstances where the 
release of the information would violate fundamental notions of 
fairness or work as an injustice. Finally, the current Rules permit 
release to the public of information concerning any disciplinary or 
other decision issued pursuant to NYSE Arca Rule 10 and NYSE Arca 
Equities Rule 10 that is not specifically enumerated in NYSE Arca Rule 
10.17(b)(1) or NYSE Arca Equities Rule 10.15(b)(1), respectively, 
regardless of the sanctions imposed, so long as the names of the 
parties and other identifying information is redacted.\11\
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    \10\ See NYSE Arca Rule 10.17(b)(1); NYSE Arca Equities Rule 
10.15(b)(1).
    \11\ See id.
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    NYSE Arca Rule 10.17 and NYSE Arca Equities Rule 10.15 seek to 
further the same goals of transparency and disclosure as NYSE and NYSE 
MKT Rule 8313 (``Rule 8313'').\12\
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    \12\ See Securities Exchange Act Release No. 53878 (May 26, 
2006), 71 FR 32622, 32624 (June 6, 2006) (SR-NYSEArca-2006-02).
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    As described below, the Exchange proposes to adopt Rule 8313 in 
substantially the same form as approved by the Securities and Exchange 
Commission (``SEC'' or ``Commission'') for NYSE and as published for 
immediate effectiveness by NYSE MKT. By adopting the proposed 
amendments to NYSE Arca Rule 10.17 and NYSE Arca Equities Rule 10.15, 
the Exchange would have uniform options and equities rules that require 
public release of disciplinary complaints as well as disciplinary 
decisions, and that are otherwise consistent with the counterpart rules 
of its NYSE and NYSE MKT affiliates.
Proposed Rule Change
Amendments to NYSE Arca Rule 10.17 Governing Release of Disciplinary 
Complaints, Decisions and Other Information Based on Rule 8313
    The Exchange proposes to delete subsections (a) through (h) of 
current NYSE Arca Rule 10.17 in order to adopt the requirements of Rule 
8313 as proposed new subsections (a) through (e).
    The Exchange proposes to amend the heading to delete the clause 
``Information Through the Public Disclosure Program'' and replace it 
with ``Complaints, Decisions and Other Information.'' As proposed, NYSE 
Arca Rule 10.17 would have the same title as Rule 8313.
General Standards
    The Exchange proposes to add the title ``General Standards'' to 
subsection (a) of NYSE Arca Rule 10.17 and delete the current text of 
subsection (a). The text of subsections (a)(1)-(3) would also be 
deleted and replaced as follows.
    First, proposed NYSE Arca Rule 10.17(a)(1) would provide that the 
Exchange shall release to the public a copy of and, at the Exchange's 
discretion, information with respect to, any disciplinary complaint or 
disciplinary decision issued by the Exchange, as defined in subsection 
(e) of the proposed Rule, other than minor rule violations, on its Web 
site. Proposed NYSE Arca Rule 10.17(a)(1) would also provide that, in 
response to a request, the Exchange shall release to the requesting 
party a copy of any identified disciplinary complaint or disciplinary 
decision issued by the Exchange, as defined in proposed NYSE Arca Rule 
10.17(e). These proposed amendments are modeled on Rule 8313(a)(1) and, 
except for an inapplicable reference to the Rule 9000 Series, would be 
the same as the NYSE and NYSE MKT Rule.
    Second, proposed NYSE Arca Rule 10.17(a)(2) would provide that the 
Exchange shall release to the public a copy of, and at the Exchange's 
discretion information with respect to, any statutory disqualification 
decision, notification, or notice issued by the Exchange pursuant to 
NYSE Arca Rules 10 or 13 that will be filed with the SEC. Proposed NYSE 
Arca Rule 10.17(a)(2) is modeled on Rule 8313(a)(2) but substitutes 
references to NYSE Arca Rules 10 and 13 for references to the NYSE and 
NYSE MKT Rule 9520 Series, and omits reference to the NYSE and NYSE MKT 
Rule 9800 Series. NYSE Arca does not have rules governing temporary 
cease and desist proceedings

[[Page 92894]]

comparable to the Rule 9800 Series. The proposed Rule is otherwise the 
same as the NYSE and NYSE MKT Rule.
    Third, proposed NYSE Arca Rule 10.17(a)(3) would provide that the 
Exchange shall release to the public information with respect to any 
suspension, cancellation, expulsion, or bar that constitutes final 
Exchange action imposed pursuant to NYSE Arca Rule 13, which governs 
cancellation, suspension and reinstatement and is the Exchange's 
analogue to the various provisions of the NYSE and NYSE MKT Rule 9550 
Series referenced in Rule 8313(a)(3) governing suspensions, 
cancellations, expulsions and bars, with the exception of NYSE and NYSE 
MKT Rule 9556, which governs failure to comply with a temporary or 
permanent cease and desist order issued under the Rule 9200, 9300 or 
9800 Series. NYSE Arca does not have rules governing temporary cease 
and desist proceedings comparable to Rule 9200, 9300 or 9800 Series. 
Like Rule 8313(a)(3), proposed NYSE Arca Rule 10.17(a)(3) would also 
encompass proceedings for failure to pay fines, other monetary 
sanctions, or costs.\13\ The proposed Rule is otherwise the same as 
Rule 8313(a)(3).
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    \13\ In that regard, Rule 8313(a)(3) references summary 
proceedings under NYSE and NYSE MKT Rule 8320. Unlike a proceeding 
under NYSE or NYSE MKT Rule 8320, a proceeding under NYSE Arca Rule 
13 for failure to pay fines, other monetary sanctions, or costs 
could not be a summary proceeding.
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    To further conform proposed NYSE Arca Rule 10.17 to Rule 8313, the 
Exchange proposes to add a new subsection (a)(4) modeled on Rule 
8313(a)(4) that provides that the Exchange may release to the public a 
copy of, and information with respect to, any decision or notice 
appealable to the SEC under Exchange Act Section 19(d). The proposed 
Rule is the same as Rule 8313(a)(4) but omits reference to any decision 
or notice issued pursuant to the NYSE and NYSE MKT Rule 9600 Series, 
which NYSE Arca has not adopted.\14\
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    \14\ The NYSE and NYSE MKT Rule 9600 Series set forth procedures 
for seeking exemptive relief from the requirements of certain 
enumerated rules.
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Release Specifications
    The Exchange proposes to add the title ``Release Specifications'' 
to subsection (b) of NYSE Arca Rule 10.17 and delete the current text 
of subsection (b).
    The Exchange also proposes to delete the entire text of current 
Rule 10.17(b)(1) and 10.17(b)(2). The Exchange proposes new subsections 
(b)(1) and (b)(2) modeled on Rule 8313(b)(1) and (b)(2), as follows.
    Proposed NYSE Arca Rule 10.17(b)(1) would provide that copies of, 
and information with respect to, any disciplinary complaint released to 
the public pursuant to paragraph (a) of the proposed Rule shall 
indicate that a disciplinary complaint represents the initiation of a 
formal proceeding by the Exchange in which findings as to the 
allegations in the complaint have not been made and does not represent 
a decision as to any of the allegations contained in the complaint. The 
proposed Rule would be the same as Rule 8313(b)(1).
    Proposed NYSE Arca Rule 10.17(b)(2) provides that copies of, and 
information with respect to, any disciplinary decision or other 
decision, order, notification, or notice released to the public 
pursuant to paragraph (a) of the proposed Rule prior to the expiration 
of the time period provided for an appeal or call for review as 
permitted under Exchange rules or the Exchange Act, or while such an 
appeal or call for review is pending, shall indicate that the findings 
and sanctions imposed therein are subject to review and modification by 
the Exchange or the SEC. The proposed Rule would be the same as Rule 
8313(b)(2).
Discretion To Redact Certain Information or Waive Publication
    The Exchange has determined that, subject to limited exceptions, 
disciplinary information should be released to the public in unredacted 
form. The Exchange proposes to add a new subsection (c) to NYSE Arca 
Rule 10.17 entitled ``Discretion to Redact Certain Information or Waive 
Publication,'' modeled on Rule 8313(c)(1) and (2). With respect to the 
limited exceptions, proposed NYSE Arca Rule 10.17(c)(1) would provide 
that the Exchange reserves the right to redact, on a case-by-case 
basis, information that contains confidential customer information, 
including customer identities, or information that raises significant 
identity theft, personal safety, or privacy concerns that are not 
outweighed by investor protection concerns. The proposed Rule would be 
the same as Rule 8313(c)(1).
    Similarly, proposed NYSE Arca Rule 10.17(c)(2) provides that, 
notwithstanding paragraph (a) of the proposed rule, the Exchange may 
determine, in its discretion, to waive the requirement to release a 
copy of, or information with respect to, any disciplinary complaint, 
disciplinary decision or other decision, order, notification, or notice 
under those extraordinary circumstances where the release of such 
information would violate fundamental notions of fairness or work an 
injustice. The proposed Rule would be the same as Rule 8313(c)(2).
Notice of Appeals of Exchange Decisions
    The Exchange proposes to add a new subsection (d) to NYSE Arca Rule 
10.17 entitled ``Notice of Appeals of Exchange Decisions to the SEC'' 
modeled on Rule 8313(d). Proposed NYSE Arca Rule 10.17(d) provides that 
the Exchange must provide notice to the public when a disciplinary 
decision of the Exchange is appealed to the SEC and that the notice 
shall state whether the effectiveness of the decision has been stayed 
pending the outcome of proceedings before the Commission. The proposed 
Rule would be the same as Rule 8313(d).
Definitions
    Finally, the Exchange proposes to add a new subsection (e) to Rule 
10.17 entitled ``Definitions.'' Proposed NYSE Arca Rule 10.17(e) would 
set forth definitions of the terms ``disciplinary complaint'' and 
``disciplinary decision'' as used in the Rule, modeled on the 
definitions contained in Rule 8313(e).
    First, Rule 10.17(e)(1) would define the term ``disciplinary 
complaint'' to mean any complaint issued pursuant to NYSE Arca Rule 
10.4, which governs complaints. The proposed text is identical to Rule 
8313(e)(1) except that the proposed Rule would substitute ``Rule 10.4'' 
for ``the Rule 9200 Series.''
    Second, proposed NYSE Arca Rule 10.17(e)(2) would define the term 
``disciplinary decision'' to mean any decision issued pursuant to NYSE 
Arca Rules 10.4(c) (Summary Determinations), 10.6 (Offers of 
Settlement), 10.7 (Decision) or 10.8 (Review), including, decisions 
issued by the Ethics and Business Conduct Committee (``EBCC''), a 
Conduct Panel, the Committee for Review (``CFR'') or the Board of 
Directors, and orders accepting offers of settlement. Under proposed 
subsection (e)(2), the term would not include decisions, notifications, 
or notices issued pursuant to paragraphs (a)(2), (a)(3) and (a)(4) of 
the proposed Rule. Proposed NYSE Arca Rule 10.17(e)(2) provides that 
minor rule violation plan letters issued pursuant to NYSE Arca Rule 
10.12 are not subject to the proposed Rule. The proposed Rule would be 
the same as Rule 8313(e)(2) except that the proposed Rule would 
substitute references to the relevant NYSE Arca Rules for references to 
the NYSE and NYSE MKT Rule 9000 Series, Rule 9550 Series, Rule 9600 
Series, Rule 9800 Series, Rule 9520 Series, and Rules 9216 and 9217.

[[Page 92895]]

Amendments to NYSE Arca Equities Rule 10.15 Governing Release of 
Disciplinary Complaints, Decisions and Other Information Based on Rule 
8313
    The Exchange proposes parallel changes to NYSE Arca Equities Rule 
10.15, which has the same structure as NYSE Arca Rule 10.17, in order 
to adopt the requirements of Rule 8313.
    The Exchange proposes to amend the heading to delete the clause 
``Information Through the Public Disclosure Program'' and replace it 
with ``Complaints, Decisions and Other Information.'' As proposed, NYSE 
Arca Equities Rule 10.15 would have the same title as Rule 8313.
General Standards
    The Exchange proposes to add the title ``General Standards'' to 
subsection (a) of NYSE Arca Equities Rule 10.15 and delete the current 
text of subsection (a). The text of subsections (a)(1)-(3) would also 
be deleted and replaced as follows.
    First, proposed NYSE Arca Equities Rule 10.15(a)(1) would provide 
that the Exchange shall release to the public a copy of and, at the 
Exchange's discretion, information with respect to, any disciplinary 
complaint or disciplinary decision issued by the Exchange, as defined 
in subsection (e) of the proposed Rule, other than minor rule 
violations, on its Web site. Proposed NYSE Arca Equities Rule 
10.15(a)(1) would also provide that, in response to a request, the 
Exchange shall release to the requesting party a copy of any identified 
disciplinary complaint or disciplinary decision issued by the Exchange, 
as defined in proposed NYSE Arca Equities Rule 10.15(e). These proposed 
amendments are modeled on Rule 8313(a)(1) and, except for an 
inapplicable reference to the Rule 9000 Series, would be the same as 
the NYSE and NYSE MKT Rule.
    Second, proposed NYSE Arca Equities Rule 10.15(a)(2) would provide 
that the Exchange shall release to the public a copy of, and at the 
Exchange's discretion information with respect to, any statutory 
disqualification decision, notification, or notice issued by the 
Exchange pursuant to NYSE Arca Equities Rules 10 or 11 that will be 
filed with the SEC. Proposed NYSE Arca Equities Rule 10.15(a)(2) is 
modeled on Rule 8313(a)(2) but substitutes references to NYSE Arca 
Equities Rules 10 and 11 for references to the NYSE and NYSE MKT Rule 
9520 Series, and omits reference to the NYSE and NYSE MKT Rule 9800 
Series. NYSE Arca Equities does not have rules governing temporary 
cease and desist proceedings comparable to the Rule 9800 Series. The 
proposed Rule is otherwise the same as the NYSE and NYSE MKT Rule.
    Third, proposed NYSE Arca Equities Rule 10.15(a)(3) would provide 
that the Exchange shall release to the public information with respect 
to any suspension, cancellation, expulsion, or bar that constitutes 
final Exchange action imposed pursuant to NYSE Arca Equities Rule 11, 
which governs cancellation, suspension and reinstatement and is the 
Exchange's analogue to the various provisions of the NYSE and NYSE MKT 
Rule 9550 Series referenced in Rule 8313(a)(3) governing suspensions, 
cancellations, expulsions and bars, with the exception of NYSE and NYSE 
MKT Rule 9556, which governs failure to comply with a temporary or 
permanent cease and desist order issued under the Rule 9200, 9300 or 
9800 Series. NYSE Arca Equities does not have rules governing temporary 
cease and desist proceedings comparable to Rule 9200, 9300 or 9800 
Series. Like Rule 8313(a), proposed NYSE Arca Equities Rule 10.15(a)(3) 
would also encompass proceedings for failure to pay fines, other 
monetary sanctions, or costs.\15\ The proposed Rule is otherwise the 
same as Rule 8313(a)(3).
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    \15\ In that regard, Rule 8313(a) references summary proceedings 
under NYSE and NYSE MKT Rule 8320. Unlike a proceeding under NYSE or 
NYSE MKT Rule 8320, a proceeding under NYSE Arca Equities Rule 11 
for failure to pay fines, other monetary sanctions, or costs could 
not be a summary proceeding.
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    To further conform proposed NYSE Arca Equities Rule 10.15 to Rule 
8313, the Exchange proposes to add a new subsection (a)(4) modeled on 
Rule 8313(a)(4) that provides that the Exchange may release to the 
public a copy of, and information with respect to, any decision or 
notice appealable to the SEC under Exchange Act Section 19(d). The 
proposed Rule is the same as Rule 8313(a)(4) but omits reference to any 
decision or notice issued pursuant to the NYSE and NYSE MKT Rule 9600 
Series, which NYSE Arca Equities has not adopted.\16\
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    \16\ See note 14, supra.
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Release Specifications
    The Exchange proposes to add the title ``Release Specifications'' 
to subsection (b) of NYSE Arca Equities Rule 10.15 and delete the 
current text of subsection (b).
    The Exchange also proposes to delete the entire text of current 
Rule 10.15(b)(1) and 10.15(b)(2). The Exchange proposes new subsections 
(b)(1) and (b)(2) modeled on Rule 8313(b)(1) and (b)(2), as follows.
    Proposed NYSE Arca Equities Rule 10.15(b)(1) would provide that 
copies of, and information with respect to, any disciplinary complaint 
released to the public pursuant to paragraph (a) of the proposed Rule 
shall indicate that a disciplinary complaint represents the initiation 
of a formal proceeding by the Exchange in which findings as to the 
allegations in the complaint have not been made and does not represent 
a decision as to any of the allegations contained in the complaint. The 
proposed Rule would be the same as Rule 8313(b)(1).
    Proposed NYSE Arca Equities Rule 10.15(b)(2) provides that copies 
of, and information with respect to, any disciplinary decision or other 
decision, order, notification, or notice released to the public 
pursuant to paragraph (a) of the proposed Rule prior to the expiration 
of the time period provided for an appeal or call for review as 
permitted under Exchange rules or the Exchange Act, or while such an 
appeal or call for review is pending, shall indicate that the findings 
and sanctions imposed therein are subject to review and modification by 
the Exchange or the SEC. The proposed Rule would be the same as Rule 
8313(b)(2).
Discretion To Redact Certain Information or Waive Publication
    The Exchange has determined that, subject to limited exceptions, 
disciplinary information should be released to the public in unredacted 
form. The Exchange proposes to add a new subsection (c) to NYSE Arca 
Equities Rule 10.15 entitled ``Discretion to Redact Certain Information 
or Waive Publication,'' modeled on Rule 8313(c)(1) and (2). With 
respect to the limited exceptions, proposed NYSE Arca Equities Rule 
10.15(c)(1) would provide that the Exchange reserves the right to 
redact, on a case-by-case basis, information that contains confidential 
customer information, including customer identities, or information 
that raises significant identity theft, personal safety, or privacy 
concerns that are not outweighed by investor protection concerns. The 
proposed Rule would be the same as Rule 8313(c)(1).
    Similarly, proposed NYSE Arca Equities Rule 10.15(c)(2) provides 
that, notwithstanding paragraph (a) of the proposed rule, the Exchange 
may determine, in its discretion, to waive the requirement to release a 
copy of, or information with respect to, any disciplinary complaint, 
disciplinary decision or other decision, order, notification, or notice 
under those extraordinary circumstances where the release of such 
information would

[[Page 92896]]

violate fundamental notions of fairness or work an injustice. The 
proposed Rule would be the same as Rule 8313(c)(2).
Notice of Appeals of Corporation Decisions
    The Exchange proposes to add a new subsection (d) to NYSE Arca 
Equities Rule 10.15 entitled ``Notice of Appeals of Corporation 
Decisions to the SEC'' modeled on Rule 8313(d). Proposed NYSE Arca 
Equities Rule 10.15(d) provides that the Exchange must provide notice 
to the public when a disciplinary decision of the Exchange is appealed 
to the SEC and that the notice shall state whether the effectiveness of 
the decision has been stayed pending the outcome of proceedings before 
the Commission. The proposed Rule would be the same as Rule 8313(d).
Definitions
    Finally, the Exchange proposes to add a new subsection (e) to NYSE 
Arca Equities Rule 10.15 entitled ``Definitions.'' Proposed NYSE Arca 
Equities Rule 10.15(e) would set forth definitions of the terms 
``disciplinary complaint'' and ``disciplinary decision'' as used in the 
Rule, modeled on the definitions contained in Rule 8313(e).
    First, Rule NYSE Arca Equities 10.15(e)(1) would define the term 
``disciplinary complaint'' to mean any complaint issued pursuant to 
NYSE Arca Rule 10.4, which governs complaints. The proposed text is 
identical to Rule 8313(e)(1) except that the proposed Rule would 
substitute ``Rule 10.4'' for ``the Rule 9200 Series.''
    Second, proposed NYSE Arca Equities Rule 10.15(e)(2) would define 
the term ``disciplinary decision'' to mean any decision issued pursuant 
to NYSE Arca Equities Rules 10.4 (c) (Summary Proceedings), 10.6 
(Offers of Settlement), 10.7 (Decision), or 10.8 (Review), including, 
decisions issued by the Business Conduct Committee (``BCC''), a Conduct 
Panel, the CFR or the Board of Directors,\17\ and orders accepting 
offers of settlement. Under proposed subsection (e)(2), the term would 
not include decisions, notifications, or notices issued pursuant to 
paragraphs (a)(2), (a)(3) and (a)(4) of the proposed Rule. Finally, 
proposed NYSE Arca Equities Rule 10.15(e)(2) provides that minor rule 
violation plan letters issued pursuant to NYSE Arca Equities Rule 10.12 
are not subject to the proposed Rule. The proposed Rule would be the 
same as Rule 8313(e)(2) except that the proposed Rule would substitute 
references to the relevant NYSE Arca Equities Rules for references to 
the NYSE and NYSE MKT Rule 9000 Series, Rule 9550 Series, Rule 9600 
Series, Rule 9800 Series, Rule 9520 Series, and Rules 9216 and 9217.
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    \17\ NYSE Arca Equities Rule 10.8(c) and (d) refer to the ``NYSE 
Arca Board of Governors,'' an outdated reference that has been 
changed to ``NYSE Arca Board of Directors'' elsewhere in the rules. 
See Securities Exchange Act Release No. 77898 (May 24, 2016), 81 FR 
34404 (May 31, 2016) (SR-NYSEArca-2016-11).
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* * * * *
    The Exchange believes that greater access to information regarding 
disciplinary actions provides valuable guidance and information to 
permit holders, associated persons, other regulators, and investors. 
Further, releasing detailed disciplinary information to the public can 
serve to deter and prevent future misconduct and improve overall 
business standards in the securities industry as well as allowing 
investors to consider firms' and representatives' disciplinary 
histories when considering whether to engage in business with them.
    Publishing more detailed information than the Exchange currently 
does would also allow permit holders to utilize that information to 
educate associated persons as to compliance matters, highlight 
potential violations and related sanctions, as well as inform the 
firms' compliance procedures involving similar business lines, 
products, or industry practices. Finally, the Exchange believes that 
any member organization or individual facing allegations of rule 
violations would also have access to more information to gain greater 
insight on related facts and sanctions.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\18\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\19\ in particular, in that it 
enables the Exchange to be so organized as to have the capacity to be 
able to carry out the purposes of the Exchange Act and to comply, and 
to enforce compliance by its exchange members and persons associated 
with its exchange members, with the provisions of the Exchange Act, the 
rules and regulations thereunder, and the rules of NYSE Arc [sic] and 
NYSE Arca Equities. In particular, the Exchange believes that the 
proposed changes to NYSE Arca Rule 10.17 and NYSE Arca Equities Rule 
10.15 regarding release of disciplinary complaints, decisions and other 
information are consistent with Section 6(b) of the Act because they 
would establish general standards for the release of disciplinary 
information to the public in line with those in effect with its 
affiliates and would provide greater access to information regarding 
the Exchange's disciplinary actions by enabling the Exchange to also 
release disciplinary complaints, which current NYSE Arca Rule 10.17 and 
NYSE Arca Equities Rule 10.15 do not provide for.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
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    For the same reasons, the Exchange believes that the proposed 
changes to NYSE Arca Rule 10.17 and NYSE Arca Equities Rule 10.15 
further the objectives of Section 6(b)(5) of the Act \20\ because the 
changes are designed 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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    \20\ 15 U.S.C. 78f(b)(5).
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    In particular, the proposed amendments to NYSE Arca Rule 10.17 and 
NYSE Arca Equities Rule 10.15 further the objectives of Section 6(b)(5) 
of the Act by providing greater clarity, consistency, and transparency 
regarding the release of disciplinary complaints, decisions and other 
information to the public. By adopting the proposed amendments to NYSE 
Arca Rule 10.17 and NYSE Arca Equities Rule 10.15 modeled on the NYSE's 
and NYSE MKT's rules, the Exchange would establish standards for the 
release of disciplinary information to the public in line with those in 
effect with its affiliates that provide greater access to information 
regarding the Exchange's disciplinary actions. The Exchange would also 
describe the scope of information subject to proposed NYSE Arca Rule 
10.17 and NYSE Arca Equities Rule 10.15. The Exchange believes that 
this proposed rule change promotes greater transparency with respect to 
the Exchange's disciplinary process, and that the proposed rule change 
provides greater access to information regarding its disciplinary 
actions because, as noted, it would require the Exchange to release 
copies of disciplinary complaints, and also provides valuable guidance 
and information to permit holders, associated persons, other 
regulators, and the investing public.

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

    The proposed rule change is not intended to address competitive 
issues, but rather it is designed to (1) enhance the Exchange's rules 
governing the release of disciplinary complaints,

[[Page 92897]]

decisions and other information to the public, thereby providing 
greater clarity and consistency and resulting in less burdensome and 
more efficient regulatory compliance and facilitating performance of 
regulatory functions, and (2) provide greater harmonization among NYSE 
Arca, NYSE Arca Equities, NYSE and NYSE MKT rules of similar purpose.

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 \21\ and Rule 19b-4(f)(6) thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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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 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEARCA-2016-161 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEARCA-2016-161. 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 Web site (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 Web site 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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEARCA-2016-161 and should 
be submitted on or before January 10, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-30553 Filed 12-19-16; 8:45 am]
 BILLING CODE 8011-01-P