Document ID: SEC-2018-1899-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2018-12-12T05:00Z

[Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)]
[Notices]
[Pages 63960-63962]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26823]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84724; File No. SR-NYSEAMER-2018-54]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change of 
Amendments to the Exchange's Rules To Delete References to the Term 
``Allied Member'' and Correct Rule 2.1220

December 6, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on November 30, 2018, NYSE American LLC (the ``Exchange'' or 
``NYSE American'') 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 the Exchange's rules to delete 
references to the term ``allied member'' and correct an inadvertent 
error in Rule 2.1220. 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 member'' from its rules. The ``allied member'' designation is 
a regulatory category based on a person's control of a member 
organization. The Exchange's affiliate New York Stock Exchange LLC (the 
``NYSE'') no longer has allied members, and FINRA has deleted the term 
from its Incorporated NYSE Rules.\4\ In order to harmonize with the 
rules of the NYSE and FINRA, the Exchange accordingly proposes to 
delete reference to ``allied member'' from the following Exchange 
rules: Rule 2, Rule 2.21E, Rule 7.3E, Rule 18, Rule 25, Rule 50, Rule 
204, Rule 310, Rule 317, Rule 320, Rule 341, Rule 341A, Rule 342, Rule 
356, Rule 359, Rule 359B, Rule 415, the preamble to the rule regarding 
Proxies, Rule 458--Equities, Rule 472, Rule 481, Rule 520, Rule 624, 
Rule 724, Rule 900.2NY and Rule 9232. The Exchange also proposes to 
delete Rule 23, which defines the term allied member, and Rule 355, 
which provides the requirements for an allied membership, in their 
entirety.
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    \4\ See Securities Exchange Act Release No. 58549 (September 15, 
2008), 73 FR 54444 (September 19, 2008) (SR-NYSE-2008-80) (Notice); 
Securities Exchange Act Release No. 58533 (September 12, 2008), 73 
FR 54652 (September 22, 2008) (SR-FINRA-2008-036) (Order).

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[[Page 63961]]

    Additionally, in October 2017, the Exchange filed to amend its 
rules regarding qualification, registration and continuing education 
requirements applicable to member organizations, Equity Trading Permit 
Holders and American Trading Permit (``ATP'') Holders.\5\ The Exchange 
mistakenly included a cross reference in Rule 2.1220(a)(7) to Rule 
11.18(b)(2) (which does not exist) rather than to Rule 920(a) when 
amending these rules.
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    \5\ See Securities Exchange Act Release No. 84388 (October 10, 
2018), 83 FR 52287 (October 16, 2018) (SR-NYSEAmer-20018-46) 
(Notice) (``Registration Rules'').
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    Rule 2.1220(a)(7) provides that each ATP Holder engaged in options 
transactions with the public have at least one Registered Options 
Principal. The rule further requires that a principal responsible for 
supervising an ATP Holder's options sales practices with the public, 
including a person designated pursuant to Rule 11.18(b)(2) register 
with the Exchange as a Registered Options Principal, unless such 
principal's options activities are limited solely to those activities 
that may be supervised by a General Securities Sales Supervisor, in 
which case, such person may register as a General Securities Sales 
Supervisor in lieu of registering as a Registered Options Principal. 
The reference to Rule 11.18(b)(2) is incorrect because there is no Rule 
11.18(b)(2) in the Exchange rulebook. The correct reference should be 
to Rule 920(a).\6\ Therefore, the Exchange proposes to replace the 
reference to Rule 11.18(b)(2) with Rule 920(a). The Exchange is not 
proposing to amend any other part of the Registration Rules.
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    \6\ Rule 920(a) provides that ``no member organization shall 
transact any business with the public in option contracts unless 
those persons engaged in the supervision of options sales practices, 
or a person to whom the designated general partner or executive 
officer (pursuant to Rule 922) or another Registered Options 
Principal delegates the authority to supervise options sales 
practices, are registered with and approved by the Exchange as 
Options Principals.'' The rule further provides that ``no individual 
member shall transact any business directly with the public in 
option contracts unless he is registered with and approved by the 
Exchange as an Options Principal.''
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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''),\7\ in general, and 
furthers the objectives of Section 6(b)(5),\8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 and FINRA rules, thus assisting members and member 
organizations in complying with those rules and thereby enhancing 
regulatory efficiency. In addition, the Exchange believes that 
providing greater harmonization between the Exchange and NYSE and FINRA 
rules would result in less burdensome and more efficient regulatory 
compliance for Exchange members and member organizations 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 member'' is consistent with the Act because the 
Exchange no longer recognizes allied member as a registration category 
and no Exchange member is currently registered as an allied member. 
Accordingly, deletion of the term from the Exchange's rules will 
provide clarity and remove any potential confusion among potential 
Exchange members and member organizations as to the category of 
memberships and registration requirements on the Exchange. Finally, the 
Exchange believes it is consistent with the Act to correct the 
incorrect cross reference in Rule 2.1220(a)(7) so that the Exchange's 
rules are accurate, avoiding any potential among ATP Holders.

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 
member organizations and their registered personnel. Further, the 
proposed changes would apply to all Exchange members and member 
organizations 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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 19b-
4(f)(6)(iii) thereunder.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 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) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 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

[[Page 63962]]

     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEAMER-2018-54 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-NYSEAMER-2018-54. 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-NYSEAMER-2018-54 and should be submitted 
on or before January 2, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-26823 Filed 12-11-18; 8:45 am]
 BILLING CODE 8011-01-P