Document ID: SEC-2022-1228-0001
Agency: sec
Document Type: Notice
Title: Order Granting Application: NYSE Chicago, Inc.
Posted Date: 2022-09-16T04:00Z

[Federal Register Volume 87, Number 179 (Friday, September 16, 2022)]
[Notices]
[Pages 56995-56996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20036]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95738]

Order Granting Application by NYSE Chicago, Inc., for an 
Exemption, Pursuant to Section 36(a) of the Exchange Act, From the Rule 
Filing Requirements of Section 19(b) of the Exchange Act With Respect 
to Certain Rules Incorporated by Reference

September 12, 2022.
    NYSE Chicago, Inc. (``Exchange'' or ``NYSE Chicago'') filed with 
the Securities and Exchange Commission (``Commission'' or ``SEC'') an 
application \1\ for an exemption under Section 36(a) of the Securities 
Exchange Act of 1934 (``Exchange Act'') \2\ and Rule 0-12 thereunder 
\3\ from the rule filing requirements of Section 19(b) of the Exchange 
Act \4\ with respect to the rules of the Exchange governing its 
members' communications with the public. Section 36 of the Exchange Act 
authorizes the Commission to conditionally or unconditionally exempt 
any person, security, or transaction, or any class or classes of 
persons, securities, or transactions, from any provision or provisions 
of the Exchange Act, or of any rule or regulation thereunder, to the 
extent that such exemption is necessary or appropriate in the public 
interest, and is consistent with the protection of investors.
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    \1\ See letter from David De Gregorio, Associate General 
Counsel, New York Stock Exchange, to Vanessa Countryman, Secretary, 
SEC, dated June 7, 2022 (``Exemptive Request'').
    \2\ 15 U.S.C. 78mm.
    \3\ 17 CFR 240.0-12 (Commission procedures for filing 
applications for orders for exemptive relief under Section 36 of the 
Exchange Act).
    \4\ 15 U.S.C. 78s(b).
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    NYSE Chicago has requested that the Commission grant the Exchange 
an exemption from the rule filing requirements of Section 19(b) of the 
Exchange Act for a change to NYSE Chicago Rule 11.2210 governing its 
members' communications with the public that are effected solely by 
virtue of a change to Rule 2210 (Communications with the Public) of the 
Financial Industry Regulatory Authority, Inc. (``FINRA''), which is 
incorporated by reference into NYSE Chicago Rule 11.2210. Specifically, 
the Exchange requests that it be permitted to incorporate by reference 
a change made to FINRA Rule 2210 without the need for the Exchange to 
separately file a similar proposed rule change pursuant to Section 
19(b) of the Exchange Act. The Exchange states that this exemption is 
appropriate because it would result in NYSE Chicago Rule 11.2210 being 
consistent with the relevant incorporated FINRA rule at all times, thus 
helping ensure identical regulation of joint members of NYSE Chicago 
and FINRA with respect to the rule, which is regulatory in nature, and 
not a trading rule.\5\ The Exchange further states that without such an 
exemption, joint members of NYSE Chicago and FINRA could be subject to 
two different standards regarding their communications with the public 
and that, by helping ensure consistency between NYSE Chicago and FINRA 
rules of same purpose, the exemption

[[Page 56996]]

would facilitate FINRA's provision of regulatory services to the 
Exchange.\6\
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    \5\ See Exemptive Request at 2. A self-regulatory organization 
(``SRO'') wishing to incorporate rules of another SRO by reference 
may submit a written request for an order exempting it from the 
requirement in Section 19(b) of the Exchange Act to file proposed 
rule changes relating to the rules incorporated by reference, if, 
among other things, the rules to be incorporated are categories of 
rules (rather than individual rules within a category) that are not 
trading rules (e.g., the SRO has requested incorporation of rules 
such as margin, suitability, or arbitration). See also Exchange Act 
Release No. 49260 (Feb. 17, 2004), 69 FR 8500 (Feb. 24, 2004).
    \6\ See Exemptive Request at 2.
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    As a condition of the requested exemption, the Exchange has agreed 
to provide written notice to its members whenever FINRA proposes a 
change to FINRA Rule 2210 that is incorporated by reference into NYSE 
Chicago Rule 11.2210.\7\ Such notice would alert the Exchange's members 
to the FINRA proposed rule change and give them an opportunity to 
comment on it.\8\ The Exchange would similarly inform members in 
writing when the Commission approves any such proposed rule change.\9\
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    \7\ See Exemptive Request at 2-3. The Exchange will provide such 
notice via a posting on the same website location where the Exchange 
posts its own rule filings pursuant to and within the timeframe 
required by Rule 19b-4(1) under the Exchange Act. The website 
posting will include a link to the location on FINRA's website where 
the applicable proposed rule change is posted. Id. at n.6.
    \8\ See Exemptive Request at 3.
    \9\ Id. at 3
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    The Commission has issued exemptions similar to the Exchange's 
request.\10\ In granting one such exemption in 2022, the Commission 
repeated an earlier Commission statement that it would consider similar 
future exemption requests from other SROs, provided that:
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    \10\ See, e.g., Exchange Act Release No. 94707 (Apr. 12, 2022), 
87 FR 22962 (Apr. 18, 2022) (order granting The Nasdaq Stock Market 
LLC and five affiliated national securities exchanges an exemption 
under Section 36(a) of the Exchange Act from the rule filing 
requirements of Section 19(b) of the Exchange Act with respect to 
certain of its rules incorporating by reference rules of FINRA) 
(``Nasdaq Order''); Exchange Act Release No. 83040 (Apr. 12, 2018), 
83 FR 17198 (Apr. 18, 2018) (order granting MIAX PEARL, LLC, an 
exemption under Section 36(a) of the Exchange Act from the rule 
filing requirements of Section 19(b) of the Exchange Act with 
respect to certain of its rules incorporating by reference rules of 
the Miami International Securities Exchange, LLC); and Exchange Act 
Release No. 61534 (Feb. 18, 2010), 75 FR 8760 (Feb. 25, 2010) (order 
granting BATS Exchange, Inc., an exemption under Section 36(a) of 
the Exchange Act from the rule filing requirements of Section 19(b) 
of the Exchange Act with respect to certain of its rules 
incorporating by reference rules of the Chicago Board Options 
Exchange, Incorporated, FINRA, and the New York Stock Exchange, 
LLC).
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     An SRO wishing to incorporate rules of another SRO by 
reference has submitted a written request for an order exempting it 
from the requirement in Section 19(b) of the Exchange Act to file 
proposed rule changes relating to the rules incorporated by reference, 
has identified the applicable originating SRO(s), together with the 
rules it wants to incorporate by reference, and otherwise has complied 
with the procedural requirements set forth in the Commission's release 
governing procedures for requesting exemptive orders pursuant to Rule 
0-12 under the Exchange Act;
     The incorporating SRO has requested incorporation of 
categories of rules (rather than individual rules within a category) 
that are not trading rules (e.g., the SRO has requested incorporation 
of rules such as margin, suitability, or arbitration); and
     The incorporating SRO has reasonable procedures in place 
to provide written notice to its members each time a change is proposed 
to the incorporated rules of another SRO.\11\
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    \11\ See Nasdaq Order at 22962 (footnotes omitted).
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    The Exchange has satisfied each of these conditions. Moreover, 
granting the Exchange an exemption from the rule filing requirements 
under Section 19(b) of the Exchange Act will promote efficient use of 
Commission and Exchange resources by avoiding duplicative rule filings 
based on simultaneous changes to identical rule text sought by more 
than one SRO. The Commission therefore finds it appropriate in the 
public interest, and consistent with the protection of investors, to 
exempt the Exchange from the rule filing requirements under Section 
19(b) of the Exchange Act with respect to the above-described rule the 
Exchange has incorporated by reference.
    Accordingly, it is ordered, pursuant to Section 36 of the Exchange 
Act,\12\ that the Exchange is exempt from the rule filing requirements 
of Section 19(b) of the Exchange Act with respect to a change to NYSE 
Chicago Rule 11.2210 resulting solely from a change made to FINRA Rule 
2210 without the need for the Exchange to separately file, pursuant to 
Section 19(b) of the Exchange Act, a proposed rule change similar to 
the one filed by FINRA, provided that the Exchange promptly provides 
written notice to its members whenever a change is proposed to FINRA 
Rule 2210, and provided that the Exchange informs its members in 
writing when the Commission approves any such proposed rule change.
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    \12\ 15 U.S.C. 78mm.

    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)(76).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-20036 Filed 9-15-22; 8:45 am]
BILLING CODE 8011-01-P