Document ID: SEC-2022-1147-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE National, Inc.
Posted Date: 2022-08-29T04:00Z

[Federal Register Volume 87, Number 166 (Monday, August 29, 2022)]
[Notices]
[Pages 52823-52825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18500]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95579; File No. SR-NYSENAT-2022-15]

Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule To Change the Name 
of Its Business Conduct Committee

August 23, 2022.
    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 August 8, 2022, NYSE National, Inc. (``NYSE National'' or the 
``Exchange'') 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 to change the name of its ``Business Conduct 
Committee'' to the ``Hearing Board.'' 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 change the name of its ``Business Conduct 
Committee'' (``BCC'') to the ``Hearing Board.'' The change will require 
amendments to the Sixth Amended and Restated Bylaws of the Exchange 
(``Bylaws'') and Rules 10.9120(v) (Definitions), 10.9217(b) (Violations 
Appropriate for Disposition Under Rule 10.9216(b)), and 10.9232 
(Criteria for Selection of Panelists and Replacement Panelists). Only 
the committee's name would change, and there would be no other change 
to the Bylaws and rules with respect to the committee.
    Pursuant to the Bylaws, the BCC is a committee of the Board and 
presides over all disciplinary proceedings in accordance with the rules 
and as may be specified in its charter. In turn, the rules mandate that 
the Board appoint the BCC annually and set the requirements for the 
BCC's composition.\4\ The rule further provide that the Chief Hearing 
Officer selects the members of hearing panels from the BCC, and the 
role of the hearing panels in adjudicating individual disciplinary 
proceedings.\5\
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    \4\ See Rule 10.9232.
    \5\ See, e.g., Rules 10.9231 (Appointment by the Chief Hearing 
Officer of Hearing Panel or Extended Hearing Panel or Replacement 
Hearing Officer), 10.9232, and 10.9268 (Decision of Hearing Panel or 
Extended Hearing Panel). Chief Hearing Officer is defined in Rule 
10.9120(c).
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    Starting in 2013, the Exchange and its self-regulatory organization 
affiliates (together with the Exchange, the ``NYSE Exchanges'') \6\ 
have adopted rules relating to investigation, discipline, and 
sanctions, and other procedural rules, based on the rules of the 
Financial

[[Page 52824]]

Industry Regulatory Authority.\7\ As a result, the NYSE Exchanges all 
have disciplinary committees that play substantially the same role and 
are subject to the same or substantially similar rules as the BCC.\8\ 
The Exchange now proposes to conform the legacy name of its 
disciplinary committee with such other committees.
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    \6\ The other NYSE Exchanges are the New York Stock Exchange LLC 
(``NYSE''), NYSE American LLC (``NYSE American''), NYSE Arca, Inc. 
(``NYSE Arca'') and NYSE Chicago, Inc. (``NYSE Chicago'').
    \7\ See Exchange Act Release Nos. 69045 (March 5, 2013), 78 FR 
15394 (March 11, 2013) (SR-NYSE-2013-02); 77241 (February 26, 2016), 
81 FR 11311 (March 3, 2016) (SR-NYSEMKT-2016-30); 83289 (May 17, 
2018), 83 FR 23968 (May 23, 2018) (SR-NYSENat-2018-02); 85639 (April 
12, 2019), 84 FR 16346 (April 18, 2019) (SR-NYSEArca-2019-15); and 
95020 (June 1, 2020), 87 FR 35034 (June 8, 2022) (SR-NYSECHX-2022-
10).
    \8\ The differences between the rules are largely attributable 
to the NYSE Exchanges' distinct membership structures and use of 
terminology, as well as the fact that not all of the NYSE Exchanges 
have a trading floor. See 83 FR 23968, supra note 7, at 23973; see, 
e.g., NYSE Rule 9231; NYSE American Rule 9231; NYSE Arca Rule 
10.9231; and NYSE Chicago Rule 9231.
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    In order to implement the change, the Exchange proposes to amend 
the Exchange Bylaws as follows.
     The first sentence of Article V, Section 5.1 (Number of 
Committees) lists the committees of the Board. The Exchange proposes to 
exchange the reference to the BCC with a reference to the Hearing 
Board, in alphabetical order, as follows (deletion in brackets, 
addition in italics):
    The committees of the Board shall consist of [a Business Conduct 
Committee,] a Committee for Review, a Hearing Board, a Nominating 
Committee, a Regulatory Oversight Committee, and such other committees 
as may be from time to time established by the Board.
     In Section 5.9 (Business Conduct Committee), ``Business 
Conduct Committee'' would be replaced with ``Hearing Board'' in the 
title and body of the section.
     In a non-substantive change, the Exchange proposes to 
amend the title of the Bylaws to reflect that they are the ``Seventh 
Amended and Restated Bylaws of NYSE National, Inc.''
    In addition, the Exchange proposes to amend the rules of the 
Exchange as follows.
     The Exchange proposes to delete the final sentence of the 
definition of ``Panelist'' in Rule 10.9120(v). The text of the sentence 
states that Hearing Panel members will be drawn from the BCC. Under the 
proposed change, that sentence would not be required, because revised 
Rule 10.9232 would state that each Panelist ``shall be a member of the 
Exchange Hearing Board,'' making the previous statement redundant. The 
proposed deletion would make the definition the same as the definition 
of ``Panelist'' in the rules of the NYSE Arca and NYSE Chicago,\9\ and, 
apart from the cross references, the same as the definition in the 
rules of the NYSE and NYSE American.\10\
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    \9\ See NYSE Arca Rule 10.9120(v) (Definitions) and NYSE Chicago 
Rule 9120(v) (Definitions).
    \10\ The NYSE and NYSE American definitions reference the Rule 
9200 Series, Rule 9550 Series, and Rule 9800 Series instead of the 
Rule 10.9200 Series, the Rule 10.9550 Series, and the Rule 10.9800 
Series. See NYSE Rule 9120(v) (Definitions) and NYSE American Rule 
9120(v) (Definitions). See also 83 FR 23968, supra note 7, at 23973 
(noting the difference between the Exchange and NYSE American 
rules).
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     Current Rule 10.9217(b) (Violations Appropriate for 
Disposition Under Rule 10.9216(b)) would be amended to replace the 
reference to the BCC with a reference to the Hearing Board.\11\
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    \11\ Rule 10.9217(b) incorporates the requirement in previous 
Rule 8.15(c) that if a person or organization fined pursuant to the 
Rule pays the fine, such payment is deemed a waiver of any right to 
a disciplinary proceeding under the Rule 10.9000 Series and of any 
right to review of the matter by the BCC, Committee for Review, or 
the Board. See id., at 23973 (noting that Rule 10.9217 is a merger 
of NYSE American Rule 9217 and Rule 8.15).
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     ``BCC'' would be replaced with ``Hearing Board'' in Rule 
10.9232. The other NYSE Exchanges use ``hearing board,'' but 
capitalizing ``Hearing Board'' would be consistent with proposed 
Article V, Section 5.1 of the Bylaws, which would capitalize the name 
of the committee. Otherwise, the revised text would be consistent with 
the same provision in the rules of the NYSE, NYSE American, NYSE Arca, 
and NYSE Chicago.\12\
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    \12\ See NYSE Rule 9232 (Criteria for Selection of Panelists and 
Replacement Panelists); NYSE American Rule 9232 (Criteria for 
Selection of Panelists and Replacement Panelists); NYSE Arca Rule 
10.9232 (Criteria for Selection of Panelists and Replacement 
Panelists); and NYSE Chicago Rule 10.9232 (Criteria for Selection of 
Panelists and Replacement Panelists).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\13\ in general, and furthers the 
objectives of Section 6(b)(1) \14\ 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 the Exchange. The 
Exchange also believes that the proposed rule change is consistent with 
Section 6(b)(5) of the Exchange Act,\15\ 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, 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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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(1).
    \15\ 15 U.S.C. 78f(b)(5).
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    Changing the name of the BCC to ``Hearing Board'' would make the 
name of the Exchange's disciplinary committee consistent with those of 
the other NYSE Exchanges, each of which has a hearing board with the 
same responsibilities and functions. The Exchange believes that this 
change would contribute to the orderly operation of the Exchange and 
would enable the Exchange to be so organized as to have the capacity to 
carry out the purposes of the Exchange Act and comply with the 
provisions of the Exchange Act by its members and persons associated 
with members, because the BCC plays substantially the same role, and is 
subject to the same or substantially similar rules, as the other NYSE 
Exchanges' hearing boards.\16\ The proposed name change therefore would 
increase conformity in the committee names, reflecting the similarity 
among the committees themselves. For the same reason, the Exchange 
believes that the proposed change would protect investors and the 
public interest.
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    \16\ Starting in 2013, the NYSE Exchanges have adopted rules 
relating to investigation, discipline, and sanctions, and other 
procedural rules, based on the rules of the Financial Industry 
Regulatory Authority. See note 7, supra.
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    The Exchange also believes that the greater consistency among the 
names of the NYSE Exchanges' hearing boards would promote the 
maintenance of a fair and orderly market and the protection of 
investors and the public interest by removing any confusion that may 
result from the Exchange's disciplinary committee being called the BCC, 
given that NYSE Arca has a business conduct committee, also referred to 
as the ``BCC,'' that is subject to different rules and has a distinct 
function and authority than the NYSE National BCC.\17\
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    \17\ See, e.g., NYSE Arca Rules 3.2(B)(2) (Exchange Committees), 
10.3 (Ex Parte Communications), 10.4 (Complaints), and 10.12 (Minor 
Rule Plan). See also 84 FR 16346, supra note 7, at 16356.
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    The proposed change would reduce redundancy by deleting the final 
sentence of the definition of ``Panelist'' in Rule 10.9120(v), which 
states that Hearing Panel members will be drawn from the BCC. Under the 
proposed change, that sentence would not be

[[Page 52825]]

required, because revised Rule 10.9232 would state that each Panelist 
``shall be a member of the Exchange Hearing Board,'' thereby making any 
previous statement redundant. The change would streamline and increase 
the clarity of the rules, which would contribute to the orderly 
operation of the Exchange and be beneficial to both investors and the 
public interest.
    For the same reasons, the proposed amendments would remove 
impediments to and perfect the mechanism of a free and open market by 
ensuring that persons subject to the Exchange's jurisdiction, 
regulators, and the investing public could more easily navigate and 
understand the Exchange Bylaws and rules. The Exchange further believes 
that the proposed amendments would not be inconsistent with the public 
interest and the protection of investors because investors will not be 
harmed and in fact would benefit from increased transparency and 
clarity, thereby reducing potential confusion.

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 Exchange Act. The proposed rule 
change is not intended to address competitive issues but rather is 
concerned solely with the name of the disciplinary committee of the 
Exchange. Because the only proposed change would be to the name of the 
committee, there would be no other change to the Bylaws and rules 
governing the BCC, including those regarding its appointment, 
composition, or jurisdiction.

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 \18\ and Rule 19b-4(f)(6) thereunder.\19\ 
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.\20\
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    \18\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 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) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 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-NYSENAT-2022-15 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-NYSENAT-2022-15. 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-NYSENAT-2022-15 and should be submitted 
on or before September 19, 2022.
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    \22\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-18500 Filed 8-26-22; 8:45 am]
BILLING CODE 8011-01-P