Document ID: SEC-2019-1061-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2019-07-26T04:00Z

[Federal Register Volume 84, Number 144 (Friday, July 26, 2019)]
[Notices]
[Pages 36149-36151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15874]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86423; File No. SR-NYSEARCA-2019-50]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Adopt a New Rule 
9.21-O, Delete Current Rules 9.21-O through 9.25-O, and Amend Rule 
10.9551

July 22, 2019.
    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 July 9, 2019, NYSE Arca, Inc. (``NYSE Arca'' 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 (1) adopt a new Rule 9.21-O 
(Communications with the Public) based on NYSE American Rule 991, (2) 
delete current Rules 9.21-O through 9.25-O, and (3) amend Rule 10.9551 
to add references to proposed Rule 9.21-O. 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.

[[Page 36150]]

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 (1) adopt a new Rule 9.21-O 
(Communications with the Public) based on NYSE American Rule 991 
(Options Communications), (2) delete Rules 9.21-O through 9.25-O, and 
(3) amend Rule 10.9551 to add references to proposed Rule 9.21-O.
Background and Proposed Rule Filing
    The Exchange recently adopted a new set of rules governing 
investigations, discipline of ETP Holders, OTP Holders, OTP Firms, and 
covered persons, sanctions, cease and desist authority, and other 
procedural rules modeled on the rules of the Exchange's affiliates, New 
York Stock Exchange LLC (``NYSE'') and NYSE American LLC (``NYSE 
American''), as well as those of the Financial Industry Regulatory 
Authority, Inc. (``FINRA'').\4\ The new disciplinary rules became 
effective on May 27, 2019.\5\
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    \4\ See Securities Exchange Act Release No. 34-85639 (April 12, 
2019), 84 FR 16346 (April 18, 2019) (SR-NYSEARCA-2019-15) (Notice) 
(``Disciplinary Rules Adoption'').
    \5\ See NYSE Arca Options Regulatory Bulletin 19-02 (April 26, 
2019), available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/rule-interpretations/2019/Regulatory%20Bulletin%20re%20Arca%20Disciplinary%20Rules.%20revised%2004.25.19%20V2.pdf.
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    In that filing, the Exchange adopted Rule 10.9551 (Failure to 
Comply with Public Communication Standards), which permits the 
Exchange's regulatory staff to issue a written notice requiring an ETP 
Holder, OTP Holder or OTP Firm to file communications with FINRA's 
Advertising Regulation Department at least 10 days prior to use if the 
staff determined that the ETP Holder had departed from the standards of 
Rule 9.21-E (Communications with the Public) and ``any applicable 
options rule.'' \6\ As the filing noted, the Exchange did not have a 
rule comparable to Rule 9.21-E for the options market and undertook to 
submit a rule filing to adopt a new Rule 9.21-O based on NYSE American 
Rule 991 and to amend Rule 10.9551.\7\
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    \6\ See Disciplinary Rules Adoption, 84 FR at 16370.
    \7\ See id., at n. 62.
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    The Exchange accordingly proposes to adopt a new Rule 9.21-O titled 
``Communications with the Public.'' Except for references to OTP Firm 
and OTP Holder, proposed Rule 9.21-O is substantially the same as NYSE 
American Rule 991, which was in turn based on FINRA Rule 2220.\8\ The 
Exchange proposes to delete its current Rules 9.21-O through 9.25-O 
governing communications with the public as obsolete.
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    \8\ See Securities Exchange Act Release No. 61499 (February 4, 
2010), 75 FR 6738 (February 10, 2010) (SR-NYSEAmex-2010-04); 
Securities Exchange Act Release No. 82402 (December 26, 2017), 83 FR 
179 (January 2, 2018) (SR-NYSEAmex-2017-39).
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    The Exchange proposes non-substantive conforming changes in Rule 
10.9551(a) and (d) to replace the phrase ``and any applicable options 
rule'' following ``Pursuant to Rule 9.21-E(c)(5)(B)'' with ``Rule 9.21-
O(c)(2).''
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\9\ in general, and furthers the objectives of Section 6(b)(5) of 
the Act,\10\ in particular, 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The proposed changes will provide greater harmonization among SROs 
resulting in less burdensome and more efficient regulatory compliance 
for common members of the Exchange, the Exchange's affiliates, and 
FINRA. As previously noted, the proposed rule text is substantially the 
same as NYSE American Rule 991, which was in turn modeled on FINRA 
rules. As such, the proposed rule change would foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities and would remove impediments to and perfect the mechanism of 
a free and open market and a national market system. The Exchange 
further believes that adopting NYSE American's rule governing options 
communications with the public will provide its permit holders with a 
clearer, consistent, and more comprehensive regulatory scheme by 
harmonizing the Exchange's rule concerning options communications with 
NYSE American's rule and the FINRA rule in the same subject matter. The 
proposed rule change would continue to ensure a uniform regulatory 
approach and would reduce any potential risks or inefficiencies in 
rules. The Exchange further notes that the changes proposed herein are 
neither novel nor controversial and are modeled on existing FINRA 
rules.
    The Exchange also believes that the proposal to use the terms ``OTP 
Firm'' and ``OTP Holder'' instead of ``ATP Holder'' would remove 
impediments to, and perfect the mechanisms of, a free and open market 
and a national market system and, in general, protect investors and the 
public interest because the proposed change would reflect the 
Exchange's membership and terminology used in the Exchange's rulebook, 
thereby reducing any potential ambiguity and providing clarify to the 
Exchange's rules. The proposed use of the terms ``OTP Firm'' and ``OTP 
Holder'' would be consistent with the NYSE American term ``ATP 
Holder.''
    The Exchange believes that deleting the Exchange's current options 
communications with the public as obsolete would remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system and, in general, protect investors and the public 
interest because it would eliminate rules that are now obsolete or that 
do not have any substantive content. Eliminating obsolete rules would 
reduce potential confusion and add transparency and clarity to the 
Exchange's rules, thereby ensuring that members, regulators, and the 
public can more easily navigate and understand the Exchange's rulebook.
    Finally, the Exchange believes that the proposed conforming changes 
to Rule 10.9551(a) would remove impediments to and perfect the 
mechanism of a free and open market and a national market system by 
ensuring that market participants can more easily navigate, understand 
and comply with its rules, thereby reducing potential investor or 
market participant confusion.

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

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not designed to address any competitive issues. Rather, the proposed 
change is designed to further harmonize the Exchange's rule regarding 
options communications with the comparable rule of the Exchange's 
affiliate NYSE American and to make conforming changes to the 
Exchange's disciplinary rules.

[[Page 36151]]

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 \11\ and Rule 19b-4(f)(6) thereunder.\12\ 
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.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
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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-2019-50 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-NYSEARCA-2019-50. 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-2019-50 and 
should be submitted on or before August 16, 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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-15874 Filed 7-25-19; 8:45 am]
 BILLING CODE 8011-01-P