Document ID: SEC-2023-0849-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2023-08-09T04:00Z

[Federal Register Volume 88, Number 152 (Wednesday, August 9, 2023)]
[Notices]
[Pages 53934-53936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16987]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98048; File No. SR-NYSE-2023-25]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Amend Rule 0

August 3, 2023.
    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 July 31, 2023, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``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 Rule 0 (Regulation of the Exchange 
and its Member Organizations) to adopt new rule text based on FINRA 
Rule 0140 (Applicability). 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 53935]]

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 Rule 0 (Regulation of the Exchange 
and its Member Organizations) to adopt new rule text based on FINRA 
Rule 0140 (Applicability), Nasdaq Stock Market LLC (``Nasdaq'') General 
2 (Organization and Administration), Section 6(a), and Nasdaq BX, Inc. 
(``Nasdaq BX'') General 2 (Organization and Administration), Section 
6(a). Specifically, the Exchange proposes a new subsection (b) in 
conformity with FINRA Rule 0140(a) (Applicability), Nasdaq General 2, 
Section 6(a), and Nasdaq BX General 2, Section 6(a).\4\ FINRA Rule 
0140(a) provides that FINRA's rules apply to all members and persons 
associated with a member and that persons associated with a member 
shall have the same duties and obligations as a member under FINRA's 
rules. The Nasdaq Exchanges' Rules mirror FINRA Rule 0140(a) and 
similarly provide that Nasdaq and Nasdaq BX rules, as applicable, apply 
to all members and persons associated with a member and that persons 
associated with a member shall have the same duties and obligations as 
a member under such rules. Proposed Rule 0(b) is substantively the same 
as FINRA Rule 0140(a) except for the inclusion of ``member 
organization'' to reflect the Exchange's membership.\5\
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    \4\ For purposes of this filing, Nasdaq and Nasdaq BX are 
referred to collectively as the ``Nasdaq Exchanges.'' Nasdaq General 
2, Section 6(a) and Nasdaq BX General 2, Section 6(a) are referred 
to collectively as the ``Nasdaq Exchanges' Rules.''
    \5\ Under the Exchange's rules, the equivalent to the term 
``member'' used in FINRA Rule 0140(a) is ``member organization.'' 
See Rules 2(a) & (b).
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    The Exchange believes that the proposed rule change would improve 
the clarity of the Exchange's rules by reflecting that the Exchange's 
rules apply to persons associated with a member organization and that 
such persons have the same duties and obligations as their Exchange 
member organization employer. A member organization's compliance with 
Exchange rules may depend on the actions of persons associated with the 
member organization. Accordingly, the Exchange believes that the 
proposed rule, which mirrors the rules of FINRA and the Nasdaq 
Exchanges, would promote consistency in the Exchange's rules by 
expressly providing that the Exchange may enforce its rules with 
respect to persons associated with a member organization, including by 
taking appropriate disciplinary action against such persons for their 
or their member firm's violation of NYSE rules. The Exchange notes that 
the proposed rule does not contemplate disciplinary action against 
individuals not involved in violations of Exchange rules.
2. Statutory Basis
    The proposed rule change is consistent with section 6(b) of the 
Act,\6\ in general, and furthers the objectives of section 6(b)(5),\7\ 
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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change 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 the proposed changes would add clarity to the 
Exchange's rules. As previously noted, the proposed rule text conforms 
to current FINRA Rule 0140(a) and the Nasdaq Exchanges' Rules without 
substantive change. The Exchange believes that adopting separate rule 
text expressly providing that all Exchange rules apply to persons 
associated with a member organization and that such persons have the 
same duties and obligations as their Exchange member organization 
employer would benefit market participants by providing increased 
clarity regarding the Exchange's ability to enforce compliance with its 
rules by persons associated with a member organization, thereby 
reducing any potential confusion with respect to the Exchange's 
interpretation or application of its rules. Adding these clarifying 
statements to the Exchange's rules would also further the goals of 
transparency and consistency across the Exchange's rules and would 
provide greater harmonization between Exchange rules and FINRA and 
Nasdaq Exchanges' rules of similar purpose, resulting in less 
burdensome and more efficient regulatory compliance. For the same 
reasons, the addition of the proposed rule text would protect investors 
and the public interest and would therefore be consistent with section 
6(b)(5) \8\ of the Act. Thus, the proposed rule change would foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities and will remove impediments to and perfect 
the mechanism of a free and open market and a national market system.
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    \8\ 15 U.S.C. 78f(b)(5).
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    Finally, the Exchange believes that the proposed change would be 
consistent with section 6(b)(1) \9\ of the Act because it would provide 
increased clarity regarding the Exchange's ability to enforce 
compliance with its rules by persons associated with a member 
organization, thereby reducing any potential confusion with respect to 
the Exchange's interpretation or application of its rules. As such, the 
proposed change would enable the Exchange to be so organized as to have 
the capacity to be able to enforce compliance by its exchange members 
and persons associated with its exchange members with the provisions of 
the Act, the rules and regulations thereunder, and the rules of the 
Exchange, consistent with section 6(b)(1) \10\ of the Act.
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    \9\ 15 U.S.C. 78f(b)(1).
    \10\ 15 U.S.C. 78f(b)(1).
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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 rule change is 
not intended to address competitive issues but rather is concerned 
solely with adding clarity and transparency to the Exchange's rules and 
provide greater harmonization with approved FINRA and Nasdaq Exchanges' 
rules.

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

[[Page 53936]]

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSE-2023-25 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-NYSE-2023-25. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NYSE-2023-25 and should be 
submitted on or before August 30, 2023.

    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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16987 Filed 8-8-23; 8:45 am]
BILLING CODE 8011-01-P