Document ID: SEC-2019-0231-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Chicago, Inc.
Posted Date: 2019-03-01T05:00Z

[Federal Register Volume 84, Number 41 (Friday, March 1, 2019)]
[Notices]
[Pages 7154-7156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03631]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85190; File No. SR-NYSECHX-2019-02]

Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Rules of the Exchange To Adopt Article 1, Rule 5

February 25, 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 February 21, 2019, the NYSE Chicago, Inc. (``NYSE 
Chicago'' 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 amend the rules of the Exchange 
(``Rules'') to adopt Article 1, Rule 5 related to designation of 
authority to act under the Rules. 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.

[[Page 7155]]

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange and its direct parent, NYSE Chicago Holdings, Inc., 
were recently acquired by NYSE Group, Inc. (``NYSE Group''), which is 
an indirect wholly-owned subsidiary of the Intercontinental Exchange, 
Inc. (``ICE'').\4\ As a result of its acquisition, the Exchange became 
part of a corporate family that now includes five separate registered 
national securities exchanges.\5\ Following the acquisition, the 
Exchange has continued to operate as a separate self-regulatory 
organization and continues to have rules, membership rosters and 
listings distinct from the rules, membership rosters and listings of 
the other NYSE Group Exchanges.
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    \4\ See Exchange Act Release No. 83635 (July 13, 2018), 83 FR 
34182 (July 19, 2018) (SR-CHX-2018-004); see also Exchange Act 
Release No. 83303 (May 22, 2018), 83 FR 24517 (May 29, 2018) (SR-
CHX-2018-004).
    \5\ The Exchange has four registered national securities 
exchange affiliates: New York Stock Exchange LLC (``NYSE''), NYSE 
Arca, Inc. (``NYSE Arca''), NYSE National and NYSE American LLC 
(``NYSE American'' and together with the Exchange, NYSE, NYSE Arca, 
and NYSE National, the ``NYSE Group Exchanges'').
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    As part of its ongoing post-acquisition transition, the Exchange is 
reviewing its Rules to identify potential rule changes that would 
enhance and streamline the administration of the Exchange. Pursuant to 
this review, the Exchange now proposes to adopt Article 1, Rule 5 
(Designation of Authority) relating to the designation of authority to 
act under the Rules, which is substantively similar to the third 
paragraph of Rule 1 of the NYSE Rules (``NYSE Rule 1'').
    Rule 5 would provide that the Chief Executive Officer (``CEO'') or 
the Chief Regulatory Officer (``CRO'') of the Exchange may formally 
designate one or more qualified employees of ICE to act in place of any 
person named in a Rule as having authority to act under such Rule in 
the event that the named person in the Rule is not available to 
administer that Rule. The proposal to specify that the designee may be 
a qualified employee of ICE is based on NYSE Rule 1. Proposed Rule 5 
would further provide that, for the purposes of a designation by the 
CEO, a qualified employee is: (1) Any officer of ICE that the CEO deems 
to possess the requisite knowledge and job qualifications to administer 
that Rule; or (2) any employee of the Exchange \6\ that the CEO and the 
Board of Directors deem to possess the requisite knowledge and job 
qualifications to administer that Rule, and that, for the purpose of a 
designation by the CRO, a qualified employee is: (1) Any ICE officer 
that the CRO deems to possess the requisite knowledge and job 
qualifications to administer that Rule; or (2) any Exchange employee 
that the CRO and the Exchange's Regulatory Oversight Committee deem to 
possess the requisite knowledge and job qualifications to administer 
that Rule.
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    \6\ The terms ``employee of the Exchange'' and ``Exchange 
employee'' refer to an individual responsible for certain Exchange 
operations who may also be responsible for certain operations of one 
or more of the other NYSE Group Exchanges and/or affiliated 
entities.
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    The Exchange has implemented policies and procedures to formally 
identify the officers and employees who have been delegated authority 
to administer a particular Rule on behalf of any named person 
identified in that Rule. The Exchange considers the delegation of 
authority to be a corporate function; accordingly, such formal 
delegation is subject to approval by the CEO, CRO and Boards of 
Directors or Regulatory Oversight Committee of the Exchange, as 
applicable, as well as compliance with all applicable bylaws of the 
Exchange. These delegations of authority are centrally maintained and 
periodically updated by the Office of the General Counsel to remain 
current with final approval by the CEO or CRO, as applicable.
    The Exchange does not currently maintain a Rule similar to proposed 
Article 1, Rule 5. Rather, certain Rules explicitly permit the Exchange 
officer to designate other individual(s) with authority granted to the 
officer under the relevant Rule.\7\
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    \7\ See e.g., Article 20, Rule 10(b) of the Rules.
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    The proposed rule change is immediately effective upon filing 
pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) \9\ 
thereunder. In addition, the Exchange is requesting a waiver of the 30-
day operative delay to permit the proposed rule change to become 
operative upon filing.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Exchange Act,\10\ 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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    \10\ 15 U.S.C. 78f(b)(5).
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    Specifically, proposed Article 1, Rule 5 would remove impediments 
to and perfect the mechanisms of a free and open market and a national 
market system because it clarifies that certain agents of the Exchange 
may act on behalf of the Exchange with respect to the administration of 
the Rules and permits the CEO, CRO, and Boards of Directors or 
Regulatory Oversight Committee of the Exchange, as applicable, to 
formally designate one or more qualified employees of the Exchange to 
act in place of any person named in a Rule within guidelines that are 
identical to NYSE Rule 1. Therefore, the Exchange believes the proposed 
rule change fosters uniformity and consistency between the Exchange and 
NYSE and, as a result, would facilitate Exchange compliance with, and 
enforcement of, the Rule, which protects investors and the public 
interest.
    The Exchange further believes that the proposed rule would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because it would provide for continuity if 
either the CEO or CRO is unavailable to act under a Rule. Having pre-
authorized delegations would allow for uninterrupted Exchange services 
that rely on either the CEO or CRO acting under a Rule.

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

[[Page 7156]]

facilitating Exchange compliance with, and enforcement of, its 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

    Because the foregoing 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 for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay. The 
Exchange believes that waiver of the operative delay is consistent with 
the protection of investors and the public interest because it would 
permit the Exchange's CEO and CRO to immediately designate authority 
under the Rule to other ICE officers and Exchange employees, which 
would serve to accelerate the post-acquisition transition process and 
therefore expedite the Exchange's integration into the NYSE Group 
family of exchanges. The Exchange notes that this filing is identical 
to NYSE Rule 1. For this reason, the Commission believes that waiver of 
the 30-day operative delay is consistent with the protection of 
investors and the public interest. Therefore, the Commission hereby 
waives the operative delay and designates the proposal as operative 
upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 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-NYSECHX-2019-02 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-NYSECHX-2019-02. 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-NYSECHX-2019-02 and should be submitted 
on or before March 22, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03631 Filed 2-28-19; 8:45 am]
 BILLING CODE 8011-01-P