[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.
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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 [email protected]. 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