[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 [email protected]. 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