[Federal Register Volume 89, Number 101 (Thursday, May 23, 2024)]
[Notices]
[Pages 45712-45715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11269]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100168; File No. SR-NYSE-2024-28]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Harmonize NYSE Rule 4530

May 17, 2024.
    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 May 9, 2024, 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, 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 harmonize NYSE Rule 4530 (Reporting 
Requirements) with certain changes by the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') to FINRA Rule 4530. 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to harmonize NYSE Rule 4530 (Reporting 
Requirements) with certain changes by FINRA to FINRA Rule 4530.
Background and Proposed Rule Change
    NYSE Rule 4530 requires member organizations to promptly report to 
the Exchange specified events, such as statutory disqualifications and 
quarterly statistical and summary information regarding written 
customer complaints. The Exchange adopted the text of FINRA Rule 4530 
in 2011 to replace comparable provisions in its legacy reporting Rule 
351.\4\
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    \4\ See Securities Exchange Act Release No. 64785 (June 30, 
2011), 76 FR 39946 (July 7, 2011) (SR-NYSE-2011-27). FINRA Rule 
4530, adopted in 2010, was modeled after NYSE Rule 351(a)-(d) and 
NASD Rule 3070. See Securities Exchange Act Release No. 63260 
(November 5, 2010), 75 FR 69508 (November 12, 2010) (SR-FINRA-2010-
034). See also Securities Exchange Act Release No. 64560 (May 27, 
2011), 76 FR 32246 (June 3, 2011) (SR-FINRA-2011-024).
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    In 2013, FINRA amended Rule 4530(e) to provide an exception from 
the reporting requirement for information disclosed on the Form U4 
(Uniform Application for Securities Industry Registration or Transfer) 
in order to avoid duplicative reporting.\5\ In addition, in 2013, FINRA 
added Supplementary Material .10 to FINRA Rule 4530 to provide that, 
for purposes of FINRA Rules 4530(a)(1)(A), (C) and (D) only, members 
are not required to report findings and actions by FINRA.\6\
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    \5\ See Securities Exchange Act Release No. 68701 (January 18, 
2013), 78 FR 5532 (January 25, 2013) (SR-FINRA-2013-006) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to FINRA Rule 4530 (Reporting Requirements)).
    \6\ See id. FINRA Rule 4530(a)(1)(A) requires a member to report 
external findings regarding the member or an associated person. 
FINRA Rules 4530(a)(1)(C) and (D) require a member to report 
regulatory actions against the member or an associated person. FINRA 
Rules 4530(a)(1)(A), (C) and (D) do not expressly exclude findings 
and actions by FINRA. See generally id. NYSE Rules 4530(a)(1)(A), 
(C) and (D) are virtually identical to the FINRA rules.

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[[Page 45713]]

    In 2015, FINRA again amended FINRA Rule 4530 to provide an 
exception from the reporting requirements of paragraph (a)(1)(H) of the 
rule for dealings with a member or associated person subject to 
statutory disqualification, if that member or associated person has 
been approved (or is otherwise permitted pursuant to FINRA rules and 
the federal securities laws) to be a member or to be associated with a 
member.\7\
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    \7\ See Securities Exchange Act Release No. 74953 (May 13, 
2015), 80 FR 28740 (May 19, 2015) (SR-FINRA-2015-011) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to the Reporting Requirements of FINRA Rule 4530(a)(1)(H)).
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    The Exchange proposes to incorporate each of these amendments into 
NYSE Rule 4530, as follows.
NYSE Rule 4530(a)(1)(H)
    NYSE Rule 4530(a)(1)(H) requires member organizations to promptly 
report whenever the member organization or an associated person of the 
member organization is subject to a ``statutory disqualification'' as 
defined in the Act.\8\ The rule also requires a member organization to 
report whenever the member organization or an associated person thereof 
is involved in the sale of any financial instrument, the provision of 
any investment advice or the financing of any such activities with any 
person that is subject to a ``statutory disqualification'' as defined 
in the Act. The report must include the name of the person subject to 
the statutory disqualification and details concerning the 
disqualification.
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    \8\ See 15 U.S.C. 78c(a)(39).
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    The Exchange proposes, consistent with current FINRA Rule 
4530(a)(1)(H), to exclude activities with a disqualified member or 
associated person that has been approved (or is otherwise permitted 
pursuant to FINRA rules and the federal securities laws) to be a member 
organization or associated with a member organization. To effectuate 
this change, the Exchange proposes to add the following deletions 
(bracketed) and additions (italicized) to NYSE Rule 4530(a)(1)(H):
    (H) is (i) subject to a ``statutory disqualification'' as that term 
is defined in the Exchange Act[,] or [is](ii) involved in the sale of 
any financial instrument, the provision of any investment advice or the 
financing of any such activities with any person [who]that is[,] 
subject to a ``statutory disqualification'' as that term is defined in 
the Exchange Act, provided, however, that this requirement shall not 
apply to activities with a member organization or an associated person 
that has been approved (or is otherwise permitted pursuant to Exchange 
rules and the federal securities laws) to be a member organization or 
to be associated with a member organization. The report shall include 
the name of the person subject to the statutory disqualification and 
details concerning the disqualification; or
    With the exception of conforming changes reflecting the Exchange's 
membership. the proposed text is identical to FINRA's counterpart rule.
NYSE Rule 4530(e)
    NYSE Rule 4530(e) currently provides that a member organization is 
not required to report a specified event under the rule if it reports 
that event on the Form U5 (Uniform Termination Notice for Securities 
Industry Registration), consistent with the requirements of that form. 
The exception does not extend to the reporting of quarterly statistical 
and summary customer complaint information under the rule. In order to 
eliminate duplicative reporting of information disclosed on a Form U4, 
and consistent with FINRA's current rule, the Exchange proposes to 
provide a similar exception for certain specified events reported on 
the Form U4. To effectuate this change, the Exchange proposes to add 
the following deletions (bracketed) and additions (italicized) to NYSE 
Rule 4530(e):

    (e) Nothing contained in this Rule shall eliminate, reduce or 
otherwise abrogate the responsibilities of a member organization or 
person associated with a member organization to promptly disclose 
required information on the Forms BD, U4 or U5, as applicable, to 
make any other required filings or to respond to the Exchange with 
respect to any customer complaint, examination or inquiry. In 
addition, member organizations are required to comply with the 
reporting obligations under paragraphs (a), (b) and (d) of this 
Rule, regardless of whether the information is reported or disclosed 
pursuant to any other rule or requirement, including the 
requirements of the Form[s] BD [or U4]. However, a member 
organization need not report an event otherwise required to be 
reported under (1) paragraph (a)(1) of this Rule if the member 
organization discloses the event on the Form U4, consistent with the 
requirements of that form, and indicates, in such manner and format 
that the Exchange may require, that such disclosure satisfies the 
requirements of paragraph (a)(1) of this Rule, as applicable; or (2) 
paragraphs (a) or (b) of this Rule if the member organization 
discloses the event on the Form U5, consistent with the requirements 
of that form.

    With the exception of conforming changes reflecting the Exchange's 
membership, the proposed text is identical to FINRA's counterpart rule.
NYSE Rule 4530, Supplementary Material .11
    Finally, the Exchange proposes to adopt the text of FINRA Rule 
4530, Supplementary Material .10, as new NYSE Rule 4530, Supplementary 
Material .11.
    NYSE Rule 4530(a)(1)(A) requires a member organization to report 
that the member organization or an associated person has been found to 
have violated any securities-, insurance-, commodities-, financial- or 
investment-related laws, rules, regulations or standards of conduct of 
any domestic or foreign regulatory body, self-regulatory organization 
or business or professional organization.
    NYSE Rule 4530(a)(1)(C) requires a member organization to report 
that the member organization or an associated person thereof has been 
named as a defendant or respondent in any proceeding brought by a 
domestic or foreign regulatory body or self-regulatory organization 
alleging the violation of any provision of the Act, or of any other 
federal, state or foreign securities, insurance or commodities statute, 
or of any rule or regulation thereunder, or of any provision of the by-
laws, rules or similar governing instruments of any securities, 
insurance or commodities domestic or foreign regulatory body or self-
regulatory organization.
    Finally, NYSE Rule 4530(a)(1)(D) requires a member organization to 
report that the member organization or associated person thereof has 
been denied registration or is expelled, enjoined, directed to cease 
and desist, suspended or otherwise disciplined by any securities, 
insurance or commodities industry domestic or foreign regulatory body 
or self-regulatory organization or is denied membership or continued 
membership in any such self-regulatory organization; or is barred from 
becoming associated with any member organization of any such self-
regulatory organization.
    Since NYSE Rules 4530(a)(1)(A), (C) and (D) do not expressly 
exclude findings and actions by the Exchange or FINRA, the Exchange 
proposes to add the following new Supplementary Material .11 to NYSE 
Rule 4530 (additions italicized):
    .11 For purposes of paragraphs (a)(1)(A), (C) and (D) of this Rule 
only, member organizations are not required

[[Page 45714]]

to report findings and actions by the Exchange or by FINRA.
    With the exception of adding findings and actions by the Exchange, 
the proposed Supplementary Material .11 to NYSE Rule 4530 is identical 
to FINRA Rule 4530.10.
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),\10\ 
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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule changes support the 
objectives of the Act by eliminating unnecessary reporting of 
information to the Exchange and allowing the Exchange to use its 
resources more efficiently. The Exchange believes that harmonizing 
Exchange rules modeled on FINRA's rules would result in less burdensome 
and more efficient regulatory compliance without compromising the 
regulatory information available to the Exchange. As previously noted, 
except for changes reflecting the Exchange's membership, the proposed 
additional text for Rule 4530 is identical to the text in FINRA Rule 
4530. As such, the proposed rule change would facilitate rule 
harmonization among self-regulatory organizations with respect to the 
reporting requirements, thereby fostering 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.

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

    The proposed rule change is consistent with section 6(b) of the 
Act,\11\ in general, and furthers the objectives of section 
6(b)(5),\12\ 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule changes support the 
objectives of the Act by eliminating unnecessary reporting of 
information to the Exchange and allowing the Exchange to use its 
resources more efficiently. The Exchange believes that harmonizing 
Exchange rules modeled on FINRA's rules would result in less burdensome 
and more efficient regulatory compliance without compromising the 
regulatory information available to the Exchange. As previously noted, 
except for changes reflecting the Exchange's membership, the proposed 
additional text for Rule 4530 is identical to the text in FINRA Rule 
4530. As such, the proposed rule change would facilitate rule 
harmonization among self-regulatory organizations with respect to the 
reporting requirements, thereby fostering 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.

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 \13\ and Rule 19b-4(f)(6) thereunder.\14\ 
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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    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\16\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \17\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \17\ 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-2024-28 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-2024-28. 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

[[Page 45715]]

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-2024-28 and should be submitted on or before June 13, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-11269 Filed 5-22-24; 8:45 am]
BILLING CODE 8011-01-P