[Federal Register Volume 89, Number 131 (Tuesday, July 9, 2024)]
[Notices]
[Pages 56459-56461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14973]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100457; File No. SR-NYSEAMER-2024-42]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Make Certain 
Conforming Clarifying Changes to Rule 601 To Harmonize With NYSE Arca 
Rule 10.16

July 2, 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 June 18, 2024, NYSE American LLC (``NYSE American'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``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 certain conforming clarifying changes to 
Rule 601 (Sanctions Guidelines) to harmonize with Rule 10.16 
(Sanctioning Guidelines--Options) of its affiliate NYSE Arca, Inc. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes certain conforming clarifying changes to Rule 
601 (Sanctions Guidelines) to harmonize with Rule 10.16 (Sanctioning 
Guidelines--Options) of its affiliate NYSE Arca, Inc. (``NYSE Arca'').
    In 2023, the Exchange adopted a new Rule 601 incorporating 
sanctions guidelines similar to Cboe Exchange, Inc. Rule 13.11, 
Supplementary Material .01, in place of the original sanction 
guidelines adopted pursuant to Section IV.B.i of the Commission's 
September 11, 2000 Order Instituting Administrative Proceedings 
Pursuant to Section 19(h)(1) of the Act (the ``2000 Order'').\4\ 
Recently, NYSE Arca adopted Rule 601 nearly verbatim as new NYSE Arca 
Rule 10.16, with three minor differences in the first two full 
paragraphs of the rule which further clarified the covered entities, 
provided examples of how disciplinary matters can be resolved, and 
clarified that the CRO's delegees would be individuals with 
responsibility for the adjudication of disciplinary actions and thus 
included in the rule's definition of ``Adjudicatory Bodies.'' \5\ In 
addition, NYSE Arca referenced summary sanctions in options-related 
matters governed by Rule 10.13 and appeals of Floor citations and 
summary sanctions governed by Rule 10.11 as examples of how 
disciplinary matters can be resolved, both of which are inapplicable to 
the Exchange.
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    \4\ See Securities Exchange Act Release No. 98798 (October 25, 
2023), 88 FR 74544 (October 31, 2023) (SR-NYSEAMER-2023-49) (Notice 
of Filing and Immediate Effectiveness of Proposed Change To Delete 
Legacy Disciplinary Rules 475, 476, 476A, and 477 and Make 
Conforming Changes to Rule 41, Rules 8001, 8130(d), 8320(d), 9001, 
9216(b)(1), 9810(a), and 781 of the Office Rules, Rules 2A, 12E, 
3170(a)(3), 902NY and Adopt a New Rule 600 and Make Conforming 
Changes to Rules 3170(C)(3), and Adopt a New Rule 601). See 
generally Securities Exchange Act Release No. 43268 (September 11, 
2000), Administrative Proceeding File No. 3-10282.
    \5\ See Securities Exchange Act Release No. 100047 (May 2, 
2024), 89 FR 38939 (May 8, 2024) (SR-NYSEArca-2024-34). NYSE Arca 
adopted the original version of Rule 10.16 pursuant to the 2000 
Order. See Securities Exchange Act Release Nos. 45416 (February 7, 
2002), 67 FR 6777 (February 13, 2002) (SR-PCX-2001-23) (Notice); 
45567 (March 15, 2002), 67 FR 13392 (March 22, 2002) (SR-PCX-2001-
23) (Order).
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    In order to harmonize with NYSE Arca Rule 10.16 and add clarity and 
consistency to Rule 601, the Exchange proposes to incorporate the three 
changes from the NYSE Arca rule, as follows.
    First, the Exchange would add ``against ATP Holders, ATP Firms and 
covered persons as defined in Rule 9120(g)'' following ``To promote 
consistency and uniformity in the imposition of penalties'' in the 
first sentence. Second, in the same sentence, the Exchange would add 
``, including letters of acceptance, waiver and consent,'' following 
``appropriate remedial sanctions through the resolution of disciplinary 
matters.'' The Exchange does not propose to adopt the NYSE Arca-
specific references to summary sanctions in options-related matters 
governed by Rule 10.13 and appeals of Floor citations and summary 
sanctions governed by Rule 10.11. Third, the Exchange would add ``and 
his or her delegees'' following CRO in the second paragraph, thus 
bringing the CRO's delegees within the definition of ``Adjudicatory 
Bodies'' therein.\6\
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    \6\ For the further avoidance of doubt, neither the proposed 
list of ways that a disciplinary matter can be resolved nor the 
persons and entities comprising the definition of Adjudicatory 
Bodies as amended by this filing in Rule 601 are intended to be 
exhaustive.
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    As proposed, Rule 601 would be amended as follows (deletions 
(bracketed) and additions (italicized)):
    To promote consistency and uniformity in the imposition of 
penalties against ATP Holders, ATP Firms and covered persons as defined 
in Rule 9120(g), the following Principal Considerations in Determining 
Sanctions should be considered in connection with the imposition of 
sanctions in all cases in determining appropriate remedial sanctions 
through the resolution of disciplinary matters, including letters of 
acceptance, waiver and consent, [through ]offers of settlement, and [or 
after ]formal disciplinary hearings.
    These Principal Considerations are not intended to be absolute. 
Based on the facts and circumstances presented in each case, the 
various individuals with responsibility for the adjudication of 
disciplinary actions, including the CRO and his or her delegees, 
Hearing Panels, Extended Hearing Panels, Hearing Officers, the 
Committee for Review, and the Board of Directors (collectively, 
``Adjudicatory Bodies''), may consider aggravating and mitigating 
factors in addition to those listed below.
    No other changes are proposed to Rule 601.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\7\ in general, and furthers the objectives of

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Section 6(b)(5),\8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that harmonizing its sanction guidelines to 
incorporate certain clarifying conforming changes based on its 
affiliate's version of the rule 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 and consistency to the Exchange's 
rules. The Exchange believes that market participants would benefit 
from the increased clarity, thereby reducing potential confusion and 
ensuring that persons subject to the Exchange's jurisdiction, 
regulators, and the investing public can more easily navigate and 
understand the Exchange's rules. Finally, the Exchange believes that 
the proposed changes would promote fairness and consistency in the 
marketplace by eliminating differences and harmonizing language related 
to sanction guidelines for options market participants across 
affiliates.

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 change is not 
designed to address any competitive issue but is rather concerned with 
making conforming clarifying changes to the Exchange rules. Since the 
proposal does not substantively modify system functionality or 
processes on the Exchange, the proposed changes will not impose any 
burden on competition.

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) of the Act \9\ and Rule 19b-4(f)(6) \10\ thereunder. 
Because the foregoing proposed rule change does not:
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    (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) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 under Rule 19b-4(f)(6) \13\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission 
may 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 so that it may 
become operative immediately upon filing to allow the Exchange to make 
conforming, clarifying changes that harmonize its sanction guidelines 
with the version adopted by its affiliate. The Commission believes 
that, as described above, the Exchange's proposal does not raise any 
new or novel issues. Therefore, the Commission believes that waving the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Accordingly, the Commission designates the 
proposed rule change to be 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 the 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 will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

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-NYSEAMER-2024-42 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-NYSEAMER-2024-42. 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

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submissions should refer to file number SR-NYSEAMER-2024-42 and should 
be submitted on or before July 30, 2024.
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    \16\ 17 CFR 200.30-3(a)(12), (59).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-14973 Filed 7-8-24; 8:45 am]
BILLING CODE 8011-01-P