[Federal Register Volume 90, Number 93 (Thursday, May 15, 2025)]
[Notices]
[Pages 20715-20718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-08550]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103018; File No. SR-NYSETEX-2025-06]
Self-Regulatory Organizations; NYSE Texas, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt New Rule
11.30
May 9, 2025.
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 2, 2025, the NYSE Texas, Inc. (``NYSE Texas'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. 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 adopt new Rule 11.30 relating to the
prevention of the misuse of material, non-public information. 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 to adopt new Rule 11.30, Prevention of the
Misuse of Material, Non-Public Information. Proposed Rule 11.30 is
based on Rule 11.3 of its affiliate, NYSE Arca, Inc.
[[Page 20716]]
(``NYSE Arca''). Proposed Rule 11.30 is identical to NYSE Arca Rule
11.3 except for minor grammatical changes and non-substantive changes
to substitute ``Participant'' where NYSE Arca rules reference an ETP
Holder, OTP Holder, and/or OTP Firm and to replace internal references
to NYSE Arca rules with references to NYSE Texas rules.
Proposed Rule 11.30(a) would provide that every Participant must
establish, maintain and enforce written policies and procedures
reasonably designed, taking into consideration the nature of such
Participant's business, to prevent the misuse of material, non-public
information by such Participant or persons associated with such
Participant. In addition, Participants for whom the Exchange is the
Designated Examining Authority (``DEA'') that are required, pursuant to
Article 7, Rule 4, to file SEC form X-17A-5, with the Exchange on an
annual or more frequent basis must file contemporaneously with the
submission for the calendar year end ITSFEA compliance acknowledgments
stating that the procedures mandated by this Rule have been
established, enforced and maintained. Any Participant or Associated
Person who becomes aware of a possible misuse of material, non-public
information must promptly notify the Exchange's Regulatory staff.
Proposed Rule 11.30(b) would provide that any Participant who fails
to file a compliance acknowledgment form in a timely manner shall be
subject to a late filing charge of $500.00 for each occurrence.
Repeated or aggravated failure to file may be referred to Enforcement
for appropriate disciplinary action.
Proposed Commentary .01 to Rule 11.30 would provide that, for
purposes of this Rule, conduct constituting the misuse of material,
non-public information includes, but is not limited to, the following:
Trading in any securities issued by a corporation,
partnership, Trust Issued Receipts, or Funds, as defined in NYSE Arca
Rule 5.3-O(g),\4\ or a trust or similar entities, or in any related
securities or related options or other derivative securities, or in any
related non-U.S. currency, non-U.S. currency options, futures or
options on futures on such currency, or in any related commodity,
related commodity futures or options on commodity futures or in any
related commodity derivatives, or any other derivatives based on such
currency while in possession of material, non-public information
concerning that issuer; or
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\4\ The Exchange does not trade options and does not have or
intend to adopt a rule comparable to NYSE Arca Rule 5.3-O(g).
Accordingly, the Exchange proposes to reference the requirements of
NYSE Arca Rule 5.3-O(g) relating to Funds in proposed Commentary
.01.
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Trading in a security or related options or other
derivative securities, or in any related non-U.S. currency, non-U.S.
currency options, futures or options on futures on such currency, or in
any related commodity, related commodity futures or options on
commodity futures or in any related commodity derivatives, or any other
derivatives based on such currency while in possession of material,
non-public information concerning imminent transactions in the above;
or
Disclosing to another person or entity any material, non-
public information involving a corporation, partnership, Trust Issued
Receipts, or Funds \5\ or a trust or similar entities whose shares are
publicly traded or an imminent transaction in an underlying security or
related securities or in the underlying non-U.S. currency, or any
related non-U.S. currency options, futures or options on futures on
such currency, or in any related commodity, related commodity futures
or options on commodity futures or in any related commodity
derivatives, or any other derivatives based on such currency for the
purpose of facilitating the possible misuse of such material, non-
public information.
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\5\ See id.
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Proposed Commentary .02 would provide that the terms ``Associated
Person'' and ``person associated with a Participant'' mean anyone who
directly is engaged in the Participant's trading-related activities,
including General partners, officers, directors, managers (or any
person occupying a similar status or performing similar functions), any
person directly or indirectly controlling, controlled by, or under
common control with a Participant, or any employee of the Participant.
In addition, for the purposes of this Rule, the term ``employee''
includes every person who is compensated directly or indirectly by the
Participant for the solicitation or handling of business in securities,
including individuals trading securities for the account of the
Participant, whether such securities are dealt in on an exchange or are
dealt over-the-counter.
Proposed Commentary .03 would state that Rule 11.30 provides that
each Participant for which the Exchange is the DEA should establish,
maintain, and enforce written policies and procedures similar to the
following, as applicable:
All Associated Persons must be advised in writing of the
prohibition against the misuse of material, non-public information; and
All Associated Persons of the Participant must sign
attestations affirming their awareness of, and agreement to abide by
the aforementioned prohibitions. These signed attestations must be
maintained for at least three years, the first two years in an easily
accessible place; and
Each Participant must receive and retain copies of trade
confirmations and monthly account statements for each account in which
an Associated Person: has a direct or indirect financial interest or
makes investment decisions. The activity in such brokerage accounts
should be reviewed at least quarterly by the Participant for the
express purpose of detecting the possible misuse of material, non-
public information; and
All Associated Persons must disclose to the Participant
whether they, or any person in whose account they have a direct or
indirect financial interest, or make investment decisions, are an
officer, director or 10% shareholder in a company whose shares are
publicly traded. Any transaction in the stock (or option thereon) of
such company shall be reviewed to determine whether the transaction may
have involved a misuse of material, non-public information.
Proposed Commentary .03 would also provide that maintenance of
these policies and procedures may not, in all cases, satisfy the
requirements and intent of Rule 11.30, and the adequacy of each
Participant's policies and procedures will depend upon the nature of
each Participant's business.
Proposed Commentary .04 would provide that Participants acting as a
registered Market Maker in products listed under Exchange Rules 5 and
8,\6\ and their affiliates, shall also establish, maintain and enforce
written policies and procedures reasonably designed to prevent the
misuse of any material, non-public information with respect to such
products, any components of the related products, any physical asset or
commodity underlying the product, applicable currencies, underlying
[[Page 20717]]
indexes, related futures or options on futures, and any related
derivative instruments.
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\6\ The Exchange recently filed proposed rule changes to provide
for the operation of Market Makers and to permit the listing and
trading of certain Exchange Traded Products on the Exchange. See
Securities Exchange Act Release Nos. 102874 (April 16, 2025), 90 FR
16896 (April 22, 2025) (SR-NYSETEX-2025-05) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1,
Reinstate Article 16, Rules 1 Through 4 and Relocate Them); 102957
(April 29, 2025) (SR-NYSECHX-2025-04) (Notice of Filing of Amendment
No. 1, and Order Granting Accelerated Approval of a Proposed Rule
Change, as Modified by Amendment No. 1, to Amend Exchange Rules 1.1,
5, 7.18, 8 and Exchange Article 22, Rules 24-27).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934,\7\ in general, and furthers the
objectives of 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 proposed change is designed to prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, remove impediments to, and perfect the mechanism of, a free
and open market and a national market system, and protect investors and
the public interest because it sets forth rules intended to protect
against the misuse of material, non-public information by Participants
on the Exchange, including by requiring every Participant to establish,
maintain, and enforce written policies and procedures reasonably
designed to prevent the misuse of material, non-public information by a
Participant or persons associated with a Participant, thereby promoting
confidence in the public markets. The Exchange believes that the
proposed rule would also remove impediments to, and perfect the
mechanism of, a free and open market because it is substantively
identical to an existing rule of its affiliate, NYSE Arca, which rule
has been previously approved by the Commission. The proposed rule
change would therefore promote consistency across the rules of
affiliated exchanges, as well as continuity for the benefit of market
participants that operate on multiple exchanges.
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 rule change is
not designed to address any competitive issue and would benefit all
market participants in implementing rules intended to prevent the
misuse of material, non-public information.
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 \9\ and Rule 19b-4(f)(6) thereunder.\10\
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)(iii) of the Act \11\ and Rule
19b-4(f)(6)(iii) thereunder.\12\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\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 fulfilled 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 19b4(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
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
believes that waiver of the 30-day operative delay would allow the
Exchange to implement the proposed change promptly and in conjunction
with the implementation of rules relating to the operation of Market
Makers on the Exchange and rules that would permit the listing and
trading of certain Exchange Traded Products on the Exchange.\15\ The
Commission believes that waiver of the operative delay would be
consistent with the protection of investors and the public interest
because the proposal raises no novel issues and would permit the
Exchange to more quickly implement a rule intended to protect investors
and the public interest by instituting protections against the misuse
of material, non-public information. Accordingly, the Commission hereby
waives the 30-day operative delay and designates the proposed rule
change as operative upon filing.\16\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ See note 6, supra.
\16\ 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 shall institute proceedings to
determine whether the proposed rule 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-NYSETEX-2025-06 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-NYSETEX-2025-06. 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
[[Page 20718]]
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 submissions should refer to file number
SR-NYSETEX-2025-06 and should be submitted on or before June 5, 2025.
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), (59).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2025-08550 Filed 5-14-25; 8:45 am]
BILLING CODE 8011-01-P