
[Federal Register Volume 79, Number 81 (Monday, April 28, 2014)]
[Notices]
[Pages 23398-23400]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-09524]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71986; File No. SR-NYSE-2014-20]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Rules 9268, 9559, and 9620 To Conform the Exchange's Rules to 
Changes Recently Adopted by the Financial Industry Regulatory 
Authority, Inc.

April 22, 2014.
    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 April 11, 2014, 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 
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 amend Rules 9268, 9559, and 9620 to 
conform the Exchange's rules to changes recently adopted by the 
Financial Industry Regulatory Authority, Inc. (``FINRA''). The text of 
the proposed rule change is available on the Exchange's Web site 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 amend Rules 9268, 9559, and 9620 to 
conform the Exchange's rules to changes recently adopted by FINRA.
Background
    On July 30, 2007, the National Association of Securities Dealers, 
Inc. (``NASD''), NYSE, and NYSE Regulation, Inc. (``NYSER'') 
consolidated their member firm regulation operations into a combined 
organization, FINRA, and entered into a plan to allocate to FINRA 
regulatory responsibility for common rules and common members (``17d-2 
Agreement'').\4\ In 2007, the parties also entered into a Regulatory 
Services Agreement (``RSA''), whereby FINRA was retained to perform 
certain regulatory services on behalf of NYSER for non-common rules. On 
June 14, 2010, the Exchange, NYSER and FINRA amended the RSA and 
retained FINRA to perform the market surveillance and enforcement 
functions that had been performed by NYSER up to that point.\5\ 
Accordingly, since June 14, 2010, FINRA has been performing all NYSE 
enforcement-related regulatory services on NYSER's behalf, including 
disciplinary proceedings relating to NYSE-only rules and against dual 
members and non-FINRA members. To facilitate FINRA's performance of 
these enforcement functions under the RSA and to further harmonize the 
rules of NYSE with those of FINRA, NYSE adopted new rules that are, 
with certain exceptions, substantially the same as the text of the 
FINRA Rule 8000 Series and Rule 9000 Series, which set forth rules for 
conducting investigations and enforcement actions.\6\ The new rules 
were implemented on July 1, 2013.\7\
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    \4\ See Securities Exchange Act Release No. 56148 (July 26, 
2007), 72 FR 42146 (August 1, 2007) (File No. 4-544) (Notice of 
Filing and Order Approving and Declaring Effective a Plan for the 
Allocation of Regulatory Responsibilities). The 17d-2 Agreement was 
entered into in accordance with the requirements of Rule 17d-2 of 
the Securities and Exchange Commission (``SEC'' or ``Commission''), 
which permits self-regulatory organizations (``SROs'') to allocate 
regulatory responsibilities with respect to common members and 
common rules. See 17 CFR 240.17d-2.
    \5\ See Securities Exchange Act Release No. 62355 (June 22, 
2010), 75 FR 36729 (June 28, 2010) (SR-NYSE-2010-46).
    \6\ See Securities Exchange Act Release Nos. 68678 (January 16, 
2013), 78 FR 5213 (January 24, 2013) (SR-NYSE-2013-02) (``Proposing 
Release''), 69045 (March 5, 2013), 78 FR 15394 (March 11, 2013) (SR-
NYSE-2013-02), and 69963 (July 10, 2013), 78 FR 42573 (July 16, 
2013) (SR-NYSE-2013-49).
    \7\ See NYSE Information Memorandum 13-8.
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Conforming Amendments
    FINRA recently amended FINRA Rules 9268, 9559, and 9620, among 
other rules, effective December 16, 2013.\8\ The Exchange proposes to 
amend the text of Rules 9268, 9559, and 9620 to conform them to FINRA 
Rules 9268, 9559, and 9620.
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    \8\ See Securities Exchange Act Release No. 69825 (June 21, 
2013), 78 FR 38771 (June 27, 2013) (SR-FINRA-2013-018), and FINRA 
Regulatory Notice 13-27. FINRA amended FINRA Rule 8313, which 
governs the release of disciplinary and other information by FINRA 
to the public, and made other conforming changes. The Exchange did 
not adopt the text of FINRA Rule 8313; therefore, it is not 
necessary for the Exchange to adopt all of the same conforming 
changes.
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    The Exchange proposes to amend Rule 9268, which addresses hearing 
panel decisions, including their content and to whom they are 
disseminated, to add a new paragraph (f). Proposed Rule 9268(f) would 
provide that unless otherwise provided in the majority decision issued 
under Rule 9268(a): (1) A sanction (other than a bar or an expulsion) 
specified in a decision constituting final disciplinary action of the 
Exchange for purposes of Exchange Act Rule 19d-1(c)(1) shall become 
effective on a date to be determined by the Exchange; and (2) a bar or 
an expulsion specified in a decision shall become effective immediately 
upon the decision becoming the final disciplinary action of the 
Exchange for purposes of Exchange Act Rule 19d-1(c)(1).\9\ Under the 
current rule, all sanctions, including bars and expulsions, become 
effective on a date to be determined by the Exchange.
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    \9\ The proposed rule change also would make conforming 
amendments to Rule 9268(b)(6).
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    As part of its changes to Rule 8313, FINRA deleted the ``Notice to 
Membership'' provisions in FINRA Rules 9552-9559. The Exchange did not 
include such provisions in its Rules 9552-9559, so no such deletions 
are necessary; however, the Exchange proposes to renumber Rule 9559(s) 
as Rule 9559(r), which is consistent with the FINRA amendments.
    Lastly, the Exchange would make conforming amendments to Rule 9620, 
which governs exemption decisions issued under the Rule 9600 
Series.\10\

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Current Rule 9620 provides that after a decision is served on the 
Applicant, the application and decision shall be publicly available 
unless Exchange staff determines that the Applicant has shown good 
cause for treating the application or decision as confidential in whole 
or in part. The Exchange proposes to amend Rule 9620 to provide that 
after a decision is served on the Applicant, the application and 
decision may be publicly available. The proposed rule change 
corresponds to the conforming amendments in FINRA Rule 9620.\11\
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    \10\ FINRA's position is that exemption decisions and notices 
under the Rule 9600 Series, which the Exchange adopted, generally 
are not disciplinary in nature. See Securities Exchange Act Release 
No. 69825 (June 21, 2013), 78 FR 38771 (June 27, 2013) (SR-FINRA-
2013-018).
    \11\ The Exchange has not entertained an application for 
exemptive relief pursuant to Rule 9610 since adopting the Rule in 
2013 and has therefore neither published an application or decision 
nor determined that an application or decision should be withheld as 
confidential in whole or in part pursuant to current Rule 9620.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\13\ in particular, because it 
is designed to promote just and equitable principles of trade and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. In addition, the Exchange believes 
that the proposed rule change furthers the objectives of Section 
6(b)(7) of the Act,\14\ in particular, in that it provides fair 
procedures for the disciplining of members \15\ and persons associated 
with members, the denial of membership to any person seeking membership 
therein, the barring of any person from becoming associated with a 
member thereof, and the prohibition or limitation by the Exchange of 
any person with respect to access to services offered by the Exchange 
or a member thereof.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78f(b)(7).
    \15\ The Exchange's equivalent to the term ``member'' in this 
context is ``member organization.''
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    The proposed rule change would provide greater harmonization 
between Exchange and FINRA rules of similar purpose, resulting in 
greater uniformity in rules and less burdensome and more efficient 
regulatory compliance. The proposed rule text is substantially the same 
as FINRA's rule text, which already has been approved by the 
Commission.\16\ 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.
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    \16\ See supra note 8.
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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 intended to address competitive issues, but rather it is designed 
to provide greater harmonization between Exchange and FINRA rules of 
similar purpose, resulting in less burdensome and more efficient 
regulatory compliance for common members and facilitating FINRA's 
performance of its regulatory functions under the RSA.

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 \17\ and Rule 19b-4(f)(6) thereunder.\18\ 
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.\19\
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    \17\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ 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 the proposal 
may become operative upon filing. The Commission believes that waiving 
the 30-day operative delay is consistent with the protection of 
investors and the public interest, as it will result in greater 
uniformity between Exchange and FINRA rules of similar purpose, and 
facilitate FINRA's performance of its regulatory functions under the 
RSA. For this reason, the Commission designates the proposed rule 
change to be operative on filing.\22\
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    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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) \23\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \23\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSE-2014-20 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-2014-20. 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

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Internet Web site (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 Web site 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 NYSE. All comments received will 
be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2014-20, and should be submitted on 
or before  May 19, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-09524 Filed 4-25-14; 8:45 am]
BILLING CODE 8011-01-P


