[Federal Register Volume 84, Number 231 (Monday, December 2, 2019)]
[Notices]
[Pages 66034-66036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25966]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87620; File No. SR-NYSECHX-2019-22]


Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt New 
NYSE Chicago Rule 11.5190

November 25, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 20, 2019, the NYSE Chicago, Inc. (``NYSE Chicago'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III 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\ 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 NYSE Chicago Rule 11.5190 that 
is substantially the same as Financial Industry Regulatory Authority 
(``FINRA'') Rule 5190. The proposed rule change is intended to 
harmonize Exchange rules with the rules of the Exchange's affiliates 
and FINRA and thus promote consistency within the securities industry. 
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 adopt new NYSE Chicago Rule 11.5190 that 
is substantially the same as FINRA Rule 5190.\3\ The proposed rule 
change will further harmonize the Exchange's rules with the rules of 
FINRA and the Exchange's affiliates. The Exchange believes the proposed 
rule change will help reduce duplicative reporting requirements for 
Participants who are also FINRA members, NYSE or NYSE American member 
organizations, and/or NYSE Arca ETP Holders because Participants will 
not be required to submit an additional Regulation M notification to 
the Exchange if they have already provided a notification to FINRA, 
NYSE, or NYSE American pursuant to their respective rules.
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    \3\ See Securities Exchange Act Release No. 58514 (September 11, 
2008), 73 FR 54190 (September 18, 2008) (SR-FINRA-2008-039). The 
Exchange's affiliates, New York Stock Exchange LLC (``NYSE''), NYSE 
American LLC (``NYSE American''), and NYSE Arca, Inc. (``NYSE 
Arca''), previously adopted versions of FINRA Rule 5190. See 
Securities Exchange Act Release No. 59965 (May 21, 2009), 74 FR 
25783 (May 29, 2009) (SR-NYSE-2009-25); Securities Exchange Act 
Release No. 59975 (May 26, 2009), 74 FR 26449 (June 2, 2009) (SR-
NYSEALTR-2009-26); and Securities Exchange Act Release No. 66311 
(February 2, 2012), 77 FR 6613 (February 8, 2012) (SR-NYSEArca-2012-
07).
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Proposed Rule Change
    The Exchange proposes to adopt Regulation M-related notification 
rules harmonized with the rules of FINRA, NYSE, NYSE American and NYSE 
Arca both to provide uniformity in the marketplace as well as to reduce 
duplicative reporting obligations for the same subject matter. The 
Exchange accordingly proposes to adopt new Rule 11.5190, which is based 
on FINRA Rule 5190, NYSE Rule 5190, NYSE American Rule 5190--Equities, 
and NYSE Arca Rule 9.5190-E.
    Proposed Rule 11.5190 would require, in part, that a Participant 
acting as a manager (or in a similar capacity) of an offering to 
provide the following information:
     The Participant's determination as to whether a one-day or 
five-day restricted period applies under Rule 101 of SEC Regulation M 
and the basis for such determination, including the contemplated date 
and time of the commencement of the restricted period, the listed 
security name and symbol, and identification of the distribution 
participants and affiliated purchasers, no later than the business day 
prior to the first complete trading session of the applicable 
restricted period, unless later notification is necessary under 
specific circumstances;
     the pricing of the distribution, including the listed 
security name and symbol, the type of security, the number of shares 
offered, the offering price, the last sale before the distribution, the 
pricing basis, the SEC effective date and time, the trade date, the 
restricted period, and identification of the distribution participants 
and affiliated purchasers, no later than the close of business the next 
business day following the pricing of the distribution, unless later 
notification is necessary under specific circumstances; and
     the cancellation or postponement of any distribution for 
which prior notification of commencement of the restricted period has 
been submitted under paragraph (c)(1)(A), immediately

[[Page 66035]]

upon the cancellation or postponement of such distribution. If no 
Participant is acting as a manager (or in a similar capacity) of such 
distribution, then each Participant that is a distribution participant 
or affiliated purchaser shall provide the notice required under 
paragraph (c)(1), unless another Participant has assumed responsibility 
in writing for compliance therewith.
    Proposed Rule 11.5190 is substantially similar to FINRA Rule 5190, 
except that the term ``member'' has been replaced with ``Participant'' 
throughout to reflect the Exchange's membership. Also, in proposed 
subsection (e), the Exchange proposes to replace ``OTC Security'' with 
``security'' and add the phrase ``stabilizing bids'' to the first 
sentence. These changes are consistent with NYSE Rule 5190(e), NYSE 
American Rule 5190(e)--Equities, and NYSE Arca Rule 9.5190-E.
    Consistent with current practice that notifications ``to the 
Exchange'' are submitted directly to FINRA,\4\ notification under 
proposed Rule 11.5190 may be satisfied by making an electronic 
submission through the secure FINRA website at https://firms.finra.org.\5\ Further, because notifications submitted pursuant 
to FINRA Rule 5190 or the rules of the Exchange's affiliates will meet 
the requirements of proposed Rule 11.5190, such notifications will also 
satisfy the notification requirements of proposed Rule 11.5190. 
Participants will therefore not need to make duplicative filings to the 
Exchange if notifications have been submitted to FINRA pursuant to 
FINRA rules or the rules of the Exchange's affiliates.
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    \4\ Under Exchange Rule 0, Participants required to submit 
notifications to the Exchange may submit such notifications to FINRA 
departments acting on the Exchange's behalf.
    \5\ The filing process is described in FINRA Regulatory Notice 
12-19 (June 4, 2012), available at https://www.finra.org/rules-guidance/notices/12-19.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\6\ in general, and 
furthers the objectives of Section 6(b)(5),\7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change will harmonize 
its rules with the rules of FINRA and the Exchange's affiliates. The 
Exchange accordingly believes that the proposed rule change supports 
the objectives of the Act by providing greater harmonization between 
Exchange Rules and FINRA Rules of similar purpose, resulting in less 
burdensome and more efficient regulatory compliance for dual members of 
both self-regulatory organizations (``SROs''). To the extent the 
Exchange has proposed changes that differ from the FINRA version of the 
rules, such changes are technical in nature and do not change the 
substance of the proposed Rule.

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 proposal is intended to 
harmonize the Exchange's rules with the rules of other SROs with 
respect to Regulation M compliance. The Exchange believes that any 
burden on competition would be clearly outweighed by the important 
regulatory goal of ensuring clear and consistent requirements 
applicable across SROs, avoiding duplication, and mitigating any risk 
of SROs implementing different standards in these important areas. 
Further, the proposed changes would apply to all Participants in the 
same manner and therefore would not impose any unnecessary intramarket 
burdens.

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 \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
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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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 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) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \10\ 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-NYSECHX-2019-22 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-NYSECHX-2019-22. 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

[[Page 66036]]

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-
NYSECHX-2019-22, and should be submitted on or before December 23, 
2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25966 Filed 11-29-19; 8:45 am]
 BILLING CODE 8011-01-P


