[Federal Register Volume 86, Number 80 (Wednesday, April 28, 2021)]
[Notices]
[Pages 22471-22474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08854]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91631; File No. SR-NYSEAMER-2021-23]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Extending 
the Expiration Date of the Temporary Amendments to Rules 9261 and 9830

April 22, 2021.
    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 20, 2021, NYSE American LLC (``NYSE American'' 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 extending the expiration date of the 
temporary amendments to Rules 9261 and 9830 as set forth in SR-
NYSEAMER-2020-69 from April 30, 2021, to August 31, 2021, in conformity 
with recent changes by the Financial Industry Regulatory Authority, 
Inc. (``FINRA''). The proposed rule change would not make any changes 
to the text of NYSE American Rules 9261 and 9830. 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 extending the expiration date of the 
temporary amendments as set forth in SR-NYSEAMER-2020-69 \4\ to Rules 
9261 (Evidence and Procedure in Hearing) and 9830 (Hearing) from April 
30, 2021 to August 31, 2021, to harmonize with recent changes by FINRA 
to extend the expiration date of the temporary amendments to its Rules 
9261 and 9830. SR-NYSEAMER-2020-69 temporarily granted to the Chief or 
Deputy Chief Hearing Officer the authority to order that hearings be 
conducted by video conference if warranted by public health risks posed 
by in-person hearings during the ongoing COVID-19 pandemic. The 
proposed rule change would not make any changes to the text of Exchange 
Rules 9261 and 9830.\5\
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    \4\ See Securities Exchange Act Release No. 90085 (October 2, 
2020), 85 FR 63603 (October 8, 2020) (SR-NYSEAMER-2020-69) (``SR-
NYSEAMER-2020-69'').
    \5\ The Exchange may submit a separate rule filing to extend the 
expiration date of the proposed extension beyond August 31, 2021 if 
the Exchange requires additional temporary relief from the rule 
requirements identified in SR-NYSEAMER-2020-69. The amended NYSE 
American rules will revert back to their original state at the 
conclusion of the temporary relief period and any extension thereof.
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Background
    In 2016, NYSE American (then known as NYSE MKT LLC) adopted 
disciplinary rules that are, with certain exceptions, substantially the 
same as the Rule 8000 Series and Rule 9000 Series of FINRA and its 
affiliate the New York Stock Exchange LLC (``NYSE''), and which set 
forth rules for conducting investigations and enforcement actions.\6\

[[Page 22472]]

The NYSE American disciplinary rules were implemented on April 15, 
2016.\7\
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    \6\ See Securities Exchange Act Release Nos. 77241 (February 26, 
2016), 81 FR 11311 (March 3, 2016) (SR-NYSEMKT-2016-30) (``2016 
Notice'').
    \7\ See NYSE MKT Information Memorandum 16-02 (March 14, 2016).
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    In adopting disciplinary rules modeled on FINRA's rules, NYSE 
American adopted the hearing and evidentiary processes set forth in 
Rule 9261 and in Rule 9830 for hearings in matters involving temporary 
and permanent cease and desist orders under the Rule 9800 Series. As 
adopted, the text of Rule 9261 and Rule 9830 are substantially the same 
as the FINRA rules with certain modifications.\8\
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    \8\ See 2016 Notice, 81 FR at 11327 & 11332.
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    In response to the COVID-19 global health crisis and the 
corresponding need to restrict in-person activities, on August 31, 
2020, FINRA filed with the Commission a proposed rule change for 
immediate effectiveness, SR-FINRA-2020-027, which allowed FINRA's 
Office of Hearing Officers (``OHO'') to conduct hearings, on a 
temporary basis, by video conference, if warranted by the current 
COVID-19-related public health risks posed by an in-person hearing. 
Among the rules FINRA amended were Rules 9261 and 9830.\9\
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    \9\ See Securities Exchange Act Release No. 89737 (September 2, 
2020), 85 FR 55712 (September 9, 2020) (SR-FINRA-2020-027) (the 
``August 31 FINRA Filing'').
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    Given that FINRA and OHO administers disciplinary hearings on the 
Exchange's behalf, and that the public health concerns addressed by 
FINRA's amendments apply equally to Exchange disciplinary hearings, on 
September 15, 2020, the Exchange filed to temporarily amend Rule 9261 
and Rule 9830 to permit FINRA to conduct virtual hearings on its 
behalf.\10\ The temporary amendments to Rule 9261 and Rule 9830, as 
originally proposed, will expire on December 31, 2020, absent another 
proposed rule change filing by the Exchange. On December 22, 2020, the 
Exchange similarly filed to extend the temporary amendments to Rule 
9261 and Rule 9830 to April 30, 2021, after which the temporary 
amendments will expire absent another proposed rule change filing by 
the Exchange.\11\
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    \10\ See note 4, supra.
    \11\ See Securities Exchange Act Release No. 90823 (December 30, 
2020), 86 FR 650 (January 6, 2021) (SR-NYSEAMER-2020-88).
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    While there are signs of improvement, FINRA has determined that the 
COVID-19 conditions necessitating these temporary amendments persist 
and, based on its assessment of current COVID-19 conditions and the 
lack of certainty as to when COVID-19-related health concerns and 
corresponding restrictions will meaningfully subside, that there is a 
continued need for this temporary relief for several months beyond 
April 30, 2021. On April 1, 2021, FINRA accordingly filed to extend the 
expiration date of the temporary rule amendments to, among other rules, 
FINRA Rule 9261 and 9830 from April 30, 2021, to August 31, 2021.\12\
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    \12\ See Securities Exchange Act Release No. 91495 (April 7, 
2021), 86 FR 19306 (April 13, 2021) (SR-FINRA-2021-006) (``SR-FINRA-
2021-006'').
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Proposed Rule Change
    Consistent with FINRA's recent proposal, the Exchange proposes to 
extend the expiration date of the temporary rule amendments to NYSE 
American Rules 9261 and 9830 as set forth in SR-NYSEAMER-2020-69 from 
April 30, 2021, to August 31, 2021.
    As set forth in SR-FINRA 2021-006, while there are signs of 
improvement, the COVID-19 conditions necessitating these temporary 
amendments persist and, based on FINRA's assessment of current COVID-19 
conditions and the lack of certainty as to when COVID-19-related health 
concerns and corresponding restrictions will meaningfully subside, 
FINRA has determined that there is a continued need for this temporary 
relief for several months beyond April 30, 2021.\13\ FINRA accordingly 
proposed to extend the expiration date of the temporary rule amendments 
from April 30, 2021, to August 31, 2021.
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    \13\ See id.
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    The Exchange proposes to similarly extend the expiration date of 
the temporary rule amendments to NYSE American Rules 9261 and 9830 as 
set forth in SR-NYSEAMER-2020-69 from April 30, 2021, to August 31, 
2021. The Exchange agrees with FINRA that the COVID-19 conditions 
necessitating these temporary amendments persist and, for the reasons 
set forth in SR-FINRA-2021-006, that there is a continued need for this 
temporary relief for several months beyond April 30, 2021. The proposed 
change would permit OHO to continue to assess, based on critical COVID-
19 data and criteria and the guidance of health and security 
consultants, whether an in-person hearing would compromise the health 
and safety of the hearing participants such that the hearing should 
proceed by video conference. As noted in SR-FINRA-2021-006, in deciding 
whether to schedule a hearing by video conference, OHO may consider a 
variety of other factors in addition to COVID-19 trends. In SR-FINRA-
2020-027, FINRA provided a non-exhaustive list of other factors OHO may 
take into consideration, including a hearing participant's individual 
health concerns and access to the connectivity and technology necessary 
to participate in a video conference hearing.\14\ The Exchange believes 
that this is a reasonable procedure to continue to follow for hearings 
under Rules 9261 and 9830 chaired by a FINRA employee.
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    \14\ See SR-FINRA-2020-042, 85 FR at 81251-52; August 31 FINRA 
Filing, 85 FR at 55713.
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    As noted below, the Exchange has filed the proposed rule change for 
immediate effectiveness and has requested that the SEC waive the 
requirement that the proposed rule change not become operative for 30 
days after the date of the filing, so the Exchange can implement the 
proposed rule change immediately.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\15\ in general, and furthers the objectives of Section 
6(b)(5),\16\ 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. Additionally, the Exchange believes 
the proposed rule change is designed to provide a fair procedure for 
the disciplining of members and persons associated with members, 
consistent with Sections 6(b)(7) and 6(d) of the Act.\17\
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ 15 U.S.C. 78f(b)(7) & 78f(d).
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    The Exchange 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. As such, the 
proposed rule change will foster 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.
    The proposed rule change, which extends the expiration date of the 
temporary amendments to Exchange rules consistent with FINRA's 
extension to its Rules 9261 and 9830 for four months as set forth in 
SR-FINRA-2021-006, will permit the Exchange to continue to effectively 
conduct hearings

[[Page 22473]]

during the COVID-19 pandemic. Given current COVID-19 conditions and the 
uncertainty around when those conditions will meaningfully improve, 
without this relief allowing OHO to proceed by video conference, some 
or all hearings may have to be postponed indefinitely. The ability to 
conduct hearings by video conference will permit the adjudicatory 
functions of the Exchange's disciplinary rules to continue unabated, 
thereby avoiding protracted delays. The Exchange believes that this is 
especially important in matters where temporary and permanent cease and 
desist orders are sought because the proposed rule change would enable 
those hearings to continue to proceed without delay, thereby enabling 
the Exchange to continue to take immediate action to stop significant, 
ongoing customer harm, to the benefit of the investing public.
    As set forth in detail in the SR-NYSEAMER-2020-69, the temporary 
relief to permit hearings to be conducted via video conference 
maintains fair process and will continue to provide fair process 
consistent with Sections 6(b)(7) and 6(d) of the Act \18\ while 
striking an appropriate balance between providing fair process and 
enabling the Exchange to fulfill its statutory obligations to protect 
investors and maintain fair and orderly markets while avoiding the 
COVID-19-related public health risks for hearing participants. The 
Exchange notes that this proposal, like SR-NYSEAMER-2020-69, provides 
only temporary relief. As proposed, the changes would be in place 
through August 31, 2021. As noted in SR-NYSEAMER-2020-69 and above, the 
amended rules will revert back to their original state at the 
conclusion of the temporary relief period and, if applicable, any 
extension thereof.
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    \18\ 15 U.S.C. 78f(b)(7) & 78f(d).
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    Accordingly, the proposed rule change extending this temporary 
relief is in the public interest and consistent with the Act's purpose.

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

    The Exchange does not believe that the proposed temporary 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 is rather 
intended solely to provide continued temporary relief given the impacts 
of the COVID-19 pandemic and the related health and safety risks of 
conducting in-person activities. The Exchange believes that the 
proposed rule change will prevent unnecessary impediments to critical 
adjudicatory processes and its ability to fulfill its statutory 
obligations to protect investors and maintain fair and orderly markets 
that would otherwise result if the temporary amendments were to expire 
on April 30, 2021.

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

    Because the foregoing 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 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 \19\ and Rule 19b-
4(f)(6) thereunder.\20\
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 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 satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. As the Exchange requested in 
connection with SR-NYSEAMER-2020-88,\21\ here too the Exchange has 
requested that the Commission waive the 30-day operative delay so that 
this proposed rule change may become operative immediately upon filing.
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    \21\ See SR-NYSEAMER-2020-88, 86 FR at 650.
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    The Exchange has indicated that extending this proposed rule change 
will prevent unnecessary impediments to critical adjudicatory processes 
and its ability to fulfill its statutory obligations to protect 
investors and maintain fair and orderly markets that would otherwise 
result if the temporary amendments were to expire on April 30, 
2021.\22\ The Commission also notes that this proposal, like SR-
NYSEAMER-2020-88, provides only temporary relief during the period in 
which the Exchange's operations are impacted by COVID-19. As proposed, 
the changes would be in place through August 31, 2021 \23\ and the 
amended rules will revert back to their original state at the 
conclusion of the temporary relief period and, if applicable, any 
extension thereof.\24\ For these reasons, the Commission believes that 
waiver of the 30-day operative delay for this proposal is consistent 
with the protection of investors and the public interest. Accordingly, 
the Commission hereby waives the 30-day operative delay and designates 
the proposal operative upon filing.\25\
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    \22\ See supra p. 8.
    \23\ As noted above, see supra note 5, the Exchange states that 
if it requires temporary relief from the rule requirements 
identified in this proposal beyond August 31, 2021, it may submit a 
separate rule filing to extend the effectiveness of the temporary 
relief under these rules.
    \24\ See supra note 5.
    \25\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change'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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEAMER-2021-23 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-2021-23. This 
file number should be included on the

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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 
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 
such 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-NYSEAMER-2021-
23 and should be submitted on or before May 19, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-08854 Filed 4-27-21; 8:45 am]
BILLING CODE 8011-01-P


