[Federal Register Volume 87, Number 225 (Wednesday, November 23, 2022)]
[Notices]
[Pages 71722-71726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25470]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96336; File No. SR-NYSENAT-2022-25]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Order Granting Accelerated Approval of a Proposed Rule 
Change To Make Certain Revisions to the Preamble to Rule 10.9217 and 
Add Rule 2.1210 to the List of Minor Rule Violations in Rule 10.9217(f)

November 17, 2022.
    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 November 4, 2022, NYSE National, Inc. (``NYSE National'' 
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 and approving the proposal 
on an accelerated basis.
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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 (1) make certain revisions to the preamble 
to Rule 10.9217 (Violations Appropriate for Disposition Under Rule 
10.9216(b)); (2) add Rule 2.1210 (Registration Requirements) to the 
list of minor rule violations in Rule 10.9217(f) and associated fine 
levels in Rule 10.9217(g); and (3) make certain non-substantive 
clarifying changes to Rule 10.9217. 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 III below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below,

[[Page 71723]]

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 (1) make certain revisions to the preamble 
to Rule 10.9217 (Violations Appropriate for Disposition Under Rule 
10.9216(b)); (2) add Rule 2.1210 (Registration Requirements) to the 
list of minor rule violations in Rule 10.9217(f) and associated fine 
levels in Rule 10.9217(g); and (3) make certain non-substantive 
clarifying changes to Rule 10.9217.
Preamble to Rule 10.9217
    The preamble to current Rule 10.9217 consists of four subsections 
(a) through (d). The Exchange propose to modify subsections (a) through 
(d) based on the preamble to the version of Rule 10.9217 adopted by the 
Exchange's affiliate NYSE Arca, Inc. (``NYSE Arca''), as follows.
    Subsection (a) currently provides that any ETP Holder or Associated 
Person may be subject to a fine under Rule 10.9216(b) with respect to 
any rules listed in the rule and that the fine amounts and fine levels 
set forth therein apply to the fines imposed. Subsection (a) further 
provides that any fine imposed pursuant to the rule and not contested 
shall not be publicly reported, except as may be required by Rule 19d-1 
under the Exchange Act or as may be required by any other regulatory 
authority.
    The Exchange proposes that the current first sentence of subsection 
(a) would be unchanged except that the Exchange would add ``, not to 
exceed $5,000,'' after ``fine'' to clarify that a minor rule fine on 
the Exchange cannot exceed $5,000.\4\ The Exchange proposes to delete 
the second sentence providing that any fine imposed pursuant to this 
Rule and not contested shall not be publicly reported, except as may be 
required by Rule 19d-1 under the Exchange Act or as may be required by 
any other regulatory authority. This information is duplicative of 
information contained in Rule 10.9216(b)(4) and 10.9217(c) in greater 
detail and further contains a process for contesting a fine which, as 
discussed below, the Exchange proposes to eliminate. As proposed, NYSE 
National Rule 10.9217(a) would be the same as NYSE Arca Rule 
10.9217(a).
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    \4\ See Securities Exchange Act Release No. 83289 (May 17, 
2018), 83 FR 23968, 23968 n.6 (May 23, 2018) (SR-NYSENAT-2018-02) 
(Notice of Filing of Amendment No. 1 and Order Granting Accelerated 
Approval of a Proposed Rule Change, as Amended by Amendment No. 1, 
To Support the Re-Launch of NYSE National, Inc. on the Pillar 
Trading Platform). As part of Amendment No. 1, the Exchange, among 
other things, adopted NYSE American's maximum $5,000 fine for minor 
rule violations under Rule 10.9217. See Amendment No.1, n. 59, 
available at: https://www.sec.gov/comments/sr-nysenat-2018-02/nysenat201802-3653908-162416.pdf.
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    Subsection (b) currently provides that if a person or organization 
that has been fined pursuant to the rule pays the fine, such payment 
shall be deemed a waiver of any right to a disciplinary proceeding 
under the Rule 10.9000 Series and of any right to review of the matter 
by the BCC, CFR or the Board of Directors. This provision incorporated 
requirements originally set forth in the Exchange's legacy Rule 
8.15(c). The Exchange's affiliates' rules contained similar 
provisions.\5\ The Exchange believes that provision would be redundant 
and unnecessary. As discussed below, the Exchange proposes to eliminate 
the specific process detailed in Rule 10.9217(c) to convert a minor 
rule fine into a disciplinary hearing. Moreover, under the Exchange's 
current procedures set forth in Rule 10.9216(b)(1), if Enforcement has 
reason to believe a violation has occurred and if the ETP Holder or 
Associated Person does not dispute the violation, Enforcement may 
prepare and request that the ETP Holder or Associated Person execute a 
minor rule violation plan letter accepting a finding of violation, 
consenting to the imposition of sanctions, and agreeing to waive such 
ETP Holder's or Associated Person's right to a hearing before a Hearing 
Panel or, if applicable, an Extended Hearing Panel, and any right of 
review by the Exchange Board of Directors, the SEC, and the courts, or 
to otherwise challenge the validity of the letter, if the letter is 
accepted. Under current Rule 10.9216(b)(4), if an ETP Holder or 
Associated Person executes the minor rule violation plan letter and the 
letter is accepted by the CRO, it is deemed final. The Exchange 
accordingly proposes to replace the current text of subsection (b) with 
the sentence ``Regulatory Staff designated by the Exchange shall have 
the authority to impose a fine pursuant to this Rule.'' As proposed, 
NYSE National Rule 10.9217(b) would be the same as NYSE Arca Rule 
10.9217(b).
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    \5\ For instance, the New York Stock Exchange LLC's (``NYSE'') 
legacy Rule 476A(c) provided that if the person against whom a minor 
rule violation fine is imposed pays the fine, such payment is deemed 
to be a waiver by such person of such person's right to a 
disciplinary proceeding under NYSE Rule 476 and any review of the 
matter by a Hearing Panel or the Exchange Board of Directors. NYSE's 
legacy rules came into effect when the NYSE adopted disciplinary 
rules modeled on the rules of the Financial Industry Regulatory 
Authority, Inc. (``FINRA''). See Securities Exchange Act Release No. 
69045 (March 5, 2013), 78 FR 15394 (March 11, 2013) (SR-NYSE-2013-
02) (Order Approving Proposed Rule Change Adopting Investigation, 
Disciplinary, Sanction, and Other Procedural Rules That Are Modeled 
on the Rules of the Financial Industry Regulatory Authority and To 
Make Certain Conforming and Technical Changes). The NYSE recently 
proposed to delete its legacy disciplinary rules. See SR-NYSE-2022-
48.
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    Subsection (c) currently provides that any person or organization 
that has been fined pursuant to Rule 10.9217 may contest such fine by 
filing with Enforcement a written application containing: (1) an 
identification of the Exchange action over which the review is being 
requested; (2) the reason(s) why the applicant disagrees with such 
action; and (3) the relief sought. Such written application must be 
submitted not more than five (5) business days after receipt of written 
notification that a fine has been imposed pursuant to this Rule. The 
subsection further provides that if a determination is contested 
pursuant to this subsection, the matter shall become a formal 
disciplinary action, and any penalty imposed by a hearing panel shall 
be publicly reported to the Exchange membership after such decision has 
become ``final'' pursuant to Rule 10.8313. Further, any person or 
organization found in violation of a minor rule under this plan is not 
required to report such violation on SEC Form BD or Form U-4, provided 
that the sanction imposed consists of a fine not exceeding $2,500 and 
the sanctioned person or organization has not sought an adjudication, 
including a hearing, or otherwise exhausted the administrative remedies 
available with respect to the matter. Finally, any fine imposed in 
excess of $2,500 will be subject to current rather than quarterly 
reporting pursuant to Rule 19d-1 under the Act.
    The Exchange proposes to no longer permit persons or organizations 
fined pursuant to Rule 10.9217 to contest the minor rule violation 
letter by filing a written application and converting it into a regular 
disciplinary proceeding. None of the Exchange's affiliates that adopted 
the FINRA disciplinary rules permit persons or organizations fined 
pursuant to their version of Rule 10.9217 to contest the fine in this 
manner, including affiliates such as the NYSE that also permitted such 
a procedures under its legacy rules.\6\ The

[[Page 71724]]

proposed changes would thereby further harmonize the Exchange's Rule 
10.9217 with the version adopted by the Exchange's affiliates. 
Moreover, the Exchange believes that its current disciplinary rules 
already provide similar and sufficient procedural protections to 
persons fined under Rule 10.9217. Currently, if an ETP Holder or 
Associated Person disputes a minor rule fine, Enforcement's only 
recourse would be to file a complaint under Rule 10.9211. Similarly, if 
an ETP Holder or Associated Person executes a minor rule plan letter 
under Rule 10.9216 and the CRO rejects the letter, the Exchange may 
take any other appropriate disciplinary action with respect to the 
alleged violation. Further, the ETP Holder or Associated Person shall 
not be prejudiced by the execution of the minor rule violation plan 
letter under Rule 10.9216(b)(1) and, under Rule 10.9216(b)(4), the 
letter may not be introduced into evidence in connection with the 
determination of the issues set forth in any complaint or in any other 
proceeding.
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    \6\ Under legacy NYSE Rule 476A(d), any person against whom a 
minor rule violation was imposed could contest the Exchange's 
determination by timely filing a written response meeting the 
requirements of an answer as provided in NYSE Rule 476(d), at which 
point the matter became a disciplinary proceeding subject to NYSE 
Rule 476. As adopted, NYSE Rule 9216 does not permit a Respondent 
(as defined in the disciplinary rules) to contest a minor rule 
violation letter by filing an answer and convert it into a regular 
disciplinary proceeding. See Securities Exchange Act Release No. 
68678 (January 16, 2013), 78 FR 5213, 5226 (January 24, 2013) (SR-
NYSE-2013-02) (Notice of Filing of Proposed Rule Change Adopting 
Investigation, Disciplinary, Sanction, and Other Procedural Rules 
That Are Modeled on the Rules of the Financial Industry Regulatory 
Authority and To Make Certain Conforming and Technical Changes). As 
noted above, the NYSE recently filed to delete its legacy 
disciplinary rules. See also note 4, supra.
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    In order to effectuate this change, the Exchange proposes to delete 
the first three sentences of subsection (c). The last two sentences, 
which are identical to NYSE Arca Rule 10.9217(c), would remain 
unchanged.
    The Exchange does not proposes any changes to current Rule 
10.9217(d).
Addition of Rule 2.1210 to the List of Eligible Rules
    The Exchange proposes to add Rule 2.1210 the list of eligible rules 
in Rule 10.9217(f).
    Rule 2.1210, which was adopted in 2018,\7\ sets forth the 
requirements for persons engaged in the investment banking or 
securities business of an ETP Holder to be registered with the Exchange 
as a representative or principal in each category of registration 
appropriate to his or her functions and responsibilities as specified 
in Rule 2.1220.
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    \7\ See Securities Exchange Act Release No. 84350 (October 3, 
2018), 83 FR 51030 (October 10, 2018) (SR-NYSENAT-2018-21) (Notice 
of Filing and Immediate Effectiveness of Amendments to Rules 
Regarding Qualification, Registration and Continuing Education 
Applicable to Equity Trading Permit Holders).
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    The Exchange proposes to add Rule 2.1210 to the list of rules in 
Rule 10.9217(f) eligible for disposition pursuant to a fine. A 
substantially similar version of Rule 2.1210 was adopted by the NYSE in 
2018 \8\ and is currently eligible for minor rule fines under the 
NYSE's version of Rule 9217.\9\ The Exchange also proposes to add 
first, second and third level fines for violations of Rule 2.1210 to 
Rule 10.9217(g)(2) as new item 6. As proposed, failure to comply with 
the registration requirements of Rule 2.1210 would be eligible for a 
$1,000 fine for the first violation, $2,500 for the second violation 
and $5,000 for the third and subsequent violations. The proposed fine 
levels would be the same as the applicable fine levels for individuals 
violating NYSE Rule 1210 set forth in NYSE Rule 9217.\10\ Current item 
6 under Rule 10.9217(g)(2) governing failure to comply with the CAT 
Compliance Rules in the Rule 6.6800 Series would become new item 7. As 
discussed below, the Exchange would add a new footnote 2 to current 
item 6 (new item 7) setting forth the range for violations of the CAT 
Compliance Rules and delete ``Up to $2,500.00'' from the chart.
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    \8\ See Securities Exchange Act Release No. 84336 (October 2, 
2018), 83 FR 50727 (October 9, 2018) (SR-NYSE-2018-44) (Notice of 
Filing and Immediate Effectiveness of Amendments To Rules Regarding 
Qualification, Registration and Continuing Education Applicable to 
Members and Member Organizations).
    \9\ See NYSE Rule 9217.
    \10\ As set forth in Rule 10.9217(c), any fine imposed in excess 
of $2,500 would be subject to current rather than quarterly 
reporting to the Commission pursuant to Rule 19d-1 under the Act.
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    The Exchange believes that the proposed change would strengthen the 
Exchange's ability to carry out its oversight and enforcement 
responsibilities in cases where full disciplinary proceedings are 
unwarranted in view of the minor nature of the particular violation.
Non-Substantive Clarifying Changes
    The Exchange proposes to add clarifying language regarding the 
disposition of minor rule fines for violations of the CAT Compliance 
Rules in the Rule 6.6800 Series based on language adopted by the 
Exchange's affiliates. Specifically, the Exchange would add a new 
footnote 2 to current item 6 (proposed item 7, discussed above) of Rule 
10.9217(g)(2) that would provide as follows:

    For failures to comply with the Consolidated Audit Trail 
Compliance Rule requirements of the Rule 6.6800 Series, the Exchange 
may impose a minor rule violation fine of up to $2,500. For more 
serious violations, other disciplinary action may be sought.

    The language is identical to that adopted by the Exchange's 
affiliates NYSE and NYSE Chicago, Inc.\11\ As noted, ``Up to 
$2,500.00'' would be deleted from the chart in current item 6 as 
redundant of proposed footnote 2. The proposed change is not intended 
to make a substantive change. Violations of the CAT Compliance Rules 
are currently eligible for minor rule fines and $2,500 is currently the 
maximum eligible fine.
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    \11\ See NYSE Rule 9217(d) (``For failures to comply with the 
Consolidated Audit Trail Compliance Rule requirements of the Rule 
6800 Series, the Exchange may impose a minor rule violation fine of 
up to $2,500. For more serious violations, other disciplinary action 
may be sought.''); NYSE Chicago 10.9217(f), n. ** (same).
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2. Statutory Basis
    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),\13\ 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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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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Preamble to Rule 10.9217
    The Exchange believes that harmonizing the preamble to Rule 10.9217 
with that of its affiliates would remove impediments to and perfect the 
mechanism of a free and open market and a national market system by a 
providing greater harmonization between Exchange rules and those of its 
affiliates in connection with minor rule fines, thereby fostering 
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. 
Moreover, by adopting the same applicable minor rule standards for 
violations of those standards as its affiliates, the Exchange would 
promote regulatory consistency.
    More specifically, the Exchange believes that the proposed changes 
to Rule 10.9217(a) clarifying that minor rule fines cannot exceed 
$5,000 and deleting duplicative information

[[Page 71725]]

regarding the public reporting of uncontested minor rule fines would 
further the goal of transparency and add clarity to the Exchange's 
rules. The Exchange believes that the proposed changes would also be 
consistent with the public interest and the protection of investors 
because investors will not be harmed and in fact would benefit from 
increased transparency, thereby reducing potential confusion. In 
addition, the Exchange believes that deleting current rule text in Rule 
10.9217(b) providing that payment of a minor fine is deemed a waiver of 
any right to a disciplinary proceeding and of any right to review would 
be redundant of the Exchange's current procedures set forth in Rule 
10.9216(b)(1) whereby execution of a minor rule violation plan letter 
accepted by the CRO is final and waives the right to a hearing and any 
right of review by an ETP Holder or Associated Person. Finally, the 
proposed elimination of the procedure set forth in Rule 10.9217(c) to 
contest the minor rule violations would further harmonize the 
Exchange's Rule 10.9217 with the version adopted by the Exchange's 
affiliates. As discussed above, the Exchange believes that its current 
disciplinary rules already provide similar and sufficient procedural 
protections to persons fined under Rule 10.9217. Eliminating the legacy 
contestation procedure in Rule 10.9217(c) would accordingly promote 
efficiency by applying uniform procedures for contesting a minor rule 
fine across exchanges.
Addition of Rule 2.1210 to the List of Eligible Rules
    Minor rule fines provide a meaningful sanction for minor or 
technical violations of rules when the conduct at issue does not 
warrant stronger, immediately reportable disciplinary sanctions. The 
inclusion of a rule in Rule 10.9217 does not minimize the importance of 
compliance with the rule, nor does it preclude the Exchange from 
choosing to pursue violations of eligible rules through formal 
disciplinary action if the nature of the violations or prior 
disciplinary history warrants more significant sanctions. Rather, the 
Exchange believes that the proposed rule change will strengthen the 
Exchange's ability to carry out its oversight and enforcement 
responsibilities in cases where full disciplinary proceedings are 
unwarranted in view of the minor nature of the particular violation. 
The option to impose a minor rule sanction gives the Exchange 
additional flexibility to administer its enforcement program in the 
most effective and efficient manner while still fully meeting the 
Exchange's remedial objectives in addressing violative conduct.
    The proposed rule change is thus designed to prevent fraudulent and 
manipulative acts and practices because it will provide the Exchange 
the ability to issue a minor rule fine for violations of the 
registration requirements set forth in Rule 2.1210 where a more formal 
disciplinary action may not be warranted or appropriate. In addition, 
the Exchange believes that adding rules based on the rules of its 
affiliate to the Exchange's minor rule plan, and adding associated fine 
levels based on the treatment of similar registration rule violations 
by its affiliate NYSE, would promote fairness and consistency in the 
marketplace by permitting the Exchange to issue a minor rule fine for 
violations of substantially similar rules that are already eligible for 
minor rule treatment, thereby harmonizing minor rule plan fines across 
affiliated exchanges for the same conduct. As noted, the proposed fine 
levels would be the same as the applicable fine levels for individuals 
violating NYSE Rule 1210 set forth in NYSE Rule 9217.
    The Exchange further believes that the proposed amendments to Rule 
10.9217 are consistent with Section 6(b)(6) of the Act,\14\ which 
provides that members and persons associated with members shall be 
appropriately disciplined for violation of the provisions of the Act, 
the rules and regulations thereunder and the rules of the exchange, by 
expulsion, suspension, limitation of activities, functions, and 
operations, fine, censure, being suspended or barred from being 
associated with a member, or any other fitting sanction. As noted, the 
proposed rule change would provide the Exchange ability to sanction 
minor or technical violations of proposed Rule 2.1210 pursuant to the 
Exchange's rules. Finally, the Exchange also believes that the proposed 
changes are 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.\15\ Rule 10.9217 does not 
preclude an ETP Holder or Associated Person from contesting an alleged 
violation under Rule 10.9216(b)and receiving a hearing on the matter 
with the same procedural rights through a litigated disciplinary 
proceeding.
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    \14\ 15 U.S.C. 78f(b)(6).
    \15\ 15 U.S.C. 78f(b)(7) and 78f(d).
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Non-Substantive Clarifying Changes
    The Exchange believes that the proposed non-substantive clarifying 
changes described above would add clarity, consistency and transparency 
to the Exchange's rules. The Exchange believes that adding such clarity 
and transparency would also be consistent with the public interest and 
the protection of investors because investors will not be harmed and in 
fact would benefit from increased transparency, thereby reducing 
potential confusion. In addition, the Exchange believes that the 
incorporating language relating to violations of the CAT Compliance 
Rules adopted by the Exchange's affiliates would promote fairness and 
consistency in the marketplace by eliminating differences and 
harmonizing language related to minor rule treatment of similar rule 
violations across affiliates. The proposed change is not intended to 
make any substantive change to the applicability of minor rule fines to 
violations of the CAT Compliance Rules or the amount of those fines.

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 rather to update the 
Exchange's rules to strengthen the Exchange's ability to carry out its 
oversight and enforcement functions and deter potential violative 
conduct and to align the Exchange's rule setting forth violations 
eligible for a minor rule fine more closely with that of its 
affiliates.

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. 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 [email protected]. Please include 
File Number SR-NYSENAT-2022-25 on the subject line.

[[Page 71726]]

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-NYSENAT-2022-25. 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 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-NYSENAT-2022-25 and should be submitted 
on or before December 14, 2022.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\16\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\17\ which requires that the 
rules of an exchange be designed to promote just and equitable 
principles of trade, to remove impediments and to perfect the mechanism 
of a free and open market and a national market system, and, in 
general, to protect investors and the public interest. The Commission 
also believes that the proposal is consistent with Sections 6(b)(1) and 
6(b)(6) of the Act \18\ which require that the rules of an exchange 
enforce compliance with, and provide appropriate discipline for, 
violations of Commission and Exchange rules. Finally, the Commission 
finds that the proposal is consistent with the public interest, the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act, as required by Rule 19d-1(c)(2) under the Act,\19\ which 
governs minor rule violation plans.
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    \16\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ 15 U.S.C. 78f(b)(1) and 78f(b)(6).
    \19\ 17 CFR 240.19d-1(c)(2).
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    As stated above, the Exchange proposes to (1) make certain 
revisions to the preamble to Rule 10.9217 (Violations Appropriate for 
Disposition Under Rule 10.9216(b)); (2) add Rule 2.1210 (Registration 
Requirements) to the list of minor rule violations in Rule 10.9217(f) 
and associated fine levels in Rule 10.9217(g); and (3) make certain 
non-substantive clarifying changes to Rule 10.9217.
    The Commission believes that Rules 10.9216(b) and 10.9217 are an 
effective way to discipline a member for a minor violation of a rule. 
More specifically, the Commission believes that the proposed revisions 
to the preamble of Rule 10.9217 are consistent with the Act because 
they would add clarity to the Exchange's rules and may help the 
Exchange's ability to better carry out its oversight and enforcement 
responsibilities. The proposed revisions to the preamble of Rule 
10.9217 also would align Rule 10.9217 with the rules of the Exchange's 
affiliates. The Commission believes that the proposed addition of Rule 
2.1210 (Registration Requirements) to the Exchange's list of current 
minor rule violations provides a reasonable means of addressing 
violations that do not rise to the level of requiring formal 
disciplinary proceedings, while providing greater flexibility in 
handling certain violations. Furthermore, the Commission believes that 
amending the associated fine schedule is consistent with the Act 
because it may help the Exchange's ability to better carry out its 
oversight and enforcement responsibilities by levying appropriate fines 
for minor violations of the rules included in Rule 10.9217, including 
minor violations of Rule 2.1210. Finally the Commission believes that 
the Exchange's proposal to make certain non-substantive changes to Rule 
10.9217 are consistent with the Act because these changes will add 
clarity to the Exchange's rules.
    In approving the proposed rule change, the Commission in no way 
minimizes the importance of compliance with the Exchange's rules and 
all other rules subject to fines under Rules 10.9216(b) and 10.9217. 
The Commission believes that a violation of any self-regulatory 
organization's rules, as well as Commission rules, is a serious matter. 
However, Rules 10.9216(b) and 10.9217 provide a reasonable means of 
addressing rule violations that may not rise to the level of requiring 
formal disciplinary proceedings, while providing greater flexibility in 
handling certain violations. The Commission expects that the Exchange 
will continue to conduct surveillance with due diligence and make a 
determination based on its findings, on a case-by-case basis, whether a 
fine of more or less than the recommended amount is appropriate for a 
violation under Rules 10.9216(b) and 10.9217 or whether a violation 
requires formal disciplinary action.
    For the same reasons as discussed above, the Commission finds good 
cause, pursuant to Section 19(b)(2) of the Act,\20\ for approving the 
proposed rule change prior to the thirtieth day after the date of 
publication of the notice of the filing thereof in the Federal 
Register. The proposal will assist the Exchange in preventing 
fraudulent and manipulative practices by allowing the Exchange to 
adequately enforce compliance with, and provide appropriate discipline 
for, violations of Exchange rules. Moreover, the proposed changes raise 
no new or novel issues. Accordingly, the Commission believes that a 
full notice-and-comment period is not necessary before approving the 
proposal.
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    \20\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\21\ and Rule 19d-1(c)(2) thereunder,\22\ that the proposed rule change 
(SR-NYSENAT-2022-25) be, and hereby is, approved on an accelerated 
basis.
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    \21\ 15 U.S.C. 78s(b)(2).
    \22\ 17 CFR 240.19d-1(c)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25470 Filed 11-22-22; 8:45 am]
BILLING CODE 8011-01-P


