
[Federal Register Volume 88, Number 191 (Wednesday, October 4, 2023)]
[Notices]
[Pages 68837-68839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21952]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98620; File No. SR-NYSEARCA-2023-66]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 0

September 28, 2023.
    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 September 27, 2023, NYSE Arca, Inc. (``NYSE Arca'' 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 0 (Regulation of the Exchange, 
OTP Holders, OTP Firms and ETP Holders) to adopt new rule text based on 
based on [sic] Rule 0 (Regulation of the Exchange and its Member 
Organizations) of its affiliate New York Stock Exchange LLC. 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 amend Rule 0 (Rule 0 [sic] (Regulation of 
the Exchange, OTP Holders, OTP Firms and ETP Holders) to adopt new rule 
text based on Rule 0 (Regulation of the Exchange and its Member 
Organizations) of its affiliate New York Stock Exchange LLC (``NYSE''). 
Specifically, the Exchange proposes a new subsection (b) in conformity 
with NYSE Rule 0(b). NYSE Rule 0(b) is in turn based on FINRA Rule 
0140(a) (Applicability), Nasdaq Stock Market LLC (``Nasdaq'') General 2 
(Organization and Administration), Section 6(a), and Nasdaq BX, Inc. 
(``Nasdaq BX'') General 2 (Organization and Administration), Section 
6(a).\4\
---------------------------------------------------------------------------

    \4\ For purposes of this filing, Nasdaq and Nasdaq BX are 
referred to collectively as the ``Nasdaq Exchanges.'' Nasdaq General 
2, Section 6(a) and Nasdaq BX General 2, Section 6(a) are referred 
to collectively as the ``Nasdaq Exchanges' Rules.''
---------------------------------------------------------------------------

    NYSE Rule 0(b) provides that the NYSE's rules apply to all member 
organizations and persons associated

[[Page 68838]]

with a member organization and that persons associated with a member 
organization shall have the same duties and obligations as a member 
organization under the NYSE's rules. NYSE Rule 0(b) mirrors FINRA Rule 
0140(a) and the versions of FINRA Rule 0140(a) adopted by the Nasdaq 
Exchanges, which similarly provide that the rules of those self-
regulatory organizations, as applicable, apply to all members and 
persons associated with a member and that persons associated with a 
member shall have the same duties and obligations as a member under 
such rules.\5\ Proposed Rule 0(d) [sic] is substantively identical to 
NYSE Rule 0(b).
---------------------------------------------------------------------------

    \5\ An ``ETP Holder'' means a sole proprietorship, partnership, 
corporation, limited liability company or other organization in good 
standing that is a registered broker-dealer and has been issued an 
Equity Trading Permit (``ETP'') by the Exchange. See Rules 1.1(n) 
and (o). ``OTP'' means an Options Trading Permit issued by the 
Exchange for effecting approved securities transactions on the 
Exchange's Trading Facilities. An OTP may be issued to a sole 
proprietor, partnership, corporation, limited liability company or 
other organization that is a registered broker-dealer pursuant to 
Section 15 of the Act, and which has been approved by the Exchange. 
See Rule 1.1(mm). ``OTP Holder'' means a natural person, in good 
standing, who has been issued an OTP, or has been named as a 
Nominee. An OTP Holder must be a registered broker or dealer 
pursuant to Section 15 of the Act, or a nominee or an associated 
person of a registered broker or dealer that has been approved by 
the Exchange to conduct business on the Exchange's Trading 
Facilities. An OTP Holder has status as a ``member'' of the NYSE 
Arca, Inc. as that term is defined in Section 3 of the Act. See Rule 
1.1(nn). ``OTP Firm'' means a sole proprietorship, partnership, 
corporation, limited liability company, or other organization in 
good standing that holds an OTP or upon whom an individual OTP 
Holder has conferred trading privileges on the Exchange's Trading 
Facilities. An OTP Firm must be a registered broker-dealer pursuant 
to Section 15 of the Act. An OTP Firm also has status as a 
``member'' of the Exchange, as that term is defined in Section 3 of 
the Act. See Rule 1.1(oo). By way of comparison, FINRA uses the term 
``member'' in its rules and NYSE uses the term ``member 
organization.''
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would improve 
the clarity of the Exchange's rules by reflecting that the Exchange's 
rules apply to persons associated with an ETP Holder, OTP Holder or OTP 
Firm and that such persons have the same duties and obligations as 
their Exchange ETP Holder, OTP Holder or OTP Firm employer. An ETP 
Holder's, OTP Holder's or OTP Firm's compliance with Exchange rules may 
depend on the actions of persons associated with the ETP Holder, OTP 
Holder or OTP Firm. Accordingly, the Exchange believes that the 
proposed rule, which mirrors the rules of its affiliate NYSE, FINRA and 
the Nasdaq Exchanges, would promote consistency in the Exchange's rules 
by expressly providing that the Exchange may enforce its rules with 
respect to persons associated with an ETP Holder, OTP Holder or OTP 
Firm, including by taking appropriate disciplinary action against such 
persons for their ETP Holder's, OTP Holder's or OTP Firm's violation of 
NYSE Arca rules. The Exchange notes that the proposed rule does not 
contemplate disciplinary action against individuals not involved in 
violations of Exchange rules.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system and, in general, protect investors and the 
public interest because the proposed changes would add clarity to the 
Exchange's rules. As previously noted, the proposed rule text conforms 
to current NYSE Rule 0(b) without change. The Exchange believes that 
adopting separate rule text expressly providing that all Exchange rules 
apply to persons associated with an ETP Holder, OTP Holder or OTP Firm 
and that such persons have the same duties and obligations as their 
Exchange ETP Holder, OTP Holder or OTP Firm employer would benefit 
market participants by providing increased clarity regarding the 
Exchange's ability to enforce compliance with its rules by persons 
associated with an ETP Holder, OTP Holder or OTP Firm, thereby reducing 
any potential confusion with respect to the Exchange's interpretation 
or application of its rules. Adding these clarifying statements to the 
Exchange's rules would also further the goals of transparency and 
consistency across the Exchange's rules and would provide greater 
harmonization between Exchange rules and the rules of NYSE, FINRA and 
the Nasdaq Exchanges, resulting in less burdensome and more efficient 
regulatory compliance. For the same reasons, the addition of the 
proposed rule text would protect investors and the public interest and 
would therefore be consistent with Section 6(b)(5) \8\ of the Act. The 
proposed rule change would accordingly 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Finally, the Exchange believes that the proposed change would be 
consistent with Section 6(b)(1) \9\ of the Act because it would provide 
increased clarity regarding the Exchange's ability to enforce 
compliance with its rules by persons associated with an ETP Holder, OTP 
Holder or OTP Firm, thereby reducing any potential confusion with 
respect to the Exchange's interpretation or application of its rules. 
As such, the proposed change would enable the Exchange to be so 
organized as to have the capacity to be able to enforce compliance by 
its exchange members and persons associated with its exchange members 
with the provisions of the Act, the rules and regulations thereunder, 
and the rules of the Exchange, consistent with Section 6(b)(1) \10\ of 
the Act.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(1).
    \10\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

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 is concerned 
solely with adding clarity and transparency to the Exchange's rules and 
providing greater harmonization with the rules of its affiliate NYSE 
and the approved rules of FINRA and the Nasdaq Exchanges.

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 \11\ and Rule

[[Page 68839]]

19b-4(f)(6) \12\ thereunder. 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.
---------------------------------------------------------------------------

    \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) 
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.
---------------------------------------------------------------------------

    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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEARCA-2023-66 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-NYSEARCA-2023-66. 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 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-NYSEARCA-2023-66 and should 
be submitted on or before October 25, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21952 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P


