Amendments to NYSE Disciplinary Rules
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The New York Stock Exchange (NYSE) is updating its rules to match changes made by FINRA to its own disciplinary procedures. These changes allow certain disciplinary actions, like expulsions or membership cancellations, to be paused for SEC review, offering a chance to appeal before they're enforced. This impacts member organizations, especially if they face tough sanctions, providing some breathing room to challenge or adjust to the decisions before they become final.
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Key Changes
- Automatic stay of expulsions for SEC review
- Authorization for respondents to seek a stay
- Alignment of NYSE rules with recent FINRA changes
Obligations
What this law requires
NYSE member organizations must comply with automatic stay of effectiveness for expulsions, membership cancellations, and denials of continued membership applications pending SEC review under Section 19 of the Securities Exchange Act of 1934.
NYSE must not enforce expulsions under Rule 8320(b)(1) until the time for filing an SEC application for review has expired with no application filed, or if filed, until the SEC completes its review or otherwise orders.
NYSE staff and adjudicators must grant respondents and applicants the opportunity to seek a stay or take other appropriate action before sanctions (suspensions, bars) or regulatory measures (denials, cease and desist orders, conditions/restrictions) take effect, where appropriate.
NYSE must restructure Rule 9269(d) regarding default decisions to allow bars or expulsions an opportunity for stay or other action before effectiveness, rather than becoming effective immediately upon final disciplinary action.
NYSE must amend Rules 8320, 9269, 9310, 9524, 9527, 9557, 9558, 9559, 9840, 9850, and 9870 to harmonize with FINRA's updated disciplinary procedures regarding stays and SEC review opportunities.