[Federal Register Volume 81, Number 168 (Tuesday, August 30, 2016)]
[Notices]
[Pages 59678-59688]
[FR Doc No: 2016-20733]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78664; File No. SR-NYSE-2016-40)

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending the Text of Current Rule 8313; Amending Rules Relating to the
Imposition of Temporary and Current Cease and Desist Orders to
Correspond to Recent Amendments by FINRA; and Making Certain Technical
and Conforming Changes to Rule 9310

August 24, 2016.
    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 August 12, 2016, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``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 (1) amendments to Rule 8313 relating to the
Exchange's ability to publicly release disciplinary complaints,
decisions and other information, modeled on the text of FINRA Rule
8313; (2) amendments to Rules 9120, 9268, 9269, 9270, 9551, 9552, 9554,
9555, 9556, 9557, 9558, 9559, 9810, 9830, 9840, 9850, and 9860 and a
new Rule 9291 relating to temporary or permanent cease and desist
orders to correspond to recent amendments by FINRA to its Rule 9100,
9200, 9550, and 9800 Series; and (3) certain technical and conforming
changes to Rule 9310. The proposed rule change is available on the
Exchange's Web site 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:
    (1) Amendments to Rule 8313 (Release of Disciplinary Decisions)
relating to the Exchange's ability to publicly release disciplinary
complaints, decisions and other information, modeled on the text of
FINRA Rule 8313; \4\
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    \4\ References to rules are to NYSE rules unless otherwise
indicated.
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    (2) amendments to Rules 9120, 9268, 9269, 9270, 9551, 9552, 9554,
9555, 9556, 9557, 9558, 9559, 9810, 9830, 9840, 9850, and 9860 and a
new Rule 9291 relating to temporary or permanent cease and desist
orders to correspond to recent amendments by FINRA to its Rule 9100,
9200, 9550, and 9800 Series; and
    (3) certain technical and conforming changes to Rule 9310.\5\
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    \5\ In addition, the Exchange proposes the following technical
and conforming changes to the harmonized rules: (1) Substituting the
term ``member organization'' for ``member'' (see note 23, infra);
(2) substituting the term ``Exchange'' for ``FINRA''; (3) changing
certain cross-references to FINRA rules to cross-references to
Exchange rules; (4) substituting a reference to the Exchange's Chief
Regulatory Officer for a reference to a senior officer at FINRA; and
(5) changing certain references to Adjudicators to make them
consistent with references to Adjudicators throughout the Rule 9000
Series.
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Background
    In 2013, the NYSE adopted disciplinary rules that are, with certain
exceptions, substantially the same as the FINRA Rule 8000 Series and
Rule 9000 Series, and which set forth rules for conducting
investigations and enforcement actions.\6\ The NYSE disciplinary rules
were implemented on July 1, 2013.\7\
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    \6\ See Securities Exchange Act Release Nos. 68678 (January 16,
2013), 78 FR 5213 (January 24, 2013) (SR-NYSE-2013-02) (``2013
Notice''), 69045 (March 5, 2013), 78 FR 15394 (March 11, 2013) (SR-
NYSE-2013-02) (``2013 Approval Order''), and 69963 (July 10, 2013),
78 FR 42573 (July 16, 2013) (SR-NYSE-2013-49).
    \7\ See NYSE Information Memorandum 13-8 (May 24, 2013).
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    In adopting the FINRA disciplinary rules, the NYSE retained its
long-standing practice of publishing all final disciplinary decisions,
other than minor rule violations, on its Web site and did not adopt the
text of FINRA Rule 8313, which provides that disciplinary complaints
and decisions that meet certain criteria will be either published or
made available upon request.\8\ At the time, the Exchange was not
directly performing enforcement-related regulatory functions, having
entered into a Regulatory Services Agreement with FINRA in 2010 to
perform those functions, among others, on the Exchange's behalf.\9\
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    \8\ 2013 Approval Order, 78 FR at 15395.
    \9\ See Securities Exchange Act Release No. 62355 (June 22,
2010), 75 FR 36729, 36729 (June 28, 2010) (SR-NYSE-2010-46).
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    In adopting the FINRA disciplinary rules, the Exchange adopted
FINRA's rules and procedures for imposing temporary or permanent cease
and desist orders. In particular, the Exchange adopted FINRA Rule 8310
as NYSE Rule 8310, which, among other things, allows the Exchange to
impose a temporary or permanent cease and desist order.\10\ NYSE Rule
9290, based on FINRA Rule 9290, provides for expedited disciplinary
proceedings.\11\ Rule 9556, based on FINRA Rule 9556, provides
procedures and consequences for a failure to comply with temporary and
permanent cease and desist orders.\12\ The Exchange also adopted the
FINRA Rule 9800 Series, which sets forth the procedures for issuing
temporary cease and desist orders, as the NYSE Rule 9800 Series.\13\
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    \10\ 2013 Notice, 78 FR at 5221.
    \11\ 2013 Notice, 78 FR at 5230. Under Rule 9290, for any
disciplinary proceeding, the subject matter of which also is subject
to a temporary cease and desist proceeding initiated pursuant to
Rule 9810 or a temporary cease and desist order, hearings are
required to be held and decisions rendered at the earliest possible
time. See id.
    \12\ Id. at 5232.
    \13\ Id. at 5233.
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    In 2015, FINRA adopted a series of amendments to its substantive
and procedural rules governing temporary and permanent cease and desist
orders.\14\ In particular, FINRA amended its Rule Series 9800 to, among
other things, revise the evidentiary standard for finding a violation
to ``a showing of likelihood of success on the merits.'' \15\ FINRA
also amended its Rules 9120,

9268, 9269, 9270, 9291,\16\ 9551, 9552,\17\ 9554, 9555, 9556, 9557,
9558, 9559, 9810,\18\ 9830, 9840, 9850 and 9860 to adopt a new
expedited proceeding for failure to comply with a temporary cease and
desist order or a permanent cease and desist order; harmonize the
provisions governing how documents are served in temporary cease and
desist proceedings and related expedited proceedings; clarify the
process for issuing permanent cease and desist orders; ease FINRA's
administrative burden in temporary cease and desist proceedings; and
make conforming changes throughout its Code of Procedure.\19\
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    \14\ See Securities Exchange Act Release Nos. 75333 (June 30,
2015), 80 FR 38783 (July 7, 2015) (SR-FINRA-2015-019) (``2015 FINRA
Notice''), 75629 (August 6, 2015), 80 FR 48379 (August 12, 2015)
(SR-FINRA-2015-019) (``2015 FINRA Filing'').
    \15\ Id. at 48379.
    \16\ FINRA also amended Rules 9348 (Powers of the National
Adjudicatory Council on Review) and 9351 (Discretionary Review by
FINRA Board). The Exchange did not adopt either rule and instead
retained the substance of its appeals process when it adopted the
Rule 8000 and 9000 Series in 2013. See 2013 Approval Order, 78 FR at
15394.
    \17\ FINRA also amended Rule 9553, which concerns failure to pay
fees, dues, assessments or other charges. The Exchange did not adopt
FINRA Rule 9553 in 2013. See 2013 Approval Order, 78 FR at 15399.
    \18\ FINRA also amended Rule 9820 (Appointment of Hearing
Officers and Hearing Panel) to expand the pool of persons eligible
to serve on hearing panels in order to ease certain administrative
burdens on FINRA's Office of Hearing Officers. See 2015 FINRA
Filing, 80 FR at 48380. The Exchange is not adopting these changes.
    \19\ Id. at 48379.
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    On January 1, 2016, the Exchange reintegrated certain regulatory
functions previously performed on its behalf by FINRA.\20\ Among other
things, the Exchange now directly performs enforcement-related
regulatory functions, including investigating potential violations of
Exchange rules, and bringing enforcement actions and conducting
disciplinary proceedings arising out of such investigations.
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    \20\ See Securities Exchange Act Release No. 75721 (Aug. 18,
2015), 80 FR 51334 (August 24, 2015) and Exchange Act Release No.
76436 (November 13, 2015), 80 FR 72460 (November 19, 2015) (SR-NYSE-
2015-35).
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Proposed Rule Change
Amendments to Rule 8313 Governing Release of Disciplinary Complaints,
Decisions and Other Information Based on FINRA Rule 8313
    Rule 8313 currently provides that the Exchange shall publish a copy
of final disciplinary action under the Rule 9000 Series, other than
minor rule violations, on its Web site. The Exchange proposes to
restructure Rule 8313 and add four subsections and text modeled on
FINRA Rule 8313, as described below. The scope of proposed Rule 8313
would be limited to publication of materials relating to the
disciplinary process set forth in the Rule 8000 and 9000 Series. In
that regard, the Exchange has determined not to adopt the FINRA rule in
all respects.
General Standards
    The Exchange proposes to add a new subsection (a) to Rule 8313
entitled ``General Standards'' and text that would set forth general
standards for the release to the public of disciplinary complaints,
decisions or information.
    Proposed Rule 8313(a)(1) would retain, as modified, the current
text of Rule 8313. The word ``publish'' would be replaced with
``release to the public'' to conform to the FINRA rule. The phrase
``final disciplinary action'' would be deleted as unnecessary in light
of the more detailed provisions throughout the proposed Rule. The
proposed Rule would provide that the Exchange shall release to the
public a copy of and, at the Exchange's discretion, information with
respect to, any disciplinary complaint or disciplinary decision issued
by the Exchange, as defined in proposed Rule 8313(e) under the Rule
9000 Series, other than minor rule violations, on its Web site.
Proposed Rule 8313(a)(1) would also provide that, in response to a
request, the Exchange shall also release to the requesting party a copy
of any identified disciplinary complaint or disciplinary decision
issued by the Exchange, as defined in proposed Rule 8313(e). These
proposed amendments are modeled on FINRA Rule 8313(a)(1) and would be
substantially similar to the FINRA rule.
    Proposed Rule 8313(a)(2) provides that the Exchange shall release
to the public a copy of, and at the Exchange's discretion information
with respect to, any statutory disqualification decision, notification,
or notice issued by the Exchange pursuant to the Rule 9520 Series that
will be filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') and any temporary cease and desist order or decision
issued by the Exchange pursuant to the Rule 9800 Series. Proposed Rule
8313(a)(2) is modeled on FINRA Rule 8313(a)(2) but would substitute the
term ``Exchange'' for ``FINRA.''
    Proposed Rule 8313(a)(3) provides that the Exchange shall release
to the public information with respect to any suspension, cancellation,
expulsion, or bar that constitutes final Exchange action imposed
pursuant to Rules 9552, 9554,\21\ 9555, 9556, and 9558, as well as
information with respect to any suspension imposed pursuant to Rule
9557. Proposed subsection (a)(3) would also provide that the Exchange
shall release to the public a copy of, and information with respect to,
any decision issued pursuant to Rule 9559 that constitutes final
Exchange action. Further, the proposed subsection would provide that
the Exchange shall release to the public information with respect to
the summary suspension or expulsion of a member organization or the
summary revocation of the registration of a covered person for a
failure to pay fines, other monetary sanctions, or costs pursuant to
Rule 8320. Proposed Rule 8313(a)(3) is modeled on FINRA Rule 8313(a)(3)
but would (1) exclude failure to pay Exchange fees from its scope; \22\
(2) substitute the term ``Exchange'' for ``FINRA''; and (3) use the
terms ``member organization'' and ``covered person'' rather than
``member'' and ``person associated with a member,'' which have
different meanings under FINRA and Exchange rules.\23\
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    \21\ FINRA's version of Rule 8313 also includes a reference to
FINRA Rule 9553, which relates to failure to pay FINRA dues, fees
and other charges. In 2013, the Exchange adopted the text of FINRA
Rule 8320, which addresses the non-payment of fines and monetary
sanctions, but did not adopt FINRA Rule 9553. See note 17, supra.
Instead, the Exchange continued to use Rule 309, which relates to
failure to pay Exchange fees and other amounts due to the Exchange.
See 2013 Approval Order, 78 FR at 15399. Inasmuch as the scope of
the proposed rule change would be limited to publication of
materials relating to the disciplinary process under the Rule 8000
and 9000 Series, the Exchange proposes to include Rule 8320 but not
Rule 309 within the scope of proposed Rule 8313(a)(3).
    \22\ See note 21, supra.
    \23\ Under FINRA Rules, a ``member'' means an individual,
partnership, corporation or other legal entity admitted to
membership in FINRA under Articles III and IV of the FINRA By-Laws.
See FINRA Rule 0160(b)(10). Article III, Sec. 1(a) generally limits
membership to registered brokers, dealers, municipal securities
brokers or dealers, or government securities brokers or dealers.
NYSE's equivalent term is ``member organization.'' See Rule 2(b)(i)
(defining ``member organization'' as a registered broker or dealer
(unless exempt pursuant to the Act) that is a member of FINRA or
another registered securities exchange). Under Rule 2(a), the term
``member'' means a natural person associated with a member
organization who has been approved by the Exchange and designated by
such member organization to effect transactions on the floor of the
Exchange or any facility thereof. A ``member'' is not a registered
broker-dealer and does not have employees; only member organizations
have employees. For purposes of the proposed amendments to its
disciplinary rules, the Exchange proposes to continue using the
phrase ``covered person'' to indicate employees of a member
organization. See 2013 Notice, 78 FR at 5219.
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    Proposed Rule 8313(a)(4) provides that the Exchange may release to
the public a copy of, and information with respect to, any decision or
notice issued pursuant to the Rule 9600 Series, and any other decision
appealable to the SEC under Exchange Act Section 19(d). Proposed Rule
8313(a)(4) is modeled on FINRA Rule 8313(a)(5). FINRA Rule 8313(a)(5)
also contains cross references to FINRA Rule 6490 and the FINRA Rule
9700 Series. FINRA Rule 6490

(Processing of Company-Related Actions) applies to issuers of non-
exchange listed equity and debt securities quoted on the OTC
marketplace. FINRA's Rule 9700 Series provides redress for persons
aggrieved by the operations of any automated quotation, execution, or
communication system owned or operated by FINRA. FINRA Rule 6490 has no
analogue in the Exchange's Rules. The Exchange does not propose to
include Rule 18, which addresses compensation in connection with an
Exchange system failure, within the scope of Rule 8313. As noted above,
the Exchange has determined to limit the scope of Rule 8313 to
publication of materials relating to the disciplinary process under the
Rule 8000 and 9000 Series.\24\ The Exchange would also substitute the
term ``Exchange'' for ``FINRA.'' \25\
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    \24\ For the same reasons, the Exchange also does not propose to
adopt FINRA Rule 8313(a)(6), which provides that that FINRA may
release to the public a copy of, and information with respect to,
any complaint, decision, order, notification or notice issued under
FINRA rules, where the release of such information is deemed by
FINRA's CEO (or such other senior officer as the CEO may designate)
to be in the public interest, in such format as he or she finds
appropriate.
    \25\ The Exchange is not proposing to adopt rule text similar to
FINRA Rule 8313(a)(4), which provides that FINRA may release to the
public a copy of, and information with respect to, any decision or
notice issued pursuant to NASD Rules 1015 and 1016 governing appeals
from adverse membership and continuing membership decisions. As
noted above, the Exchange has determined to limit the scope of Rule
8313 to publication of materials relating to the disciplinary
process under the Rule 8000 and 9000 Series.
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Release Specifications
    The Exchange proposes to add a new subsection (b) to Rule 8313
entitled ``Release Specifications'' modeled on FINRA Rules 8313(b)(1)
and (2).
    Proposed Rule 8313(b)(1) provides that copies of, and information
with respect to, any disciplinary complaint released to the public
pursuant to paragraph (a) of the proposed Rule shall indicate that a
disciplinary complaint represents the initiation of a formal proceeding
by the Exchange in which findings as to the allegations in the
complaint have not been made and does not represent a decision as to
any of the allegations contained in the complaint. The proposed Rule
would be the same as FINRA Rule 8313(b)(1) except that the proposed
Rule would substitute the term ``Exchange'' for ``FINRA.''
    Proposed Rule 8313(b)(2) provides that copies of, and information
with respect to, any disciplinary decision or other decision, order,
notification, or notice released to the public pursuant to paragraph
(a) of the proposed Rule prior to the expiration of the time period
provided for an appeal or call for review as permitted under Exchange
rules or the Exchange Act, or while such an appeal or call for review
is pending, shall indicate that the findings and sanctions imposed
therein are subject to review and modification by the Exchange or the
SEC. The proposed Rule would be the same as FINRA Rule 8313(b)(2)
except that the proposed Rule would substitute the term ``Exchange''
for ``FINRA.''
Discretion To Redact Certain Information or Waive Publication
    The Exchange has determined that, subject to limited exceptions,
disciplinary information should be released to the public in unredacted
form. The Exchange proposes to add a new subsection (c) to Rule 8313
entitled ``Discretion to Redact Certain Information or Waive
Publication,'' modeled on FINRA Rule 8313(c)(1) and (2).
    With respect to the limited exceptions, proposed Rule 8313(c)(1)
would provide that the Exchange reserves the right to redact, on a
case-by-case basis, information that contains confidential customer
information, including customer identities, or information that raises
significant identity theft, personal safety, or privacy concerns that
are not outweighed by investor protection concerns. The proposed Rule
would be the same as FINRA Rule 8313(c)(1) except that the proposed
Rule would substitute the term ``Exchange'' for ``FINRA.''
    Similarly, proposed Rule 8313(c)(2) provides that, notwithstanding
paragraph (a) of the proposed rule, the Exchange may determine, in its
discretion, to waive the requirement to release a copy of, or
information with respect to, any disciplinary complaint, disciplinary
decision or other decision, order, notification, or notice under those
extraordinary circumstances where the release of such information would
violate fundamental notions of fairness or work an injustice. The
proposed Rule would be the same as FINRA Rule 8313(c)(1) [sic] except
that the proposed Rule would substitute the term ``Exchange'' for
``FINRA.''
Notice of Appeals of Exchange Decisions
    The Exchange proposes to add a new subsection (d) to Rule 8313
entitled ``Notice of Appeals of Exchange Decisions to the SEC'' modeled
on FINRA Rule 8313(d). Proposed Rule 8313(d) provides that the Exchange
must provide notice to the public when a disciplinary decision of the
Exchange is appealed to the SEC and the notice shall state whether the
effectiveness of the decision has been stayed pending the outcome of
proceedings before the Commission. The proposed Rule would be the same
as FINRA Rule 8313(d)(1) except that the proposed Rule would substitute
the term ``Exchange'' for ``FINRA.''
Definitions
    Finally, the Exchange proposes to add a new subsection (e) to Rule
8313 entitled ``Definitions.'' Proposed Rule 8313(e) would set forth
definitions of the terms ``disciplinary complaint'' and ``disciplinary
decision'' as used in the Rule, modeled on the definitions contained in
FINRA Rule 8313(e).
    First, Rule 8313(e)(1) would define the term ``disciplinary
complaint'' to mean any complaint issued pursuant to the Rule 9200
Series. The proposed text is identical to FINRA Rule 8313(e)(1).
    Second, Rule 8313(e)(2) would define the term ``disciplinary
decision'' to mean any decision issued pursuant to the Rule 9000
Series, including, decisions issued by a Hearing Officer, Hearing
Panel, Extended Hearing Panel, or the Board of Directors, and orders
accepting offers of settlement, and Letters of Acceptance, Waiver and
Consent. Under proposed subsection (e)(2), the term would not include
decisions issued pursuant to the Rule 9550 Series, Rule 9600 Series, or
Rule 9800 Series, or decisions, notifications, or notices issued
pursuant to the Rule 9520 Series, which are addressed by paragraphs
(a)(2), (a)(3) and (a)(4) of the proposed Rule. Finally, Rule
8313(e)(2) provides that minor rule violation plan letters issued
pursuant to Rules 9216 and 9217 are not subject to the proposed Rule.
The proposed Rule would be the same as FINRA Rule 8313(e)(2) except
that the proposed Rule would substitute the term ``Exchange'' for
``FINRA.''
* * * * *
    The Exchange believes that greater access to information regarding
disciplinary actions provides valuable guidance and information to
member organizations, associated persons, other regulators, and
investors.\26\ Further, releasing detailed disciplinary information to
the public can serve to deter and prevent future misconduct and improve
overall business standards in the securities industry as well as
allowing investors to consider firms' and representatives' disciplinary
histories when considering whether to

engage in business with them.\27\ Publishing more detailed information
than the exchange currently does would also allow member organizations
to utilize that information to educate associated persons as to
compliance matters, highlight potential violations and related
sanctions, as well as inform the firms' compliance procedures involving
similar business lines, products, or industry practices. Finally, the
Exchange believes that any member organization or individual facing
allegations of rule violations would also have access to more
information to gain greater insight on related facts and sanctions.\28\
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    \26\ See Securities Exchange Act Release Nos. 69178 (March 19,
2013), 78 FR 17975, 17976 (March 25, 2013) (SR-FINRA-2013-018) and
69825 (June 21, 2013), 78 FR 38771, 38775 (June 27, 2013) (SR-FINRA-
2013-018).
    \27\ Release No. 69178, 78 FR at 17976.
    \28\ See id.
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Harmonization With FINRA Rules Relating to Temporary or Permanent Cease
and Desist Orders
    The Exchange also proposes to harmonize its disciplinary rules and
procedures relating to the imposition of temporary and permanent cease
and desist orders with approved FINRA amendments. To effectuate these
changes, the Exchange proposes the following amendments to Rules 9120,
9268, 9269, 9270, 9551, 9552, 9554, 9555, 9556, 9557, 9558, 9559, 9810,
and 9830, 9840, 9850, and 9860. The Exchange also proposes to adopt a
new Rule 9291 based on FINRA's recently adopted Rule 9291.
     The Exchange proposes to amend the Rule 9120 definitions
applicable to the Rule 9000 Series, as follows:
    [cir] The Exchange proposes to amend the definition of ``Hearing
Panel'' in Rule 9120(s) to encompass a Hearing Panel constituted under
the Rule 9800 Series to conduct a temporary cease and desist
proceeding.
    [cir] The Exchange proposes to amend the definition of ``Interested
Staff'' in Rule 9120(t)(A) to encompass any staff that issues a
petition under the Rule 9000 Series.\29\
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    \29\ In 2015, the Exchange amended and streamlined the
definition of ``Interested Staff'' in Rule 9120(t) and, as a result,
the NYSE and FINRA definitions of ``Interested Staff'' are organized
differently. However, both definitions encompass supervisory
personnel up to the most senior level, including the CRO, when staff
reporting to such supervisory personnel directly participated in a
matter. See Securities Exchange Act Release No. 76436 (November 13,
2015), 80 FR 72460, 72462 (November 19, 2015) (June 27, 2013) (SR-
NYSE-2015-35). The proposed change to Rule 9120(t)(A) would bring
any staff that issues a petition under the Rule 9000 Series within
the ambit of the definition, and thus remain consistent with the
FINRA definition, as amended in the 2015 FINRA Filing.
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    [cir] The Exchange proposes to amend the definition of ``Panelist''
in Rule 9120(v) to encompass the use of the term in the Rule 9550
Series and the Rule 9800 Series.
    [cir] Finally, the Exchange proposes to amend the definition of
``Respondent'' in Rule 9120(y) to provide that in a proceeding governed
by the Rule 9800 Series, the term ``Respondent'' means a member
organization or covered person that has been served with a notice
initiating a cease and desist proceeding.
     Rule 9268 sets forth the timing and the contents of a
decision of the Hearing Panel or Extended Hearing Panel and the
procedures for a dissenting opinion, service of the decision, and any
requests for review. The Exchange proposes to amend Rule 9268(b), which
sets forth the contents of a panel decision, by adding a new subsection
(7), providing that when the sanctions include a permanent cease and
desist order, the decision should include a statement that is
consistent with the requirements of Rule 9291(a) concerning the
content, scope, and form of a permanent cease and desist order. The
proposed change is identical to that recently adopted by FINRA to its
version of Rule 9268.
     Rule 9269 governs the process for the issuance and review
of default decisions when a Respondent fails to timely answer a
complaint or fails to appear at a pre-hearing conference or hearing
where due notice has been provided. The Exchange proposes to amend Rule
9269(a), governing issuance of default decisions, to add a new
subsection (4) that provides that the Office of Hearing Officers shall
provide a copy of the default decision to each member organization with
which a Respondent is associated. The proposed change is identical to
recently adopted FINRA Rule 9269(a)(4), except for conforming
references to member organizations.
     Rule 9270 provides a settlement procedure for a Respondent
who has been notified that a proceeding has been instituted against him
or her. The Exchange proposes two amendments to this Rule. First, the
Exchange would amend Rule 9270(c), which details the content and
signature requirements for offers of settlement, to add a new
subsection (6) providing that, if applicable, the offer should describe
in detail a proposed permanent cease and desist order to be imposed
that is consistent with the requirements of proposed Rule 9291(a)
concerning the content, scope, and form of a permanent cease and desist
order. This proposed amendment is substantially the same as FINRA Rule
9270(c)(6) as amended in the 2015 FINRA Filing.\30\
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    \30\ The Exchange also proposes a non-substantive amendment at
the end of Rule 9270(c)(4) to delete the word ``and'' and a non-
substantive amendment at the end of Rule 9270(c)(5) to delete a
period, add a semicolon, and add the word ``and.''
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    Second, the Exchange proposes to add the phrase ``including, if
applicable, a permanent cease and desist order'' to Rule 9270(f)(1),
governing uncontested offers of settlement, and a sentence to Rule
9270(f)(3) providing that Enforcement shall provide a copy of an issued
order of acceptance to each member organization with which a Respondent
is associated. The proposed amendments are identical to FINRA Rules
9270(e)(1) and 9270(e)(3), respectively, except for conforming
references to the Exchange's Enforcement group and member
organizations.
     The Exchange proposes to amend the notice and service
requirements for expedited proceedings under the Rule 9550 Series, by
providing for service upon counsel and service by email. Specifically,
the Exchange proposes to make amendments to subsection (b) of the
following Rules, consistent with recent changes to the counterpart
FINRA rules, regarding service on counsel or other representative and
the requirements for service by email:
    [cir] The Exchange proposes to add a clause to the first sentence
of subsection (b) of Rule 9551 (Failure to Comply with Public
Communication Standards), which governs expedited proceedings relating
to a member organization's departure from the public communication
standards of Rule 2210, providing that Regulatory Staff shall
alternatively serve counsel representing the member organization, or
other person authorized to represent others under Rule 9141, when
counsel or other person authorized to represent others under Rule 9141
agrees to accept service for the member organization with the required
notice under the Rule and that the notice can also be provided by
email.
    The Exchange proposes to delete the sentence, ``When counsel for
the member organization or other person authorized to represent others
under Rule 9141 agrees to accept service of such notice, then
Regulatory Staff may serve notice on counsel or other person authorized
to represent others under Rule 9141 as specified in Rule 9134,'' and
add a sentence to the end of subsection (b) providing that papers
served on a member organization by email shall be sent to the email
address on file with the Exchange and shall also be served by either
overnight courier or personal delivery in conformity with subsections
(a)(1) and (3) and (b)(2) of Rule 9134.

    The Exchange would also add text providing that the papers served
on counsel for a member organization, or other person authorized to
represent others under Rule 9141, by email shall be sent to the email
address that counsel or other person authorized to represent others
under Rule 9141 provides and shall also be served by either overnight
courier or personal delivery in conformity with Rule 9134(a)(1) and
(3). Finally, the Exchange would add a sentence specifying that service
is complete upon sending the notice by email, mailing the notice by
U.S. Postal Service first class mail, first class certified mail, first
class registered mail, or Express Mail, sending the notice through a
courier service, or delivering it in person, except that, where
duplicate service is required, service is complete when the duplicate
service is complete;
    [cir] Rule 9552 (Failure to Provide Information or Keep Information
Current), which sets forth procedures for expedited proceedings
relating to a member organization or covered person's failure to
provide information or keep information current, would be amended by
adding a clause to the first sentence of subsection (b) providing that
Regulatory Staff shall alternatively serve counsel representing the
member organization or covered person, or other person authorized to
represent others under Rule 9141, when counsel or other person
authorized to represent others under Rule 9141 agrees to accept service
for the member organization or covered person with the required notice
under the Rule and that the notice can also be provided by email.
    The Exchange proposes to delete the sentence, ``When counsel for
the member organization or covered person, or other person authorized
to represent others under Rule 9141 agrees to accept service of such
notice, then Regulatory Staff may serve notice on counsel or other
person authorized to represent others under Rule 9141 as specified in
Rule 9134,'' and add a sentence to the end of Rule 9552(b) providing
that papers served on a member organization by email shall be sent to
the email address on file with the Exchange and shall also be served by
either overnight courier or personal delivery in conformity with
paragraphs (a)(1) and (3) and (b)(2) of Rule 9134.
    Further, the proposed rule text would provide that papers served on
a person by email shall be sent to the person's last known email
address and shall also be served by either overnight courier or
personal delivery in conformity with paragraphs (a)(1) and (3) and
(b)(1) of Rule 9134. The proposed amendment would specify that papers
served on counsel for a member organization or covered person, or other
person authorized to represent others under Rule 9141, by email shall
be sent to the email address that counsel or other person authorized to
represent others under Rule 9141 provides and shall also be served by
either overnight courier or personal delivery in conformity with Rule
9134(a)(1) and (3).
    Finally, the proposed amendment would provide that service is
complete upon sending the notice by email, mailing the notice by U.S.
Postal Service first class mail, first class certified mail, first
class registered mail, or Express Mail, sending the notice through a
courier service, or delivering it in person, except that, where
duplicate service is required, service is complete when the duplicate
service is complete;
    [cir] The Exchange proposes to amend Rule 9554 (Failure to Comply
with an Arbitration Award or Related Settlement or an Order of
Restitution or Settlement Providing for Restitution), which governs
expedited proceedings relating to noncompliance with an arbitration
award, settlement agreement, or restitution order, by adding a clause
to the first sentence of subsection (b) providing that Regulatory Staff
shall alternatively serve counsel representing the member organization
or covered person, or other person authorized to represent others under
Rule 9141, when counsel or other person authorized to represent others
under Rule 9141 agrees to accept service for the member organization or
covered person with the required notice under the Rule and that the
notice can also be provided by email.
    The Exchange would also delete the sentence, ``When counsel for the
member organization or covered person, or other person authorized to
represent others under Rule 9141 agrees to accept service of such
notice, then Regulatory Staff may serve notice on counsel or other
person authorized to represent others under Rule 9141 as specified in
Rule 9134,'' and add a sentence to the end of Rule 9554(b) providing
that papers served on a member organization by email shall be sent to
the email address on file with the Exchange and shall also be served by
either overnight courier or personal delivery in conformity with
paragraphs (a)(1) and (3) and (b)(2) of Rule 9134. Further, the
proposed amendment would specify that papers served on a person by
email shall be sent to the person's last known email address and shall
also be served by either overnight courier or personal delivery in
conformity with paragraphs (a)(1) and (3) and (b)(1) of Rule 9134.
    The proposed amendment would also specify that papers served on
counsel for a member organization or covered person, or other person
authorized to represent others under Rule 9141, by email shall be sent
to the email address that counsel or other person authorized to
represent others under Rule 9141 provides and shall also be served by
either overnight courier or personal delivery in conformity with
paragraphs (a)(1) and (3) of Rule 9134.
    Finally, the proposed amendment would provide that service is
complete upon sending the notice by email, mailing the notice by U.S.
Postal Service first class mail, first class certified mail, first
class registered mail, or Express Mail, sending the notice through a
courier service, or delivering it in person, except that, where
duplicate service is required, service is complete when the duplicate
service is complete;
    [cir] The Exchange proposes to add a clause to the first sentence
of subsection (b) of Rule 9555 (Failure to Meet the Eligibility or
Qualification Standards or Prerequisites for Access to Services), which
governs expedited proceedings in connection with the failure to meet
the eligibility or qualification standards or prerequisites for access
to services offered by the Exchange, providing that Exchange staff
shall alternatively serve counsel representing the member organization
or covered person, or other person authorized to represent others under
Rule 9141, when counsel or other person authorized to represent others
under Rule 9141 agrees to accept service for the member organization or
covered person with the required notice under the Rule and that the
notice can also be provided by email.
    The Exchange would also delete the sentence, ``When counsel for the
member organization or covered person, or other person authorized to
represent others under Rule 9141 agrees to accept service of such
notice, then Exchange staff may serve notice on counsel or other person
authorized to represent others under Rule 9141 as specified in Rule
9134,'' and add a sentence to the end of Rule 9554(b) providing that
papers served on a member organization by email shall be sent to the
email address on file with the Exchange and shall also be served by
either overnight courier or personal delivery in conformity with
paragraphs (a)(1) and (3) and (b)(2) of Rule 9134.
    Further, the proposed amendment would specify that papers served on
a person by email shall be sent to the person's last known email
address and shall also be served by either overnight courier or
personal delivery in conformity with paragraphs (a)(1) and

(3) and (b)(1) of Rule 9134. The proposed amendment would also specify
that the papers served on counsel for a member organization or covered
person, or other person authorized to represent others under Rule 9141,
by email shall be sent to the email address that counsel or other
person authorized to represent others under Rule 9141 provides and
shall also be served by either overnight courier or personal delivery
in conformity with Rule 9134(a)(1) and (3).
    Finally, the proposed amendment would provide that service is
complete upon sending the notice by email, mailing the notice by U.S.
Postal Service first class mail, first class certified mail, first
class registered mail, or Express Mail, sending the notice through a
courier service, or delivering it in person, except that, where
duplicate service is required, service is complete when the duplicate
service is complete;
    [cir] The Exchange proposes to amend subsection (b) of Rule 9556
(Failure to Comply with Temporary and Permanent Cease and Desist
Orders), which governs expedited proceedings relating to noncompliance
with a temporary or permanent cease and desist order, to add the word
``email'' to the list of service methods in the first sentence. The
proposed Rule would therefore permit Regulatory Staff to serve the
member organization or covered person subject to a notice issued under
the Rule (or upon counsel representing the member organization or
covered person, or other person authorized to represent others under
Rule 9141, when counsel or other person authorized to represent others
under Rule 9141 agrees to accept) by email in addition to overnight
courier or personal delivery.
    The Exchange would also add a sentence to subsection (b) providing
that papers served on a member organization by email shall be sent to
the email address on file with the Exchange and shall also be served by
either overnight courier or personal delivery in conformity with
paragraphs (a)(1) and (3) and (b)(2) of Rule 9134. Further, the
proposed amendment would specify that papers served on a person by
email shall be sent to the person's last known email address and shall
also be served by either overnight courier or personal delivery in
conformity with paragraphs (a)(1) and (3) and (b)(1) of Rule 9134. The
proposed amendment would also specify that the papers served on counsel
for a member organization or covered person, or other person authorized
to represent others under Rule 9141 by email shall be sent to the email
address that counsel or other person authorized to represent others
under Rule 9141 provides and shall also be served by either overnight
courier or personal delivery in conformity with Rule 9134(a)(1) and
(3).
    Finally, the Exchange proposes to amend the last sentence of
subsection (b) to provide that service is complete upon ``sending''
rather than ``mailing'', which word would be deleted; adding the phrase
``email or'' to the list of service methods; and adding an exception
clause providing that ``except that, where duplicate service is
required, service is complete upon sending the duplicate service'';
    [cir] Rule 9557 (Procedures for Regulating Activities Under Rules
4110, 4120 and 4130 Regarding a Member Organization Experiencing
Financial or Operational Difficulties), which allows the Exchange to
issue a notice directing a member organization to comply with the
provisions of Rule 4110 (Capital Compliance), 4120 (Regulatory
Notification and Business Curtailment), or 4130 (Regulation of
Activities of Section 15C Member Organizations Experiencing Financial
and/or Operational Difficulties), or otherwise directing it to restrict
its business activities, would be amended to add a clause to the first
sentence of subsection (b) providing Exchange staff shall alternatively
serve counsel representing the member organization, or other person
authorized to represent others under Rule 9141, when counsel or other
person authorized to represent others under Rule 9141 agrees to accept
service for the member organization and that the notice can also be
provided by email.
    The Exchange would also add a sentence to subsection (b) providing
that papers served on a member organization by email shall be sent to
the email address on file with the Exchange and shall also be served by
either overnight courier or personal delivery in conformity with
paragraphs (a)(1) and (3) and (b)(2) of Rule 9134. Further, the
proposed amendment would specify that papers served on counsel for a
member organization or other person authorized to represent others
under Rule 9141 by email shall be sent to the email address that
counsel or other person authorized to represent others under Rule 9141
provides and shall also be served by either overnight courier or
personal delivery in conformity with paragraphs (a)(1) and (3) of Rule
9134.
    Finally, the last sentence of subsection (b) would be amended to
reflect that service is complete upon ``sending'' rather than
``mailing'', which word would be deleted; adding the phrase ``email
or'' to the list of service methods; and adding an exception clause
providing that ``except that, where duplicate service is required,
service is complete upon sending the duplicate service''; and
    [cir] Subsection (b) of Rule 9558 (Summary Proceedings for Actions
Authorized by Section 6(d)(3) of the Exchange Act), which allows the
Exchange's Chief Regulatory Officer to provide written authorization to
Exchange staff to issue a written notice for a summary proceeding for
an action authorized by Section 6(d)(3) of the Act, would be amended by
to add a clause to the first sentence providing Exchange staff shall
alternatively serve counsel representing the member organization, or
other person authorized to represent others under Rule 9141, when
counsel or other person authorized to represent others under Rule 9141
agrees to accept service for the member organization or covered person
and adding ``email'' to the list of service methods.
    The Exchange would also add a sentence to subsection (b) providing
that papers served on a member organization by email shall be sent to
the email address on file with the Exchange and shall also be served by
either overnight courier or personal delivery in conformity with
paragraphs (a)(1) and (3) and (b)(2) of Rule 9134.
    Papers served on a person by email shall be sent to the person's
last known email address and shall also be served by either overnight
courier or personal delivery in conformity with paragraphs (a)(1) and
(3) and (b)(1) of Rule 9134. Further, the proposed amendment would
specify that papers served on counsel for a member organization or
covered person, or other person authorized to represent others under
Rule 9141 by email shall be sent to the email address that counsel or
other person authorized to represent others under Rule 9141 provides
and shall also be served by either overnight courier or personal
delivery in conformity with Rule 9134(a)(1) and (3).
    Finally, the last sentence of subsection (b) would be amended to
reflect that service is complete ``sending'' rather than ``mailing'',
which word would be deleted; adding the phrase ``email or'' to the list
of service methods; and adding an exception clause providing that
``except that, where duplicate service is required, service is complete
upon sending the duplicate service.''
     With the exception of conforming changes to reflect the
Exchange's membership, omission of service by

facsimile,\31\ and omission of a reference to ``the email address
listed in the FINRA Contact System submitted to FINRA pursuant to
Article 4, Section III of the FINRA By-Laws,'' \32\ the text of the
proposed amendments to NYSE Rules 9551, 9552, 9554, 9555, 9556, 9557,
and 9558 is substantially similar to that of FINRA Rules 9551, 9552,
9554, 9555, 9556, 9557, and 9558.
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    \31\ See 2015 FINRA Filing, 80 FR at 48380 (``FINRA proposed to
explicitly allow service by facsimile and on counsel, as well as by
email, across all temporary cease and desist and expedited
proceedings'').
    \32\ See id. The proposed rule change permitting email service
in Rules 9551, 9552, 9554, 9555, 9556, 9557, and 9558 is the same as
that contained in the corresponding FINRA rules, except the proposed
rules provide that papers served on a member organization by email
shall be sent to ``the email address on file with the Exchange''
instead of ``the email address listed in the FINRA Contact System
submitted to FINRA pursuant to Article 4, Section III of the FINRA
By-Laws.'' The Exchange's membership department collects and
maintains email contact information for member organizations.
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     The Exchange proposes amending Rule 9556(g) to add the
phrase, ``imposed after the process described in paragraphs (a) through
(f) of'' (and delete the word ``under'') before the phrase, ``this
Rule,'' to conform to the recent changes to FINRA Rule 9556(g). The
Exchange believes that the proposed change adds greater specificity to
the Rule.
     The Exchange also proposes adding a new subsection (h) to
Rule 9556 titled ``Subsequent Proceedings'' permitting Regulatory Staff
(with prior written authorization from the CRO) to file a petition
seeking a hearing if the subject of a temporary or permanent cease and
desist order fails to comply with that order and has previously been
served with a notice under Rule 9556(a) for a failure to comply with
any provision of the same temporary or permanent cease and desist
order.
    [cir] Under the proposed Rule, the petition shall be served in
accordance with Rule 9556(b) and filed with the Office of Hearing
Officers.\33\ The proposed Rule would also require the petition to
explicitly identify the provision of the permanent or temporary cease
and desist order that is alleged to have been violated, contain a
statement of facts specifying the alleged violation, describe with
particularity the sanctions that Regulatory Staff seeks to have
imposed, and note that a hearing under Rule 9559 is requested.
Regulatory Staff may seek the imposition of any fitting sanction.\34\
---------------------------------------------------------------------------

    \33\ Proposed Rule 9556(h)(1).
    \34\ Id. at (2).
---------------------------------------------------------------------------

    [cir] Proposed Rule 9556(h)(3) provides that, in contrast to other
Rule 9556 proceedings, a Respondent's compliance with the temporary or
permanent cease and desist order is not a ground for dismissing the
Rule 9556(h) proceeding. Thus, a Respondent's compliance with a
temporary or permanent cease and desist order after a Rule 9556(h)
proceeding has been initiated would not prevent an adjudicator from
reviewing the matter and imposing a fitting sanction for the
Respondent's violation.
    [cir] Finally, Proposed Rule 9556(h)(4) provides that Regulatory
Staff can withdraw the petition without prejudice and can refile a
petition based on allegations concerning the same facts and
circumstances that are set forth in the withdrawn petition. As with the
FINRA rule on which it is based, the proposed provision provides the
Exchange with the flexibility to withdraw the petition where, for
instance, the Respondent evidences a good faith intent to comply with
the temporary or permanent cease and desist order without the need to
adjudicate the petition, while preserving the Exchange's right to
refile the petition if the Respondent fails to do so.\35\ Proposed Rule
9556(h) is substantially similar to FINRA Rule 9556(h).
---------------------------------------------------------------------------

    \35\ See 2015 FINRA Notice, 80 FR at 38785.
---------------------------------------------------------------------------

     Rule 9559 (Hearing Procedures for Expedited Proceedings
Under the Rule 9550 Series) sets forth uniform hearing procedures for
all expedited proceedings under the Rule 9550 Series. The Exchange
proposes to amend Rule 9559 to reflect the new expedited proceedings
set forth in proposed Rule 9556(h). The proposed changes are
substantially similar to those recently adopted by FINRA for its Rule
9559. Specifically:
    [cir] Rule 9559(a) would be amended to add the phrase ``or who is
served with a petition instituting an expedited proceeding under Rule
9556(h).''
    [cir] Rule 9559(c), which governs stays, would be amended to add a
new subparagraph (1)(B) specifying that stays under subsection (c)
would not apply to a petition instituting an expedited proceeding under
Rule 9556(h).
    [cir] Rule 9559(d), governing the appointment and authority of
hearing officers and hearing panels, would similarly be amended to add
references to proceedings under Rule 9556(h).
    [cir] Rule 9559(f), governing time of hearing, would be amended to
add a new subsection (2) providing that a hearing shall be held within
ten days after a Respondent is served a petition seeking an expedited
proceeding issued under Rule 9556(h), adding a reference to Rule
9556(h) to current subsection (2), and renumbering the remaining
subsections.
    [cir] Rule 9559(g), governing notice of hearing, would be amended
to add a new subsection (2) providing that a Hearing Officer shall
issue a notice stating the date, time, and place of the hearing at
least six days prior to the hearing in the case of an action brought
pursuant to Rule 9556(h), adding a reference to Rule 9556(h) to current
subsection (2), and renumbering the remaining subsections.
    [cir] Rule 9559(h) governing transmission of documents would be
amended as follows to reflect the new expedited proceeding the Exchange
proposes under Rule 9556(h) for enforcing violations of a temporary or
permanent cease and desist orders [sic]. The changes closely parallel
FINRA's amendments to its version of Rule 9559(h) to bring Rule 9556(h)
proceedings within the scope of the rule and distinguish them from
actions brought under Rule 9556 and already reflected in the rule.
    The first sentence of subsection (h)(1) would be amended to add the
clause ``not less than six days before the hearing in an action brought
under Rule 9556(h)'' after ``Not less than two business days before the
hearing in an action brought under Rule 9557,'' to specifically bring
proposed proceedings under Rule 9556(h) within the scope of the Rule.
The clause ``not less than seven days before the hearing in an action
brought under Rules 9556 and 9558'' that would follow the proposed
addition would be amended to carve out Rule 9556(h) proceedings by
adding the words ``except Rule 9556(h)'' after ``Rules 9556'' and
before ``and 9558.'' Subsection (h)(1) would be further amended to
reflect that ``the respondent who has received a petition pursuant to
Rule 9556(h)'' would also be provided with all documents that were
considered in issuing the notice, and that these documents could be
provided by email or personal delivery in addition to overnight
courier.
    The Exchange also proposes to add the sentence ``Documents served
by email shall also be served by either overnight courier or personal
delivery'' before the last sentence in Rule 9559(h)(1).
    The last sentence of subsection (h)(1) would be amended to delete
the word ``such'' and add the word ``the'' before ``criteria,'' and to
add the clause ``in this paragraph'' after the word ``criteria.''
    Rule 9559(h)(2) would be amended to provide that exhibit and
witness lists shall be served by email or personal delivery in addition
to overnight courier. Finally, the Exchange proposes

to add a sentence to the end of subsection (h)(2) providing that
``Documents served by email shall also be served by either overnight
courier or personal delivery.''
    [cir] Rule 9559(m), governing failure to appear at a pre-hearing
conference or hearing or to comply with a Hearing Officer order
requiring production of information, would be amended to add a new
subsection (2) providing that a Hearing Officer may issue a default
decision against a Respondent who is the subject of a petition \36\
filed pursuant to Rule 9556(h), and may deem the allegations against
that Respondent admitted. The contents of a default decision shall
conform to the content requirements of Rule 9559(p). A Respondent may,
for good cause shown, file a motion to set aside a default. Upon a
showing of good cause, the Hearing Officer that entered the original
order shall decide the motion. If the Hearing Officer is not available,
the Chief Hearing Officer shall appoint another Hearing Officer to
decide the motion. If a default decision is not called for review
pursuant to Rule 9559(q), the default decision shall become the final
Exchange action.
---------------------------------------------------------------------------

    \36\ The first paragraph of Rule 9559(m) would also be amended
to add ``or petition'' after the word ``notice'' to reflect proposed
expedited proceedings under Rule 9556(h). In the penultimate
sentence of the first paragraph, the comma after ``In such cases''
would be deleted, and a colon would be added in its place. The
remainder of the sentence, together with the last sentence of the
current rule, would be renumbered as new subsection (1).
---------------------------------------------------------------------------

    [cir] Finally, Rule 9559(n) governing sanctions, costs and remands
would be amended to add references to Rule 9556(h) proceedings. Rule
9559(n) would also be amended to add a new subsection (2) providing
that, in an action brought under Rule 9556(h), the Hearing Officer may
impose any fitting sanction. The remaining subsections of the Rule
would be renumbered. These proposed changes are identical to those
recently adopted in FINRA Rule 9559.
     Rule 9810 (Initiation of Proceeding) sets forth procedures
for initiating temporary cease and desist proceedings. The Exchange
proposes various amendments to the Rule to harmonize it with FINRA Rule
9810, as follows:
    [cir] Rule 9810(a) governing service and filing of a notice would
be amended to add text providing that a proceeding can alternatively be
initiated by service upon counsel representing the Respondent, or other
person authorized to represent others under Rule 9141, when counsel or
other person authorized to represent others under Rule 9141 agrees to
accept service for the Respondent. Rule 9810(a) would also be amended
to specifically provide for service by email, and text would be added
to the Rule providing that if service is made by email, Enforcement
shall send an additional copy of the notice by personal service or
overnight commercial courier and that service is complete upon sending
the notice by email or overnight courier or delivering it in person,
except that, where duplicate service is required, service is complete
when the duplicate service is complete. Finally, the Rule would be
amended to provide that the notice shall be effective when service is
complete.
    [cir] Rule 9810(b) sets forth the requirements for the content of
the notice, and would be amended to add a new subsection (2) providing
that the notice also be accompanied by a memorandum of points and
authorities setting forth the legal theories upon which Enforcement
relies. Current subsection (2) would be renumbered. The Exchange also
proposes to clarify the required contents of the notice by specifying
that the notice shall state whether Enforcement is requesting the
Respondent to be required to take action, refrain from taking action
``or both.''
    [cir] The Exchange proposes to add a new subsection (c) to Rule
9810 entitled ``Authority to Approve Settlements,'' providing that if
the Parties agree to the terms of the proposed temporary cease and
desist order, the Hearing Officer shall have the authority to approve
and issue the order.
    [cir] Current subsection (c) of Rule 9810 governing filing of the
underlying complaint would become subsection (d). The Exchange also
proposes to add a sentence providing that service of the complaint can
be made in accordance with the service provisions in paragraph (a).
     Rule 9830 (Hearing) sets forth hearing procedures for
temporary cease and desist proceedings. The Exchange proposes the
following changes to harmonize the Rule with FINRA's recent amendments:
    [cir] Rule 9830(a) would be amended to specify that either the
Chief Hearing Officer or Deputy Chief Hearing Officer can extend the
date of hearing for good cause shown and eliminate the need for consent
of the parties.
    [cir] Rule 9830(b) would be amended to add text specifying that the
Office of Hearing Officers can also serve notice of a hearing upon
counsel representing the Respondent, or other person authorized to
represent others under Rule 9141, when counsel or other person
authorized to represent others under Rule 9141 agrees to accept service
for the Respondent, and to specify that service can be by email.
    The Rule would also be amended to add text specifying that if
service is made by email, the Office of Hearing Officers shall send an
additional copy of the notice by personal service or overnight
commercial courier. Service is complete upon sending the notice by
email or overnight courier or delivering it in person, except that,
where duplicate service is required, service is complete when the
duplicate service is complete.
    [cir] Rule 9830(e) would be amended to add text specifying that,
prior to the hearing, the Hearing Officer may order a Party to furnish
to all other Parties and the Hearing Panel such information as deemed
appropriate, including any or all of the pre-hearing submissions
described in Rule 9242(a). The Rule would also provide that documentary
evidence submitted by the Parties would not become part of the record,
unless the Hearing Officer or Hearing Panel orders some or all of the
evidence included pursuant to Rule 9830(g). The Exchange would also
change the phrase, ``its consideration'' to ``the Hearing Panel's
consideration,'' to add greater specificity.
     Rule 9840 (Issuance of Temporary Cease and Desist Order by
Hearing Panel) sets forth the basis, including the evidentiary
standard, for issuance of a temporary cease and desist order. The
Exchange proposes the following changes to harmonize the Rule with
FINRA's recent amendments:
    [cir] Rule 9840(a) would be amended to specify that either the
Chief Hearing Officer or Deputy Chief Hearing Officer can extend the
ten day period for issuance of a decision stating whether a cease and
desist order shall be imposed for good cause shown and eliminate the
need for consent of the parties. Rule 9840(a)(1) would be amended to
revise the evidentiary standard in temporary cease and desist
proceedings to ``a showing of likelihood of success on the merits.''
This was one of the main changes recently effectuated by FINRA.\37\
Rule 9840(a)(2) would be amended to add ``alleged'' before the

term ``violative conduct'' in keeping with the recent FINRA amendment.
---------------------------------------------------------------------------

    \37\ See 2015 FINRA Notice, 80 FR at 38784. The current
evidentiary standard for imposing a temporary cease and desist
order, set forth in Rule 9840(a)(1), is ``a preponderance of the
evidence that the alleged violation specified in the notice has
occurred.'' As explained in the 2015 FINRA Notice, the
``preponderance of the evidence'' standard sets too high an
evidentiary threshold for this critical investor-protection tool.
Indeed, it is the identical standard for proving a violation in the
concurrent underlying disciplinary proceeding. This poses
administrative challenges that create a strong disincentive to seek
a temporary cease and desist order. See id.
---------------------------------------------------------------------------

    [cir] Rule 9840(b)(1) and (3) would be amended to apply to any
successor of a Respondent, where the Respondent is a member
organization. This proposed change is similar to the proposed change
with respect to Rule 9291, discussed above [sic]. Subsection (3) would
also be amended to remove the words ``is to'' and ``or'' and add the
words ``or both'' to the end of the clause.
    [cir] Rule 9840(c) would be amended to provide that, alternatively,
a temporary cease and desist order would remain effective and
enforceable until a settlement offer is accepted pursuant to Rule 9270.
    [cir] Rule 9840(d) would be amended to specify that the Hearing
Panel's decision and any temporary cease and desist order should be
served by the Office of Hearing Officers on Enforcement and the
Respondent or upon counsel representing the Respondent, or other person
authorized to represent others under Rule 9141, when counsel or other
person authorized to represent others under Rule 9141 agrees to accept
service for the Respondent. The Rule would also be amended to specify
that service can be by email and that if service is made by email, the
Office of Hearing Officers shall send an additional copy of the
decision and any temporary cease and desist order by personal service
or overnight commercial courier. Under the proposed Rule, service is
complete upon sending the notice by email or overnight courier or
delivering it in person, except that, where duplicate service is
required, service is complete when duplicate service is complete. The
Office of Hearing Officers provides a copy of the temporary cease and
desist order to each member organization with which a Respondent is
associated.
    [cir] Finally, the Exchange proposes to add a new subsection (e)
headed ``Delivery Requirement'' that provides that where a Respondent
is a member organization, Respondent shall deliver a copy of a
temporary cease and desist order, within one business day of receiving
it, to its covered persons.
     Rule 9850 (Review by Hearing Panel) sets forth the process
for a Party to petition the Hearing Panel to modify, set aside, limit
or suspend a temporary cease and desist order. The Exchange proposes
the following changes to harmonize the Rule with FINRA's recent
amendments:
    [cir] The first sentence of Rule 9850 would be amended to add a
clause specifying that the Office of Hearing Officers can also serve a
temporary cease and desist order upon counsel representing the
Respondent, or other person authorized to represent others under Rule
9141, when counsel or other person authorized to represent others under
Rule 9141 agrees to accept service for the Respondent.
    [cir] Rule 9850 would be amended to add a sentence providing that
the Hearing Panel that presided over the temporary cease and desist
order proceeding shall retain jurisdiction to modify, set aside, limit,
or suspend the temporary cease and desist order, unless at the time the
application is filed a Hearing Panel has already been appointed in the
underlying disciplinary proceeding commenced under Rule 9211 in which
case the Hearing Panel appointed in the disciplinary proceeding has
jurisdiction.
    [cir] Rule 9850 would also be amended to specify that either the
Chief Hearing Officer or Deputy Chief Hearing Officer can extend the
time for the Hearing Panel to respond to a request under the Rule for
good cause shown and eliminate the need for consent of the parties.
    [cir] Rule 9850 would be amended to add text specifying that the
Hearing Panel's response can also be served upon counsel representing
the Respondent, or other person authorized to represent others under
Rule 9141, when counsel or other person authorized to represent others
under Rule 9141 agrees to accept service for the Respondent, and that
email is a permitted method of service. A sentence would also be added
before the last sentence in the Rule providing that if service is made
by email, the Office of Hearing Officers shall send an additional copy
of the temporary cease and desist order by personal service or
overnight commercial courier.
     Rule 9860 (Violation of Temporary Cease and Desist Orders)
provides that a Respondent who violates a temporary cease and desist
order may have its association or membership suspended or canceled
under Rule 9556. The Exchange proposes to amend the Rule to add that a
Respondent may also be subject to any fitting sanction under Rule 9556.
     Finally, the Exchange proposes to adopt the text of FINRA
Rule 9291 governing the content, scope, and form of a permanent cease
and desist order. Under proposed Rule 9291(a), when a decision issued
under Rule 9268 or Rule 9269 or an order of acceptance issued under
Rule 9270 imposes a permanent cease and desist order, the decision
shall: order a Respondent (and any successor of a Respondent, where the
Respondent is a member organization) to cease and desist permanently
from violating a specific rule or statutory provision; set forth the
violation; and describe in reasonable detail the act or acts the
Respondent (and any successor of a Respondent, where the Respondent is
a member organization) shall take or refrain from taking.
    The proposed Rule would also require Respondents that are member
organizations to deliver a copy of a permanent cease and desist order,
within one business day of receiving it, to its covered persons.\38\
With the exception of conforming changes to reflect the Exchange's
membership, the text of the proposed Rule is the same as FINRA Rule
9291. The Exchange currently does not have a similar rule.
---------------------------------------------------------------------------

    \38\ See proposed Rule 9291(b).
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Technical and Conforming Changes
    The Exchange proposes technical and conforming changes to Rule
9310. Rule 9310(b), which governs reviews by the Exchange Board of
Directors, would be amended to specify that the determinations or
penalties imposed subject to Board review would include the terms of
any permanent cease and desist order.
2. Statutory Basis
Amendments to Rule 8313
    The Exchange believes that the proposed changes to Rule 8313 are
consistent with Section 6(b) of the Act,\39\ in general, and Section
6(b)(1) \40\ in particular, in that they enable the NYSE to be so
organized as to have the capacity to be able to carry out the purposes
of the Exchange Act and to comply, and to enforce compliance by its
exchange members and persons associated with its exchange members, with
the provisions of the Exchange Act, the rules and regulations
thereunder, and the rules of NYSE. In particular, the Exchange believes
that the proposed changes to Rule 8313 regarding release of
disciplinary complaints, decisions and other information are consistent
with Section 6(b) of the Act because they would establish general
standards for the release of disciplinary information to the public to
provide greater access to information regarding the Exchange's
disciplinary actions.
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    \39\ 15 U.S.C. 78f(b).
    \40\ 15 U.S.C. 78f(b)(1).
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    For the same reasons, the Exchange believes that the proposed
changes to Rule 8313 further the objectives of Section 6(b)(5) of the
Act \41\ because the changes are designed to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating

transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
In particular, the proposed amendments to Rule 8313 further the
objectives of Section 6(b)(5) of the Act by providing greater clarity,
consistency, and transparency regarding the release of disciplinary
complaints, decisions and other information to the public. By adopting
the proposed amendments to Rule 8313 modeled on FINRA's rule, the
Exchange would establish standards for the release of disciplinary
information to the public in line with those in effect at FINRA that
provide greater access to information regarding the Exchange's
disciplinary actions and describe the scope of information subject to
proposed Rule 8313. The Exchange believes that this proposed rule
change promotes greater transparency to the Exchange's disciplinary
process, and that the proposed rule change provides greater access to
information regarding its disciplinary actions, and also provides
valuable guidance and information to member organizations, associated
persons, other regulators, and the investing public.\42\
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    \41\ 15 U.S.C. 78f(b)(5).
    \42\ See Release No. 69178, 78 FR at 38775.
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Harmonization With FINRA Rules
    The Exchange believes that the proposed changes to Rules 9120,
9268, 9269, 9270, 9551, 9552, 9554, 9555, 9556, 9557, 9558, 9559, 9810,
9830, 9840, 9850, and 9860 and adopting a new Rule 9291 regarding the
imposition of temporary or permanent cease and desist orders are
consistent with Section 6(b) of the Act,\43\ in general, and Section
6(b)(1) \44\ in particular, in that they enable the NYSE to be so
organized as to have the capacity to be able to carry out the purposes
of the Exchange Act and to comply, and to enforce compliance by its
exchange members and persons associated with its exchange members, with
the provisions of the Exchange Act, the rules and regulations
thereunder, and the rules of NYSE. In particular, the Exchange believes
that the proposed changes are consistent with Section 6(b) of the Act
because the changes would enhance the Exchange's ability to utilize its
temporary cease and desist authority, thereby making it a more viable
investor-protection tool and allowing the Exchange to take appropriate
action against member organizations and their associated persons
engaged in serious misconduct.
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    \43\ 15 U.S.C. 78f(b).
    \44\ 15 U.S.C. 78f(b)(1).
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    For the same reasons, the Exchange believes that the proposed
changes to the Exchange's rules further the objectives of Section
6(b)(5) of the Act \45\ because the changes are designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
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    \45\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, revising the evidentiary standard for obtaining
temporary cease and desist orders by harmonizing the Exchange's rules
with those of FINRA would better serve the investor protection purposes
of the Exchange's temporary cease and desist authority and allow the
Exchange to initiate and resolve temporary cease and desist proceedings
more expeditiously. Further, these proposed changes, including the
revised evidentiary standard, would also improve the Exchange's ability
to enforce compliance with applicable laws and rules by its member
organizations and persons associated with member organizations, and the
Exchange's ability to prevent fraudulent and manipulative acts and
practices.
    The Exchange also believes that the proposed rule change supports
the objectives of Section 6(b)(5) of the Act by providing greater
harmonization between Exchange and FINRA rules of similar purpose,
resulting in less burdensome and more efficient regulatory compliance
for common members. As previously noted, the text of Rules 9120, 9268,
9269, 9270, 9291, 9551, 9552, 9554, 9555, 9556, 9557, 9558, 9559, 9810,
9830, 9840, 9850, and 9860 relating to the imposition of temporary or
permanent cease and desist orders is substantially the same as FINRA's
rule text. To the extent the Exchange has proposed changes that differ
from the FINRA version of the Exchange rules, such changes are
generally technical in nature and do not change the substance of the
rules.
    In addition, the Exchange believes that the proposed changes to
Rules 9120, 9268, 9269, 9270, 9551, 9552, 9554, 9555, 9556, 9557, 9558,
9559, 9810, 9830, 9840, 9850, and 9860 and adopting a new Rule 9291
further the objectives of Section 6(b)(7) of the Act \46\ in that they
provide fair procedures for, among other things, the disciplining of
members and persons associated with members \47\ because the rules
governing temporary cease and desist orders and expedited proceedings
require notice and an opportunity to be heard before a neutral
tribunal, in addition to the numerous other procedural safeguards
described above and included in the rules. At the same time, the
proposed rule change maintains all of the existing restraints on the
Exchange's temporary cease and desist authority, including rule
provisions that restrict who may authorize the initiation of a
temporary cease and desist proceeding; narrowly define the violations
that a temporary cease and desist order can address; and limit the
issuance of temporary cease and desist orders to situations where the
alleged violative conduct or continuation thereof is likely to result
in significant dissipation or conversion of assets or other significant
harm to investors.\48\
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    \46\ 15 U.S.C. 78f(b)(7).
    \47\ Under the Exchange's equities rules, the equivalent to the
term ``member'' in this context is ``member organization.'' See note
23, supra.
    \48\ See Rule 9840(a)(2). Under NYSE Rule 9810(a), with the
prior written authorization of the Exchange's CRO or such other
senior officers as the CRO may designate, Enforcement may initiate a
temporary cease and desist proceeding with respect to alleged
violations of Section 10(b) of the Act, SEC Rules 10b-5 and 15g-1
through 15g-9, NYSE Rule 2010 (if the alleged violation is
unauthorized trading, or misuse or conversion of customer assets, or
is based on violations of Section 17(a) of the Securities Act of
1933) or NYSE Rule 2020. See also 2015 FINRA Notice, 80 FR at 38784.
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    Finally, making conforming amendments to Rule 9310 in connection
with the proposed harmonization of the Exchange's rules governing
temporary cease and desist orders and expedited proceedings supports
the objectives of Section 6(b)(5) of the Act. The conforming amendments
will update and add specificity to the Exchange's rules, which will
promote just and equitable principles of trade and help to protect
investors.

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 it is designed
to (1) enhance the Exchange's rules governing the release of
disciplinary complaints, decisions and other information to the public,
thereby providing greater clarity and consistency and resulting in less
burdensome and more efficient regulatory compliance and facilitating
performance of regulatory functions, and (2) provide greater
harmonization among Exchange and FINRA rules of

similar purpose regarding the imposition of temporary cease and desist
orders and expedited proceedings, thereby enhancing the quality of the
Exchange's regulatory program, resulting in less burdensome and more
efficient regulatory compliance and facilitating performance of
regulatory functions.

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) of the Act \49\ and Rule 19b-4(f)(6) thereunder.\50\
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 for 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 \51\ and Rule 19b-
4(f)(6) thereunder.\52\
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    \49\ 15 U.S.C. 78s(b)(3)(A).
    \50\ 17 CFR 240.19b-4(f)(6).
    \51\ 15 U.S.C. 78s(b)(3)(A).
    \52\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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 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.

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<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2016-40 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2016-40. 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 Web site (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 Web site 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; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2016-40, and should be
submitted on or before September 20, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\53\
---------------------------------------------------------------------------

    \53\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20733 Filed 8-29-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 87 (Wednesday, May 6, 2015)]
[Notices]
[Pages 26063-26064]
[FR Doc No: 2015-10478]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2015-D-1378]

Bioequivalence Recommendations for Clozapine Orally
Disintegrating Tablets/Oral; Draft Guidance for Industry; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the
availability of a draft guidance for industry entitled ``Bioequivalence
Recommendations for Clozapine,'' for the orally disintegrating tablets
(ODTs). The recommendations provide specific guidance on the design of
bioequivalence (BE) studies to support abbreviated new drug
applications (ANDAs) for clozapine ODTs.

DATES: Although you can comment on any guidance at any time (see 21 CFR
10.115(g)(5)), to ensure that the Agency considers your comment on the
draft guidance before it begins work on the final version of the
guidance, submit either electronic or written comments on the draft
guidance by July 6, 2015.

ADDRESSES: Submit written requests for single copies of the draft
guidance to the Division of Drug Information, Center for Drug
Evaluation and Research, Food and Drug Administration, 10001 New
Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD
20993-0002. Send one self-addressed adhesive label to assist that
office in processing your requests. See the SUPPLEMENTARY INFORMATION
section for electronic access to the draft guidance documents.
    Submit electronic comments on the draft guidance to http://www.regulations.gov. Submit written comments to the Division of Dockets
Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Xiaoqiu Tang, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 75, Rm. 4730, Silver Spring, MD 20993-0002, 301-
796-5850.

SUPPLEMENTARY INFORMATION:

I. Background

    In the Federal Register of June 11, 2010 (75 FR 33311), FDA
announced the availability of a guidance for industry, ``Bioequivalence
Recommendations for Specific Products,'' which explained the process
that would be used to make product-specific BE recommendations
available to the public on FDA's Web site at http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm. As
described in that guidance, FDA adopted this process as a means to
develop and disseminate product-specific BE recommendations and provide
a meaningful opportunity for the public to consider and comment on
those recommendations. This notice announces the availability of one
draft BE recommendation for clozapine ODTs.
    Clozapine tablets, marketed under the name CLOZARIL, are the
subject of new drug application (NDA) 19-758, held by Novartis
Pharmaceuticals Corporation and approved by FDA on September 26, 1989.
FazaClo ODTs were approved by FDA on February 19, 2004, under NDA 21-
590, currently held by Jazz Pharmaceuticals III International LTD,
based upon a finding that FazaClo ODTs were bioequivalent to CLOZARIL
immediate-release tablets. FazaClo ODTs are available as yellow, orally
disintegrating tablets of 12.5, 25, 100, 150, and 200 \1\ milligrams
(mg) of clozapine for oral administration without water. They are
formulated to disintegrate once exposed to saliva and then are easily
swallowed.
---------------------------------------------------------------------------

    \1\ FDA approved the supplemental NDA for the 150 and 200 mg
strengths on July 9, 2010.
---------------------------------------------------------------------------

    In June 2005, FDA published a guidance for industry entitled
``Clozapine Tablets: In Vivo Bioequivalence and In Vitro Dissolution
Testing'' (Clozapine Guidance) (70 FR 35447, June 20, 2005), which
replaced a 1996 product-specific bioequivalence guidance for clozapine
tablets. The 2005 Clozapine Guidance recommends that ANDA applicants
employ multiple-dose, steady-state studies to evaluate the

bioequivalence of clozapine products.\2\ FDA recommends that such
studies be performed only in patients who have not responded well to
standard antipsychotic drug treatment and who have been receiving a
maintenance dose of an approved clozapine product for at least 3
months. FDA is now issuing a draft guidance for industry on BE
recommendations for generic clozapine that applies specifically to the
ODTs.
---------------------------------------------------------------------------

    \2\ The formatting of this guidance was updated in March 2011,
but the content is unchanged. The March 2011 version is available at
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM249219.pdf.
---------------------------------------------------------------------------

    Beckloff Associates, Inc., filed a citizen petition in December
2007, a citizen petition supplement in February 2009, and a second
citizen petition in November 2010, requesting that FDA impose certain
requirements for bioequivalence testing for ANDAs referencing FazaClo
(clozapine) ODTs and modify the Clozapine Guidance (Docket Nos. FDA-
2007-P-0188 and FDA-2010-P-0574). FDA is denying these petitions today.
    This draft guidance is being issued consistent with FDA's good
guidance practices regulation (21 CFR 10.115). The draft guidance, when
finalized, will represent the current thinking of FDA on bioequivalence
recommendations for clozapine. It does not establish any rights for any
person and is not binding on FDA or the public. You can use an
alternative approach if it satisfies the requirements of the applicable
statutes and regulations.

II. Comments

    Interested persons may submit either electronic comments regarding
this document to http://www.regulations.gov or written comments to the
Division of Dockets Management (see ADDRESSES). It is only necessary to
send one set of comments. Identify comments with the docket number
found in brackets in the heading of this document. Received comments
may be seen in the Division of Dockets Management between 9 a.m. and 4
p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

III. Electronic Access

    Persons with access to the Internet may obtain the documents at
either http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm or http://www.regulations.gov.

    Dated: April 30, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015-10478 Filed 5-5-15; 8:45 am]
BILLING CODE 4164-01-P