FR 2020-29214

The document from the Securities and Exchange Commission (SEC) discusses a proposed rule change by the NYSE American LLC, which seeks to extend the expiration date of temporary amendments to specific rules. These amendments permit regulatory hearings to take place via video conferencing because of the public health risks presented by the COVID-19 pandemic. Initially set to lapse on December 31, 2020, the SEC filing proposes pushing this date to April 30, 2021, to align with similarly extended measures by the Financial Industry Regulatory Authority (FINRA).

General Summary

Amid ongoing health concerns, the NYSE American LLC is looking to extend the temporary amendments to its disciplinary rules, which originally expired at the end of 2020. These modifications allow hearings to be conducted through video conferencing instead of in-person, a change adopted to mitigate health risks due to the COVID-19 pandemic. This continuity ensures that hearings, especially those involving cease and desist orders critical to investor protection, are not delayed. The SEC invites public comments to evaluate and provide feedback on this proposed rule extension.

Issues and Concerns

One of the major issues with the document is its use of technical language and references to previous filings and regulatory acts, which could pose comprehension challenges for laypersons. Regulatory rules and legislative codes are often mentioned by number without explanation, making it difficult for readers without legal or financial expertise to fully understand the text.

Another concern is that the document refers to assessments of the COVID-19 situation but lacks detail on the specific criteria or data backing the decision to extend the rule changes. Readers might want clearer insights into how health risks are measured and evaluated.

Finally, there is no explanation of alternative methods considered before deciding on video conferencing. The absence of such details might lead readers to question why this approach was selected over other potential solutions.

Public Impact

The rule extension's potential impact on the public is mixed. On one hand, it ensures continuity in regulatory operations, safeguarding investor and market interests during the pandemic. It demonstrates adaptability in maintaining crucial market functions amid unprecedented challenges.

However, the continued reliance on virtual hearings could raise concerns about accessibility and transparency. It is essential for stakeholders to understand how these virtual processes work and remain assured that the integrity of hearings is preserved.

Stakeholder Impact

• Investors and the Public: The proposed rule change prioritizes investor protection and market stability by preventing delays in hearings that can address critical issues, such as halting ongoing customer harm. Thus, it is largely positive in maintaining regulatory vigilance during the pandemic.

• NYSE American LLC and FINRA: These organizations benefit as the changes allow them to continue their regulatory duties without hindrance. It furthers their ability to adapt operational processes in response to current health challenges, showcasing their responsiveness.

• Legal Professionals and Firms: There might be concerns regarding the nuances of conducting virtual hearings, such as potential technical issues or fairness perceptions. Legal representatives must be adept in navigating these hearings effectively.

In conclusion, while the regulatory adaptation to COVID-19 through extensions for videoconference hearings shows considerable foresight, it should be paired with transparency around decision-making criteria and a proactive stance toward longer-term strategies, should such needs persist. Public and legal community feedback will be integral in refining these approaches to maintain both efficacy and trust.