Regulatory Bulletin NYSE RB 17-02 NYSE MKT RB 17-02 July 17, 2017 TO: SUBJECT: NYSE and NYSE MKT MEMBERS AND MEMBER ORGANIZATIONS NYSE Rule 36 - Use of Non-NYSE Provided Cellular Phones on the Floor of the Exchange I. Purpose The Exchange recently amended Rule 36 (Communication Between Exchange and Members Offices) to permit Floor brokers to use cellular or wireless phones on the Floor of the Exchange (the Floor ) that have not been provided by the Exchange and to make related changes modeled on the rules of NYSE MKT and NYSE Arca, Inc., governing telephone use on those markets options trading floors. The changes will be operative on September 15, 2017 (the Implementation Date ). The current version of Rule 36 will remain in effect until the Implementation Date. All Exchange-provided cellular phones will be disabled as of the Implementation Date. II. Background Rule 36 governs the establishment of telephone or electronic communications between the Floor and any other location, which requires Exchange approval. Supplementary Material.20,.21 and.23 to Rule 36 outline the conditions under which Floor brokers are permitted to use portable phones authorized and provided by the Exchange. On July 7, 2017, the SEC approved amendments to Rule 36 that permit Floor brokers to use cellular and wireless phones on the Floor of the Exchange that have not been provided by the Exchange ( Non-Exchange Phones ), subject to certain specific requirements outlined below. 1 Pursuant to the recent amendment to Rule 36, before using a Non-Exchange Phone, a Floor broker must: register the device with the Exchange (amended Rule 36.21(a)); complete an attestation at the time of registration that he or she is aware of and understands the rules governing the use of telephones on the Floor (amended Rule 36.21(a)); and maintain records of the use of telephones and all other approved alternative communication devices, including logs of calls placed (amended Rule 36.21(d)). 1 The SEC s approval order is available at https://www.sec.gov/rules/sro/nyse/2017/34-81103.pdf.
III. Obligations under Amended Rule 36 Registration of Cellular or Wireless Phones with the Exchange Prior to using a Non-Exchange Phone on the Floor, a Floor broker must register that phone by sending an email to the NYSE Regulation On-Floor Supervision Unit at Rule36Submissions@theice.com with the subject line NYSE Floor phone registration. That email should specify: the type of phone (e.g., iphone X, Samsung Galaxy X); the cellular or wireless carrier; the phone number; and the name and badge number of the member who will be using the phone on the Floor. Member organizations are reminded that they have an obligation to keep the registration information up to date and immediately advise the Exchange of any changes by sending an email to the same address. Pursuant to amended Rule 36.21(a), no Floor broker may employ any alternative cellular or wireless phone on the Floor without prior approval of the Exchange. Attestation by Floor Broker Pursuant to amended Rule 36.21(a), at the time a new phone is registered, Floor brokers must complete a form identifying the registered phone that broker will be using on the Floor and attesting, among other things, that: they are aware of and understand the rules governing the use of telephones on the Floor and may not employ any alternative cellular or wireless phone (other than the devices described in the form) on the Floor without prior Exchange approval; the Exchange has the right to request from the individual broker, his or her firm, or the broker s portable phone service provider any data and records relating to incoming and outgoing calls that the Exchange s Regulatory Group deems necessary; and use of a cellular or wireless phone pursuant to amended Rules 36.20 and 36.21 must comply with those rules and all other rules, policies, and procedures of both the federal securities laws and the Exchange, including the record retention requirements, as set forth in Exchange Rule 440 and SEC Rules 17a-3 and 17a-4. Member organizations must retain and be able to provide records relating to the cellular or wireless phones used by the member organizations brokers on the Floor. The Attestation is attached as Exhibit A and should be completed and submitted to NYSE Regulation On-Floor Supervision Unit by sending an email to Rule36Submissions@theice.com. Supervision If a member organization operating a Floor broker business chooses to register phones with the Exchange under amended Rule 36.21(a), that member organization must establish or enhance its supervisory policies and procedures to ensure that communications using a Non- Exchange Phone are made in a manner consistent with Rule 36. Amended Rule 36.21(d)
provides that member organizations must maintain records of the use of telephones and all other approved alternative communication devices, including logs of calls placed, for a period of not less than three years, the first two years in an accessible place. The information in the logs must include but not be limited to the date and time of the call, whether the call was incoming or outgoing, the telephone number of all other parties to the call and the duration of the call. A member does not satisfy its obligation to obtain and preserve those records by relying upon the fact that they are retained in the files of its cellular or wireless carrier. For example, if a member organization permits its employees to use personal cell phones on the Floor, rather than firm-issued cell phones, the firm should establish procedures to obtain records from its employees sufficient to meet the record-keeping requirements of Rule 36.21(d). The Exchange reserves the right to periodically inspect such records pursuant to Rule 8210. If a member organization allows for the use of cellular or wireless phones on the Floor that provide additional functionality (e.g., call forwarding or conference calling), records relating to the use of such functionality must also be retained and are also subject to supervisory review. It will be incumbent upon the member organization to ensure that such phone records are preserved and retained as described above. Member organizations are also reminded of their supervisory responsibilities with respect to text and e-mail capabilities of Non-Exchange Phones, which should be subject to the firms policies and procedures on e-communications, as required by FINRA Rule 3110 and NYSE Rule 3110. Additional guidance related to FINRA Rule 3110, including information on e- communication policies, is available in FINRA Regulatory Notice 14-10. As with Exchange-issued phones currently, member organizations must also implement procedures designed to deter anyone calling their cellular or wireless phones from using caller ID block or other means to conceal the phone number from which a call is being made. Members and member organizations must make and retain records demonstrating compliance with such procedures. See amended Rule 36.21(c). With respect to other capabilities of Non-Exchange Phones, Floor brokers should refer to guidance provided in FINRA Regulatory Notice 17-18 - Guidance on Social Networking and Business Communications. Amended Rule 36.21(f) provides that the Exchange assumes no liability to Floor brokers arising from conflicts between phones in use on the Floor or due to electronic interference problems resulting from the use of telephones on the Floor. IV. Contact Information Questions regarding the changes related to Rule 36 may be directed to: Stephen Larson, Senior Director, NYSE Regulation, at 212.656.3830, Scott Palmer, Director, NYSE Regulation, at 212.656.3826, or Mike Fitzpatrick, Manager, NYSE Regulation, at 212.656.2092. Operational questions may be directed to: Bob Airo, Senior Director, Operations, at 212.656.5663, or Anthony Monteleone, Head of NYSE Trading Floor Operations, at 212.656.5515.
EXHIBIT A FLOOR BROKER CELLULAR AND WIRELESS TELEPHONE ATTESTATION (RULES 36.20 and 36.21) I, (insert full name of member and badge number), employed by, or associated with [insert firm name], hereby acknowledge that I will be utilizing the following cellular or wireless telephone(s) on the Floor pursuant to Rules 36.20 and 36.21, which phone number(s) was (were) separately registered with the New York Stock Exchange (the NYSE or Exchange ) by email dated (copy attached): Phone Number I hereby attest that I am aware of and understand the rules governing the use of telephones on the Floor and that I may not employ any alternative cellular or wireless phone (other than the devices as described herein) on the Floor without prior approval of the Exchange. As a condition of my use of the above cellular or wireless phone(s) pursuant to Rules 36.20 and 36.21, which enables me to receive and send calls on the Floor, I further acknowledge that the Exchange has the right to request from me, my firm or my portable phone service provider any data and records relating to incoming and outgoing calls that the Regulatory Group deems necessary. I also acknowledge that my use of a cellular or wireless phone pursuant to Exchange Rules 36.20 and 36.21 must comply with those rules and all other rules, policies, and procedures of both the federal securities laws and the Exchange, including the record retention requirements, as set forth in Exchange Rule 440 and SEC Rules 17a-3 and 17a- 4. I also acknowledge that I may not employ any alternative cellular or wireless phone (other than the devices as described herein) on the Floor without prior approval of the Exchange. ****
Please sign and return this document to your firm s compliance department with a copy to New York Stock Exchange Regulation, 11 Wall Street, 20th Floor, New York, NY 10005. Print Name: Signed: Date: