NYSE Updates Rules to Sync with FINRA on Firm Discipline Procedures
Published Date: 4/10/2026
Notice
Summary
The New York Stock Exchange (NYSE) is updating its rules to match recent changes made by FINRA, the financial industry watchdog. These updates mainly affect how the NYSE handles investigations and disciplinary actions against member firms, including automatic pauses on certain expulsions so the SEC can review them. The changes are effective immediately and aim to keep things fair and clear for everyone involved.
Analyzed Economic Effects
5 provisions identified: 3 benefits, 0 costs, 2 mixed.
Expulsions Stayed Pending SEC Review
If the Exchange orders an expulsion, a cancellation of membership, or a denial of continued membership, that action will not become effective until the time to file an application for SEC review (under Section 19 of the Exchange Act) has expired or, if an application is timely filed within that period, until the SEC completes its review or otherwise orders. The rule references the 30-day filing period for SEC review under Section 19.
Expedited Suspensions Delayed Five Business Days
For expedited Rule 9557 notices (e.g., where a member faces operational or financial restrictions), a suspension for failure to comply will be effective five business days after service of a notice of suspension. The Exchange also requires the notice to identify the alleged failures, state when action will take effect, and explain how to avoid the action.
Opportunity to Seek Stay Before Other Sanctions
Exchange staff and adjudicators will have authority to give respondents or applicants the chance to seek a stay from the SEC or take other action before certain sanctions or regulatory measures (for example, suspensions, bars, denials of statutory disqualification, or conditions/restrictions) take effect. This authority does not apply to the expulsions/cancellations/denials described separately.
Authority To Delay Cease-and-Desist Orders
Adjudicators would have authority to grant applicants an opportunity to seek a stay from the SEC or take other action before temporary or permanent cease-and-desist orders become effective. Rules 9840, 9850, and 9870 are amended to allow such discretion, including the ability for the Chief Hearing Officer or Deputy Hearing Officer to stay effectiveness for good cause.
Public Notice of Appeals and Stay Status
The Exchange will provide public notice (including on its website and via FINRA BrokerCheck) when a disciplinary decision is appealed to the SEC and will state whether the effectiveness of the decision has been stayed pending SEC review. This lets investors check whether a member organization is subject to adverse regulatory action and whether it is stayed.
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