82 FR 39920 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of a Proposed Rule Change To Extend the Implementation Date for Certain Changes to the Rule 5700 Series and Rule 5810

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 161 (August 22, 2017)

Page Range		39920-39921
FR Document		2017-17682
Federal Register, Volume 82 Issue 161 (Tuesday, August 22, 2017)
[Federal Register Volume 82, Number 161 (Tuesday, August 22, 2017)]
[Notices]
[Pages 39920-39921]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-17682]



[[Page 39920]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81406; File No. SR-NASDAQ-2017-081]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of a Proposed Rule Change To Extend the Implementation 
Date for Certain Changes to the Rule 5700 Series and Rule 5810

August 16, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on August 7, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
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\ 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 to extend the date on which certain changes 
concerning the continued listing requirements for exchange-traded 
products (``ETPs'') in the Nasdaq Rule 5700 Series, as well as a 
related amendment to Nasdaq Rule 5810 (Notification of Deficiency by 
the Listing Qualifications Department), are implemented.
    The Exchange proposes to delay the implementation date of these 
changes until July 1, 2018. Given the scope of the proposed rule 
changes, the Exchange believes that this will ensure that ETP issuers 
have adequate time to develop and put into operation the new processes 
and systems necessitated by them.

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 Exchange 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 these 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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On September 30, 2016, the Exchange filed a proposed rule change, 
as subsequently amended by Amendments No. 1 and 2 thereto, and as 
supplemented by two clean-up filings \3\ (as amended and supplemented, 
collectively, the ``Proposed Rule Change''), to adopt certain changes 
to the Nasdaq Rule 5700 Series, as well as a related amendment to 
Nasdaq Rule 5810 (Notification of Deficiency by the Listing 
Qualifications Department), to add additional continued listing 
standards for ETPs, as well as clarify the procedures that the Exchange 
will undertake when an ETP is noncompliant with applicable rules.
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    \3\ See Securities Exchange Act Release No. 79081 (Oct. 11, 
2016), 81 FR 71548 (Oct. 17, 2016) (SR-NASDAQ-2016-135); see also 
Securities Exchange Act Release No. 80708 (May 17, 2017), 82 FR 
23690 (May 23, 2017) (SR-NASDAQ-2017-040); see also Securities 
Exchange Act Release No. 80810 (May 30, 2017), 82 FR 26205 (June 6, 
2017) (SR-NASDAQ-2017-052).
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    On May 3, 2017, the Exchange filed to extend the implementation 
date from August 1, 2017 until October 1, 2017.\4\ The Exchange now 
proposes to extend the implementation date of the amendments specified 
in the Proposed Rule Change to July 1, 2018.
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    \4\ See Securities Exchange Act Release No. 80708 (May 17, 
2017), 82 FR 23690 (May 23, 2017) (SR-NASDAQ-2017-040).
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    Since the Proposed Rule Change was approved, the Exchange has 
engaged in extensive conversations with issuers of listed ETPs, 
industry advocacy groups and index providers to discuss the new rule 
requirements and offer guidance on rule interpretation and 
application.\5\ As a result of these conversations, ETP issuers have 
expressed concern about their ability to have in place systems and 
procedures to ensure compliance by the current October 1, 2017 
implementation date. In particular, listed ETP issuers, and industry 
advocacy groups on their behalf, have explained that issuers will 
require time to design and test new compliance systems as well as 
engage in discussions with third-party providers to source and track 
new data elements required for rule compliance.\6\
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    \5\ In addition to submitting the index components to the 
Exchange on a quarterly basis, the Exchange believes that it would 
be appropriate for issuers to review the index components for 
compliance with the continued listing requirements in connection 
with index rebalances, reconstitutions, or other material changes to 
the index components.
    \6\ See, for example, Letter, dated July 11, 2017, from Dorothy 
Donohue, Acting General Counsel, Investment Company Institute to 
Brent J. Fields, Secretary, Securities and Exchange Commission, 
available at https://www.sec.gov/comments/sr-nasdaq-2016-135/nasdaq2016135-1846208-155175.pdf.
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    The Exchange believes it is appropriate to extend the 
implementation date of the Proposed Rule Change to July 1, 2018 to 
provide listed ETP issuers with the time needed to develop and test 
their compliance procedures. In support of its proposal, the Exchange 
notes that the Proposed Rule Change imposes significant new compliance 
requirements on issuers that they have not been subject to previously. 
To meet these new compliance requirements, issuers must develop 
internal systems as well as coordinate with third-party service 
providers, such as index providers, to develop procedures by which they 
can obtain essential data. Listed issuers have informed the Exchange 
that they are unable to complete this extensive project by the pending 
October 1, 2017 implementation date. The Exchange believes that it is 
critical for listed ETP issuers to have the appropriate procedures and 
systems in place to monitor and evidence ETP compliance with the new 
continued listing rules before such rules are implemented. Therefore, 
the Exchange proposes to extend the implementation date for the 
Proposed Rule Change until July 1, 2018.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is consistent 
with the protection of investors because it will enable listed issuers 
to have the systems and procedures needed to monitor and evidence 
compliance with the Proposed Rule Change prior to such rule being 
implemented. Providing

[[Page 39921]]

listed issuers with additional time to ensure that they have adequate 
compliance systems in place furthers the protection of investors and 
the public interest because it will enhance investor confidence that 
listed issuers are complying with Exchange rules.
    For these reasons, Nasdaq believes the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act.

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 not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. The Exchange 
believes that the proposed rule change will facilitate listed issuer 
ability to monitor and evidence compliance with approved continued 
listing rules by providing issuers with additional time to develop and 
test their internal systems and procedures prior to the implementation 
date.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange received a copy of a letter from the Investment 
Company Institute, on behalf of listed ETP issuers, to the SEC.\9\ As 
described in Item 3 [sic], above, the Investment Company Institute 
detailed challenges that listed ETP issuers are facing in developing 
compliance systems to address the amendments contained in the Proposed 
Rule Change and have requested that the implementation date for such 
amendments be extended to July 1, 2018.
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    \9\ See Footnote 6, infra. [sic]
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III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change; or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 protected]. Please include 
File Number SR-NASDAQ-2017-081 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2017-081. 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 the 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-NASDAQ-2017-081 and should 
be submitted on or before September 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17682 Filed 8-21-17; 8:45 am]
 BILLING CODE 8011-01-P
39920 Federal Register / Vol. 82, No. 161 / Tuesday, August 22, 2017 / Notices

SECURITIES AND EXCHANGE the most significant aspects of such track new data elements required for
COMMISSION statements. rule compliance.6
The Exchange believes it is
A. Self-Regulatory Organization’s appropriate to extend the
[Release No. 34–81406; File No. SR–
NASDAQ–2017–081]
Statement of the Purpose of, and implementation date of the Proposed
Statutory Basis for, the Proposed Rule Rule Change to July 1, 2018 to provide
Self-Regulatory Organizations; The Change listed ETP issuers with the time needed
NASDAQ Stock Market LLC; Notice of 1. Purpose to develop and test their compliance
Filing of a Proposed Rule Change To procedures. In support of its proposal,
Extend the Implementation Date for On September 30, 2016, the Exchange the Exchange notes that the Proposed
Certain Changes to the Rule 5700 filed a proposed rule change, as Rule Change imposes significant new
Series and Rule 5810 subsequently amended by Amendments compliance requirements on issuers that
No. 1 and 2 thereto, and as they have not been subject to
August 16, 2017. supplemented by two clean-up filings 3 previously. To meet these new
Pursuant to Section 19(b)(1) of the (as amended and supplemented, compliance requirements, issuers must
Securities Exchange Act of 1934 collectively, the ‘‘Proposed Rule develop internal systems as well as
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Change’’), to adopt certain changes to coordinate with third-party service
notice is hereby given that on August 7, the Nasdaq Rule 5700 Series, as well as providers, such as index providers, to
2017, The NASDAQ Stock Market LLC a related amendment to Nasdaq Rule develop procedures by which they can
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 5810 (Notification of Deficiency by the obtain essential data. Listed issuers have
Securities and Exchange Commission Listing Qualifications Department), to informed the Exchange that they are
(‘‘SEC’’ or ‘‘Commission’’) the proposed add additional continued listing unable to complete this extensive
rule change as described in Items I and standards for ETPs, as well as clarify the project by the pending October 1, 2017
II below, which Items have been procedures that the Exchange will implementation date. The Exchange
prepared by the Exchange. The undertake when an ETP is believes that it is critical for listed ETP
Commission is publishing this notice to noncompliant with applicable rules. issuers to have the appropriate
solicit comments on the proposed rule
On May 3, 2017, the Exchange filed to procedures and systems in place to
change from interested persons.
extend the implementation date from monitor and evidence ETP compliance
I. Self-Regulatory Organization’s August 1, 2017 until October 1, 2017.4 with the new continued listing rules
Statement of the Terms of Substance of The Exchange now proposes to extend before such rules are implemented.
the Proposed Rule Change the implementation date of the Therefore, the Exchange proposes to
The Exchange proposes to extend the amendments specified in the Proposed extend the implementation date for the
date on which certain changes Rule Change to July 1, 2018. Proposed Rule Change until July 1,
concerning the continued listing Since the Proposed Rule Change was 2018.
requirements for exchange-traded approved, the Exchange has engaged in 2. Statutory Basis
products (‘‘ETPs’’) in the Nasdaq Rule extensive conversations with issuers of The Exchange believes that its
5700 Series, as well as a related listed ETPs, industry advocacy groups proposal is consistent with Section 6(b)
amendment to Nasdaq Rule 5810 and index providers to discuss the new of the Act,7 in general, and furthers the
(Notification of Deficiency by the rule requirements and offer guidance on objectives of Section 6(b)(5) of the Act,8
Listing Qualifications Department), are rule interpretation and application.5 As in particular, in that it is designed to
implemented. a result of these conversations, ETP promote just and equitable principles of
The Exchange proposes to delay the issuers have expressed concern about trade, to foster cooperation and
implementation date of these changes their ability to have in place systems coordination with persons engaged in
until July 1, 2018. Given the scope of and procedures to ensure compliance by regulating, clearing, settling, processing
the proposed rule changes, the the current October 1, 2017 information with respect to, and
Exchange believes that this will ensure implementation date. In particular, facilitating transactions in securities, to
that ETP issuers have adequate time to listed ETP issuers, and industry remove impediments to and perfect the
develop and put into operation the new advocacy groups on their behalf, have mechanism of a free and open market
processes and systems necessitated by explained that issuers will require time and a national market system, and, in
them. to design and test new compliance general, to protect investors and the
systems as well as engage in discussions public interest.
II. Self-Regulatory Organization’s
with third-party providers to source and The Exchange believes that the
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule proposed rule change is consistent with
3 See Securities Exchange Act Release No. 79081
Change the protection of investors because it
(Oct. 11, 2016), 81 FR 71548 (Oct. 17, 2016) (SR–
NASDAQ–2016–135); see also Securities Exchange will enable listed issuers to have the
In its filing with the Commission, the
Act Release No. 80708 (May 17, 2017), 82 FR 23690 systems and procedures needed to
Exchange included statements (May 23, 2017) (SR–NASDAQ–2017–040); see also monitor and evidence compliance with
concerning the purpose of and basis for Securities Exchange Act Release No. 80810 (May the Proposed Rule Change prior to such
the proposed rule change and discussed 30, 2017), 82 FR 26205 (June 6, 2017) (SR–
NASDAQ–2017–052). rule being implemented. Providing
any comments it received on the
4 See Securities Exchange Act Release No. 80708
proposed rule change. The text of these
sradovich on DSK3GMQ082PROD with NOTICES

6 See, for example, Letter, dated July 11, 2017,
(May 17, 2017), 82 FR 23690 (May 23, 2017) (SR–
statements may be examined at the NASDAQ–2017–040). from Dorothy Donohue, Acting General Counsel,
places specified in Item IV below. The 5 In addition to submitting the index components Investment Company Institute to Brent J. Fields,
Exchange has prepared summaries, set to the Exchange on a quarterly basis, the Exchange Secretary, Securities and Exchange Commission,
believes that it would be appropriate for issuers to available at https://www.sec.gov/comments/sr-
forth in sections A, B, and C below, of nasdaq-2016-135/nasdaq2016135-1846208-
review the index components for compliance with
the continued listing requirements in connection 155175.pdf.
1 15 U.S.C. 78s(b)(1). 7 15 U.S.C. 78f(b).
with index rebalances, reconstitutions, or other
2 17 CFR 240.19b–4. material changes to the index components. 8 15 U.S.C. 78f(b)(5).

VerDate Sep<11>2014 18:00 Aug 21, 2017 Jkt 241001 PO 00000 Frm 00172 Fmt 4703 Sfmt 4703 E:\FR\FM\22AUN1.SGM 22AUN1
Federal Register / Vol. 82, No. 161 / Tuesday, August 22, 2017 / Notices 39921

listed issuers with additional time to IV. Solicitation of Comments For the Commission, by the Division of
ensure that they have adequate Trading and Markets, pursuant to delegated
compliance systems in place furthers Interested persons are invited to authority.10
the protection of investors and the submit written data, views, and Eduardo A. Aleman,
public interest because it will enhance arguments concerning the foregoing, Assistant Secretary.
investor confidence that listed issuers including whether the proposed rule [FR Doc. 2017–17682 Filed 8–21–17; 8:45 am]
are complying with Exchange rules. change is consistent with the Act. BILLING CODE 8011–01–P
Comments may be submitted by any of
For these reasons, Nasdaq believes the
proposed rule change is consistent with the following methods:
SECURITIES AND EXCHANGE
the requirements of Section 6(b)(5) of Electronic Comments COMMISSION
the Act.
• Use the Commission’s Internet [Release No. 34–81408; File No. SR–
B. Self-Regulatory Organization’s comment form (http://www.sec.gov/ NYSEAMER–2017–04]
Statement on Burden on Competition rules/sro.shtml); or
Self-Regulatory Organizations; NYSE
The Exchange does not believe that • Send an email to rule-comments@ American LLC; Notice of Filing and
the proposed rule change will impose sec.gov. Please include File Number SR– Immediate Effectiveness of Proposed
any burden on competition not NASDAQ–2017–081 on the subject line. Rule Change To Modify the NYSE
necessary or appropriate in furtherance American Options Fee Schedule
of the purposes of the Act, as amended. Paper Comments
The Exchange believes that the • Send paper comments in triplicate August 16, 2017.
proposed rule change will facilitate to Secretary, Securities and Exchange Pursuant to Section 19(b)(1)1 of the
listed issuer ability to monitor and Commission, 100 F Street NE., Securities Exchange Act of 1934 (the
evidence compliance with approved Washington, DC 20549–1090. ‘‘Act’’),2 and Rule 19b-4 thereunder,3
continued listing rules by providing notice is hereby given that, on August
issuers with additional time to develop All submissions should refer to File 1, 2017, NYSE American LLC (the
and test their internal systems and Number SR–NASDAQ–2017–081. This ‘‘Exchange’’ or ‘‘NYSE American’’) filed
procedures prior to the implementation file number should be included on the with the Securities and Exchange
date. subject line if email is used. To help the Commission (the ‘‘Commission’’) the
Commission process and review your proposed rule change as described in
C. Self-Regulatory Organization’s Items I, II, and III below, which Items
comments more efficiently, please use
Statement on Comments on the have been prepared by the self-
only one method. The Commission will
Proposed Rule Change Received From regulatory organization. The
post all comments on the Commission’s
Members, Participants, or Others Commission is publishing this notice to
Internet Web site (http://www.sec.gov/
The Exchange received a copy of a rules/sro.shtml). Copies of the solicit comments on the proposed rule
letter from the Investment Company submission, all subsequent change from interested persons.
Institute, on behalf of listed ETP issuers, amendments, all written statements I. Self-Regulatory Organization’s
to the SEC.9 As described in Item 3 [sic], with respect to the proposed rule Statement of the Terms of the Substance
above, the Investment Company change that are filed with the of the Proposed Rule Change
Institute detailed challenges that listed Commission, and all written The Exchange proposes to modify the
ETP issuers are facing in developing communications relating to the NYSE American Options Fee Schedule
compliance systems to address the proposed rule change between the (‘‘Fee Schedule’’). The Exchange
amendments contained in the Proposed Commission and any person, other than proposes to implement the fee change
Rule Change and have requested that those that may be withheld from the effective August 1, 2017. The proposed
the implementation date for such public in accordance with the change is available on the Exchange’s
amendments be extended to July 1, provisions of 5 U.S.C. 552, will be Web site at www.nyse.com, at the
2018. available for Web site viewing and principal office of the Exchange, and at
III. Date of Effectiveness of the printing in the Commission’s Public the Commission’s Public Reference
Proposed Rule Change and Timing for Reference Room, 100 F Street NE., Room.
Commission Action Washington, DC 20549, on official
II. Self-Regulatory Organization’s
business days between the hours of
Within 45 days of the date of Statement of the Purpose of, and
10:00 a.m. and 3:00 p.m. Copies of the Statutory Basis for, the Proposed Rule
publication of this notice in the Federal filing also will be available for
Register or within such longer period Change
inspection and copying at the principal
up to 90 days (i) as the Commission may office of the Exchange. All comments In its filing with the Commission, the
designate if it finds such longer period received will be posted without change; self-regulatory organization included
to be appropriate and publishes its statements concerning the purpose of,
the Commission does not edit personal
reasons for so finding or (ii) as to which and basis for, the proposed rule change
identifying information from
the self-regulatory organization and discussed any comments it received
consents, the Commission will: submissions. You should submit only
on the proposed rule change. The text
information that you wish to make
sradovich on DSK3GMQ082PROD with NOTICES

(A) By order approve or disapprove of those statements may be examined at
available publicly. All submissions the places specified in Item IV below.
such proposed rule change; or should refer to File Number SR– The Exchange has prepared summaries,
(B) institute proceedings to determine NASDAQ–2017–081 and should be
whether the proposed rule change submitted on or before September 12, 10 17 CFR 200.30–3(a)(12).
should be disapproved. 2017. 1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
9 See Footnote 6, infra. [sic] 3 17 CFR 240.19b–4.

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Document Created: 2018-10-24 11:57:22
Document Modified: 2018-10-24 11:57:22
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 39920