83 FR 22560 - TCW Direct Lending LLC, et al.;
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 94 (May 15, 2018)
Federal Register Volume 83, Issue 94 (May 15, 2018)
| Page Range | 22560-22563 | |
| FR Document | 2018-10246 |
[Federal Register Volume 83, Number 94 (Tuesday, May 15, 2018)] [Notices] [Pages 22560-22563] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-10246] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33094; File No. 812-14765] TCW Direct Lending LLC, et al.; May 9, 2018. AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Notice. ----------------------------------------------------------------------- Notice of an application for an order under sections 12(d)(1)(J), 57(c), 57(i) and 60 of Investment Company Act of 1940 (the ``Act'') and rule 17d-1 under the Act to permit certain joint transactions otherwise prohibited by sections 12(d)(1)(A), 12(d)(1)(C), 57(a)(1), 57(a)(2) and 57(a)(4) of the Act and rule 17d-1 under the Act. Applicants: TCW Direct Lending LLC (the ``Fund''), TCW Middle Market Lending Opportunities BDC, Inc. (the ``Extension Fund''), and TCW Asset Management Company (the ``Adviser''). Summary of Application: Applicants seek an order to permit the Fund (i) to conduct an exchange offer pursuant to which investors in the Fund (``Unitholders''), including certain directors and officers of the Fund and employees of the Adviser (collectively, the ``TCW Directors, Officers and Employees''), may elect to exchange all or a portion of their units in the Fund (``Units'') for an equivalent number of shares (``Shares'') in the Extension Fund (each such Unitholder, an ``Electing Unitholder''), and (ii) to transfer to the Extension Fund a pro rata portion of the Fund's assets and liabilities, including a pro rata portion of each of the Fund's portfolio investments, in proportion to the percentage of Units tendered and accepted for exchange. Filing Dates: The application was filed on April 20, 2017, and amended on October 16, 2017, May 3, 2018, and May 9, 2018. Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on May 30, 2018 and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to section 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. The Applicants: c/o Adrian Rae Leipsic, Esq., and Adam E. Fleisher, Esq., Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, New York 10006. FOR FURTHER INFORMATION CONTACT: Asen Parachkevov, Senior Counsel, or David J. Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number, or an applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090. Applicants' Representations 1. The Fund, a Delaware limited liability company, is a closed-end management investment company that has elected to be regulated as a business development company (``BDC'') under the Act. On April 18, 2014, the Fund filed a registration statement on Form 10 to register Units pursuant to section 12(g) of the Exchange Act of 1934 (the ``Exchange Act''). The Fund commenced operations on September 19, 2014. The Fund operates as a direct lending company that seeks to generate risk-adjusted returns primarily through direct investments in senior secured loans made to middle-market companies or other companies that are engaged in various businesses. 2. The Fund conducted a private offering of its Units to investors in reliance on the exemption from registration provided by section 506 of Regulation D under the Securities Act of 1933 (the ``Securities Act''). The Fund entered into subscription agreements with its Unitholders, pursuant to which the Unitholders made capital commitments to the Fund. The Units are not traded on an exchange and are not freely transferable. 3. The Extension Fund, a Delaware corporation and a wholly-owned subsidiary of the Fund, intends to elect to be regulated as a BDC. Applicants state that the Extension Fund will have investment objectives and investment policies that are substantially similar to the Fund's. Applicants state that the Extension Fund intends to conduct an initial public offering or listing of its Shares immediately following the completion of the Proposed Transactions. 4. The Adviser, a Delaware limited liability company, is registered as an investment adviser under the Investment Advisers Act of 1940 (the ``Advisers Act''). The Adviser serves as investment adviser to the Fund pursuant to an investment advisory [[Page 22561]] agreement, and intends to serve as investment adviser to the Extension Fund. 5. Applicants state that the Fund's legal interest in each of its existing portfolio investments is capable of being proportionally assigned or similarly transferred on a pro rata basis. Applicants further state that each of the credit agreements and loan documents governing the terms of the Fund's assets, which primarily consist of loans and other private investments in middle market companies, permits an assignment, participation or similar transfer by the Fund without the need for the written consent of any administrative or collateral agent, borrower or other party. 6. Applicants state that the Fund's limited liability company operating agreement (the ``LLC Agreement'') provides that the Fund will be dissolved upon the expiration of its six-year term on September 19, 2020 (subject to any extensions of the term in accordance with the procedures set forth in the LLC Agreement), whereupon the Fund's assets will be liquidated in an orderly manner, capital will be returned to the Unitholders, and the Fund will wind up. Applicants state that the Fund's organizational documents do not permit the Fund to conduct an initial public offering of its Units, and the Fund has agreed that no Unitholder will be required to participate in a publicly traded vehicle without such Unitholder's consent. 7. Applicants state that the Fund's LLC Agreement provides for the ability of the Fund to engage in a ``split-off'' transaction, which, as described below and in greater detail in the application, would be implemented through the Exchange Offer, the Refinancing, the Contribution Transaction and the Share Issuance (each defined below, and, collectively, the ``Proposed Transactions''). The costs and expenses of the Proposed Transactions will be borne by the Adviser.\1\ --------------------------------------------------------------------------- \1\ All costs and expenses relating to the organization and operation of the Extension Fund will be borne by the Extension Fund as fully disclosed to investors prior to their decision to participate in the Exchange Offer. --------------------------------------------------------------------------- 8. If the requested order is granted, the Applicants propose to conduct an exchange offer, pursuant to which each Unitholder may elect to exchange a number of Units for an equivalent number of Shares (the ``Exchange Offer''). The Exchange Offer will be conducted as a private placement pursuant to Regulation D and made in compliance with rule 13e-4 under the Exchange Act and section 23(c)(2) of the Act. 9. Applicants state that the Exchange Offer will not commence unless and until (1) the boards of the Fund and the Extension Fund (the ``Fund Board'' and the ``Extension Fund Board'', and collectively, the ``Boards''), including a ``required majority'' (as defined in section 57(o) of the Act (``Required Majority'')) of the directors of each Board, authorize and approve the Proposed Transactions, and make all necessary determinations, including among other things, that: (i) The Proposed Transactions are in the best interests of the Fund or the Extension Fund, as applicable, (ii) the interests of Unitholders who elect to remain invested in the Fund and the interests of the Electing Unitholders will not be diluted as a result of effecting the Proposed Transactions, and (iii) following the Proposed Transactions, all Unitholders, including the Electing Unitholders, will hold the same pro rata interest in the same underlying portfolio investments as immediately prior to the Exchange; (2) the Fund Board, including a Required Majority, approves the participation in the Exchange by any ``remote'' affiliate of the Fund, as described in Section 57(d) of the Act and as required under section 57(f) of the Act; and (3) the Extension Fund Board, including a Required Majority, and the Fund, in its capacity as initial shareholder of the Extension Fund, each approve the investment advisory agreement between the Extension Fund and the Adviser. 10. Applicants state that simultaneously with the Share Issuance (as defined below), the Fund will transfer to the Extension Fund a pro rata portion of each of the Fund's assets and liabilities, including each of the Fund's portfolio investments, in proportion to the percentage of Units tendered by Electing Unitholders and accepted for exchange (the ``Contribution Transaction''). Applicants state that such computation will be objective and formulaic and determined solely on the basis of the percentage of Electing Unitholders, and will not be impacted by the valuation of the Fund's assets or any other factor that would impart an element of discretion. Applicants further state that material liabilities (other than those arising under the Fund's credit facility) will also be proportionally transferred or transferred on a pro rata basis by the Fund to the Extension Fund. 11. Applicants state that simultaneously with the Contribution Transaction, the Extension Fund will issue the applicable number of Shares to each Electing Unitholder in exchange for the corresponding number of Units accepted by the Fund from such Electing Unitholder in the Exchange Offer (the ``Share Issuance''). 12. Immediately prior to (and effectively contemporaneously with) the closing of the Exchange, the Contribution Transaction and the Share Issuance, (a) the Extension Fund will enter into a new credit facility and draw down an amount equal to the pro rata portion of the Fund's existing indebtedness immediately prior to the closing of the Exchange Offer attributable to the Units that have been validly tendered by Electing Unitholders and accepted for exchange, which amount will be distributed to the Fund and will be used to pay down the Fund's current outstanding senior secured revolving credit facility, and (b) the Fund will enter into a new credit facility to drawn down an amount to pay down the remainder of its existing credit facility (together, the ``Refinancing''). 13. Applicants believe that the Proposed Transactions will result in a number of benefits to Unitholders. Applicants state that the Proposed Transactions will provide Unitholders with the optionality that was negotiated for and was disclosed at the time of their investment in the Fund and will enable Unitholders to participate in the Extension Fund in a manner that promotes capital formation. Applicants state that the Proposed Transactions will position the Extension Fund to continue operations as a BDC with the goals of achieving greater economies of scale and completing an initial public offering or listing of its Shares. Applicants further state that by allowing the Unitholders to elect to participate in the Extension Fund, the Proposed Transactions will enable potential future retail investors to benefit from alignment with sophisticated institutional investors who elect to participate in the Extension Fund. Legal Analysis Section 57(a)(1) and 57(a)(2) of the Act 1. The Applicants are requesting an exemption pursuant to section 57(c) from the provisions of sections 57(a)(1) and 57(a)(2), in order to permit the Applicants to effect the Contribution Transaction and the Share Issuance. 2. Sections 57(a)(1) provides that it shall be unlawful for any person who is related to a BDC in a manner described in section 57(b) \2\, acting as principal, to sell to such BDC, or to a company controlled by such BDC, any securities [[Page 22562]] or other property unless such sale involves solely (emphasis added) (i) securities of which the buyer is the issuer or (ii) securities of which the seller is the issuer and which are part of a general offering to the holders of a class of its securities. --------------------------------------------------------------------------- \2\ Section 57(b) specifies the persons to whom the prohibitions of sections 57(a)(1), (a)(2) and (a)(4) apply. --------------------------------------------------------------------------- 3. Section 57(a)(2) provides that it shall be unlawful for any person who is related to a BDC in a manner described in section 57(b), acting as principal, to purchase from such BDC, or from a company controlled by such BDC, any securities or other property except for securities of which the seller is the issuer. 4. Rule 57b-1 does not exempt the Fund and the Extension Fund from being subject to the prohibitions of section 57(a).\3\ In addition, the TCW Directors, Officers and Employees may be prohibited by section 57(a)(1) and (2) from participating in the Share Issuance as a result of tendering their Units in the Exchange. --------------------------------------------------------------------------- \3\ Rule 57b-1 exempts certain persons otherwise related to a BDC in a manner described in section 57(b)(2) from being subject to the prohibitions of section 57(a). Specifically, this rule states that the provisions of section 57(a) shall not apply to any person: (a) Solely because that person is directly or indirectly controlled by a BDC; or (b) solely because that person is directly or indirectly controlling, controlled by, or under common control with, a person described in (a) of the rule or is an officer, director, partner, copartner, or employee of a person described in (a) of the rule (emphasis added). --------------------------------------------------------------------------- 5. Section 57(c) authorizes the Commission to issue an exemptive order if (i) the terms of the proposed transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching of the BDC or its shareholders or partners on the part of any person concerned, (ii) the proposed transaction is consistent with the policy of the BDC, as recited in the filings made by such company with the Commission under the Securities Act, its registration statement and reports filed under the Exchange Act, and its reports to shareholders or partners; and, and (iii) the proposed transaction is consistent with the general purposes of the Act. 6. The Applicants submit that the request for an exemption from the provisions of section 57(a)(1) and (a)(2) meets the standards for an order set forth in section 57(c). First, Applicants state that the terms of the Contribution Transaction, including the consideration to be paid or received, are fair and reasonable and involve no element of overreaching, since the transfer by the Fund of a pro rata portion of each of its assets and liabilities to the Extension Fund will be determined solely on the basis of the percentage of Electing Unitholders, which is purely an objective and formulaic exercise. Second, the Applicants state that the Contribution Transaction and the Share Issuance are consistent with the stated investment policies of the Fund as fully disclosed to Unitholders. Finally, the Applicants submit that the Boards, including a Required Majority of each, will have approved and authorized, as well as made all required determinations with respect to, the Proposed Transactions. Section 57(a)(4) and Rule 17d-1, as Made Applicable to BDCs by Section 57(i) of the Act 7. The Applicants are also requesting an Order pursuant to section 57(i) and rule 17d-1, to permit certain joint transactions that may be otherwise prohibited by Section 57(a)(4) and rule 17d-1. 8. Section 57(a)(4) makes it unlawful for any person who is related to a BDC in a manner described in section 57(b), acting as principal, knowingly to effect any transaction in which the BDC or a company controlled by such BDC is a joint or a joint and several participant. Section 57(i) provides that the rules under section 17(d) applicable to registered closed-end investment companies are deemed to apply to transactions subject to section 57(a). In relevant part, rule 17d-1 prohibits any person who is related to a BDC in a manner described in section 57(b), acting as principal, from participating in, or effecting any transaction in connection with, any joint enterprise or other joint arrangement in which the BDC or a company controlled by such BDC is a participant, unless an application has been filed with the Commission and an order has been granted. 9. The Fund and the Extension Fund may be viewed as affiliated persons of each other in a manner described in section 57(b). Considered together, the Proposed Transactions will require a considerable degree of coordination among the Fund, the Extension Fund and the Adviser that may indicate the existence of a ``joint arrangement'' as described in rule 17d-1. Further, certain TCW Directors, Officers and Employees who have invested in the Fund are affiliated persons of the Fund pursuant to section 57(b). 10. Rule 17d-1(b) provides that in determining whether to grant such an order, the Commission will consider whether the participation of the investment company in the joint transaction ``is consistent with the provisions, policies and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of other participants.'' 11. The Applicants submit that the request for an order under section 57(a)(4) and rule 17d-1 meets the standards set forth to rule 17d-1 for the same reasons as discussed above with respect to the request for exemption from sections 57(a)(1) and (a)(2). The Applicants state that TCW Directors, Officers and Employees will participate in the Exchange pursuant to the same terms and documentation as all other Unitholders, and the Proposed Transactions will not place any of the Fund, the Extension Fund or existing Unitholders of the Fund in a position less advantageous than that of any other of such persons. The Applicants further submit that the terms of the investment advisory agreement between the Extension Fund and the Adviser will be comprehensively disclosed to all Unitholders in the Offer to Exchange, the Fund and the Extension Fund will pay comparable management fees in respect of overlapping investments transferred by the Fund to the Extension Fund, and each Unitholder who wishes to remain invested in the Fund will be subject to the Fund's existing fee structure without any modification. Sections 12(d)(1)(A) and 12(d)(1)(C), as Made Applicable to BDCs by Section 60 of the Act 12. The Applicants are requesting an exemption pursuant to section 12(d)(1)(J) from the provisions of section 12(d)(1)(A) and section 12(d)(1)(C), to permit the Applicants to effect the Proposed Transactions. 13. Sections 12(d)(1)(A) and 12(d)(1)(C) are made applicable to BDCs by section 60 to the same extent as if they were registered closed-end investment companies. The Proposed Transactions may be viewed as violating sections 12(d)(1)(A) \4\ and 12(d)(1)(C) \5\ because prior to the Exchange, the Fund will own 100% of the newly issued Shares of the Extension Fund, even [[Page 22563]] though such ownership will exist for only a momentary period of time. --------------------------------------------------------------------------- \4\ Section 12(d)(1)(A) provides that no registered investment company (``acquiring company'') may acquire securities of any other investment company (``acquired company'') if such securities represent more than 3% of the acquired company's outstanding voting stock or more than 5% of the acquiring company's total assets, or if such securities, together with the securities of other investment companies, represent more than 10% of the acquiring company's total assets. \5\ Section 12(d)(1)(C) provides that no investment company (``acquiring company'') may acquire any securities issued by a registered closed-end investment company, if the acquiring company owns more than 10% of the total outstanding voting stock of such closed-end company. --------------------------------------------------------------------------- 14. The Applicants submit that the requested exemption from sections 12(d)(1)(A) and 12(d)(1)(C) meets the standards set forth in section 12(d)(1)(J). Section 12(d)(1)(J) provides that ``the Commission, by rule or regulation, upon its own motion or by order upon application, may conditionally or unconditionally exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions from any provision of this subsection, if and to the extent that such exemption is consistent with the public interest and the protection of investors.'' 15. The Applicants state that the Proposed Transactions are consistent with the public interest in that they are intended to result in a benefit to non-electing Unitholders, Electing Unitholders and potential future investors in the Extension Fund. The Applicants also state that the Proposed Transactions are consistent with investor protection because the momentary holding by the Fund of Shares of the Existing Fund does not raise any of the concerns that Sections 12(d)(1)(A) and (C) were intended to address. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-10246 Filed 5-14-18; 8:45 am] BILLING CODE 8011-01-P
![22560 Federal Register / Vol. 83, No. 94 / Tuesday, May 15, 2018 / Notices
Paper Comments ACTION: Notice. Liberty Plaza, New York, New York
• Send paper comments in triplicate 10006.
Notice of an application for an order
to Brent J. Fields, Secretary, Securities under sections 12(d)(1)(J), 57(c), 57(i) FOR FURTHER INFORMATION CONTACT:
and Exchange Commission, 100 F Street and 60 of Investment Company Act of Asen Parachkevov, Senior Counsel, or
NE, Washington, DC 20549–1090. 1940 (the ‘‘Act’’) and rule 17d–1 under David J. Marcinkus, Branch Chief, at
All submissions should refer to File the Act to permit certain joint (202) 551–6821 (Division of Investment
Number SR–NYSEAMER–2018–20. This transactions otherwise prohibited by Management, Chief Counsel’s Office).
file number should be included on the sections 12(d)(1)(A), 12(d)(1)(C), SUPPLEMENTARY INFORMATION: The
subject line if email is used. To help the 57(a)(1), 57(a)(2) and 57(a)(4) of the Act following is a summary of the
Commission process and review your and rule 17d–1 under the Act. application. The complete application
comments more efficiently, please use APPLICANTS: TCW Direct Lending LLC may be obtained via the Commission’s
only one method. The Commission will (the ‘‘Fund’’), TCW Middle Market website by searching for the file
post all comments on the Commission’s Lending Opportunities BDC, Inc. (the number, or an applicant using the
internet website (http://www.sec.gov/ ‘‘Extension Fund’’), and TCW Asset Company name box, at http://
rules/sro.shtml). Copies of the Management Company (the ‘‘Adviser’’). www.sec.gov/search/search.htm or by
submission, all subsequent SUMMARY OF APPLICATION: Applicants calling (202) 551–8090.
amendments, all written statements seek an order to permit the Fund (i) to Applicants’ Representations
with respect to the proposed rule conduct an exchange offer pursuant to
change that are filed with the 1. The Fund, a Delaware limited
which investors in the Fund
Commission, and all written liability company, is a closed-end
(‘‘Unitholders’’), including certain
communications relating to the management investment company that
directors and officers of the Fund and
proposed rule change between the has elected to be regulated as a business
employees of the Adviser (collectively,
Commission and any person, other than development company (‘‘BDC’’) under
the ‘‘TCW Directors, Officers and
those that may be withheld from the the Act. On April 18, 2014, the Fund
Employees’’), may elect to exchange all
public in accordance with the filed a registration statement on Form 10
or a portion of their units in the Fund
provisions of 5 U.S.C. 552, will be to register Units pursuant to section
(‘‘Units’’) for an equivalent number of
available for website viewing and 12(g) of the Exchange Act of 1934 (the
shares (‘‘Shares’’) in the Extension Fund
printing in the Commission’s Public ‘‘Exchange Act’’). The Fund commenced
(each such Unitholder, an ‘‘Electing
Reference Room, 100 F Street NE, operations on September 19, 2014. The
Unitholder’’), and (ii) to transfer to the
Washington, DC 20549 on official Fund operates as a direct lending
Extension Fund a pro rata portion of the
business days between the hours of company that seeks to generate risk-
Fund’s assets and liabilities, including a
10:00 a.m. and 3:00 p.m. Copies of the adjusted returns primarily through
pro rata portion of each of the Fund’s
filing also will be available for direct investments in senior secured
portfolio investments, in proportion to
inspection and copying at the principal loans made to middle-market companies
the percentage of Units tendered and
office of the Exchange. All comments or other companies that are engaged in
accepted for exchange.
received will be posted without change. various businesses.
FILING DATES: The application was filed 2. The Fund conducted a private
Persons submitting comments are on April 20, 2017, and amended on
cautioned that we do not redact or edit offering of its Units to investors in
October 16, 2017, May 3, 2018, and May reliance on the exemption from
personal identifying information from 9, 2018.
comment submissions. You should registration provided by section 506 of
HEARING OR NOTIFICATION OF HEARING: An Regulation D under the Securities Act of
submit only information that you wish
order granting the application will be 1933 (the ‘‘Securities Act’’). The Fund
to make available publicly. All
issued unless the Commission orders a entered into subscription agreements
submissions should refer to File
hearing. Interested persons may request with its Unitholders, pursuant to which
Number SR–NYSEAMER–2018–20 and
a hearing by writing to the the Unitholders made capital
should be submitted on or before June
Commission’s Secretary and serving commitments to the Fund. The Units are
5, 2018.
applicants with a copy of the request, not traded on an exchange and are not
For the Commission, by the Division of personally or by mail. Hearing requests freely transferable.
Trading and Markets, pursuant to delegated should be received by the Commission 3. The Extension Fund, a Delaware
authority.14 by 5:30 p.m. on May 30, 2018 and corporation and a wholly-owned
Eduardo A. Aleman, should be accompanied by proof of subsidiary of the Fund, intends to elect
Assistant Secretary. service on the applicants, in the form of to be regulated as a BDC. Applicants
[FR Doc. 2018–10263 Filed 5–14–18; 8:45 am] an affidavit, or, for lawyers, a certificate state that the Extension Fund will have
BILLING CODE 8011–01–P of service. Pursuant to section 0–5 investment objectives and investment
under the Act, hearing requests should policies that are substantially similar to
state the nature of the writer’s interest, the Fund’s. Applicants state that the
SECURITIES AND EXCHANGE any facts bearing upon the desirability Extension Fund intends to conduct an
COMMISSION of a hearing on the matter, the reason for initial public offering or listing of its
the request, and the issues contested. Shares immediately following the
[Investment Company Act Release No. Persons who wish to be notified of a
33094; File No. 812–14765] completion of the Proposed
hearing may request notification by Transactions.
daltland on DSKBBV9HB2PROD with NOTICES
TCW Direct Lending LLC, et al.; writing to the Commission’s Secretary. 4. The Adviser, a Delaware limited
ADDRESSES: Secretary, U.S. Securities liability company, is registered as an
May 9, 2018. and Exchange Commission, 100 F Street investment adviser under the
AGENCY:Securities and Exchange NE, Washington, DC 20549–1090. The Investment Advisers Act of 1940 (the
Commission (‘‘Commission’’). Applicants: c/o Adrian Rae Leipsic, ‘‘Advisers Act’’). The Adviser serves as
Esq., and Adam E. Fleisher, Esq., Cleary investment adviser to the Fund
14 17 CFR 200.30–3(a)(12). Gottlieb Steen & Hamilton LLP, One pursuant to an investment advisory
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![Federal Register / Vol. 83, No. 94 / Tuesday, May 15, 2018 / Notices 22563
though such ownership will exist for publishing this notice to solicit more transparency as to the offerings for
only a momentary period of time. comments on the proposed rule change market participants.
14. The Applicants submit that the from interested persons.
requested exemption from sections Ports
12(d)(1)(A) and 12(d)(1)(C) meets the I. Self-Regulatory Organization’s The Exchange proposes to define a
standards set forth in section 12(d)(1)(J). Statement of the Terms of Substance of port within Section 3 to provide
Section 12(d)(1)(J) provides that ‘‘the the Proposed Rule Change additional clarity to the fee schedule as
Commission, by rule or regulation, upon The Exchange proposes to reorganize ‘‘a logical connection or session that
its own motion or by order upon and amend Chapter XV, Section 3, enables a market participant to send
application, may conditionally or entitled ‘‘BX Options Market—Ports and inbound messages and/or receive
unconditionally exempt any person, Other Services.’’ outbound messages from the Exchange
security, or transaction, or any class or The text of the proposed rule change using various communication
classes of persons, securities, or is available on the Exchange’s website at protocols.’’ The Exchange believes this
transactions from any provision of this http://nasdaqbx.cchwallstreet.com/, at definition will assist Participants in
subsection, if and to the extent that such the principal office of the Exchange, and distinguishing ports from other
exemption is consistent with the public at the Commission’s Public Reference offerings.
interest and the protection of investors.’’ Room. Order and Quote Protocols
15. The Applicants state that the
Proposed Transactions are consistent II. Self-Regulatory Organization’s The Exchange proposes to add a new
with the public interest in that they are Statement of the Purpose of, and section (i) and include the following
intended to result in a benefit to non- Statutory Basis for, the Proposed Rule introductory sentence, ‘‘The following
electing Unitholders, Electing Change order and quote protocols are available
Unitholders and potential future In its filing with the Commission, the on BX.’’ Today, BX offers market
investors in the Extension Fund. The Exchange included statements participants an Order Entry order
Applicants also state that the Proposed concerning the purpose of and basis for protocol and an SQF quote protocol.
Transactions are consistent with the proposed rule change and discussed These fees currently exist on the fee
investor protection because the any comments it received on the schedule. The Exchange is not
momentary holding by the Fund of proposed rule change. The text of these amending any pricing related to these
Shares of the Existing Fund does not statements may be examined at the protocols. The Exchange proposes to
raise any of the concerns that Sections places specified in Item IV below. The rename ‘‘Order Entry Port Fee’’ as ‘‘FIX
12(d)(1)(A) and (C) were intended to Exchange has prepared summaries, set Port Fee.’’ This description is more
address. forth in sections A, B, and C below, of accurate as ‘‘FIX’’ is the name of the
For the Commission, by the Division of the most significant aspects of such order entry protocol. A Participant may
Investment Management, under delegated statements. request an SQF Port or an SQF Purge
authority. Port, the price is $500 for either port.
A. Self-Regulatory Organization’s SQF is an interface that allows market
Eduardo A. Aleman,
Statement of the Purpose of, and the makers to connect and send quotes,
Assistant Secretary.
Statutory Basis for, the Proposed Rule sweeps and auction responses into the
[FR Doc. 2018–10246 Filed 5–14–18; 8:45 am] Change Exchange. The SQF Purge port only
BILLING CODE 8011–01–P
1. Purpose receives and notifies of purge requests
from the market maker. The proposal is
The Exchange proposes to reorganize to include a line item for each offering
SECURITIES AND EXCHANGE and amend Chapter XV, Section 3,
COMMISSION because a market participant may either
entitled ‘‘BX Options Market—Ports and select an SQF port or an SQF Purge Port
[Release No. 34–83192; File No. SR–BX– Other Services.’’ The Exchange offers and both are assessed the same $500 fee.
2018–017] various services across its 6 affiliated The price does not vary. The Exchange
options markets, BX, The Nasdaq separately lists these offerings on
Self-Regulatory Organizations; Nasdaq Options Market LLC, Nasdaq Phlx LLC,
BX, Inc.; Notice of Filing and Nasdaq ISE, LLC. A separate line item
Nasdaq ISE, LLC, Nasdaq GEMX, LLC will make clear that there are two
Immediate Effectiveness of a Proposed and Nasdaq MRX, LLC (‘‘Nasdaq
Rule Change To Reorganize and options for this offering. The price of the
Affiliated Markets’’).3 The Exchange SQF Purge Port is not being amended.
Amend Chapter XV, Section 3, entitled desires to rename services to conform
BX Options Market—Ports and Other The Exchange believes that grouping
the naming of the offerings across all the available order and quote protocols
Services Nasdaq Affiliated Markets. The together into their own subsection will
May 9, 2018. Exchange proposes to reorganize provide greater transparency within its
Pursuant to Section 19(b)(1) of the Section 3 to list order and quote fee schedule as to the available
Securities Exchange Act of 1934 (the protocols first, order and execution protocols.
‘‘Act’’),1 and Rule 19b–4 thereunder,2 offerings next, followed by data ports
and other ports as the last section. The Order and Execution Information
notice is hereby given that on April 27,
2018, Nasdaq BX, Inc. (‘‘BX’’ or Exchange proposes to list data offerings The Exchange proposes to add a new
‘‘Exchange’’) filed with the Securities which are offered at no cost. The section (ii) and add the following
and Exchange Commission Exchange believes that aligning its introductory sentence, ‘‘The following
daltland on DSKBBV9HB2PROD with NOTICES
(‘‘Commission’’) the proposed rule offerings, where relevant, across the order and execution information is
change as described in Items I and II Nasdaq Affiliated Markets will provide available to Participants.’’ The Exchange
below, which Items have been prepared proposes to group the available order
3 The Exchange will file a similar rule change on
by the Exchange. The Commission is and execution information that is
each Nasdaq Affiliated Market to conform the
offerings by amending naming to make them similar
particular to a Participant’s executions
1 15 U.S.C. 78s(b)(1). and delineating each offering on the fee schedule on BX into its own subsection. Today,
2 17 CFR 240.19b–4. where no fee is assessed. BX offers CTI, Order Entry DROP and
VerDate Sep<11>2014 20:27 May 14, 2018 Jkt 244001 PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM 15MYN1](https://thefederalregister.org/doc/83_FR_22654/page/4.svg)
Document Created: 2018-05-15 00:33:11
Document Modified: 2018-05-15 00:33:11
| 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 | |
| Action | Notice. | |
| Dates | The application was filed on April 20, 2017, and amended on October 16, 2017, May 3, 2018, and May 9, 2018. | |
| Contact | Asen Parachkevov, Senior Counsel, or David J. Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). | |
| FR Citation | 83 FR 22560 |
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