83 FR 23498 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material to Rule 706 To Harmonize Its Sponsored Access Rules With Those of Its Affiliates
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 98 (May 21, 2018)
Federal Register Volume 83, Issue 98 (May 21, 2018)
| Page Range | 23498-23502 | |
| FR Document | 2018-10706 |
[Federal Register Volume 83, Number 98 (Monday, May 21, 2018)] [Notices] [Pages 23498-23502] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-10706] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83239; File No. SR-MRX-2018-14] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material to Rule 706 To Harmonize Its Sponsored Access Rules With Those of Its Affiliates May 15, 2018. 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 May 9, 2018, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed with the Securities and Exchange Commission (``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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Supplementary Material to Rule 706 to harmonize its sponsored access rules with those of its affiliates. The text of the proposed rule change is available on the Exchange's website at http://nasdaqmrx.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission's Public Reference Room. [[Page 23499]] 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 The purpose of the proposed rule change is to amend Supplementary Material to Rule 706, which contains the Exchange's sponsored access rules, to harmonize these rules with those of the Nasdaq Exchanges.\3\ On March 9, 2016, the Exchange and its affiliates, International Securities Exchange, LLC (now, Nasdaq ISE, LLC) (``ISE'') and ISE Gemini, LLC (now, Nasdaq GEMX, LLC) (``GEMX'' and together with ISE and MRX, ``ISE Exchanges''), were acquired by Nasdaq, Inc. (``Acquisition'').\4\ In the context of the Acquisition, the ISE Exchanges have been working to align certain of its rules and processes with those of the Nasdaq Exchanges in order to provide consistent standards across the six exchanges owned and operated by Nasdaq, Inc. (collectively, ``Affiliated Exchanges''). As part of this effort, the proposal set forth below harmonizes the Exchange's sponsored access rules with the Nasdaq Sponsored Access Rules in order to provide uniform standards and requirements for users of the Affiliated Exchanges.\5\ --------------------------------------------------------------------------- \3\ See NQX Rule 4615, BX Rule 4615 and PHLX Rule 1094 (collectively, ``Nasdaq Sponsored Access Rules''). \4\ See Securities Exchange Act Release No. 78119 (June 21, 2016), 81 FR 41611 (June 27, 2016) (SR-ISE-2016-11; SR-ISEGemini- 2016-05; SR-ISEMercury-2016-10). \5\ ISE and GEMX will each file similar rule change proposals with the Commission to harmonize their sponsored access rules with the Nasdaq Sponsored Access Rules. --------------------------------------------------------------------------- In particular, the Exchange proposes to (1) define the term ``Sponsored Access'' and ``Customer Agreement;'' (2) specify the requirement to comply with Rule 15c3-5 under the Act (``Market Access Rule''); (3) remove the requirements that each Sponsored Customer and each Sponsoring Member enter into certain agreements with the Exchange; and (4) make a number of related, non-substantive changes. Each change is discussed in detail as follows. Defining Sponsored Access A Sponsored Customer is a non-member of the Exchange, such as an institutional investor, that gains access to the Exchange \6\ and trades under a Sponsoring Member's execution and clearing identity pursuant to a sponsorship arrangement between such non-member and Sponsoring Member, as set forth in Supplementary Material to Rule 706. The Exchange is proposing to define the term ``Sponsored Access'' to clarify the type of market access arrangement that is subject to this rule. Accordingly, the Exchange proposes to amend Supplementary Material .01(a) to Rule 706 to add the following definition: ``Sponsored Access shall mean an arrangement whereby a Member permits its customers to enter orders into the System that bypass the Member's trading system and are routed directly to the Exchange, including routing through a service bureau or other third party technology provider.'' This definition mirrors the language set forth in the Nasdaq Sponsored Access Rules,\7\ and is derived from the Commission's description of Sponsored Access used in the release approving the Market Access Rule.\8\ The Exchange believes that defining Sponsored Access in Supplementary Material .01(a) to Rule 706 will provide market participants with greater clarity regarding Sponsored Access and their obligations with respect to this type of access arrangement. --------------------------------------------------------------------------- \6\ For example, a broker-dealer may allow its customer--whether an institution such as a hedge fund, mutual fund, bank or insurance company, an individual, or another broker-dealer--to use the broker- dealer's MPID, account or other mechanism or mnemonic used to identify a market participant for the purposes of electronically accessing the Exchange. \7\ See NQX Rule 4615(a), BX Rule 4615(a) and PHLX Rule 1094(a). \8\ The Market Access Rule, among other things, requires broker- dealers providing others with access to an exchange or alternative trading system to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory, and other risks of providing such access. See Securities Exchange Act Release No. 63241 (November 3, 2010), 75 FR 69792 (November 15, 2010). --------------------------------------------------------------------------- Defining Customer Agreement The Exchange proposes to amend Supplementary Material .01(b)(1) to Rule 706 to define the agreement that Sponsored Customers must enter into and maintain with one or more Sponsoring Members to establish proper relationship(s) and account(s) through which the Sponsored Customer may trade on the Exchange, as a ``Customer Agreement.'' \9\ --------------------------------------------------------------------------- \9\ The Nasdaq Sponsored Access Rules also similarly define ``Customer Agreement.'' See NQX Rule 4615(b)(i), BX Rule 4615(b)(i) and PHLX Rule 1094(b)(i). --------------------------------------------------------------------------- Market Access Rule Pursuant to Supplementary Material .01(b)(2) to Rule 706, the Sponsoring Member is responsible for the activities of the Sponsored Customer. Sponsored Customers are required to have procedures in place to comply with the Exchange's rules, and the Sponsoring Member takes responsibility for the Sponsored Customer's activity on the Exchange. Members may have multiple Sponsored Access relationships in place at a given time. The Exchange's examination program assesses compliance with the sponsored access rules set forth in Supplementary Material to Rule 706, among other rules.\10\ The Exchange now proposes to specifically enumerate in Supplementary Material .01(b)(2) to Rule 706 the member's obligation to comply with the Market Access Rule, with which Members are currently required to comply in connection with market access.\11\ The Exchange believes that specifying the obligation to comply with the Market Access Rule within the rule itself will reinforce that Supplementary Material to Rule 706 presupposes member compliance with the Market Access Rule. --------------------------------------------------------------------------- \10\ The Exchange has a Regulatory Services Agreement (``RSA'') with the Financial Industry Regulatory Authority (``FINRA'') to conduct regulatory examinations, among other obligations. \11\ See NQX Rule 4615(b)(ii)(A), BX Rule 4615(b)(ii)(A) and PHLX Rule 1094(b)(ii)(A) for consistent provisions. --------------------------------------------------------------------------- Elimination of Certain Contract Requirements The Exchange currently requires a Sponsored Customer Agreement between the Sponsored Customer and the Exchange,\12\ and a Sponsored Customer Addendum to the member access agreement (hereinafter, ``Addendum'') that is provided to the Exchange by the Sponsoring Member.\13\ At this time, the Exchange proposes to remove the existing requirements to submit the Sponsored Customer Agreement and Addendum to the Exchange in order to align its sponsored access rules with the Nasdaq Sponsored Access Rules. The Exchange will continue to require a Customer Agreement between the Sponsored Customer and Sponsoring Member [[Page 23500]] pursuant to Supplementary Material .01(b)(2) to Rule 706.\14\ --------------------------------------------------------------------------- \12\ See Supplementary Material .01(a) to Rule 706. \13\ See Supplementary Material .01(b)(2)(i) and (b)(3) to Rule 706. \14\ The Nasdaq Sponsored Access Rules likewise only require a Customer Agreement between the sponsored participant and sponsoring member. See NQX Rule 4615(b)(i), BX Rule 4615(b)(i) and PHLX Rule 1094(b)(i). --------------------------------------------------------------------------- Today, only members may request connectivity to the Exchange by contacting Nasdaq Subscriber Services. A member may obtain separate ports for the purpose of providing Sponsored Access. If separate ports are requested by a member for the purpose of providing Sponsored Access, the member must request those ports from the Exchange and is responsible for the Sponsored Customer's activity on the Exchange.\15\ In all circumstances, the Exchange only permits members to request connectivity to the market and the member is responsible for all customer orders submitted through the member's port. In addition, such connection by the member requires approval by the Exchange for the purpose of testing as well as other relevant information sharing with the Exchange by the member to obtain a port. The Exchange is therefore aware of the member responsible for each of its ports. The Exchange may also request further information about a member's particular customer relationship, including the list of all Authorized Traders who may have access to the Exchange on behalf of the Sponsored Customer, as it deems necessary.\16\ --------------------------------------------------------------------------- \15\ In such cases, the Nasdaq Exchanges also require members to disclose the sponsored access arrangement as a condition to approving the member's port request. MRX will similarly require members requesting connectivity to MRX for the purpose of providing Sponsored Access to disclose sponsored access arrangements as a condition to approval. \16\ See Rule 1601. --------------------------------------------------------------------------- The Exchange believes that completing and submitting the Sponsored Customer Agreement and Addendum is unnecessarily burdensome in light of the current structure in place at the Exchange. The Sponsored Customer Agreement requirement was intended to ensure that the Sponsored Customer was informed of its obligation to comply with the Exchange's Certificate of Formation, By-Laws, Rules and procedures, including the requirements in Supplementary Material .01(b)(2)(iii)-(ix).\17\ The agreement also provided the Exchange with contractual privity, which would no longer exist with the removal of the Sponsored Customer Agreement. The Exchange does not believe the loss of privity with the Sponsored Customer creates a concern as the Exchange has the ability to remove access to the port at any time if it determines that the activity of the Sponsored Customer warrants such removal. In addition, as discussed below, the Sponsored Customer will be informed of its obligations through the Customer Agreement that it executed with the Sponsoring Member. As noted above, the Exchange only permits its members to request connectivity to the Exchange's trading system, and members remain responsible for all trades submitted through such ports. Pursuant to Supplementary Material .01(b)(2)(vii) to Rule 706, the trading activity of a Sponsored Customer must be monitored by the Sponsoring Member for compliance with the terms of the Customer Agreement with the Sponsored Customer. Finally, Sponsoring Members continue to be obligated to comply with Supplementary Material .01(b) to Rule 706 and the Market Access Rule. As such, the Sponsoring Member is responsible for any and all actions taken by its Sponsored Customer and any person acting on behalf of or in the name of such Sponsored Customer. --------------------------------------------------------------------------- \17\ These requirements include, among others, the Sponsored Customer's obligation to maintain, keep current and provide to the Sponsoring Member a list of Authorized Traders who may obtain access to the Exchange on behalf of the Sponsored Customer. In addition, the Sponsored Customer must take reasonable security precautions to prevent unauthorized use or access to the Exchange, and is responsible for having adequate procedures and controls in place to comply with MRX's rules. --------------------------------------------------------------------------- The Addendum requirement was intended to notify the Exchange of the relationship between the Sponsoring Member and the Sponsored Customer, and to provide the Sponsoring Member's express acknowledgment of the Sponsoring Member's responsibility for the orders, executions and actions of its Sponsored Customer. However, as noted above, the Exchange may request additional information about a particular customer relationship as it deems necessary.\18\ The Exchange will also require that its members disclose the Sponsored Customer relationship as a condition for approving any ports requested for the purpose of providing Sponsored Access.\19\ Accordingly, the Exchange will continue to be notified of Sponsored Customer arrangements even with the removal of the Addendum. Furthermore, as discussed above, Sponsoring Members continue to be obligated to comply with Supplementary Material .01(b) to Rule 706 and the Market Access Rule, and are therefore responsible for any and all actions taken by its Sponsored Customer and any person acting on behalf of or in the name of such Sponsored Customer. The Exchange, through its RSA with FINRA, reviews member compliance with Supplementary Material to Rule 706, including compliance with the Market Access Rule. --------------------------------------------------------------------------- \18\ See Rule 1601. \19\ See note 15 above. --------------------------------------------------------------------------- Supplementary Material .01(b)(1) to Rule 706 requires that the Sponsored Customer and the Sponsoring Member maintain a Customer Agreement with the sponsorship provisions set forth in paragraph (2) to ensure compliance with Exchange's rules and obligations related to security, among other things. Additionally, Supplementary Material .01(b)(2)(iv) and (v) require that the Customer Agreement include the Sponsored Customer's obligation to maintain, keep current and provide to the Sponsoring Member a list of Authorized Traders who have been granted access to the Exchange on behalf of the Sponsored Customer, and provide such Authorized Traders with appropriate training prior to any use or access to the Exchange. In addition, pursuant to the Customer Agreement provisions required by Rule 706, Supplementary Material .01(b)(vii), the Sponsored Customer is obligated to take reasonable security precautions to prevent unauthorized use or access to the Exchange, including unauthorized entry of information into the Exchange's System, or the information and data made available therein. Finally, the Customer Agreement must provide that the Sponsored Customer is responsible for any and all orders, trades and other messages and instructions entered, transmitted or received under identifiers, passwords and security codes of Authorized Traders, and for the trading and other consequences thereof, including granting unauthorized access to the Exchange.\20\ The contents and the requirement for a Customer Agreement are unchanged. --------------------------------------------------------------------------- \20\ See Rule 706, Supplementary Material .01(b)(vii). --------------------------------------------------------------------------- Clean-Up Changes The Exchange proposes to correct two typographical errors in subsections (vii) and (ix) of Supplementary Material .01(b)(2) to Rule 706. First in subsection (vii), the Exchange proposes to correct a typo by replacing ``of'' with ``or'' in the first sentence. The proposed sentence would therefore state ``Sponsored Customer shall take reasonable security precautions to prevent unauthorized use or access to the Exchange . . .'' Second, subsection (ix) would be amended to correct a typo in the last portion of the first sentence. In particular, the phrase ``. . . Sponsored Customers access to and use of the Exchange'' should be ``. . . Sponsored [[Page 23501]] Customer's access to and use of the Exchange.'' Both of these proposed changes are non-substantive clean-ups, and are intended to ensure that the rule text is as accurate and clear as possible. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\21\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\22\ in particular, in that it is designed to promote just and equitable principles of trade, 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. Overall, the proposed rule change is intended to align the Exchange's sponsored access rules in Supplementary Material to Rule 706 with the Nasdaq Sponsored Access Rules, and is part of the Exchange's continued effort to promote efficiency and conformity of its processes with those of the Nasdaq Exchanges. Consistent rules and processes across the Affiliated Exchanges would in turn simplify the regulatory requirements for members of the Exchange that are also participants on the Nasdaq Exchanges. The Exchange believes that its proposal would provide greater harmonization among similar rules and procedures of the Affiliated Exchanges, resulting in greater uniformity and more efficient regulatory compliance. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and national market system. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78f(b). \22\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Defining Sponsored Access Adding a definition of Sponsored Access will assist market participants to understand the type of arrangements that are subject to Supplementary Material to Rule 706, and such clarity will serve to promote just and equitable principles of trade. The Exchange believes that adding the Sponsored Access definition will provide its members with additional guidance with respect to this Rule. Defining Customer Agreement Defining the agreement that Sponsored Customers must enter into and maintain with one or more Sponsoring Members to establish proper relationship(s) and account(s) through which the Sponsored Customer may trade on the Exchange, as a ``Customer Agreement'' will also serve to provide members with clarity on the agreement that the Exchange will continue to require and the obligations that are contained within the Customer Agreement. This amendment is non-substantive. Market Access Rule As discussed above, Exchange members will continue to be required to comply with Supplementary Material to Rule 706 and the Market Access Rule. The Exchange believes that specifically enumerating the member's responsibility to comply with the Market Access Rule within the Rule itself will provide members with additional guidance concerning the application of the Rule. This change is non-substantive as members are currently responsible for complying with the Market Access Rule. Elimination of Certain Contract Requirements Removing the requirements to submit and complete a Sponsored Customer Agreement and Addendum will remove impediments to and perfect the mechanism of a free and open market by aligning the Exchange's sponsored access rules with the Nasdaq Sponsored Access Rules, which currently do not require additional agreements for their sponsored participants other than a Customer Agreement.\23\ The Exchange believes that its proposal would create equivalent sponsored access standards and requirements among the Affiliated Exchanges and also provide clarity to its members, which is beneficial to both investors and the public interest. While elimination of the Sponsored Customer Agreement requirement will also eliminate the Exchange's contractual privity with the Sponsored Customer, the Exchange notes that any potential concerns to the loss of privity are mitigated by the Exchange's ability to restrict the Sponsored Customer's access to a port at any time it is warranted by the Sponsored Customer's trading activity. As discussed above, connectivity to the Exchange must be requested by a member of the Exchange. Such connection requires approval by the Exchange, testing and other security features as well as information sharing with the Exchange by the member. In addition, Supplementary Material .01(b)(2) to Rule 706 delineates the terms of the required contractual relationship between the Sponsoring Member and the Sponsored Customer in the Customer Agreement, which remains in effect. The Exchange also believes that the Addendum is unnecessary in light of the fact that Sponsoring Members must request connectivity to the Exchange as well as enter into a Customer Agreement with the Sponsored Customer. Furthermore, as discussed above, the Exchange will require members to disclose the Sponsored Customer relationship as a condition to approving the member's port request to provide Sponsored Access. Finally, as is the case with other Exchange rules, the Exchange examines for compliance with Supplementary Material to Rule 706 and may request information about any customer relationship which concerns the Exchange pursuant to Rule 1601. --------------------------------------------------------------------------- \23\ See NQX Rule 4615, BX Rule 4615 and PHLX Rule 1094. --------------------------------------------------------------------------- Clean-Up Changes The Exchange believes that the proposed changes to correct the two typos in subsections (vii) and (ix) of Supplementary Material .01(b)(2) to Rule 706 will add further clarification to the Exchange's Rulebook and alleviate potential confusion as to the applicability of the Exchange's rules, which will protect investors and the public interest. 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 because all members would be subject to the same sponsored access requirements, as discussed above. The proposed rule change is designed to provide greater harmonization among the sponsored access rules across the Affiliated Exchanges, resulting in more efficient regulatory compliance for common members, and is not intended to have any competitive effect. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has [[Page 23502]] become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \24\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\25\ --------------------------------------------------------------------------- \24\ 15 U.S.C. 78s(b)(3)(A)(iii). \25\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \26\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \27\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange represents that waiver of the operative delay would allow the Exchange to harmonize its sponsored access rule to the rules of the Nasdaq Exchanges.\28\ The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed rule change would simplify the regulatory requirements of members of the Exchange that are also participants on the Nasdaq Exchanges. Further, the Commission does not believe that the proposed rule change raises any new or novel issues. Accordingly, the Commission hereby waives the operative delay and designates the proposal operative upon filing.\29\ --------------------------------------------------------------------------- \26\ 17 CFR 240.19b-4(f)(6). \27\ 17 CFR 240.19b-4(f)(6)(iii). \28\ See supra note 3. \29\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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 CommentsUse 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-MRX-2018-14 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-MRX-2018-14. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-MRX-2018-14 and should be submitted on or before June 11, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\30\ --------------------------------------------------------------------------- \30\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-10706 Filed 5-18-18; 8:45 am] BILLING CODE 8011-01-P
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Trading Permit Holders and other 60 days of the filing of the proposed rule personal identifying information from
persons using its facilities. change, the Commission summarily may comment submissions. You should
The Exchange believes that reducing temporarily suspend such rule change if submit only information that you wish
the $400 per month to $0.02 per it appears to the Commission that such to make available publicly. All
contract with a cap of $400 per month action is necessary or appropriate in the submissions should refer to File
on a TPH sending drop copies from public interest, for the protection of Number SR–CBOE–2018–033 and
PULSe to a non-TPH customer is investors, or otherwise in furtherance of should be submitted on or before June
reasonable because the fee will continue the purposes of the Act. If the 11, 2018.
to allow the Exchange to monitor, Commission takes such action, the
develop and implement upgrades, Commission will institute proceedings For the Commission, by the Division of
maintain, and customize PULSe to to determine whether the proposed rule Trading and Markets, pursuant to delegated
ensure a non-TPH customer receives change should be approved or authority.8
timely and accurate drop copies while disapproved. Eduardo A. Aleman,
also potentially reducing the sending IV. Solicitation of Comments Assistant Secretary.
TPH’s costs. The Exchange believes the [FR Doc. 2018–10711 Filed 5–18–18; 8:45 am]
fee is equitable and not unfairly Interested persons are invited to
BILLING CODE 8011–01–P
discriminatory because the monthly fee submit written data, views, and
is assessed equally to any TPH sending arguments concerning the foregoing,
drop copies to its non-TPH customers. including whether the proposed rule
SECURITIES AND EXCHANGE
Additionally, use of the drop copy change is consistent with the Act.
Comments may be submitted by any of COMMISSION
functionality by a TPH and non-TPH
customer is voluntary. the following methods:
[Release No. 34–83239; File No. SR–MRX–
B. Self-Regulatory Organization’s Electronic Comments 2018–14]
Statement on Burden on Competition • Use the Commission’s internet
The Exchange does not believe that comment form (http://www.sec.gov/ Self-Regulatory Organizations; Nasdaq
the proposed rule changes will impose rules/sro.shtml); or MRX, LLC; Notice of Filing and
any burdens on competition that are not • Send an email to rule-comments@ Immediate Effectiveness of Proposed
necessary or appropriate in furtherance sec.gov. Please include File Number SR– Rule Change To Amend
of the purposes of the Act. The CBOE–2018–033 on the subject line. Supplementary Material to Rule 706 To
Exchange does not believe that the Paper Comments Harmonize Its Sponsored Access
proposed rule change will impose any Rules With Those of Its Affiliates
• Send paper comments in triplicate
burden on intramarket competition that to Secretary, Securities and Exchange May 15, 2018.
is not necessary or appropriate in Commission, 100 F Street NE,
furtherance of the purposes of the Act Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the
because the proposed PULSe-related Securities Exchange Act of 1934
All submissions should refer to File
fees are assessed equally to TPH (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Number SR–CBOE–2018–033. This file
broker’s electing to use the optional notice is hereby given that on May 9,
number should be included on the
Drop Copy functionality. The Exchange 2018, Nasdaq MRX, LLC (‘‘MRX’’ or
subject line if email is used. To help the
does not believe that the proposed ‘‘Exchange’’) filed with the Securities
Commission process and review your
change will cause any unnecessary and Exchange Commission
comments more efficiently, please use
burden on intermarket competition (‘‘Commission’’) the proposed rule
only one method. The Commission will
because the proposed fees relate to use change as described in Items I and II
post all comments on the Commission’s
of an Exchange-provided order entry below, which Items have been prepared
internet website (http://www.sec.gov/
system. To the extent that any proposed by the Exchange. The Commission is
rules/sro.shtml). Copies of the
change makes the Exchange a more publishing this notice to solicit
submission, all subsequent
attractive marketplace for market comments on the proposed rule change
amendments, all written statements
participants at other exchanges, such from interested persons.
with respect to the proposed rule
market participants are welcome to
change that are filed with the
become Exchange market participants. I. Regulatory Organization’s Statement
Commission, and all written
C. Self-Regulatory Organization’s communications relating to the of the Terms of Substance of the
Statement on Comments on the proposed rule change between the Proposed Rule Change
Proposed Rule Change Received From Commission and any person, other than The Exchange proposes to amend
Members, Participants, or Others those that may be withheld from the Supplementary Material to Rule 706 to
The Exchange neither solicited nor public in accordance with the harmonize its sponsored access rules
received comments on the proposed provisions of 5 U.S.C. 552, will be
with those of its affiliates.
rule change. available for website viewing and
printing in the Commission’s Public The text of the proposed rule change
III. Date of Effectiveness of the Reference Room, 100 F Street NE, is available on the Exchange’s website at
Proposed Rule Change and Timing for Washington, DC 20549, on official http://nasdaqmrx.cchwallstreet.com/, at
Commission Action business days between the hours of the principal office of the Exchange, and
sradovich on DSK3GMQ082PROD with NOTICES
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of the at the Commission’s Public Reference
effective pursuant to Section 19(b)(3)(A) filing also will be available for Room.
of the Act 6 and paragraph (f) of Rule inspection and copying at the principal
19b–4 7 thereunder. At any time within office of the Exchange. All comments
received will be posted without change. 8 17 CFR 200.30–3(a)(12).
6 15 U.S.C. 78s(b)(3)(A). Persons submitting comments are 1 15 U.S.C. 78s(b)(1).
7 17 CFR 240.19b–4(f). cautioned that we do not redact or edit 2 17 CFR 240.19b–4.
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become effective pursuant to Section change is consistent with the Act. SECURITIES AND EXCHANGE
19(b)(3)(A)(iii) of the Act 24 and Comments may be submitted by any of COMMISSION
subparagraph (f)(6) of Rule 19b–4 the following methods:
thereunder.25 Proposed Collection; Comment
A proposed rule change filed Electronic Comments Request
pursuant to Rule 19b–4(f)(6) under the • Use the Commission’s internet Upon Written Request, Copies Available
Act 26 normally does not become comment form (http://www.sec.gov/ From: Securities and Exchange
operative for 30 days after the date of its rules/sro.shtml); or Commission, Office of FOIA Services,
filing. However, Rule 19b–4(f)(6)(iii) 27
permits the Commission to designate a • Send an email to rule-comments@ 100 F Street NE, Washington, DC
sec.gov. Please include File Number SR– 20549–2736.
shorter time if such action is consistent
with the protection of investors and the MRX–2018–14 on the subject line. Extension:
public interest. The Exchange has asked Rule 12b–1, SEC File No. 270–188, OMB
Paper Comments Control No. 3235–0212.
the Commission to waive the 30-day
operative delay so that the proposal may • Send paper comments in triplicate Notice is hereby given that, pursuant
become operative immediately upon to Secretary, Securities and Exchange to the Paperwork Reduction Act of 1995
filing. The Exchange represents that Commission, 100 F Street NE, (44 U.S.C. 3501 et seq.), the Securities
waiver of the operative delay would Washington, DC 20549–1090. and Exchange Commission (the
allow the Exchange to harmonize its ‘‘Commission’’) is soliciting comments
sponsored access rule to the rules of the All submissions should refer to File on the collection of information
Nasdaq Exchanges.28 The Commission Number SR–MRX–2018–14. This file summarized below. The Commission
believes that waiving the 30-day number should be included on the plans to submit this existing collection
operative delay is consistent with the subject line if email is used. To help the of information to the Office of
protection of investors and the public Commission process and review your Management and Budget (‘‘OMB’’) for
interest because the proposed rule comments more efficiently, please use extension and approval.
change would simplify the regulatory only one method. The Commission will Rule 12b–1 under the Investment
requirements of members of the post all comments on the Commission’s Company Act of 1940 (17 CFR
Exchange that are also participants on internet website (http://www.sec.gov/ 270.12b–1) permits a registered open-
the Nasdaq Exchanges. Further, the rules/sro.shtml). Copies of the end investment company (‘‘fund’’) to
Commission does not believe that the submission, all subsequent bear expenses associated with the
proposed rule change raises any new or amendments, all written statements distribution of its shares, provided that
novel issues. Accordingly, the with respect to the proposed rule the fund complies with certain
Commission hereby waives the change that are filed with the requirements, including, among other
operative delay and designates the Commission, and all written things, that it adopt a written plan
proposal operative upon filing.29 communications relating to the (‘‘rule 12b–1 plan’’) and that it preserves
At any time within 60 days of the proposed rule change between the in writing any agreements relating to the
filing of the proposed rule change, the Commission and any person, other than rule 12b–1 plan. The rule in part
Commission summarily may those that may be withheld from the requires that (i) the adoption or material
temporarily suspend such rule change if public in accordance with the amendment of a rule 12b–1 plan be
it appears to the Commission that such provisions of 5 U.S.C. 552, will be approved by the fund’s directors,
action is: (i) Necessary or appropriate in available for website viewing and including its independent directors,
the public interest; (ii) for the protection printing in the Commission’s Public and, in certain circumstances, its
of investors; or (iii) otherwise in Reference Room, 100 F Street NE, shareholders; (ii) the board review
furtherance of the purposes of the Act. Washington, DC 20549, on official quarterly reports of amounts spent
If the Commission takes such action, the business days between the hours of under the rule 12b–1 plan; and (iii) the
Commission shall institute proceedings 10:00 a.m. and 3:00 p.m. Copies of the board, including the independent
to determine whether the proposed rule filing also will be available for directors, consider continuation of the
should be approved or disapproved. inspection and copying at the principal rule 12b–1 plan and any related
office of the Exchange. All comments agreements at least annually. Rule
IV. Solicitation of Comments 12b–1 also requires funds relying on the
received will be posted without change.
Interested persons are invited to Persons submitting comments are rule to preserve for six years, the first
submit written data, views, and cautioned that we do not redact or edit two years in an easily accessible place,
arguments concerning the foregoing, personal identifying information from copies of the rule 12b–1 plan and any
including whether the proposed rule comment submissions. You should related agreements and reports, as well
submit only information that you wish as minutes of board meetings that
24 15 U.S.C. 78s(b)(3)(A)(iii). to make available publicly. All describe the factors considered and the
25 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
submissions should refer to File basis for adopting or continuing a rule
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file Number SR–MRX–2018–14 and should 12b–1 plan.
the proposed rule change at least five business days be submitted on or before June 11, 2018. Rule 12b–1 also prohibits funds from
prior to the date of filing of the proposed rule paying for distribution of fund shares
change, or such shorter time as designated by the For the Commission, by the Division of
Trading and Markets, pursuant to delegated
with brokerage commissions on their
Commission. The Exchange has satisfied this
portfolio transactions. The rule requires
sradovich on DSK3GMQ082PROD with NOTICES
requirement. authority.30
26 17 CFR 240.19b–4(f)(6). funds that use broker-dealers that sell
Eduardo A. Aleman,
27 17 CFR 240.19b–4(f)(6)(iii). their shares to also execute their
28 See supra note 3. Assistant Secretary. portfolio securities transactions, to
29 For purposes only of waiving the 30-day [FR Doc. 2018–10706 Filed 5–18–18; 8:45 am] implement policies and procedures
operative delay, the Commission has also
considered the proposed rule’s impact on
BILLING CODE 8011–01–P reasonably designed to prevent: (i) The
efficiency, competition, and capital formation. See persons responsible for selecting broker-
15 U.S.C. 78c(f). 30 17 CFR 200.30–3(a)(12). dealers to effect transactions in fund
VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 E:\FR\FM\21MYN1.SGM 21MYN1](https://thefederalregister.org/doc/83_FR_23596/page/5.svg)
Document Created: 2018-11-02 11:07:50
Document Modified: 2018-11-02 11:07:50
| 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 | 83 FR 23498 |
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