83 FR 35291 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Exchange Rule 11.13, Order Execution and Routing, To Amend the Operation of the Super Aggressive Order Instruction
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 143 (July 25, 2018)
Federal Register Volume 83, Issue 143 (July 25, 2018)
| Page Range | 35291-35295 | |
| FR Document | 2018-15848 |
[Federal Register Volume 83, Number 143 (Wednesday, July 25, 2018)] [Notices] [Pages 35291-35295] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-15848] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83673; File No. SR-CboeBZX-2018-051] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Exchange Rule 11.13, Order Execution and Routing, To Amend the Operation of the Super Aggressive Order Instruction July 19, 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 July 11, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') 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 Exchange has designated this proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders it effective upon filing with the Commission. 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. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend the operation of the Super Aggressive order instruction under paragraph (b)(4)(C) of Exchange Rule 11.13. The text of the proposed rule change is available at the Exchange's website at www.markets.cboe.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. 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 [[Page 35292]] the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the description of the Super Aggressive Re-Route instruction (``Super Aggressive instruction'') under paragraph (b)(4)(C) of Exchange Rule 11.13, Order Execution and Routing to: (i) Specify that an incoming BZX Post Only Order or Partial Post Only at Limit Order that locks a resting order with a Super Aggressive instruction must be designated as eligible for display on the Exchange (a ``displayed order'') for the order with a Super Aggressive instruction to engage in a liquidity swap and execute against that incoming order; and (ii) modify language from the description of the Super Aggressive instruction that states if an order that does not contain a Super Aggressive instruction maintains higher priority than one or more Super Aggressive eligible orders, the Super Aggressive eligible order(s) with lower priority will not be converted and an incoming BZX Post Only Order or Partial Post Only at Limit Order will be posted or cancelled in accordance with Exchange Rule 11.9(c)(6) or 11.9(c)(7). Super Aggressive is an optional order instruction that directs the System \5\ to route an order when an away Trading Center locks or crosses the limit price of the order resting on the BZX Book.\6\ When an order with a Super Aggressive instruction is locked by an incoming BZX Post Only Order or Partial Post Only at Limit Order (hereafter collectively referred to as a ``Post Only Order'') that does not remove liquidity pursuant to Rule 11.9(c)(6) or 11.9(c)(7), respectively,\7\ the order with a Super Aggressive instruction is converted to an executable order and will remove liquidity against such incoming order. --------------------------------------------------------------------------- \5\ The term ``System'' is defined as ``the electronic communications and trading facility designated by the Board through which securities orders of Users are consolidated for ranking, execution and, when applicable, routing away.'' See Exchange Rule 1.5(aa). \6\ See Exchange Rule 1.5(e). \7\ A BZX Post Only Order will remove contra-side liquidity from the BZX Book if the order is an order to buy or sell a security priced below $1.00 or if the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the BZX Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. See Exchange Rule 11.9(c)(6). A Partial Post Only at Limit Order will remove liquidity from the BZX Book up to the full size of the order if, at the time of receipt, it can be executed at prices better than its limit price. See Exchange Rule 11.9(c)(7). --------------------------------------------------------------------------- First, the Exchange proposes to modify the behavior of the Super Aggressive instruction to require that the incoming Post Only Order that locks a resting order with a Super Aggressive instruction must be designated as a displayed order for an execution to occur. The Super Aggressive instruction is generally utilized for best execution purposes because it enables the order to immediately attempt to access displayed liquidity on another Trading Center that is either priced equal to or better than the order with a Super Aggressive instruction's limit price. The Super Aggressive instruction also enables the order to execute against an equally priced incoming Post Only Order that would otherwise not execute by being willing to act as the liquidity remover in such a scenario. Today, the incoming Post Only Order may either be a displayed order or a non-displayed order for it to engage in a liquidity swap with an order with a Super Aggressive instruction resting on the BZX Book. Consistent with the Super Aggressive instruction to access liquidity displayed on other Trading Centers, the Exchange proposes to amend the Super Aggressive instruction such that an order with such instruction will execute against an equally priced incoming Post Only Order only when such order is to be displayed on the BZX Book. The order with a Super Aggressive instruction would continue to act as a liquidity remover in such a scenario. Should such an equally priced incoming Post Only Order not be designated as a displayed order, the resting order with a Super Aggressive instruction would remain on the BZX Book and await an execution where it may act as a liquidity provider. The incoming Post Only Order that is also designated as a non-displayed order would be posted to the BZX Book at its limit price, creating an internally locked non-displayed book. As is the case today, an execution would continue to occur where an incoming Post Only Order is priced more aggressively than the order with a Super Aggressive instruction resting on the BZX Book, regardless of whether the incoming Post Only Order was designated as a displayed order or a non-displayed order.\8\ --------------------------------------------------------------------------- \8\ See id. --------------------------------------------------------------------------- The Exchange notes that Users seeking to act as a liquidity remover once resting on the BZX Book in all cases (i.e., seeking to execute against incoming Post Only orders regardless of the display instruction) may attach the Non-Displayed Swap (``NDS'') instruction to their order.\9\ The NDS instruction is similar to the Super Aggressive instruction, in that it also is an optional order instruction that a User may include on an order that directs the Exchange to have such order, when resting on the BZX Book, execute against an incoming Post Only Order rather than have it be locked by the incoming order. Today, because orders with either instruction (i.e., Super Aggressive and NDS) will execute against incoming Post Only Orders regardless of whether the order is to be displayed, the instructions are currently identical with two exceptions. First, an order with a Super Aggressive instruction will not convert into a liquidity removing order and execute against a Post Only Order if there is an order on the order book with priority over such order that does not also contain a Super Aggressive instruction. As further described below, the Exchange is proposing to modify this feature of the Super Aggressive instruction. The second current distinction between the two instructions, which would remain, is that an order with a Super Aggressive instruction can be displayed on the Exchange whereas an order with the NDS instruction must be non-displayed. As amended, the additional distinction between the two instructions would be whether an order would become a liquidity removing order against any Post Only Order that would lock it (i.e., NDS) or only when the Post Only Order that would lock it also is a displayed order (i.e., Super Aggressive). --------------------------------------------------------------------------- \9\ See Exchange Rule 11.9(c)(12). --------------------------------------------------------------------------- The below examples illustrate the proposed behavior. Assume the National Best Bid and Offer (``NBBO'') is $10.00 by $10.10. An order to buy is displayed on the BZX Book at $10.00 with a Super Aggressive instruction. There are no other orders resting on the BZX Book. An order to sell at $10.00 with a Post Only that is designated as a displayed order is entered. The incoming order to sell would execute against the resting order to buy at $10.00, the locking price, because the incoming order was designated as a displayed order. The order to buy would act as the liquidity remover and the order to sell would act as the liquidity adder. However, no execution would occur if the incoming order to sell was designated as a non-displayed order. Instead, the incoming order to sell would be posted non-displayed to the BZX Book at $10.00, its limit price, causing the BZX Book to be internally locked. [[Page 35293]] Second, the Exchange proposes to enable a Post Only Order that is designated as a displayed order to execute against an equally priced non-displayed order with a Super Aggressive instruction where a non- displayed order without a Super Aggressive instruction maintains time priority over the Super Aggressive eligible order at that price. In such case, the non-displayed, non-Super Aggressive order seeks to remain a liquidity provider and would cede time priority to the order with a Super Aggressive instruction, which is willing to act as a liquidity remover to facilitate the execution. The Exchange proposes to effect this change by modifying language in the description of the Super Aggressive instruction to state that if an order displayed on the BZX Book does not contain a Super Aggressive instruction and maintains higher priority than one or more Super Aggressive eligible orders, the Super Aggressive eligible order(s) with lower priority will not be converted and the incoming Post Only Order will be posted or cancelled in accordance with Exchange Rule 11.9(c)(6) or Rule 11.9(c)(7). Thus, an order with a Super Aggressive instruction, whether displayed on the Exchange or non-displayed, will never execute ahead of a displayed order that maintains time priority. The Super Aggressive instruction is designed to facilitate executions that would otherwise not occur due to Post Only Order requirement to not remove liquidity. Users entering orders with the Super Aggressive instruction tend to be fee agnostic because an order with a Super Aggressive instruction is willing to route to an away Trading Center displaying an equally or better priced order (i.e., pay a fee at such Trading Center). Meanwhile, an order without the Super Aggressive instruction elects to remain on the BZX Book as the liquidity provider until it may execute against an incoming order that would act as the liquidity remover. Therefore, enabling the Super Aggressive order to execute against an incoming order, regardless of whether a non-displayed order without a Super Aggressive instruction maintains priority, is consistent with the User's intent for both orders--one choses to remain the liquidity provider and forgo the execution while the other is willing to execute irrespective of whether it is the liquidity provider or remover. The Exchange notes that similar behavior occurs for orders utilizing the NDS instruction,\10\ which also seeks to engage in a liquidity swap against incoming Post Only Orders. The Exchange, however, has proposed to retain the existing limitation with respect to orders displayed on the BZX Book. --------------------------------------------------------------------------- \10\ See Exchange Rule 11.9(c)(12). See also Securities Exchange Act Release No. 83537 (June 28, 2018), (SR-CboeBZX-2018-042) (including an example where an order cedes execution priority to an order with an NDS instruction). --------------------------------------------------------------------------- The following example illustrates the operation of an order with a Super Aggressive instruction under the proposed rule change. Assume the NBBO is $10.00 by $10.04. There is a non-displayed Limit Order to buy resting on the BZX Book at $10.03 (``Order A''). A second non-displayed Limit Order to buy at $10.03 is then entered with a Super Aggressive instruction and has time priority behind the first Limit Order (``Order B''). A Post Only Order to sell priced at $10.03 is entered. Under current behavior, the incoming sell Post Only Order would not execute against Order A and would post to the BZX Book \11\ because the value of such execution against the resting buy order when removing liquidity does not equal or exceed the value of such execution if the order instead posted to the BZX Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. Further, the incoming sell Post Only Order could not execute against Order B because Order A is on the BZX Book and maintains time priority over Order B. Under the proposed change, the incoming sell order, if it was designated as a displayed order, would execute against Order B and Order B would become the remover of liquidity while the incoming sell Post Only Order would become the liquidity provider. In such case, Order A cedes priority to Order B because Order A did not also include a Super Aggressive instruction \12\ and thus the User that submitted the order did not indicate the preference to be treated as the remover of liquidity in favor of an execution; instead, by not using Super Aggressive, a User indicates the preference to remain posted on the BZX Book as a liquidity provider. However, if the incoming sell order was priced at $10.02, it would receive sufficient price improvement to execute upon entry against all resting buy Limit Orders in time priority at $10.03.\13\ Also, if Order A was displayed on the BZX Book, no execution would occur, as the proposed change would only apply to non-displayed liquidity. --------------------------------------------------------------------------- \11\ Such order would be posted to the BZX Book in accordance with the Exchange's re-pricing instructions to comply with Rule 610(d) of Regulation NMS. See Exchange Rules 11.9(g)(1) and (g)(2). See also 242 CFR 242.610(d). \12\ This behavior is consistent with the operation of the Exchange's NDS instruction. See supra note 10. \13\ The execution occurs here because the value of the execution against the buy order when removing liquidity exceeds the value of such execution if the order instead posted to the BZX Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. See supra note 7. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \14\ in general, and furthers the objectives of Section 6(b)(5) of the Act \15\ in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in 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. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78f(b). \15\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The proposed changes to the Super Aggressive order instruction are designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in 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. The Super Aggressive instruction is an optional feature that is intended to reflect the order management practices of various market participants. The proposal to limit the execution of an order with a Super Aggressive instruction to execute against incoming Post Only Orders that also are designated as displayed orders promotes just and equitable principles of trade because it enables Users to elect an order instruction consistent with their intent to execute only against displayed orders, in part, for best execution purposes. The amended Super Aggressive instruction would ensure executions at the best available price displayed on another Trading Center or against an incoming order that would have been displayed on the BZX Book. Users seeking to act as a liquidity remover once resting on the BZX Book and execute against an incoming Post Only Order that is also designated as a non-displayed order may attach the NDS instruction to their order.\16\ --------------------------------------------------------------------------- \16\ See Exchange Rule 11.9(c)(12). --------------------------------------------------------------------------- The proposed change to the Super Aggressive instruction also removes impediments to and perfects the mechanism of a free and open market and a national market system because it [[Page 35294]] is designed to facilitate executions that would otherwise not occur due to the Post Only Order requirement to not remove liquidity. The proposal enables non-displayed Super Aggressive orders to execute against an incoming order, regardless of whether another non-displayed order without a Super Aggressive instruction maintains priority consistent with the User's intent for both orders--one chooses to remain the liquidity provider and forgo the execution while the other is willing to execute irrespective of whether it is the liquidity provider or remover. The non-Super Aggressive order seeks to remain a liquidity provider and cede its time priority to the order with a Super Aggressive instruction, which is willing to act as a liquidity remover to facilitate the execution. It also enables an order without the Super Aggressive instruction to remain on the BZX Book as a liquidity provider, consistent with the expected operation of their resting order. The Exchange notes that similar behavior occurs for orders utilizing the NDS \17\ instruction, which also seeks to engage in a liquidity swap against incoming Post Only Orders. Finally, by limiting the proposed change to non-displayed orders, the proposal remains consistent with NDS and also retains existing functionality with respect to the handling of displayed orders. --------------------------------------------------------------------------- \17\ See supra note 10. --------------------------------------------------------------------------- For the reasons set forth above, the Exchange believes the proposal removes impediments to and perfects the mechanism of a free and open market and a national market system, and, in general, protects 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 result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. On the contrary, the proposed changes to the Super Aggressive order instruction are intended to improve the usefulness of the instruction and to align its operation with the intention of the User, resulting in enhanced competition through increased usage and execution quality on the Exchange. Thus, to the extent the change is intended to improve functionality on the Exchange to encourage Users to direct their orders to the Exchange, the change is competitive, but the Exchange does not believe the proposed change will result in any burden on intermarket competition as it is a minor change to available functionality. The proposed changes to the Super Aggressive order instruction also promote intramarket competition because they will facilitate the execution of orders that would otherwise remain unexecuted consistent with the intent of the User entering the order, thereby increasing the efficient functioning of the Exchange. Further, the Super Aggressive order instruction will remain available to all Users in the same way it is today. Thus, Users can continue to choose between various optional order instructions, including Super Aggressive, NDS, and others, depending on the order handling they prefer the Exchange to utilize. Therefore, the Exchange does not believe the proposed rule change will result in any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. 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 become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\19\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 78s(b)(3)(A)(iii). \19\ 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 under Rule 19b-4(f)(6) normally does not become operative for 30 days after the date of the filing. However, Rule 19b-4(f)(6)(iii) \20\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. In its filing, BZX requested that the Commission waive the 30-day operative delay so that the Exchange can implement the proposed rule change promptly after filing. The Exchange stated that the proposal to allow an order with a Super Aggressive instruction to execute against an incoming Post Only order only if the Post Only order is displayable is consistent with the use of the Super Aggressive instruction to access liquidity displayed on other Trading Centers. Further, according to the Exchange, users seeking to execute against incoming non-displayable Post Only orders will continue to be able to attach the NDS order instruction, as well as other order instructions that may permit such executions. In addition, the Exchange stated that the proposed priority change where non-displayed orders without a Super Aggressive instruction would cede priority to non-displayed orders with a Super Aggressive instruction is similar to, and consistent with, the Exchange's priority ceding functionality for orders with an NDS instruction and would facilitate executions that would otherwise not occur due to an incoming Post Only order's requirement not to remove liquidity. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest, as the proposed rule change relates to optional functionality that is consistent with existing functionality and, if selected by Exchange users, may enable them to better manage their orders and may increase order interaction on the Exchange. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.\21\ --------------------------------------------------------------------------- \20\ 17 CFR 240.19b-4(f)(6)(iii). \21\ 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: [[Page 35295]] 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-CboeBZX-2018-051 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-CboeBZX-2018-051. 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-CboeBZX-2018-051, and should be submitted on or before August 15, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12) and (59). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-15848 Filed 7-24-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 143 / Wednesday, July 25, 2018 / Notices 35291
such as supply and demand. Therefore, transactions with the Fund of Funds.4 SECURITIES AND EXCHANGE
applicants assert that secondary market The purchase of Creation Units by a COMMISSION
transactions in shares will not lead to Fund of Funds directly from a Fund will
[Release No. 34–83673; File No. SR–
discrimination or preferential treatment be accomplished in accordance with the CboeBZX–2018–051]
among purchasers. Finally, applicants policies of the Fund of Funds and will
represent that share market prices will be based on the NAVs of the Funds. Self-Regulatory Organizations; Cboe
be disciplined by arbitrage BZX Exchange, Inc.; Notice of Filing
9. Applicants also request relief to
opportunities, which should prevent and Immediate Effectiveness of a
shares from trading at a material permit a Feeder Fund to acquire shares
of another registered investment Proposed Rule Change to Exchange
discount or premium from NAV. Rule 11.13, Order Execution and
6. With respect to Funds that effect company managed by the Adviser
having substantially the same Routing, To Amend the Operation of
creations and redemptions of Creation the Super Aggressive Order
Units in kind and that are based on investment objectives as the Feeder
Fund (‘‘Master Fund’’) beyond the Instruction
certain Underlying Indexes that include
foreign securities, applicants request limitations in section 12(d)(1)(A) and July 19, 2018.
relief from the requirement imposed by permit the Master Fund, and any Pursuant to Section 19(b)(1) of the
section 22(e) in order to allow such principal underwriter for the Master Securities Exchange Act of 1934
Funds to pay redemption proceeds Fund, to sell shares of the Master Fund (‘‘Act’’),1 and Rule 19b–4 thereunder,2
within fifteen calendar days following to the Feeder Fund beyond the notice is hereby given that on July 11,
the tender of Creation Units for limitations in section 12(d)(1)(B). 2018, Cboe BZX Exchange, Inc. (the
redemption. Applicants assert that the 10. Section 6(c) of the Act permits the ‘‘Exchange’’ or ‘‘BZX’’) filed with the
requested relief would not be Securities and Exchange Commission
Commission to exempt any persons or
inconsistent with the spirit and intent of (‘‘Commission’’) the proposed rule
transactions from any provision of the
section 22(e) to prevent unreasonable, change as described in Items I and II
Act if such exemption is necessary or
undisclosed or unforeseen delays in the below, which Items have been prepared
actual payment of redemption proceeds. appropriate in the public interest and
consistent with the protection of by the Exchange. The Exchange has
7. Applicants request an exemption to designated this proposal as a ‘‘non-
permit Funds of Funds to acquire Fund investors and the purposes fairly
controversial’’ proposed rule change
shares beyond the limits of section intended by the policy and provisions of
pursuant to Section 19(b)(3)(A) of the
12(d)(1)(A) of the Act; and the Funds, the Act. Section 12(d)(1)(J) of the Act
Act 3 and Rule 19b–4(f)(6) thereunder,4
and any principal underwriter for the provides that the Commission may
which renders it effective upon filing
Funds, and/or any broker or dealer exempt any person, security, or with the Commission. The Commission
registered under the Exchange Act, to transaction, or any class or classes of is publishing this notice to solicit
sell shares to Funds of Funds beyond persons, securities, or transactions, from comments on the proposed rule change
the limits of section 12(d)(1)(B) of the any provision of section 12(d)(1) if the from interested persons.
Act. The application’s terms and exemption is consistent with the public
conditions are designed to, among other interest and the protection of investors. I. Self-Regulatory Organization’s
things, help prevent any potential (i) Section 17(b) of the Act authorizes the Statement of the Terms of Substance of
undue influence over a Fund through Commission to grant an order the Proposed Rule Change
control or voting power, or in permitting a transaction otherwise The Exchange filed a proposal to
connection with certain services, prohibited by section 17(a) if it finds amend the operation of the Super
transactions, and underwritings, (ii) that (a) the terms of the proposed Aggressive order instruction under
excessive layering of fees, and (iii) transaction are fair and reasonable and paragraph (b)(4)(C) of Exchange Rule
overly complex fund structures, which do not involve overreaching on the part 11.13.
are the concerns underlying the limits of any person concerned; (b) the The text of the proposed rule change
in sections 12(d)(1)(A) and (B) of the proposed transaction is consistent with is available at the Exchange’s website at
Act. the policies of each registered www.markets.cboe.com, at the principal
8. Applicants request an exemption office of the Exchange, and at the
from sections 17(a)(1) and 17(a)(2) of the investment company involved; and (c)
the proposed transaction is consistent Commission’s Public Reference Room.
Act to permit persons that are Affiliated
Persons, or Second Tier Affiliates, of the with the general purposes of the Act. II. Self-Regulatory Organization’s
Funds, solely by virtue of certain For the Commission, by the Division of Statement of the Purpose of, and
ownership interests, to effectuate Investment Management, under delegated Statutory Basis for, the Proposed Rule
purchases and redemptions in-kind. The authority. Change
deposit procedures for in-kind Eduardo A. Aleman, In its filing with the Commission, the
purchases of Creation Units and the Exchange included statements
Assistant Secretary.
redemption procedures for in-kind concerning the purpose of and basis for
redemptions of Creation Units will be [FR Doc. 2018–15861 Filed 7–24–18; 8:45 am]
the proposed rule change and discussed
the same for all purchases and BILLING CODE 8011–01–P
any comments it received on the
redemptions, and Deposit Instruments proposed rule change. The text of these
and Redemption Instruments will be 4 The requested relief would apply to direct sales
statements may be examined at the
valued in the same manner as those of shares in Creation Units by a Fund to a Fund of
places specified in Item IV below. The
daltland on DSKBBV9HB2PROD with NOTICES
Funds and redemptions of those shares. Applicants,
investment positions currently held by moreover, are not seeking relief from section 17(a) Exchange has prepared summaries, set
the Funds. Applicants also seek relief for, and the requested relief will not apply to, forth in Sections A, B, and C below, of
from the prohibitions on affiliated transactions where a Fund could be deemed an
transactions in section 17(a) to permit a Affiliated Person, or a Second-Tier Affiliate, of a 1 15
Fund of Funds because an Adviser or an entity U.S.C. 78s(b)(1).
Fund to sell its shares to and redeem its controlling, controlled by or under common control
2 17 CFR 240.19b–4.
shares from a Fund of Funds, and to with an Adviser provides investment advisory 3 15 U.S.C. 78s(b)(3)(A).
engage in the accompanying in-kind services to that Fund of Funds. 4 17 CFR 240.19b–4(f)(6).
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Electronic Comments SECURITIES AND EXCHANGE 2 filing requirement therefore is 10
COMMISSION hours in the aggregate (1 respondent ×
• Use the Commission’s internet one filing per respondent × 10 hours per
comment form (http://www.sec.gov/ Proposed Collection; Comment filing).
rules/sro.shtml); or Request Estimates of the burden hours are
• Send an email to rule-comments@ Upon Written Request, Copies Available
made solely for the purposes of the PRA
sec.gov. Please include File Number SR– and are not derived from a
From: Securities and Exchange
CboeBZX–2018–051 on the subject line. comprehensive or even a representative
Commission, Office of FOIA Services,
survey or study of the costs of SEC rules
Paper Comments 100 F Street NE, Washington, DC
and forms. The information provided on
20549–2736
Form N–8B–2 is mandatory. The
• Send paper comments in triplicate Extension: information provided on Form N–8B–2
to Secretary, Securities and Exchange Form N–8B–2, SEC File No. 270–186, OMB will not be kept confidential. An agency
Commission, 100 F Street NE, Control No. 3235–0186
may not conduct or sponsor, and a
Washington, DC 20549–1090. Notice is hereby given that, pursuant person is not required to respond to, a
All submissions should refer to File to the Paperwork Reduction Act of 1995 collection of information unless it
Number SR–CboeBZX–2018–051. This (44 U.S.C. 3501 et seq.), the Securities displays a currently valid OMB control
file number should be included on the and Exchange Commission (the number.
subject line if email is used. To help the ‘‘Commission’’) is soliciting comments Written comments are invited on: (a)
Commission process and review your on the collection of information Whether the proposed collection of
summarized below. The Commission information is necessary for the proper
comments more efficiently, please use
plans to submit this existing collection performance of the functions of the
only one method. The Commission will
of information to the Office of agency, including whether the
post all comments on the Commission’s Management and Budget for extension information will have practical utility;
internet website (http://www.sec.gov/ and approval. (b) the accuracy of the agency’s estimate
rules/sro.shtml). Copies of the Form N–8B–2 (17 CFR 274.12) is the of the burden of the collection of
submission, all subsequent form used by unit investment trusts information; (c) ways to enhance the
amendments, all written statements (‘‘UITs’’) other than separate accounts quality, utility, and clarity of the
with respect to the proposed rule that are currently issuing securities, information collected; and (d) ways to
change that are filed with the including UITs that are issuers of minimize the burden of the collection of
Commission, and all written periodic payment plan certificates and information on respondents, including
communications relating to the UITs of which a management through the use of automated collection
proposed rule change between the investment company is the sponsor or techniques or other forms of information
Commission and any person, other than depositor, to comply with the filing and technology. Consideration will be given
those that may be withheld from the disclosure requirements imposed by to comments and suggestions submitted
public in accordance with the section 8(b) of the Investment Company in writing within 60 days of this
provisions of 5 U.S.C. 552, will be Act of 1940 (15 U.S.C. 80a–8(b)). Form publication.
available for website viewing and N–8B–2 requires disclosure about the Please direct your written comments
printing in the Commission’s Public organization of a UIT, its securities, the to Pamela Dyson, Director/Chief
Reference Room, 100 F Street NE, personnel and affiliated persons of the Information Officer, Securities and
Washington, DC 20549, on official depositor, the distribution and Exchange Commission, c/o Candace
business days between the hours of redemption of securities, the trustee or Kenner, 100 F Street NE, Washington,
10:00 a.m. and 3:00 p.m. Copies of the custodian, and financial statements. The DC 20549; or send an email to: PRA_
filing also will be available for Commission uses the information Mailbox@sec.gov.
provided in the collection of Dated: July 19, 2018.
inspection and copying at the principal
information to determine compliance
office of the Exchange. All comments Eduardo A. Aleman,
with section 8(b) of the Investment
received will be posted without change. Assistant Secretary.
Company Act.
Persons submitting comments are Each registrant subject to the Form N– [FR Doc. 2018–15857 Filed 7–24–18; 8:45 am]
cautioned that we do not redact or edit 8B–2 filing requirement files Form N– BILLING CODE 8011–01–P
personal identifying information from 8B–2 for its initial filing and does not
comment submissions. You should file post-effective amendments on Form
submit only information that you wish N–8B–2.1 The Commission staff SECURITIES AND EXCHANGE
to make available publicly. All estimates that approximately one COMMISSION
submissions should refer to File respondent files one Form N–8B–2 Submission for OMB Review;
Number SR–CboeBZX–2018–051, and filing annually with the Commission.2 Comment Request
should be submitted on or before Staff estimates that the burden for
August 15, 2018. compliance with Form N–8B–2 is Upon Written Request, Copies Available
For the Commission, by the Division of approximately 10 hours per filing. The From: Securities and Exchange
Trading and Markets, pursuant to delegated total hour burden for the Form N–8B– Commission, Office of FOIA Services,
authority.22 100 F Street NE, Washington, DC
daltland on DSKBBV9HB2PROD with NOTICES
1 Post-effective amendments are filed with the
20549–2736
Eduardo A. Aleman, Commission on the UIT’s Form S–6. Hence,
Assistant Secretary. respondents only file Form N–8B–2 for their initial Extension:
registration statement and not for post-effective Rule 24b–1; SEC File No. 270–205; OMB
[FR Doc. 2018–15848 Filed 7–24–18; 8:45 am] Control No. 3235–0194
amendments.
BILLING CODE 8011–01–P 2 In 2015 the Commission received 3 filings,
while in 2016 and 2017, the Commission received
Notice is hereby given that pursuant
0 filings, respectively. The cumulative 3-year to the Paperwork Reduction Act of 1995
22 17 CFR 200.30–3(a)(12) and (59). average is, therefore, 1 filing per year. (44 U.S.C. 3501 et seq.), the Securities
VerDate Sep<11>2014 18:50 Jul 24, 2018 Jkt 244001 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 E:\FR\FM\25JYN1.SGM 25JYN1](https://thefederalregister.org/doc/83_FR_35434/page/5.svg)
Document Created: 2018-07-25 00:44:10
Document Modified: 2018-07-25 00:44:10
| 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 35291 |
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