83 FR 37569 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Withdrawal of Proposed Rule Change To Amend Rule 4702(b)(14) To Establish a Price Improvement Only Variation on the Midpoint Extended Life Order

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 148 (August 1, 2018)

Page Range		37569-37570
FR Document		2018-16425

Federal Register, Volume 83 Issue 148 (Wednesday, August 1, 2018)

[Federal Register Volume 83, Number 148 (Wednesday, August 1, 2018)]
[Notices]
[Pages 37569-37570]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-16425]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83721; File No. SR-NASDAQ-2018-038]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Withdrawal of Proposed Rule Change To Amend Rule 4702(b)(14) 
To Establish a Price Improvement Only Variation on the Midpoint 
Extended Life Order

July 26, 2018.
    On May 4, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to establish a price improvement only variation on 
the Midpoint Extended Life Order. The proposed rule change was 
published for comment in the Federal Register on May 23, 2018.\3\ On 
July 5, 2018, pursuant to Section 19(b)(2) of the Act,\4\ the 
Commission designated a longer period within which to approve the 
proposed rule change, disapprove the proposed rule change, or institute 
proceedings to determine whether to approve or disapprove the proposed 
rule change.\5\ The Commission received one comment letter on the 
proposed rule change \6\ and one response letter from the Exchange.\7\ 
On July 23, 2018, the Exchange withdrew

[[Page 37570]]

the proposed rule change (SR-NASDAQ-2018-038).
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 83272 (May 17, 
2018), 83 FR 23978.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 83595, 83 FR 32158 
(July 11, 2018). The Commission designated August 21, 2018 as the 
date by which the Commission shall approve or disapprove, or 
institute proceedings to determine whether to approve or disapprove, 
the proposed rule change.
    \6\ See Letter to Brent J. Fields, Secretary, Commission, from 
Sal Arnuk and Joe Saluzzi, Partners, Co-Founders, and Co-Heads of 
Equity Trading, Themis Trading LLC, dated June 12, 2018.
    \7\ See Letter to Brent J. Fields, Secretary, Commission, from 
Brett M. Kitt, Senior Associate General Counsel, Nasdaq, dated July 
10, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-16425 Filed 7-31-18; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices 37569

its investment objective and to equitize the self-regulatory organization should be submitted on or before
cash in the short term. consents, the Commission will: August 22, 2018.
With respect to any Fund holdings of (A) By order approve or disapprove
For the Commission, by the Division of
exchange-traded or OTC equity the proposed rule change, or
Trading and Markets, pursuant to delegated
securities issued upon conversion of (B) institute proceedings to determine
authority.36
fixed income convertible securities and whether the proposed rule change
Work Out Securities, such securities should be disapproved. Robert W. Errett,
will not exceed 10% and 5%, Deputy Secretary.
IV. Solicitation of Comments
respectively, of the Fund’s total assets. [FR Doc. 2018–16424 Filed 7–31–18; 8:45 am]
The Adviser and Sub-Adviser represent Interested persons are invited to BILLING CODE 8011–01–P
that the Fund generally will not actively submit written data, views, and
invest in equity securities issued upon arguments concerning the foregoing,
conversion of fixed income convertible including whether the proposed rule SECURITIES AND EXCHANGE
securities or Work Out Securities, but change is consistent with the Act. COMMISSION
may, at times, receive a distribution of Comments may be submitted by any of
such securities in connection with the the following methods:
[Release No. 34–83721; File No. SR–
Fund’s holdings in other securities. Electronic Comments NASDAQ–2018–038]
Therefore, the Fund’s holdings in equity
• Use the Commission’s internet
securities issued upon conversion of Self-Regulatory Organizations; The
comment form (http://www.sec.gov/
fixed income convertible securities and Nasdaq Stock Market LLC; Notice of
rules/sro.shtml); or
Work Out Securities generally would • Send an email to rule-comments@ Withdrawal of Proposed Rule Change
not be acquired as the result of the sec.gov. Please include File Number SR– To Amend Rule 4702(b)(14) To
Fund’s voluntary investment decisions. NYSEArca–2018–43 on the subject line. Establish a Price Improvement Only
The proposed rule change is designed Variation on the Midpoint Extended
to perfect the mechanism of a free and Paper Comments Life Order
open market and, in general, to protect • Send paper comments in triplicate
investors and the public interest in that July 26, 2018.
to Secretary, Securities and Exchange
it will facilitate the listing and trading Commission, 100 F Street NE, On May 4, 2018, The Nasdaq Stock
of shares of an additional type of Washington, DC 20549–1090. Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
actively-managed exchange-traded All submissions should refer to File filed with the Securities and Exchange
product that will enhance competition Number SR–NYSEArca-2018–43. This Commission (‘‘Commission’’), pursuant
among market participants, to the file number should be included on the to Section 19(b)(1) of the Securities
benefit of investors and the marketplace. subject line if email is used. To help the Exchange Act of 1934 (‘‘Act’’) 1 and Rule
B. Self-Regulatory Organization’s Commission process and review your 19b–4 thereunder,2 a proposed rule
Statement on Burden on Competition comments more efficiently, please use change to establish a price improvement
only one method. The Commission will only variation on the Midpoint
The Exchange does not believe that Extended Life Order. The proposed rule
the proposed rule change will impose post all comments on the Commission’s
internet website (http://www.sec.gov/ change was published for comment in
any burden on competition that is not the Federal Register on May 23, 2018.3
necessary or appropriate in furtherance rules/sro.shtml). Copies of the
submission, all subsequent On July 5, 2018, pursuant to Section
of the purpose of the Act. The Exchange 19(b)(2) of the Act,4 the Commission
notes that the proposed rule change will amendments, all written statements
with respect to the proposed rule designated a longer period within which
facilitate the listing and trading of an to approve the proposed rule change,
additional type of actively-managed change that are filed with the
Commission, and all written disapprove the proposed rule change, or
exchange-traded product that institute proceedings to determine
principally will hold fixed income communications relating to the
proposed rule change between the whether to approve or disapprove the
securities and that will enhance proposed rule change.5 The Commission
competition among market participants, Commission and any person, other than
those that may be withheld from the received one comment letter on the
to the benefit of investors and the proposed rule change 6 and one
marketplace. public in accordance with the
provisions of 5 U.S.C. 552, will be response letter from the Exchange.7 On
C. Self-Regulatory Organization’s available for website viewing and July 23, 2018, the Exchange withdrew
Statement on Comments on the printing in the Commission’s Public
Proposed Rule Change Received From Reference Room, 100 F Street NE, 36 17 CFR 200.30–3(a)(12).
Members, Participants, or Others Washington, DC 20549 on official 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
No written comments were solicited business days between the hours of 3 See Securities Exchange Act Release No. 83272
or received with respect to the proposed 10:00 a.m. and 3:00 p.m. Copies of the (May 17, 2018), 83 FR 23978.
rule change. filing also will be available for 4 15 U.S.C. 78s(b)(2).
inspection and copying at the principal 5 See Securities Exchange Act Release No. 83595,
III. Date of Effectiveness of the office of the Exchange. All comments 83 FR 32158 (July 11, 2018). The Commission
Proposed Rule Change and Timing for received will be posted without change. designated August 21, 2018 as the date by which
Commission Action Persons submitting comments are the Commission shall approve or disapprove, or
sradovich on DSK3GMQ082PROD with NOTICES

institute proceedings to determine whether to
Within 45 days of the date of cautioned that we do not redact or edit approve or disapprove, the proposed rule change.
publication of this notice in the Federal personal identifying information from 6 See Letter to Brent J. Fields, Secretary,

Register or within such longer period comment submissions. You should Commission, from Sal Arnuk and Joe Saluzzi,
up to 90 days (i) as the Commission may submit only information that you wish Partners, Co-Founders, and Co-Heads of Equity
Trading, Themis Trading LLC, dated June 12, 2018.
designate if it finds such longer period to make available publicly. All 7 See Letter to Brent J. Fields, Secretary,
to be appropriate and publishes its submissions should refer to File Commission, from Brett M. Kitt, Senior Associate
reasons for so finding or (ii) as to which Number SR–NYSEArca–2018–43 and General Counsel, Nasdaq, dated July 10, 2018.

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37570 Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices

the proposed rule change (SR– Member Groups that would potentially Amendment No. 2 to the Advance
NASDAQ–2018–038). cause the largest aggregate credit Notice.7 The Commission received five
For the Commission, by the Division of exposure for OCC in extreme but comment letters in support of the
Trading and Markets, pursuant to delegated plausible market conditions (i.e., adopt proposal contained in the Advance
authority.8 a ‘‘Cover 2 Standard’’ for sizing the Notice.8 This publication serves as
Robert W. Errett, Clearing Fund); notice of no objection to the Advance
Deputy Secretary. (3) adopt a new risk tolerance for OCC Notice.
[FR Doc. 2018–16425 Filed 7–31–18; 8:45 am]
to cover a 1-in-50 year hypothetical
II. Background
BILLING CODE 8011–01–P
market event at a 99.5% confidence
level over a two-year look-back period; The Advance Notice concerns
(4) adopt a new Clearing Fund and proposed changes to OCC’s By-Laws 9
SECURITIES AND EXCHANGE stress testing methodology, which and Rules,10 the formalization of the
COMMISSION would be underpinned by a new substantially new Policy, and the
scenario-based one-factor risk model adoption of OCC’s new Methodology
[Release No. 34–83714; File No. SR–OCC– stress testing approach, as detailed in Description.11 According to OCC, the
2018–803] changes comprising the Advance Notice
the newly proposed Policy and
Methodology Description; are primarily designed to enhance
Self-Regulatory Organizations; The
(5) document governance, monitoring, OCC’s overall resiliency, particularly
Options Clearing Corporation; Notice
and review processes related to Clearing with respect to the level of OCC’s pre-
of No Objection to Advance Notice, as
Fund and stress testing; funded financial resources.12
Modified by Amendments No. 1 and 2,
Concerning Proposed Changes to the (6) provide for certain anti-procyclical
Options Clearing Corporation’s Stress limitations on the reduction in Clearing Filing’’). On May 30, 2018, OCC also filed a related
Fund size from month to month; proposed rule change (SR–OCC–2018–008) with the
Testing and Clearing Fund Commission pursuant to Section 19(b)(1) of the
Methodology (7) increase the minimum Clearing Exchange Act and Rule 19b–4 thereunder, seeking
Fund contribution requirement for approval of changes to its rules necessary to
July 26, 2018. Clearing Members to $500,000; implement the Advance Notice (‘‘Proposed Rule
(8) modify OCC’s allocation weighting Change’’). 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b–
I. Introduction 4, respectively. The Proposed Rule Change was
methodology for Clearing Fund published in the Federal Register on June 15, 2018.
On May 30, 2018, The Options contributions; Securities Exchange Act Release No. 83406 (Jun. 11,
Clearing Corporation (‘‘OCC’’) filed with (9) reduce from five to two business 2018), 83 FR 28018 (Jun. 15, 2018).
the Securities and Exchange days the timeframe within which 7 In Amendment No. 2, OCC made three non-

Commission (‘‘Commission’’) advance substantive changes to the proposal. Specifically,
Clearing Members are required to fund OCC (1) updated a cross-reference in Article VI,
notice SR–OCC–2018–803 (‘‘Advance Clearing Fund deficits due to monthly Section 27 of the OCC By-Laws to reflect the
Notice’’) pursuant to Section 806(e)(1) of or intra-month resizing or due to Rule relocation of OCC’s clearing fund-related rules, (2)
Title VIII of the Dodd-Frank Wall Street amendments; added an Interpretation and Policy to proposed
Reform and Consumer Protection Act, Rule 1001 to clarify the applicability of the 5
(10) provide additional clarity in percent month-over-month limitation in the
entitled Payment, Clearing and OCC’s Rules regarding certain anti- reduction of clearing fund size is not intended to
Settlement Supervision Act of 2010 procyclicality measures in OCC’s apply to the initial changes in to OCC’s clearing
(‘‘Act’’) 1 and Rule 19b–4(n)(1)(i) 2 under margin model; and fund sizing resulting from implementation of the
the Securities Exchange Act of 1934 proposed methodology, and (3) clarified an
(11) make a number of other non- implementation date of September 1, 2018 for the
(‘‘Exchange Act’’) 3 to propose changes substantive clarifying, conforming, and proposed changes in the filing.
to OCC’s By-Laws and Rules, the organizational changes to OCC’s By- 8 See letter from Andrej Bolkovic, CEO, ABN
formalization of a substantially new Laws, Rules, Collateral Risk AMRO Clearing Corporation LLC (‘‘AACC’’), dated
Clearing Fund Methodology Policy Management Policy, Default June 26, 2018, to Brent Fields, Secretary,
(‘‘Policy’’), and the adoption of a Commission (AACC Letter I) ; letter from Chris
Management Policy, and filed Concannon, President and COO, Cboe Global
document describing OCC’s new procedures, including retiring OCC’s Markets (‘‘CBOE’’), dated July 6, 2018, to Brent
Clearing Fund and stress testing existing Clearing Fund Intra-Month Re- Fields, Secretary, Commission (CBOE Letter I);
methodology (‘‘Methodology sizing Procedure, Financial Resources letter from Matthew R. Scott, President, Merrill
Description’’).4 The proposed changes Lynch Professional Clearing Corp. (‘‘MLPRO’’),
Monitoring and Call Procedure (‘‘FRMC dated July 6, 2018, to Brent J. Fields, Secretary,
are primarily designed to enhance Procedure’’), and Monthly Clearing Commission (MLPRO Letter I); letter from Kurt
OCC’s overall resiliency, particularly Fund Sizing Procedure, as these Eckert, Partner, Wolverine Execution Services
with respect to the level of OCC’s pre- procedures would no longer be relevant (‘‘WEX’’), dated July 12, 2018, to Brent Fields,
funded financial resources. Specifically, Secretary, Commission (WEX Letter I); and letter
to OCC’s proposed Clearing Fund and from Mark Dehnert, Managing Director, Goldman
the proposed changes would: stress testing methodology and would Sachs & Co. LLC (‘‘GS’’), dated July 17, 2018, to
(1) Reorganize, restate, and be replaced by the proposed Rules, Brent J. Fields, Secretary, Commission (GS Letter I),
consolidate the provisions of OCC’s By- Policy, and Methodology Description available at https://www.sec.gov/comments/sr-occ-
Laws and Rules relating to the Clearing 2018-008/occ2018008.htm.
described herein. Since the proposal contained in the Advance
Fund into a newly revised Chapter X of On June 7, 2018, OCC filed Notice was also filed as a proposed rule change, all
OCC’s Rules; Amendment No. 1 to the Advance public comments received on the proposal are
(2) modify the coverage level of OCC’s Notice.5 The Advance Notice, as considered regardless of whether the comments are
Clearing Fund sizing requirement to amended, was published for public submitted on the proposed rule change or the
sradovich on DSK3GMQ082PROD with NOTICES

protect OCC against losses stemming Advance Notice.
comment in the Federal Register on July 9 OCC’s By-Laws are available at https://
from the default of the two Clearing 6, 2018.6 On July 11, 2018, OCC filed www.theocc.com/components/docs/legal/rules_
and_bylaws/occ_bylaws.pdf.
8 17 CFR 200.30–3(a)(12). 10 OCC’s Rules are available at https://
5 In Amendment No. 1, OCC corrected formatting
1 12 U.S.C. 5465(e)(1). errors in Exhibits 5A and 5B without changing the www.theocc.com/components/docs/legal/rules_
2 17 CFR 240.19b–4(n)(1)(i). and_bylaws/occ_rules.pdf.
substance of the proposed rule change.
3 15 U.S.C. 78a et seq. 6 Securities Exchange Act Release No. 83561 (Jun. 11 See Notice of Filing, 83 FR at 31594.
4 See Notice of Filing infra note 6, at 83 FR 31594. 29, 2018), 83 FR 31594 (Jul. 6, 2018) (‘‘Notice of 12 See id.

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Document Created: 2018-08-01 01:23:11
Document Modified: 2018-08-01 01:23:11

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
FR Citation		83 FR 37569