83 FR 46976 - Self-Regulatory Organizations; National Futures Association; Notice of Filing and Immediate Effectiveness of Proposed Change to the Interpretive Notice to National Futures Association Compliance Rule 2-30(b): Risk Disclosure Statement for Security Futures Contracts

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 180 (September 17, 2018)

Page Range		46976-46977
FR Document		2018-20075
Federal Register, Volume 83 Issue 180 (Monday, September 17, 2018)
[Federal Register Volume 83, Number 180 (Monday, September 17, 2018)]
[Notices]
[Pages 46976-46977]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-20075]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84076; File No. SR-NFA-2018-04]


Self-Regulatory Organizations; National Futures Association; 
Notice of Filing and Immediate Effectiveness of Proposed Change to the 
Interpretive Notice to National Futures Association Compliance Rule 2-
30(b): Risk Disclosure Statement for Security Futures Contracts

September 11, 2018.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-7 thereunder,\2\ notice is hereby 
given that on August 31, 2018, National Futures Association (``NFA'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change described in Items I, II, and 
III below, which Items have been prepared by NFA. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 17 CFR 240.19b-7.
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    On August 21, 2018, NFA also filed this proposed rule change with 
the Commodity Futures Trading Commission (``CFTC'') and requested that 
the CFTC make a determination that review of the proposed rule change 
of NFA is not necessary.\3\ The CFTC has not yet made such 
determination.
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    \3\ See Letter dated August 21, 2018 from Carol A. Wooding, 
NFA's Vice President and General Counsel to Christopher J. 
Kirkpatrick, Office of the Secretariat, CFTC.
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I. Self-Regulatory Organization's Description and Text of the Proposed 
Rule Change

    NFA's Interpretive Notice 9050 entitled ``NFA Compliance Rule 2-
30(b): Risk Disclosure Statement for Security Futures Contracts'' 
(``Interpretive Notice 9050'') requires NFA Members and Associates 
(``Member'') who are registered as brokers or dealers under Section 
15(b)(11) of the Exchange Act \4\ to provide a disclosure statement for 
security futures products (``SFPs'') to a customer at or before the 
time the Member approves the account to trade SFPs. The risk disclosure 
statement contains, among other things, a section on Securities 
Investor Protection Corporation (``SIPC'') coverage for cash 
protection. NFA is amending Section 6.1 of Interpretive Notice 9050 to 
reflect that SIPC coverage for cash protection has increased from 
$100,000 to $250,000.
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    \4\ 15 U.S.C. 78o(b)(11).
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    NFA is also amending Interpretive Notice 9050 to incorporate one 
other non-substantive change. The text of the proposed rule changes to 
Interpretive Notice 9050 is found in Exhibit 4.

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

    In its filing with the Commission, NFA 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. NFA 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
    Section 15A(k) of the Exchange Act \5\ makes NFA a national 
securities association for the limited purpose of regulating the 
activities of Members who are registered as brokers or dealers in SFPs 
under Section 15(b)(11) of the Exchange Act.\6\ NFA's Interpretive 
Notice 9050 applies to all Members who meet the criteria outlined in 
Interpretive Notice 9050, including those that are registered as 
security futures brokers or dealers under Section 15(b)(11) of the 
Exchange Act.\7\
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    \5\ 15 U.S.C. 78o-3(k).
    \6\ 15 U.S.C. 78o(b)(11).
    \7\ Id.
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    The risk disclosure statement for SFPs is a uniform statement that 
was jointly developed in 2002 by NFA, FINRA, and a number of securities 
and futures exchanges. SEC staff recently contacted NFA and requested a 
change to Section 6.1 of the Risk Disclosure Statement to reflect that 
SIPC coverage for cash protection has increased from $100,000 to 
$250,000. Accordingly, NFA's amendment to Section 6.1 of Interpretive 
Notice 9050 is a minor amendment to correct the limit of SIPC cash 
protection.
    NFA is also amending Section 5.2 of Interpretive Notice 9050 to 
make a stylistic change to delete a set of quotation marks around the 
qualifying abbreviation for National Securities Clearing Corporation--
NSCC. FINRA staff notified NFA that it also intends to make the same 
modifications to its risk disclosure statement to cover its members.
    Amendments to NFA Interpretive Notice 9050 were previously filed 
with the SEC in SR-NFA-2002-05, Exchange Act Release No. 34-46613 (Oct. 
7, 2002), 67 FR 64176 (Oct. 17, 2002); SR-NFA-2002-06, Exchange Act 
Release No. 34-47150 (Jan. 9, 2003), 68 FR 2381 (Jan. 16, 2003); SR-
NFA-2007-07, Exchange Act Release No. 34-57142 (Jan. 14, 2008), 73 FR 
3502 (Jan. 18, 2008); SR-NFA-2010-02, Exchange Act Release No. 34-62624 
(Aug. 2, 2010), 75 FR 47666 (Aug. 6, 2010); SR-NFA-2010-03, Exchange 
Act Release No. 34-62651 (Aug. 4, 2010), 75 FR 48393 (Aug. 10, 2010); 
and [sic] SR-NFA-2014-02, Exchange Act Release No. 34-71980 (Apr. 21, 
2014), 79 FR 23027 (Apr. 25, 2014); and SR-NFA-2018-03, Exchange Act 
Release No. 34-83589 (July 3, 2018), 83 FR 31804 (July 9, 2018).
2. Statutory Basis
    The proposed rule change is authorized by, and consistent with, 
Section 15A(k)(2)(B) of the Exchange Act.\8\ That Section requires NFA 
to have rules that are designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
and, in general, to

[[Page 46977]]

protect investors and the public interest, in connection with SFPs. The 
proposed rule change accomplishes this by requiring Members to provide 
customers trading in SFPs with a risk disclosure statement which 
correctly reflects the SIPC coverage for cash protection. Accordingly, 
NFA is amending Interpretive Notice 9050 to update the risk disclosure 
statement to reflect that SIPC coverage for cash protection has 
increased from $100,000 to $250,000. Further, NFA is amending 
Interpretive Notice 9050 to reflect one other non-substantive stylistic 
change. This proposal is not designed to regulate, by virtue of any 
authority conferred by the Exchange Act, matters not related to the 
purposes of the Exchange Act or the administration of the association.
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    \8\ 15 U.S.C. 78o-3(k)(2)(B).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NFA 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. The proposed change would not 
impose any additional reporting requirements or costs on Members.

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

    NFA did not publish the rule change to the membership for comment. 
NFA did not receive comment letters concerning the rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    On August 21, 2018, NFA requested that the CFTC make a 
determination that review of the proposed rule change of NFA is not 
necessary. The CFTC has not yet made such determination. At any time 
within 60 days of the date of effectiveness of the proposed rule 
change, the Commission, after consultation with the CFTC, may summarily 
abrogate the proposed rule change and require that the proposed rule 
change be refiled in accordance with the provisions of Section 19(b)(1) 
of the Exchange Act.\9\
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    \9\ 15 U.S.C. 78s(b)(1).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NFA-2018-04 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-NFA-2018-04. 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 a.m. and 3 
p.m. Copies of the filing also will be available for inspection and 
copying at the principal office of NFA. 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-NFA-
2018-04 and should be submitted on or before October 9, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Eduardo A. Aleman,
Assistant Secretary.
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    \10\ 17 CFR 200.30-3(a)(73).
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[FR Doc. 2018-20075 Filed 9-14-18; 8:45 am]
 BILLING CODE 8011-01-P
46976 Federal Register / Vol. 83, No. 180 / Monday, September 17, 2018 / Notices

securities exchange.8 In particular, the Commodity Futures Trading regulating the activities of Members
Commission finds that the proposed Commission (‘‘CFTC’’) and requested who are registered as brokers or dealers
rule change is consistent with Section that the CFTC make a determination in SFPs under Section 15(b)(11) of the
6(b)(2) of the Act,9 which states that that review of the proposed rule change Exchange Act.6 NFA’s Interpretive
‘‘any registered broker or dealer or of NFA is not necessary.3 The CFTC has Notice 9050 applies to all Members who
natural person associated with a not yet made such determination. meet the criteria outlined in Interpretive
registered broker or dealer may become Notice 9050, including those that are
a member of such exchange and any I. Self-Regulatory Organization’s registered as security futures brokers or
person may become associated with a Description and Text of the Proposed dealers under Section 15(b)(11) of the
member thereof.’’ The rule, as revised, Rule Change Exchange Act.7
is consistent with the statutory NFA’s Interpretive Notice 9050 The risk disclosure statement for SFPs
requirement. Thus, the Commission entitled ‘‘NFA Compliance Rule 2– is a uniform statement that was jointly
finds that the proposed amendment to 30(b): Risk Disclosure Statement for developed in 2002 by NFA, FINRA, and
Rule 2 is consistent with the Act. Security Futures Contracts’’ a number of securities and futures
(‘‘Interpretive Notice 9050’’) requires exchanges. SEC staff recently contacted
IV. Conclusion
NFA Members and Associates NFA and requested a change to Section
It is therefor ordered, pursuant to (‘‘Member’’) who are registered as 6.1 of the Risk Disclosure Statement to
Section 19(b)(2) of the Act,10 that the brokers or dealers under Section reflect that SIPC coverage for cash
proposed rule change (SR–NYSE–2018– 15(b)(11) of the Exchange Act 4 to protection has increased from $100,000
33) be, and hereby is, approved. provide a disclosure statement for to $250,000. Accordingly, NFA’s
For the Commission, by the Division of security futures products (‘‘SFPs’’) to a amendment to Section 6.1 of
Trading and Markets, pursuant to delegated customer at or before the time the Interpretive Notice 9050 is a minor
authority.11 Member approves the account to trade amendment to correct the limit of SIPC
Eduardo A. Aleman, SFPs. The risk disclosure statement cash protection.
Assistant Secretary. contains, among other things, a section NFA is also amending Section 5.2 of
[FR Doc. 2018–20076 Filed 9–14–18; 8:45 am] on Securities Investor Protection Interpretive Notice 9050 to make a
BILLING CODE 8011–01–P Corporation (‘‘SIPC’’) coverage for cash stylistic change to delete a set of
protection. NFA is amending Section quotation marks around the qualifying
6.1 of Interpretive Notice 9050 to reflect abbreviation for National Securities
SECURITIES AND EXCHANGE that SIPC coverage for cash protection Clearing Corporation—NSCC. FINRA
COMMISSION has increased from $100,000 to staff notified NFA that it also intends to
$250,000. make the same modifications to its risk
[Release No. 34–84076; File No. SR–NFA–
2018–04] NFA is also amending Interpretive disclosure statement to cover its
Notice 9050 to incorporate one other members.
Self-Regulatory Organizations; non-substantive change. The text of the Amendments to NFA Interpretive
National Futures Association; Notice proposed rule changes to Interpretive Notice 9050 were previously filed with
of Filing and Immediate Effectiveness Notice 9050 is found in Exhibit 4. the SEC in SR–NFA–2002–05, Exchange
of Proposed Change to the Interpretive Act Release No. 34–46613 (Oct. 7, 2002),
II. Self-Regulatory Organization’s 67 FR 64176 (Oct. 17, 2002); SR–NFA–
Notice to National Futures Association Statement of the Purpose of, and
Compliance Rule 2–30(b): Risk 2002–06, Exchange Act Release No. 34–
Statutory Basis for the Proposed Rule 47150 (Jan. 9, 2003), 68 FR 2381 (Jan.
Disclosure Statement for Security
Change 16, 2003); SR–NFA–2007–07, Exchange
Futures Contracts
In its filing with the Commission, Act Release No. 34–57142 (Jan. 14,
September 11, 2018. NFA included statements concerning 2008), 73 FR 3502 (Jan. 18, 2008); SR–
Pursuant to Section 19(b)(7) of the the purpose of and basis for the NFA–2010–02, Exchange Act Release
Securities Exchange Act of 1934 proposed rule change and discussed any No. 34–62624 (Aug. 2, 2010), 75 FR
(‘‘Exchange Act’’),1 and Rule 19b–7 comments it received on the proposed 47666 (Aug. 6, 2010); SR–NFA–2010–
thereunder,2 notice is hereby given that rule change. The text of these statements 03, Exchange Act Release No. 34–62651
on August 31, 2018, National Futures may be examined at the places specified (Aug. 4, 2010), 75 FR 48393 (Aug. 10,
Association (‘‘NFA’’) filed with the in Item IV below. NFA has prepared 2010); and [sic] SR–NFA–2014–02,
Securities and Exchange Commission summaries, set forth in sections A, B, Exchange Act Release No. 34–71980
(‘‘SEC’’ or ‘‘Commission’’) the proposed and C below, of the most significant (Apr. 21, 2014), 79 FR 23027 (Apr. 25,
rule change described in Items I, II, and aspects of such statements. 2014); and SR–NFA–2018–03, Exchange
III below, which Items have been Act Release No. 34–83589 (July 3, 2018),
prepared by NFA. The Commission is A. Self-Regulatory Organization’s
83 FR 31804 (July 9, 2018).
publishing this notice to solicit Statement of the Purpose of, and
comments on the proposed rule change Statutory Basis for the Proposed Rule 2. Statutory Basis
from interested persons. Change The proposed rule change is
On August 21, 2018, NFA also filed 1. Purpose authorized by, and consistent with,
this proposed rule change with the Section 15A(k)(2)(B) of the Exchange
Section 15A(k) of the Exchange Act 5 Act.8 That Section requires NFA to have
8 In approving this proposed rule change, the makes NFA a national securities rules that are designed to prevent
daltland on DSKBBV9HB2PROD with NOTICES

Commission has considered the proposed rule’s association for the limited purpose of fraudulent and manipulative acts and
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f). 3 See Letter dated August 21, 2018 from Carol A.
practices, to promote just and equitable
9 15 U.S.C. 78f(b)(2).
Wooding, NFA’s Vice President and General principles of trade, and, in general, to
10 15 U.S.C. 78s(b)(2).
Counsel to Christopher J. Kirkpatrick, Office of the
11 17 CFR 200.30–3(a)(12). Secretariat, CFTC. 6 15 U.S.C. 78o(b)(11).
1 15 U.S.C. 78s(b)(7). 4 15 U.S.C. 78o(b)(11). 7 Id.
2 17 CFR 240.19b–7. 5 15 U.S.C. 78o–3(k). 8 15 U.S.C. 78o–3(k)(2)(B).

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Federal Register / Vol. 83, No. 180 / Monday, September 17, 2018 / Notices 46977

protect investors and the public interest, Electronic Comments SECURITIES AND EXCHANGE
in connection with SFPs. The proposed COMMISSION
rule change accomplishes this by • Use the Commission’s internet
requiring Members to provide customers comment form (http://www.sec.gov/ [Release No. 34–84097; File No. SR–NYSE–
trading in SFPs with a risk disclosure rules/sro.shtml); or 2018–40]
statement which correctly reflects the • Send an email to rule-comments@
SIPC coverage for cash protection. sec.gov. Please include File Number SR– Self-Regulatory Organizations; New
Accordingly, NFA is amending NFA–2018–04 on the subject line. York Stock Exchange LLC; Notice of
Interpretive Notice 9050 to update the Filing and Immediate Effectiveness of
risk disclosure statement to reflect that Paper Comments Proposed Rule Change To Amend the
SIPC coverage for cash protection has NYSE Price List
• Send paper comments in triplicate
increased from $100,000 to $250,000. September 12, 2018.
to Secretary, Securities and Exchange
Further, NFA is amending Interpretive
Commission, 100 F Street NE, Pursuant to Section 19(b)(1)1 of the
Notice 9050 to reflect one other non-
Washington, DC 20549–1090. Securities Exchange Act of 1934 (the
substantive stylistic change. This
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
proposal is not designed to regulate, by All submissions should refer to File notice is hereby given that, on August
virtue of any authority conferred by the Number SR–NFA–2018–04. This file 31, 2018, New York Stock Exchange
Exchange Act, matters not related to the number should be included on the LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
purposes of the Exchange Act or the subject line if email is used. To help the with the Securities and Exchange
administration of the association. Commission process and review your Commission (the ‘‘Commission’’) the
B. Self-Regulatory Organization’s comments more efficiently, please use proposed rule change as described in
Statement on Burden on Competition only one method. The Commission will Items I, II, and III below, which Items
NFA does not believe that the post all comments on the Commission’s have been prepared by the self-
proposed rule change will result in any internet website (http://www.sec.gov/ regulatory organization. The
burden on competition that is not rules/sro.shtml). Copies of the Commission is publishing this notice to
necessary or appropriate in furtherance submission, all subsequent solicit comments on the proposed rule
of the purposes of the Act. The amendments, all written statements change from interested persons.
proposed change would not impose any with respect to the proposed rule I. Self-Regulatory Organization’s
additional reporting requirements or change that are filed with the Statement of the Terms of Substance of
costs on Members. Commission, and all written the Proposed Rule Change
communications relating to the
C. Self-Regulatory Organization’s The Exchange to amend its Price List
proposed rule change between the
Statement on Comments on the to (1) modify the Tier 1 and Tier 3
Commission and any person, other than
Proposed Rule Change Received From Adding Credit requirements; (2) amend
Members, Participants, or Others those that may be withheld from the
its routing fees; (3) introduce a new
public in accordance with the
NFA did not publish the rule change incremental step up tier for
provisions of 5 U.S.C. 552, will be Supplemental Liquidity Providers
to the membership for comment. NFA available for website viewing and
did not receive comment letters (‘‘SLP’’); and (4) modify the Tier 1 and
printing in the Commission’s Public Tier 2 Adding Tier and SLP Provide
concerning the rule change.
Reference Room, 100 F Street NE, Tier requirements for securities traded
III. Date of Effectiveness of the Washington, DC 20549, on official pursuant to Unlisted Trading Privileges
Proposed Rule Change and Timing for business days between the hours of 10 (‘‘UTP’’) (Tapes B and C). The Exchange
Commission Action a.m. and 3 p.m. Copies of the filing also proposes to implement these changes to
On August 21, 2018, NFA requested will be available for inspection and its Price List effective September 4,
that the CFTC make a determination copying at the principal office of NFA. 2018. The proposed rule change is
that review of the proposed rule change All comments received will be posted available on the Exchange’s website at
of NFA is not necessary. The CFTC has without change. Persons submitting www.nyse.com, at the principal office of
not yet made such determination. At comments are cautioned that we do not the Exchange, and at the Commission’s
any time within 60 days of the date of redact or edit personal identifying Public Reference Room.
effectiveness of the proposed rule information from comment submissions. II. Self-Regulatory Organization’s
change, the Commission, after You should submit only information Statement of the Purpose of, and
consultation with the CFTC, may that you wish to make available Statutory Basis for, the Proposed Rule
summarily abrogate the proposed rule publicly. All submissions should refer Change
change and require that the proposed to File Number SR–NFA–2018–04 and
rule change be refiled in accordance should be submitted on or before In its filing with the Commission, the
with the provisions of Section 19(b)(1) October 9, 2018. self-regulatory organization included
of the Exchange Act.9 statements concerning the purpose of,
For the Commission, by the Division of and basis for, the proposed rule change
IV. Solicitation of Comments Trading and Markets, pursuant to delegated and discussed any comments it received
Interested persons are invited to authority.10 on the proposed rule change. The text
submit written data, views, and Eduardo A. Aleman, of those statements may be examined at
daltland on DSKBBV9HB2PROD with NOTICES

arguments concerning the foregoing, Assistant Secretary. the places specified in Item IV below.
including whether the proposed rule [FR Doc. 2018–20075 Filed 9–14–18; 8:45 am] The Exchange has prepared summaries,
change is consistent with the Act. BILLING CODE 8011–01–P
set forth in sections A, B, and C below,
Comments may be submitted by any of
the following methods: 1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
9 15 U.S.C. 78s(b)(1). 10 17 CFR 200.30–3(a)(73). 3 17 CFR 240.19b–4.

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Document Created: 2018-09-15 01:38:03
Document Modified: 2018-09-15 01:38:03
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 46976