83 FR 50718 - Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rule 7600(a)(4) (Qualified Open Outcry Orders-Floor Crossing)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 195 (October 9, 2018)

Page Range		50718-50720
FR Document		2018-21783
Federal Register, Volume 83 Issue 195 (Tuesday, October 9, 2018)
[Federal Register Volume 83, Number 195 (Tuesday, October 9, 2018)]
[Notices]
[Pages 50718-50720]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-21783]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84340; File No. SR-BOX-2018-30]


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rule 
7600(a)(4) (Qualified Open Outcry Orders--Floor Crossing)

October 2, 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 September 20, 2018, BOX Exchange LLC (the ``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 self-regulatory organization. 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)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend BOX Rule 7600(a)(4) (Qualified Open 
Outcry Orders--Floor Crossing). The text of the proposed rule change is 
available from the principal office of the Exchange, at the 
Commission's Public Reference Room and also on the Exchange's internet 
website at http://boxoptions.com.

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 self-regulatory organization 
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 self-regulatory organization 
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 Exchange proposes to amend Rule 7600(a)(4) to provide the 
ability for the Exchange to determine the applicable number of legs for 
a Complex Qualified Open Outcry Orders (``Complex QOO Order'').\3\ 
Currently, Complex QOO Orders are limited to a maximum of four (4) legs 
on the BOX Trading Floor. The Exchange proposes to have the applicable 
number of legs now be determined by the Exchange.\4\ The Exchange notes 
that only orders that meet the definition of a Complex Order \5\ are 
allowed to trade on the BOX Trading Floor.\6\ Any orders that are 
entered into the system as a Complex Order on the BOX Trading Floor 
that do not meet the definition of a Complex Order will be rejected.
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    \3\ A QOO Order is a two-sided order that is used by Floor 
Brokers to execute transactions from the Trading Floor. See Rule 
7600.
    \4\ The Exchange notes that the number of legs determined by the 
Exchange will apply to all classes. The Exchange also notes that the 
proposal discussed herein is not making any changes to the priority 
rules for Complex Orders.
    \5\ The term ``Complex Order'' means any order involving the 
simultaneous purchase and/or sale of two or more different options 
series in the same underlying security, for the same account, in a 
ratio that is equal to or greater than one-to-three (.333) and less 
than or equal to three-to-one (3.00) and for the purpose of 
executing a particular investment strategy. See BOX Rule 7240(a)(7).
    \6\ On the Trading Floor, a Floor Broker or such Floor Broker's 
employee shall, contemporaneously upon receipt of an order, and 
prior to announcement of such an order in the trading crowd, record 
all options orders represented by such Floor Broker onto the Floor 
Broker's order entry mechanism. See Rule 7580(e)(1).
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    The Exchange will inform Participants in advance of any change to 
the number of legs via Informational Circular. The Exchange notes that 
another exchange in the industry has similar rules in place which 
provide flexibility in determining the maximum number of legs for 
complex orders at their respective exchange.\7\
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    \7\ See Cboe Exchange Inc. (``Cboe'') Rule 6.53.02. Cboe's rule 
states that ``[c]omplex orders of twelve (12) or less must be 
entered on a single order ticket at time of systemization. If 
permitted by the Exchange (which the Exchange will announce by 
Regulatory Circular), complex orders of more than twelve (12) legs 
may be split across multiple order tickets . . .'' BOX believes that 
this is similar to the proposal discussed herein. BOX's reading of 
Cboe's rule suggests that Cboe may determine the applicable number 
of legs for complex orders on their respective trading floor. As 
such, the Exchange believes that the proposed change is similar to 
the Cboe rule cited above. BOX does note, however, that [sic] is not 
proposing a twelve leg maximum but rather that the Exchange be 
responsible for determining the applicable number of legs for 
Complex Orders on the BOX Trading Floor. Further, the Exchange will 
communicate to Participants in advance of any change to the 
applicable number of legs via Informational Circular. See also EDGX 
Exchange, Inc (``EDGX'') Rule 21.20(a)(5). The Exchange notes that 
EDGX is an electronic exchange and as such, its rules apply to 
electronic trading only.

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[[Page 50719]]

    The Exchange also proposes to correct the location of a misplaced 
comma in Rule 7600(a)(4). Rule 7600(a)(4), as amended, will make clear 
that the cross reference to Rule 7240(a)(5) applies to Complex QOO 
Orders and not multi-leg orders. The Exchange believes that this 
correction will add clarity with regard to Complex QOO Orders traded on 
the BOX Trading Floor.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Securities Exchange Act of 1934 
(the ``Act''),\8\ in general, and Section 6(b)(5) of the Act,\9\ in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes the proposed rule change, 
which provides the Exchange with greater flexibility in determining the 
maximum number of legs for Complex QOO Orders, will benefit Floor 
Brokers and their customers by providing the potential for increased 
opportunities for executions on the BOX Trading Floor. Further, the 
Exchange believes that the proposed change will provide the potential 
for greater liquidity which should, in turn, benefit and protect 
investors and the public interest through the potential for greater 
volume of orders and executions on the BOX Trading Floor. As discussed 
above, the Exchange notes that another exchange has a similar rule 
which allows for the maximum number of legs for complex orders to be 
determined by the exchange.\10\
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    \10\ See supra, note 7.
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    Lastly, the Exchange believes that the proposed change to correct 
the inadvertent error in Rule 7600(a)(4) is reasonable as it will 
provide clarity with respect to QOO Orders on the Exchange.

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. In this regard and as indicated 
above, the Exchange notes that the proposed rule change is similar to 
the rules of another exchange.\11\ The Exchange does not believe the 
proposal will impose any burden on intermarket competition, as the 
proposed rule will allow BOX to compete with other options exchanges in 
the industry. The Exchange notes that it operates in a highly 
competitive market in which market participants can readily direct 
order flow to competing venues who offer similar functionality. Lastly, 
the Exchange believes that the proposed change will not impose a burden 
on intramarket competition as the proposal will apply to all 
Participants that wish to submit Complex Orders on the BOX Trading 
Floor.
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    \11\ Id.
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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 comments on the 
proposed rule change.

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

    Because the 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) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of 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.
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    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 necessary or 
appropriate in the public interest, for the protection of investors, or 
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 Comments

     Use 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-BOX-2018-30 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-BOX-2018-30. 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 such 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

[[Page 50720]]

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-BOX-2018-30, and should be 
submitted on or before October 30, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-21783 Filed 10-5-18; 8:45 am]
 BILLING CODE 8011-01-P
50718 Federal Register / Vol. 83, No. 195 / Tuesday, October 9, 2018 / Notices

19(b)(3)(A)(ii) of the Act.17 At any time received will be posted without change; statements concerning the purpose of,
within 60 days of the filing of the the Commission does not edit personal and basis for, the proposed rule change
proposed rule change, the Commission identifying information from and discussed any comments it received
summarily may temporarily suspend submissions. You should submit only on the proposed rule change. The text
such rule change if it appears to the information that you wish to make of these statements may be examined at
Commission that such action is: (i) available publicly. All submissions the places specified in Item IV below.
Necessary or appropriate in the public should refer to File Number SR–ISE– The self-regulatory organization has
interest; (ii) for the protection of 2018–81 and should be submitted on or prepared summaries, set forth in
investors; or (iii) otherwise in before October 30, 2018. Sections A, B, and C below, of the most
furtherance of the purposes of the Act. For the Commission, by the Division of significant aspects of such statements.
If the Commission takes such action, the Trading and Markets, pursuant to delegated
Commission shall institute proceedings A. Self-Regulatory Organization’s
authority.18
to determine whether the proposed rule Statement of the Purpose of, and
Eduardo A. Aleman,
should be approved or disapproved. Statutory Basis for, the Proposed Rule
Assistant Secretary. Change
IV. Solicitation of Comments [FR Doc. 2018–21786 Filed 10–5–18; 8:45 am]
BILLING CODE 8011–01–P
1. Purpose
Interested persons are invited to
submit written data, views, and The Exchange proposes to amend
arguments concerning the foregoing, Rule 7600(a)(4) to provide the ability for
SECURITIES AND EXCHANGE the Exchange to determine the
including whether the proposed rule
COMMISSION applicable number of legs for a Complex
change is consistent with the Act.
Comments may be submitted by any of [Release No. 34–84340; File No. SR–BOX– Qualified Open Outcry Orders
the following methods: 2018–30] (‘‘Complex QOO Order’’).3 Currently,
Complex QOO Orders are limited to a
Electronic Comments Self-Regulatory Organizations; BOX maximum of four (4) legs on the BOX
• Use the Commission’s internet Exchange LLC; Notice of Filing and Trading Floor. The Exchange proposes
comment form (http://www.sec.gov/ Immediate Effectiveness of a Proposed to have the applicable number of legs
rules/sro.shtml); or Rule Change To Amend BOX Rule now be determined by the Exchange.4
• Send an email to rule-comments@ 7600(a)(4) (Qualified Open Outcry The Exchange notes that only orders
sec.gov. Please include File Number SR– Orders—Floor Crossing) that meet the definition of a Complex
ISE–2018–81 on the subject line. Order 5 are allowed to trade on the BOX
October 2, 2018.
Trading Floor.6 Any orders that are
Paper Comments Pursuant to Section 19(b)(1) of the
entered into the system as a Complex
• Send paper comments in triplicate Securities Exchange Act of 1934
Order on the BOX Trading Floor that do
to Secretary, Securities and Exchange (‘‘Act’’),1 and Rule 19b–4 thereunder,2
not meet the definition of a Complex
Commission, 100 F Street NE, notice is hereby given that on
Order will be rejected.
Washington, DC 20549–1090. September 20, 2018, BOX Exchange LLC
The Exchange will inform
All submissions should refer to File (the ‘‘Exchange’’) filed with the
Participants in advance of any change to
Number SR–ISE–2018–81. This file Securities and Exchange Commission
the number of legs via Informational
number should be included on the (‘‘Commission’’) the proposed rule
Circular. The Exchange notes that
subject line if email is used. To help the change as described in Items I and II
another exchange in the industry has
Commission process and review your below, which Items have been prepared
similar rules in place which provide
comments more efficiently, please use by the self-regulatory organization. The
flexibility in determining the maximum
only one method. The Commission will Commission is publishing this notice to
number of legs for complex orders at
post all comments on the Commission’s solicit comments on the proposed rule
their respective exchange.7
internet website (http://www.sec.gov/ change from interested persons.
rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s 3 A QOO Order is a two-sided order that is used

submission, all subsequent Statement of the Terms of the Substance by Floor Brokers to execute transactions from the
Trading Floor. See Rule 7600.
amendments, all written statements of the Proposed Rule Change 4 The Exchange notes that the number of legs
with respect to the proposed rule The Exchange proposes to amend determined by the Exchange will apply to all
change that are filed with the BOX Rule 7600(a)(4) (Qualified Open classes. The Exchange also notes that the proposal
Commission, and all written discussed herein is not making any changes to the
Outcry Orders—Floor Crossing). The priority rules for Complex Orders.
communications relating to the text of the proposed rule change is 5 The term ‘‘Complex Order’’ means any order
proposed rule change between the available from the principal office of the involving the simultaneous purchase and/or sale of
Commission and any person, other than Exchange, at the Commission’s Public two or more different options series in the same
those that may be withheld from the Reference Room and also on the
underlying security, for the same account, in a ratio
public in accordance with the that is equal to or greater than one-to-three (.333)
Exchange’s internet website at http:// and less than or equal to three-to-one (3.00) and for
provisions of 5 U.S.C. 552, will be boxoptions.com. the purpose of executing a particular investment
available for website viewing and strategy. See BOX Rule 7240(a)(7).
printing in the Commission’s Public II. Self-Regulatory Organization’s 6 On the Trading Floor, a Floor Broker or such

Reference Room, 100 F Street NE, Statement of the Purpose of, and Floor Broker’s employee shall, contemporaneously
Statutory Basis for, the Proposed Rule upon receipt of an order, and prior to
Washington, DC 20549, on official
amozie on DSK3GDR082PROD with NOTICES1

announcement of such an order in the trading
business days between the hours of Change crowd, record all options orders represented by
10:00 a.m. and 3:00 p.m. Copies of the In its filing with the Commission, the such Floor Broker onto the Floor Broker’s order
filing also will be available for entry mechanism. See Rule 7580(e)(1).
self-regulatory organization included 7 See Cboe Exchange Inc. (‘‘Cboe’’) Rule 6.53.02.
inspection and copying at the principal
Cboe’s rule states that ‘‘[c]omplex orders of twelve
office of the Exchange. All comments 18 17 CFR 200.30–3(a)(12). (12) or less must be entered on a single order ticket
1 15 U.S.C. 78s(b)(1). at time of systemization. If permitted by the
17 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4. Exchange (which the Exchange will announce by

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Federal Register / Vol. 83, No. 195 / Tuesday, October 9, 2018 / Notices 50719

The Exchange also proposes to correct orders to be determined by the At any time within 60 days of the
the location of a misplaced comma in exchange.10 filing of the proposed rule change, the
Rule 7600(a)(4). Rule 7600(a)(4), as Lastly, the Exchange believes that the Commission summarily may
amended, will make clear that the cross proposed change to correct the temporarily suspend such rule change if
reference to Rule 7240(a)(5) applies to inadvertent error in Rule 7600(a)(4) is it appears to the Commission that such
Complex QOO Orders and not multi-leg reasonable as it will provide clarity with action is necessary or appropriate in the
orders. The Exchange believes that this respect to QOO Orders on the Exchange. public interest, for the protection of
correction will add clarity with regard investors, or otherwise in furtherance of
B. Self-Regulatory Organization’s the purposes of the Act. If the
to Complex QOO Orders traded on the
Statement on Burden on Competition Commission takes such action, the
BOX Trading Floor.
The Exchange does not believe that Commission shall institute proceedings
2. Statutory Basis to determine whether the proposed rule
the proposed rule change will impose
The Exchange believes that the any burden on competition not should be approved or disapproved.
proposal is consistent with the necessary or appropriate in furtherance IV. Solicitation of Comments
requirements of Section 6(b) of the of the purposes of the Act. In this regard
Securities Exchange Act of 1934 (the and as indicated above, the Exchange Interested persons are invited to
‘‘Act’’),8 in general, and Section 6(b)(5) notes that the proposed rule change is submit written data, views, and
of the Act,9 in particular, in that it is similar to the rules of another arguments concerning the foregoing,
designed to prevent fraudulent and exchange.11 The Exchange does not including whether the proposed rule
manipulative acts and practices, to believe the proposal will impose any change is consistent with the Act.
promote just and equitable principles of burden on intermarket competition, as Comments may be submitted by any of
trade, to foster cooperation and the proposed rule will allow BOX to the following methods:
coordination with persons engaged in compete with other options exchanges Electronic Comments
facilitating transactions in securities, to in the industry. The Exchange notes that
• Use the Commission’s internet
remove impediments to and perfect the it operates in a highly competitive
comment form (http://www.sec.gov/
mechanism of a free and open market market in which market participants can rules/sro.shtml); or
and a national market system, and, in readily direct order flow to competing • Send an email to rule-comments@
general to protect investors and the venues who offer similar functionality. sec.gov. Please include File Number SR–
public interest. Lastly, the Exchange believes that the BOX–2018–30 on the subject line.
In particular, the Exchange believes proposed change will not impose a
the proposed rule change, which burden on intramarket competition as Paper Comments
provides the Exchange with greater the proposal will apply to all • Send paper comments in triplicate
flexibility in determining the maximum Participants that wish to submit to Secretary, Securities and Exchange
number of legs for Complex QOO Complex Orders on the BOX Trading Commission, 100 F Street NE,
Orders, will benefit Floor Brokers and Floor. Washington, DC 20549–1090.
their customers by providing the C. Self-Regulatory Organization’s All submissions should refer to File
potential for increased opportunities for Statement on Comments on the Number SR–BOX–2018–30. This file
executions on the BOX Trading Floor. Proposed Rule Change Received From number should be included on the
Further, the Exchange believes that the Members, Participants, or Others subject line if email is used. To help the
proposed change will provide the Commission process and review your
potential for greater liquidity which The Exchange has neither solicited comments more efficiently, please use
should, in turn, benefit and protect nor received comments on the proposed only one method. The Commission will
investors and the public interest rule change. post all comments on the Commission’s
through the potential for greater volume III. Date of Effectiveness of the internet website (http://www.sec.gov/
of orders and executions on the BOX Proposed Rule Change and Timing for rules/sro.shtml). Copies of the
Trading Floor. As discussed above, the Commission Action submission, all subsequent
Exchange notes that another exchange amendments, all written statements
has a similar rule which allows for the Because the proposed rule change with respect to the proposed rule
maximum number of legs for complex does not (i) significantly affect the change that are filed with the
protection of investors or the public Commission, and all written
Regulatory Circular), complex orders of more than
interest; (ii) impose any significant communications relating to the
twelve (12) legs may be split across multiple order burden on competition; and (iii) become proposed rule change between the
tickets . . .’’ BOX believes that this is similar to the operative for 30 days from the date on Commission and any person, other than
proposal discussed herein. BOX’s reading of Cboe’s which it was filed, or such shorter time
rule suggests that Cboe may determine the those that may be withheld from the
applicable number of legs for complex orders on
as the Commission may designate, it has public in accordance with the
their respective trading floor. As such, the Exchange become effective pursuant to Section provisions of 5 U.S.C. 552, will be
believes that the proposed change is similar to the 19(b)(3)(A) of the Act 12 and Rule 19b– available for website viewing and
Cboe rule cited above. BOX does note, however, 4(f)(6) thereunder.13
that [sic] is not proposing a twelve leg maximum printing in the Commission’s Public
but rather that the Exchange be responsible for Reference Room, 100 F Street NE,
10 See supra, note 7.
determining the applicable number of legs for Washington, DC 20549 on official
Complex Orders on the BOX Trading Floor. Further, 11 Id.
business days between the hours of
amozie on DSK3GDR082PROD with NOTICES1

the Exchange will communicate to Participants in 12 15 U.S.C. 78s(b)(3)(A).
advance of any change to the applicable number of 13 17 CFR 240.19b–4(f)(6). As required under Rule
10:00 a.m. and 3:00 p.m. Copies of such
legs via Informational Circular. See also EDGX 19b–4(f)(6)(iii), the Exchange provided the filing also will be available for
Exchange, Inc (‘‘EDGX’’) Rule 21.20(a)(5). The Commission with written notice of its intent to file inspection and copying at the principal
Exchange notes that EDGX is an electronic the proposed rule change, along with a brief
exchange and as such, its rules apply to electronic
office of the Exchange. All comments
description and the text of the proposed rule
trading only. change, at least five business days prior to the date
received will be posted without change.
8 15 U.S.C. 78f(b).
of filing of the proposed rule change, or such Persons submitting comments are
9 15 U.S.C. 78f(b)(5). shorter time as designated by the Commission. cautioned that we do not redact or edit

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50720 Federal Register / Vol. 83, No. 195 / Tuesday, October 9, 2018 / Notices

personal identifying information from determine whether to approve or SECURITIES AND EXCHANGE
comment submissions. You should disapprove the proposed rule change.8 COMMISSION
submit only information that you wish On September 19, 2017, the Exchange
to make available publicly. All filed Amendment No. 1 to the proposed Submission for OMB Review;
submissions should refer to File rule change.9 On October 18, 2017, the Comment Request
Number SR–BOX–2018–30, and should Exchange filed Amendment No. 2 to the Upon Written Request, Copies Available
be submitted on or before October 30, proposed rule change.10 On October 19, From: Securities and Exchange
2018. 2017, the Division of Trading and Commission, Office of FOIA Services,
For the Commission, by the Division of Markets, for the Commission pursuant 100 F Street NE, Washington, DC
Trading and Markets, pursuant to delegated to delegated authority,11 approved the 20549–2736
authority.14 proposed rule change, as modified by
Extension:
Eduardo A. Aleman, Amendments No. 1 and No. 2.12 Rule 10f–3; SEC File No. 270–237, OMB
Assistant Secretary. On October 24, 2017, the Secretary of Control No. 3235–0226
[FR Doc. 2018–21783 Filed 10–5–18; 8:45 am] the Commission notified the Exchange Notice is hereby given that, pursuant
BILLING CODE 8011–01–P that pursuant to Rule 431 of the to the Paperwork Reduction Act of 1995
Commission’s Rules of Practice,13 the (44 U.S.C. 3501–3520), the Securities
Commission would review the and Exchange Commission
SECURITIES AND EXCHANGE Delegated Order and that the Delegated (‘‘Commission’’) has submitted to the
COMMISSION Order was stayed until the Commission Office of Management and Budget a
[Securities Exchange Act of 1934; Release ordered otherwise.14 On November 8, request for extension and approval of
No. 34–84337/October 2, 2018] 2017, the Commission issued a the collections of information discussed
scheduling order allowing the filing of below.
In the Matter of Chicago Stock additional statements.15 Section 10(f) of the Investment
Exchange, Inc., 440 South LaSalle Company Act of 1940 (15 U.S.C. 80a)
Street, Suite 800, Chicago, IL 60605; On July 25, 2018, CHX withdrew the
proposed rule change (SR–CHX–2017– (the ‘‘Act’’) prohibits a registered
File No. SR–CHX–2017–04; Order investment company (‘‘fund’’) from
Setting Aside the Order by Delegated 04).16
purchasing any security during an
Authority Approving SR–CHX–2017–04 Under Commission Rule of Practice underwriting or selling syndicate if the
431(a), the Commission may ‘‘affirm, fund has certain relationships with a
On February 10, 2017, the Chicago
reverse, modify, set aside or remand for principal underwriter for the security.
Stock Exchange, Inc. (‘‘Exchange’’ or
‘‘CHX’’) filed with the Securities and further proceedings, in whole or in part, Congress enacted this provision in 1940
Exchange Commission (‘‘Commission’’), any action made pursuant to’’ delegated to protect funds and their shareholders
pursuant to Section 19(b)(1) of the authority.17 We find that, in light of the by preventing underwriters from
Securities Exchange Act of 1934 CHX’s withdrawal of the proposed rule ‘‘dumping’’ unmarketable securities on
(‘‘Exchange Act’’) 1 and Rule 19b–4 change, it is appropriate to set aside the affiliated funds.
thereunder,2 a proposed rule change to Delegated Order. Rule 10f–3 (17 CFR 270.10f–3)
adopt the CHX Liquidity Enhancing Accordingly, it is ordered that the permits a fund to engage in a securities
Access Delay on a pilot basis. The October 19, 2017 order approving by transaction that otherwise would violate
proposed rule change was published for delegated authority CHX’s proposed section 10(f) if, among other things: (i)
comment in the Federal Register on rule change number SR–CHX–2017–04, The fund’s directors have approved
February 21, 2017.3 On April 3, 2017, be, and it hereby is, set aside. procedures for purchases made in
the Commission designated a longer reliance on the rule, regularly review
By the Commission. fund purchases to determine whether
period within which to approve the
Eduardo A. Aleman, they comply with these procedures, and
proposed rule change, disapprove the
proposed rule change, or institute Assistant Secretary. approve necessary changes to the
proceedings to determine whether the [FR Doc. 2018–21761 Filed 10–5–18; 8:45 am] procedures; and (ii) a written record of
proposed rule change should be BILLING CODE 8011–01–P
each transaction effected under the rule
disapproved.4 On May 22, 2017, the is maintained for six years, the first two
Commission instituted proceedings 8 See Securities Exchange Act Release No. 81415,
of which in an easily accessible place.
under Section 19(b)(2)(B) of the 82 FR 40051 (August 23, 2017). The written record must state: (i) From
Exchange Act 5 to determine whether to 9 The amendments to the proposed rule change whom the securities were acquired; (ii)
approve or disapprove the proposed are available at: https://www.sec.gov/comments/sr- the identity of the underwriting
chx-2017-04/chx201704.htm. syndicate’s members; (iii) the terms of
rule change.6 On August 17, 2017, 10 See supra note 9.
pursuant to Section 19(b)(2) of the 11 17 CFR 200.30–3(a)(12).
the transactions; and (iv) the
Exchange Act,7 the Commission 12 See Exchange Act Release No. 81913, 82 FR
information or materials on which the
designated a longer period for 49433 (October 25, 2017) (‘‘Delegated Order’’). fund’s board of directors has determined
Commission action on proceedings to 13 17 CFR 201.431. that the purchases were made in
14 See Letter from Secretary of the Commission to compliance with procedures established
14 17 Albert (A.J.) Kim, VP and Associate General by the board.
CFR 200.30–3(a)(12).
1 15
Counsel, Chicago Stock Exchange, Inc., dated The rule also conditionally allows
U.S.C. 78s(b)(1). October 24, 2017, available at https://www.sec.gov/
2 17 CFR 240.19b–4. managed portions of fund portfolios to
amozie on DSK3GDR082PROD with NOTICES1

rules/sro/chx/2017/34-81913-letter-from-
3 See Securities Exchange Act Release No. 80041
secretary.pdf. purchase securities offered in otherwise
(February 14, 2017), 82 FR 11252. 15 See Exchange Act Release No. 80234, 82 FR off-limits primary offerings. To qualify
4 See Securities Exchange Act Release No. 80364,
52762 (November 14, 2017). for this exemption, rule 10f–3 requires
82 FR 17065 (April 7, 2017). 16 See letter from Albert J. Kim, Vice President
5 15 U.S.C. 78s(b)(2)(B). that the subadviser that is advising the
and Associate General Counsel, CHX, to Eduardo A.
6 See Securities Exchange Act Release No. 80740, Aleman, Assistant Secretary, Commission, dated purchaser be contractually prohibited
82 FR 24412 (May 26, 2017). July 25, 2018. from providing investment advice to
7 15 U.S.C. 78s(b)(2). 17 17 CFR 201.431(a). any other portion of the fund’s portfolio

VerDate Sep<11>2014 19:13 Oct 05, 2018 Jkt 247001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\09OCN1.SGM 09OCN1
Document Created: 2018-10-06 00:58:27
Document Modified: 2018-10-06 00:58:27
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 50718