83 FR 53134 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delete Current Rules on Arbitration, Under Chapter 18
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 203 (October 19, 2018)
Federal Register Volume 83, Issue 203 (October 19, 2018)
| Page Range | 53134-53136 | |
| FR Document | 2018-22777 |
[Federal Register Volume 83, Number 203 (Friday, October 19, 2018)] [Notices] [Pages 53134-53136] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-22777] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84423; File No. SR-GEMX-2018-35] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delete Current Rules on Arbitration, Under Chapter 18 October 15, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on October 9, 2018, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to delete the current rules on arbitration (``Current Arbitration Rules''), under Chapter 18, and incorporate by reference The Nasdaq Stock Market LLC's (``Nasdaq'') rules on arbitration at General 6 (``Proposed Arbitration Rules''), into General 6 of the Exchange's rulebook's (``Rulebook'') shell structure.\3\ --------------------------------------------------------------------------- \3\ Recently, the Exchange added a shell structure to its Rulebook with the purpose of improving efficiency and readability and to align its rules closer to those of its five sister exchanges, The Nasdaq Stock Market LLC; Nasdaq BX, Inc.; Nasdaq PHLX LLC; Nasdaq ISE, LLC; and Nasdaq MRX, LLC (``Affiliated Exchanges''). The shell structure currently contains eight (8) Chapters which, once complete, will apply a common set of rules to the Affiliated Exchanges. See Securities Exchange Act Release No. 82171 (November 29, 2017), 82 FR 57516 (December 5, 2017) (SR-GEMX-2017-54). --------------------------------------------------------------------------- The text of the proposed rule change is available on the Exchange's website at http://nasdaqgemx.cchwallstreet.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 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 delete the rules on arbitration, currently under Chapter 18, and incorporate by reference the Nasdaq rules on arbitration at General 6 of Nasdaq's rulebook into General 6 of the Exchange's Rulebook. The Exchange adopted the Current Arbitration Rules to ensure a fair and efficient manner in which to handle any dispute, claim or controversy arising out of, or in connection with, the business of any Member of the Exchange. To help administer the process of dispute resolution, the Exchange and FINRA are parties to a Regulatory Contract, pursuant to which FINRA has agreed to perform certain functions and provide access to certain services, including: Member regulation and registration; non-real time market surveillance; examinations and investigations; and dispute resolution. FINRA currently operates the largest securities dispute resolution forum in the United States,\4\ and has given the Exchange access to these services. Under the Current Arbitration Rules, Members and associated persons of a Member are [[Page 53135]] subject to the FINRA Code of Arbitration Procedure. --------------------------------------------------------------------------- \4\ http://www.finra.org/arbitration-and-mediation. --------------------------------------------------------------------------- Because the Affiliated Exchanges are also parties to similar Regulatory Contracts with FINRA that make their members and associated persons of such members subject to the FINRA Code of Arbitration Procedure, the Exchange believes it is pertinent that a common set of rules on arbitration be included in the General section of the Rulebook's shell. Nasdaq completed this process recently \5\ and, pursuant to subsequent filings, the intention is to replace the existing arbitration rules for each of the Affiliated Exchanges by incorporating the Nasdaq rules on arbitration by reference. --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release No. 83834 (August 13, 2018), 83 FR 41115 (August 17, 2018) (SR-NASDAQ-2018-067). --------------------------------------------------------------------------- Therefore, the Exchange will incorporate by reference the Proposed Arbitration Rules in ``General 6 Arbitration'' of the shell's ``General Rules'' section. The relocation and harmonization of the arbitration rules is part of the Exchange's continued effort to promote efficiency and conformity of its processes with those of its Affiliated Exchanges.\6\ The Exchange believes that the adoption and placement of the Proposed Arbitration Rules to their new location in the shell will facilitate the use of the Rulebook by Members of the Exchange who are members of other Affiliated Exchanges. Moreover, the proposed changes are of a conforming nature and will not amend the substance of the adopted rules other than to update the language to that of the Proposed Arbitration Rules, and to make conforming cross-reference changes. --------------------------------------------------------------------------- \6\ See footnote 3. --------------------------------------------------------------------------- GEMX will continue to file proposed rule changes to amend its General 6 Rules until such time as it receives an exemption from the Securities and Exchange Commission, pursuant to its authority under Section 36 of the Exchange Act of 1934 (``Act'') and Rule 0-12 \7\ thereunder, from the Section 19(b) filing requirements to separately file a proposed rule change to amend General 6. --------------------------------------------------------------------------- \7\ See 17 CFR 240.0-12; Securities Exchange Act Release No. 39624 (February 5, 1998), 63 FR 8101 (February 18, 1998). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\8\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest, by promoting efficiency and structural conformity of the Exchange's processes with those of the Affiliated Exchanges and to make the Exchange's Rulebook easier to read and more accessible to its Members. The Exchange believes that the adoption and harmonization of the arbitration rules and cross-reference updates are of a non-substantive nature. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- 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. The proposed changes do not impose a burden on competition because, as previously stated, they are (i) of a non-substantive nature, (ii) intended to harmonize the structure of the Exchange's rules with those of its Affiliated Exchanges, and (iii) intended to organize the Rulebook in a way that it will ease the Members' navigation and reading of the rules across the Affiliated Exchanges. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\11\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(iii). \11\ 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. --------------------------------------------------------------------------- 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 CommentsUse 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-GEMX-2018-35 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-GEMX-2018-35. 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. [[Page 53136]] All submissions should refer to File Number SR-GEMX-2018-35 and should be submitted on or before November 9, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ Eduardo A. Aleman, Assistant Secretary. --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2018-22777 Filed 10-18-18; 8:45 am] BILLING CODE 8011-01-P
![53134 Federal Register / Vol. 83, No. 203 / Friday, October 19, 2018 / Notices
III. Date of Effectiveness of the inspection and copying at the principal The text of the proposed rule change
Proposed Rule Change, and Timing for office of FICC and on DTCC’s website is available on the Exchange’s website at
Commission Action (http://dtcc.com/legal/sec-rule- http://nasdaqgemx.cchwallstreet.com/,
The foregoing rule change has become filings.aspx). All comments received at the principal office of the Exchange,
effective pursuant to Section 19(b)(3)(A) will be posted without change. Persons and at the Commission’s Public
of the Act 25 and paragraph (f) of Rule submitting comments are cautioned that Reference Room.
19b–4 thereunder.26 At any time within we do not redact or edit personal
II. Self-Regulatory Organization’s
60 days of the filing of the proposed rule identifying information from comment
Statement of the Purpose of, and
change, the Commission summarily may submissions. You should submit only
Statutory Basis for, the Proposed Rule
temporarily suspend such rule change if information that you wish to make
Change
it appears to the Commission that such available publicly. All submissions
action is necessary or appropriate in the should refer to File Number SR–FICC– In its filing with the Commission, the
public interest, for the protection of 2018–009 and should be submitted on Exchange included statements
investors, or otherwise in furtherance of or before November 9, 2018. concerning the purpose of and basis for
the purposes of the Act. For the Commission, by the Division of the proposed rule change and discussed
Trading and Markets, pursuant to delegated any comments it received on the
IV. Solicitation of Comments authority.27 proposed rule change. The text of these
Interested persons are invited to Eduardo A. Aleman, statements may be examined at the
submit written data, views and Assistant Secretary. places specified in Item IV below. The
arguments concerning the foregoing, [FR Doc. 2018–22778 Filed 10–18–18; 8:45 am] Exchange has prepared summaries, set
including whether the proposed rule forth in sections A, B, and C below, of
BILLING CODE 8011–01–P
change is consistent with the Act. the most significant aspects of such
Comments may be submitted by any of statements.
the following methods: SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
Electronic Comments COMMISSION Statement of the Purpose of, and
• Use the Commission’s internet [Release No. 34–84423; File No. SR–GEMX– Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ 2018–35] Change
rules/sro.shtml); or 1. Purpose
• Send an email to rule-comments@ Self-Regulatory Organizations; Nasdaq
sec.gov. Please include File Number SR– GEMX, LLC; Notice of Filing and The Exchange proposes to delete the
FICC–2018–009 on the subject line. Immediate Effectiveness of Proposed rules on arbitration, currently under
Rule Change To Delete Current Rules Chapter 18, and incorporate by
Paper Comments on Arbitration, Under Chapter 18 reference the Nasdaq rules on
• Send paper comments in triplicate arbitration at General 6 of Nasdaq’s
to Secretary, Securities and Exchange October 15, 2018.
rulebook into General 6 of the
Commission, 100 F Street NE, Pursuant to Section 19(b)(1) of the
Exchange’s Rulebook.
Washington, DC 20549. Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 The Exchange adopted the Current
All submissions should refer to File Arbitration Rules to ensure a fair and
Number SR–FICC–2018–009. This file notice is hereby given that on October
9, 2018, Nasdaq GEMX, LLC (‘‘GEMX’’ efficient manner in which to handle any
number should be included on the dispute, claim or controversy arising out
subject line if email is used. To help the or ‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or of, or in connection with, the business
Commission process and review your of any Member of the Exchange. To help
comments more efficiently, please use ‘‘Commission’’) the proposed rule
change as described in Items I, II, and administer the process of dispute
only one method. The Commission will resolution, the Exchange and FINRA are
post all comments on the Commission’s III, below, which Items have been
prepared by the Exchange. The parties to a Regulatory Contract,
internet website (http://www.sec.gov/ pursuant to which FINRA has agreed to
rules/sro.shtml). Copies of the Commission is publishing this notice to
solicit comments on the proposed rule perform certain functions and provide
submission, all subsequent access to certain services, including:
amendments, all written statements change from interested persons.
Member regulation and registration;
with respect to the proposed rule I. Self-Regulatory Organization’s non-real time market surveillance;
change that are filed with the Statement of the Terms of Substance of examinations and investigations; and
Commission, and all written the Proposed Rule Change dispute resolution. FINRA currently
communications relating to the operates the largest securities dispute
proposed rule change between the The Exchange proposes to delete the
current rules on arbitration (‘‘Current resolution forum in the United States,4
Commission and any person, other than
Arbitration Rules’’), under Chapter 18, and has given the Exchange access to
those that may be withheld from the
and incorporate by reference The these services. Under the Current
public in accordance with the
Nasdaq Stock Market LLC’s (‘‘Nasdaq’’) Arbitration Rules, Members and
provisions of 5 U.S.C. 552, will be
rules on arbitration at General 6 associated persons of a Member are
available for website viewing and
printing in the Commission’s Public (‘‘Proposed Arbitration Rules’’), into
Reference Room, 100 F Street NE, General 6 of the Exchange’s rulebook’s closer to those of its five sister exchanges, The
amozie on DSK3GDR082PROD with NOTICES1
(‘‘Rulebook’’) shell structure.3 Nasdaq Stock Market LLC; Nasdaq BX, Inc.; Nasdaq
Washington, DC 20549 on official PHLX LLC; Nasdaq ISE, LLC; and Nasdaq MRX,
business days between the hours of 27 17
LLC (‘‘Affiliated Exchanges’’). The shell structure
CFR 200.30–3(a)(12). currently contains eight (8) Chapters which, once
10:00 a.m. and 3:00 p.m. Copies of the 1 15 U.S.C. 78s(b)(1). complete, will apply a common set of rules to the
filing also will be available for 2 17 CFR 240.19b–4. Affiliated Exchanges. See Securities Exchange Act
3 Recently, the Exchange added a shell structure Release No. 82171 (November 29, 2017), 82 FR
25 15 U.S.C. 78s(b)(3)(A). 57516 (December 5, 2017) (SR–GEMX–2017–54).
to its Rulebook with the purpose of improving
26 17 CFR 240.19b–4(f). efficiency and readability and to align its rules 4 http://www.finra.org/arbitration-and-mediation.
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![53136 Federal Register / Vol. 83, No. 203 / Friday, October 19, 2018 / Notices
All submissions should refer to File rule change and discussed any to divide the predefined scenarios into
Number SR–GEMX–2018–35 and comments it received on the proposed four categories. Previously, the Stress
should be submitted on or before rule change. The text of these statements Testing Framework divided the
November 9, 2018. may be examined at the places specified predefined scenarios into three
For the Commission, by the Division of in Item IV below. ICC has prepared categories by combining the Historically
Trading and Markets, pursuant to delegated summaries, set forth in sections (A), (B), Observed Extreme but Plausible Market
authority.12 and (C) below, of the most significant Scenarios: Severity of Losses in
Eduardo A. Aleman, aspects of these statements. Response to a Baseline Credit Event and
Assistant Secretary. the Hypothetically Constructed
(A) Clearing Agency’s Statement of the (Forward Looking) Extreme but
[FR Doc. 2018–22777 Filed 10–18–18; 8:45 am] Purpose of, and Statutory Basis for, the Plausible Market Scenarios into one
BILLING CODE 8011–01–P Proposed Rule Change category. ICC proposes to separate these
(a) Purpose scenarios into two categories to
SECURITIES AND EXCHANGE maintain uniformity throughout the
ICC proposes revising its Stress
COMMISSION Stress Testing Framework since each
Testing Framework and its Liquidity
represents a distinct sub-section in the
[Release No. 34–84424; File No. SR–ICC– Risk Management Framework.
‘Predefined Scenarios’ section of the
2018–010] Specifically, ICC proposes clarifying
Stress Testing Framework. Additionally,
changes regarding current aspects of its
ICC proposes to categorize the
Self-Regulatory Organizations; ICE stress testing and liquidity stress testing Discordant Spread Scenarios (i.e.,
Clear Credit LLC; Notice of Filing and practices to address comments received scenarios designed to reproduce
Immediate Effectiveness of a Proposed from independent validations, as well as significant discordant outcomes during
Rule Change Relating to ICC’s Stress additional clean-up changes. The the considered period) and the Opposite
Testing Framework and ICC’s Liquidity independent validator comments Discordant Spread Scenarios (i.e.,
Risk Management Framework revolve around clarification updates scenarios constructed using the opposite
that do not change ICC’s current stress discordant outcomes to those observed
October 15, 2018. testing and liquidity stress testing
Pursuant to Section 19(b)(1) of the during the considered period) as
practices. ICC’s proposed changes to Historically Observed Extreme but
Securities Exchange Act of 1934 address the independent validator
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Plausible to ensure consistency with the
comments include updates to correct scenarios classified as Historically
notice is hereby given that on October inconsistencies between section
1, 2018, ICE Clear Credit LLC (‘‘ICC’’) Observed Extreme but Plausible in the
numbering and the table of contents, Liquidity Risk Management Framework,
filed with the Securities and Exchange ensure that scenarios are categorized
Commission (‘‘Commission’’) the which include the Discordant Spread
consistently across the ICC Stress Scenarios and the Opposite Discordant
proposed rule change described in Items Testing Framework and the ICC
I, II, and III below, which Items have Spread Scenarios.
Liquidity Risk Management Framework, ICC proposes clarifying changes to the
been prepared primarily by ICC. ICC define potentially unclear terminology,
filed the proposed rule changes ‘Display of Discordant Behavior among
and clarify or include additional detail Instrument Groups’ section. ICC
pursuant to Section 19(b)(3)(A) of the relating to potentially ambiguous proposes to more clearly define
Act,3 and Rule 19b–4(f)(4)(ii) phrases or text such that ICC’s discordant change as discordant relative
thereunder,4 so that the proposal was documentation provides a clearer view spread move. ICC proposes to add
immediately effective upon filing with of its stress testing and liquidity stress clarifying language to define the market
the Commission. The Commission is testing practices. ICC believes such depth of sovereign reference entities in
publishing this notice to solicit revisions will facilitate the prompt and terms of the observed weekly trading
comments on the proposed rule change accurate clearance and settlement of volumes from the Depository Trust &
from interested persons. securities transactions and derivative Clearing Corporation (‘‘DTCC’’). In
I. Clearing Agency’s Statement of the agreements, contracts, and transactions addition, ICC proposes to include
Terms of Substance of the Proposed for which it is responsible. The language to clarify that the historical
Rule Change proposed revisions are described in period selected to represent the greatest
detail as follows. combined discordant change for
The principal purpose of the
proposed rule change is to revise the Stress Testing Framework sovereign reference entities can be
ICC Stress Testing Framework and the different from the one selected for
ICC proposes revisions to the Stress corporate single names (‘‘SNs’’).
ICC Liquidity Risk Management Testing Framework to address ICC proposes enhancements to the
Framework. These revisions do not independent validator comments and to ‘Reverse Stress Testing: Guaranty Fund
require any changes to the ICC Clearing make clarification and clean-up changes Adequacy Analysis’ section to provide
Rules (‘‘Rules’’). to enhance readability. ICC proposes additional clarity regarding how ICC
II. Clearing Agency’s Statement of the clean-up changes to the Table of performs such analysis. Specifically,
Purpose of, and Statutory Basis for, the Contents to add two sections, which are ICC proposes to add explanatory
Proposed Rule Change not new to the document, but were language to note that, upon the
In its filing with the Commission, ICC previously excluded from the Table of simultaneous default of two Clearing
Contents. ICC also proposes, for clarity, Participant (‘‘CP’’) affiliate groups
amozie on DSK3GDR082PROD with NOTICES1
included statements concerning the
purpose of and basis for the proposed updates to the ‘Overview’ section to (‘‘AGs’’), ICC considers additional
abbreviate ‘‘Risk Committee’’ to ‘‘RC.’’ adverse spread realizations and
12 17 CFR 200.30–3(a)(12).
ICC proposes corresponding changes idiosyncratic credit events associated
1 15 U.S.C. 78s(b)(1). throughout the document. with reference obligations on which the
2 17 CFR 240.19b–4. ICC proposes amendments to the stress tested CP sold protection.
3 15 U.S.C. 78s(b)(3)(A). ‘Predefined Scenarios’ section of the ICC proposes enhancements to the
4 17 CFR 240.19b–4(f)(4)(ii). Stress Testing Framework. ICC proposes ‘Interest Rate Sensitivity Analysis’
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Document Created: 2018-10-19 01:26:02
Document Modified: 2018-10-19 01:26:02
| 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 53134 |
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