83_FR_53337 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

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)

Page Range53134-53136
FR Document2018-22777

Federal Register, Volume 83 Issue 203 (Friday, October 19, 2018)
[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]


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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.
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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 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\
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    \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).
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    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.
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    \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).
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    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.
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    \6\ See footnote 3.
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    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).
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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).
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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\
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    \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.
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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 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.
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    \12\ 17 CFR 200.30-3(a)(12).
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[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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                                                                            Federal Register / Vol. 83, No. 203 / Friday, October 19, 2018 / Notices                                              53135

                                              subject to the FINRA Code of                            promote just and equitable principles of                  it appears to the Commission that such
                                              Arbitration Procedure.                                  trade, to remove impediments to and                       action is necessary or appropriate in the
                                                 Because the Affiliated Exchanges are                 perfect the mechanism of a free and                       public interest, for the protection of
                                              also parties to similar Regulatory                      open market and a national market                         investors, or otherwise in furtherance of
                                              Contracts with FINRA that make their                    system, and, in general to protect                        the purposes of the Act. If the
                                              members and associated persons of such                  investors and the public interest, by                     Commission takes such action, the
                                              members subject to the FINRA Code of                    promoting efficiency and structural                       Commission shall institute proceedings
                                              Arbitration Procedure, the Exchange                     conformity of the Exchange’s processes                    to determine whether the proposed rule
                                              believes it is pertinent that a common                  with those of the Affiliated Exchanges                    should be approved or disapproved.
                                              set of rules on arbitration be included in              and to make the Exchange’s Rulebook
                                                                                                                                                                IV. Solicitation of Comments
                                              the General section of the Rulebook’s                   easier to read and more accessible to its
                                              shell. Nasdaq completed this process                    Members. The Exchange believes that                         Interested persons are invited to
                                              recently 5 and, pursuant to subsequent                  the adoption and harmonization of the                     submit written data, views, and
                                              filings, the intention is to replace the                arbitration rules and cross-reference                     arguments concerning the foregoing,
                                              existing arbitration rules for each of the              updates are of a non-substantive nature.                  including whether the proposed rule
                                              Affiliated Exchanges by incorporating                                                                             change is consistent with the Act.
                                                                                                      B. Self-Regulatory Organization’s                         Comments may be submitted by any of
                                              the Nasdaq rules on arbitration by                      Statement on Burden on Competition
                                              reference.                                                                                                        the following methods:
                                                 Therefore, the Exchange will                            The Exchange does not believe that
                                                                                                                                                                Electronic Comments
                                              incorporate by reference the Proposed                   the proposed rule change will impose
                                              Arbitration Rules in ‘‘General 6                        any burden on competition not                               • Use the Commission’s internet
                                              Arbitration’’ of the shell’s ‘‘General                  necessary or appropriate in furtherance                   comment form (http://www.sec.gov/
                                              Rules’’ section.                                        of the purposes of the Act. The                           rules/sro.shtml); or
                                                 The relocation and harmonization of                  proposed changes do not impose a                            • Send an email to rule-comments@
                                              the arbitration rules is part of the                    burden on competition because, as                         sec.gov. Please include File Number SR–
                                              Exchange’s continued effort to promote                  previously stated, they are (i) of a non-                 GEMX–2018–35 on the subject line.
                                              efficiency and conformity of its                        substantive nature, (ii) intended to                      Paper Comments
                                              processes with those of its Affiliated                  harmonize the structure of the
                                                                                                      Exchange’s rules with those of its                           • Send paper comments in triplicate
                                              Exchanges.6 The Exchange believes that                                                                            to Secretary, Securities and Exchange
                                              the adoption and placement of the                       Affiliated Exchanges, and (iii) intended
                                                                                                      to organize the Rulebook in a way that                    Commission, 100 F Street NE,
                                              Proposed Arbitration Rules to their new                                                                           Washington, DC 20549–1090.
                                              location in the shell will facilitate the               it will ease the Members’ navigation and
                                                                                                      reading of the rules across the Affiliated                All submissions should refer to File
                                              use of the Rulebook by Members of the
                                                                                                      Exchanges.                                                Number SR–GEMX–2018–35. This file
                                              Exchange who are members of other
                                                                                                                                                                number should be included on the
                                              Affiliated Exchanges. Moreover, the                     C. Self-Regulatory Organization’s                         subject line if email is used. To help the
                                              proposed changes are of a conforming                    Statement on Comments on the                              Commission process and review your
                                              nature and will not amend the                           Proposed Rule Change Received From                        comments more efficiently, please use
                                              substance of the adopted rules other                    Members, Participants, or Others                          only one method. The Commission will
                                              than to update the language to that of
                                                                                                        No written comments were either                         post all comments on the Commission’s
                                              the Proposed Arbitration Rules, and to
                                                                                                      solicited or received.                                    internet website (http://www.sec.gov/
                                              make conforming cross-reference
                                                                                                                                                                rules/sro.shtml).
                                              changes.                                                III. Date of Effectiveness of the
                                                                                                                                                                   Copies of the submission, all
                                                 GEMX will continue to file proposed                  Proposed Rule Change and Timing for
                                                                                                                                                                subsequent amendments, all written
                                              rule changes to amend its General 6                     Commission Action
                                                                                                                                                                statements with respect to the proposed
                                              Rules until such time as it receives an                    Because the foregoing proposed rule                    rule change that are filed with the
                                              exemption from the Securities and                       change does not: (i) Significantly affect                 Commission, and all written
                                              Exchange Commission, pursuant to its                    the protection of investors or the public                 communications relating to the
                                              authority under Section 36 of the                       interest; (ii) impose any significant                     proposed rule change between the
                                              Exchange Act of 1934 (‘‘Act’’) and Rule                 burden on competition; and (iii) become                   Commission and any person, other than
                                              0–12 7 thereunder, from the Section                     operative for 30 days from the date on                    those that may be withheld from the
                                              19(b) filing requirements to separately                 which it was filed, or such shorter time                  public in accordance with the
                                              file a proposed rule change to amend                    as the Commission may designate, it has                   provisions of 5 U.S.C. 552, will be
                                              General 6.                                              become effective pursuant to Section                      available for website viewing and
                                              2. Statutory Basis                                      19(b)(3)(A)(iii) of the Act 10 and                        printing in the Commission’s Public
                                                                                                      subparagraph (f)(6) of Rule 19b–4                         Reference Room, 100 F Street NE,
                                                 The Exchange believes that its
                                                                                                      thereunder.11                                             Washington, DC 20549, on official
                                              proposal is consistent with Section 6(b)                   At any time within 60 days of the
                                              of the Act,8 in general, and furthers the                                                                         business days between the hours of
                                                                                                      filing of the proposed rule change, the                   10:00 a.m. and 3:00 p.m. Copies of the
                                              objectives of Section 6(b)(5) of the Act,9              Commission summarily may
                                              in particular, in that it is designed to                                                                          filing also will be available for
                                                                                                      temporarily suspend such rule change if                   inspection and copying at the principal
                                                5 See Securities Exchange Act Release No. 83834                                                                 office of the Exchange. All comments
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                                                                                                        10 15  U.S.C. 78s(b)(3)(A)(iii).
                                              (August 13, 2018), 83 FR 41115 (August 17, 2018)          11 17
                                                                                                                                                                received will be posted without change.
                                              (SR–NASDAQ–2018–067).                                            CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                                                                      4(f)(6) requires a self-regulatory organization to give   Persons submitting comments are
                                                6 See footnote 3.
                                                7 See 17 CFR 240.0–12; Securities Exchange Act
                                                                                                      the Commission written notice of its intent to file       cautioned that we do not redact or edit
                                                                                                      the proposed rule change at least five business days      personal identifying information from
                                              Release No. 39624 (February 5, 1998), 63 FR 8101        prior to the date of filing of the proposed rule
                                              (February 18, 1998).                                    change, or such shorter time as designated by the
                                                                                                                                                                comment submissions. You should
                                                8 15 U.S.C. 78f(b).
                                                                                                      Commission. The Exchange has satisfied this               submit only information that you wish
                                                9 15 U.S.C. 78f(b)(5).                                requirement.                                              to make available publicly.


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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
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 53134 

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