83 FR 58309 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Amendment Nos. 1, 2, and 3 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3, to List and Trade Corporate Non-Convertible Bonds on Nasdaq

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 223 (November 19, 2018)

Page Range		58309-58315
FR Document		2018-25093

Federal Register, Volume 83 Issue 223 (Monday, November 19, 2018)

[Federal Register Volume 83, Number 223 (Monday, November 19, 2018)]
[Notices]
[Pages 58309-58315]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-25093]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84575; File No. SR-NASDAQ-2018-070]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Amendment Nos. 1, 2, and 3 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment Nos. 1, 2, and 3, to List and Trade Corporate Non-Convertible
Bonds on Nasdaq

November 13, 2018.

I. Introduction

On August 27, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade corporate non-convertible bonds
on the Exchange. The proposed rule change was published for comment in
the Federal Register on September 6, 2018.\3\ On October 12, 2018, the
Exchange filed Amendment No. 1 to the proposed rule change.\4\ On
October 16, 2018, pursuant to Section 19(b)(2) of the Act,\5\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\6\ On November 7, 2018, the Exchange filed Amendment No. 2 to
the proposed rule change.\7\ On November 8, 2018, the Exchange filed
Amendment No. 3 to the proposed rule change.\8\ The Commission received
no comment letters on the proposed rule change. The Commission is
publishing notice of the filing of Amendment Nos. 1, 2, and 3 to
solicit comment from interested persons and is approving the proposed
rule change, as modified by Amendment Nos. 1, 2, and 3 on an
accelerated basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 84001 (August 30,
2018), 83 FR 45289 (``Notice'').
\4\ In Amendment No. 1, the Exchange made clarifying and
technical revisions to the proposal, including to the proposed rule
text. The amendment is available at: https://www.sec.gov/comments/sr-nasdaq-2018-070/srnasdaq2018070-4514560-176013.pdf.
\5\ 15 U.S.C. 78s(b)(2).
\6\ See Securities Exchange Act Release No. 84439, 83 FR 53339
(October 22, 2018). The Commission designated December 5, 2018, as
the date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
\7\ In Amendment No. 2, the Exchange made additional clarifying
and technical revisions to the proposal, including to the proposed
rule text. The amendment is available at: https://www.sec.gov/comments/sr-nasdaq-2018-070/srnasdaq2018070-4629939-176409.pdf.
\8\ In Amendment No. 3, the Exchange made two clarifying and
technical revisions to the proposal, including to the proposed rule
text. The amendment is available at: https://www.sec.gov/comments/sr-nasdaq-2018-070/srnasdaq2018070-4630086-176412.pdf.
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II. Description of the Proposal, as Modified by Amendment Nos. 1, 2,
and 3

The Exchange proposes to amend its rules to permit the initial and
continued listing of non-convertible corporate debt securities
(``bonds'' or ``non-convertible bonds'') on Nasdaq and to establish
fees for listing those bonds.\9\ The Exchange also proposes to adopt
rules to trade such listed non-convertible bonds.
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\9\ Nasdaq rules currently provide for the initial and continued
listing of convertible bonds. See Nasdaq Rule 5515 and 5560.
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A. Listing Rules

For the initial listing of a non-convertible bond, the Exchange
proposes to require that the following conditions be satisfied: (1) The
principal amount outstanding or market value must be at least $5
million; \10\ and (2) the issuer of the non-convertible bond must have
one class of equity security that is listed on the Exchange, the New
York Stock Exchange LLC (``NYSE''), or NYSE American LLC (``NYSE
American'').\11\
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\10\ See proposed Rule 5702(a)(1).
\11\ See proposed Rule 5702(a)(2). The Exchange anticipates that
it will not be ready, prior to the second quarter of 2019, to list
non-convertible bonds of issuers whose equity securities are listed
on NYSE or NYSE American. The Exchange states that it will post a
notification via a trader alert at least seven days prior to
accepting applications from issuers to list such non-convertible
bonds.
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The Exchange proposes the following requirements for the continued
listing of a non-convertible bond: (1) The market value or principal
amount of non-convertible bonds outstanding is at least $400,000; \12\
and (2) the issuer must be able to meet its obligations on the listed
non-convertible bonds.\13\
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\12\ See proposed Rule 5702(b)(1).
\13\ See proposed Rule 5702(b)(2).
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The Exchange proposes to amend its current Rule 5810(c)(3) to
provide that the failure of an issuer of a non-convertible bond to meet
the $400,000 public float requirement stipulated above for a period of
30 consecutive business days will constitute a deficiency. In such an
event, the Exchange's Listings Qualifications Department will promptly
notify the deficient issuer, and the issuer will have a period of 180
calendar days from such notification to regain compliance. Compliance
will be deemed to be regained by meeting the $400,000 public

[[Page 58310]]

float requirement for a minimum of 10 consecutive business days, unless
the Listing Qualifications Department exercises its discretion to
extend this 10-day period as set forth in Rule 5810(c)(3)(G).
The Exchange also proposes to amend its current Rule 5810(c)(1) to
provide that the failure of an issuer to meet its obligations on the
non-convertible bonds, as determined by the Exchange's Listings
Qualifications Department, would result in immediate suspension and the
commencement of delisting proceedings.
In addition to the proposed quantitative requirements for listing
non-convertible bonds, the issuer of listed bonds would have to comply
with other requirements that are generally applicable to companies
listed on Nasdaq pursuant to Rule 5250 (Obligations for Companies
Listed on The Nasdaq Stock Market).\14\ The Exchange proposes to amend
its current Rule 5250(e)(3) to require issuers of non-convertible bonds
to provide at least 10 calendar days advance notice to the Exchange of
certain corporate actions, including redemptions (full or partial
calls), tender offers, changes in par value, and changes in identifier
(e.g., CUSIP number or symbol). In addition, the Exchange proposes to
amend the definition of a ``Substitution Listing Event'' in its Rule
5005(a)(41) to provide that a change in the obligor of a listed debt
security would constitute a Substitution Listing Event and thus require
the issuer to notify the Exchange pursuant to Rule 5250(e)(4).\15\
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\14\ See Nasdaq Rule 5250, requiring, among other things, that
issuers provide certain information to the Exchange, make public
disclosure of certain material information, and file all required
periodic financial reports.
\15\ The Exchange proposes to make this change with respect to
convertible and non-convertible bonds.
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In addition to the Exchange's rules that would apply to issuers of
non-convertible bonds that list on Nasdaq,\16\ the Exchange states that
such issuers would also be required to register non-convertible bonds
listed on the Exchange with the Commission pursuant to Section 12(a) of
the Act.\17\
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\16\ In addition to Nasdaq Rule 5250, the Exchange notes that,
currently, the Rule 5600 Series, which sets forth certain corporate
governance requirements for listed issuers, would apply to non-
convertible bonds listed on the Exchange.
\17\ Section 12(a) requires that, in order for an exchange
member, broker or dealer to effect a transaction in a security on a
national securities exchange, a registration must be effective ``as
to such security for such exchange.'' See 15 U.S.C. 78(l)(a). The
Exchange notes that, because the Exchange is proposing as an initial
listing requirement that the issuer currently list a class of equity
security on the Exchange, NYSE, or NYSE American, listed issuers of
non-convertible bonds may already disclose certain information
required by Section 12(a) of the Act.
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Finally, the Exchange proposes to make a non-substantive change to
its current Rule 5515(b)(4) to replace references to the American Stock
Exchange with NYSE American.\18\
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\18\ See Securities Exchange Act Release No. 80283 (Mar. 21,
2017), 82 FR 15244 (Mar. 27, 2017) (SR-NYSEMKT-2017-14).
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B. Listing Fees

The Exchange proposes to impose a non-refundable application fee of
$5,000 to list a class of non-convertible bonds.\19\ The Exchange
proposes to waive this application fee if a company will be switching
the listing market for its non-convertible bonds from NYSE or NYSE
American to the Exchange.\20\
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\19\ See proposed Rule 5935(a).
\20\ See id.
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The Exchange also proposes to impose an annual fee of $5,000 on the
issuer of each class of non-convertible bonds listed pursuant to Rule
5702.\21\ A company that switches the listing market for its non-
convertible bonds from NYSE or NYSE American to the Exchange would not
be liable for the annual fee until January 1 of the calendar year
following the effective date of the non-convertible bonds listing on
the Exchange.\22\
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\21\ See proposed Rule 5935(b).
\22\ See id.
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The Exchange also proposes to clarify rule text relating to listing
fees for convertible bonds.\23\
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\23\ Rule 5920(a)(2) requires a company that submits an
application to list any class of convertible debentures on the
Nasdaq Capital Market to pay an application fee of $5,000 and a fee
of $1,000 or $50 per million dollars face amount of debentures
outstanding, whichever is higher. The Exchange proposes to clarify
that the second fee is an entry fee, and that it is based upon the
face amount of convertible bonds outstanding.
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C. Trading Rules

In conjunction with the Exchange's proposal to adopt listing rules
for non-convertible bonds, the Exchange is proposing to trade such
listed non-convertible bonds on an electronic system (``Nasdaq Bond
Exchange'') and is proposing rules to govern such trading.\24\ The
Exchange proposes that all orders in non-convertible bonds will be
received, processed, executed, and reported by means of the Nasdaq Bond
Exchange.\25\ The Exchange's proposed trading rules would apply to: (i)
All transactions effected through the Nasdaq Bond Exchange; (ii) all
bids and offers made through the Nasdaq Bond Exchange; (iii) the
handling of orders and the conduct of accounts and other matters
relating to bidding, offering, and trading through the Nasdaq Bond
Exchange; and (iv) any non-convertible bond that is traded on the
Nasdaq Bond Exchange.\26\
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\24\ The Nasdaq Bond Exchange will only trade non-convertible
bonds that are listed on the Exchange. See Proposed Rule 4000B(e).
The Exchange states that the Nasdaq Bond Exchange will offer Members
certain core trading functionality that will be competitive with the
NYSE bond trading platform (``NYSE Bonds''). The Exchange states
that the Nasdaq Bond Exchange and the proposed trading rules that
govern it are based on NYSE Bonds and NYSE Rule 86, albeit a ``pared
down version.'' See Notice, supra note 3, at 45292.
\25\ See proposed Rule 4000B(a).
\26\ See proposed Rule 4000B(b)(1).
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1. Order Types
The Exchange proposes to allow Users \27\ of the Nasdaq Bond
Exchange to enter two types of orders: (1) Nasdaq Bond Exchange Good
for Day Limit Orders, and (2) Nasdaq Bond Exchange Fill-or-Kill All-Or-
None Orders. A Nasdaq Bond Exchange Good for Day Limit Order is an
order to buy or sell a stated quantity of units of non-convertible
bonds at a specified price or at a better price that, if not executed
or cancelled, will expire at the end of the trading session on the day
on which it is entered.\28\ A Nasdaq Bond Exchange Fill-or-Kill All-Or-
None Order is a market order that is to be executed immediately in its
entirety against one or more contra parties at the best prices
available, or if it is not executed immediately in its entirety, is
cancelled.\29\ All orders on the Nasdaq Bond Exchange will be displayed
and will be anonymous.\30\
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\27\ A ``User'' is any Nasdaq Member that has elected to receive
access to the Nasdaq Bond Exchange. See Proposed Rule
4000B(b)(2)(D).
\28\ See proposed Rule 4000B(b)(2)(B)(i).
\29\ See proposed Rule 4000B(b)(2)(B)(ii).
\30\ See Notice, supra note 3, at 45292.
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2. Trading Units
The minimum unit of trading on the Nasdaq Bond Exchange will be one
non-convertible bond unless the issuer otherwise specifies a larger
minimum unit of trading in the bond indenture agreement.\31\ The Nasdaq
Bond Exchange will accept and display bids and offers in bonds priced
to three decimal places.\32\
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\31\ See proposed Rule 4000B(c).
\32\ See proposed Rule 4000B(d). The Exchange states that bonds
priced to three decimal places is the market standard. See Notice,
supra note 3, at 45292.
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3. Order Entry and Execution
To post an order in a particular bond on the Nasdaq Bond Exchange,
a User will be required to enter certain basic information including
CUSIP number, order quantity, order type (e.g., Nasdaq Bond Exchange
Good for Day Limit Order), price (up to three decimals), and

[[Page 58311]]

side (buy or sell).\33\ The terms of an order entered into the Nasdaq
Bond Exchange may not be modified after entry.\34\ An order may be
cancelled at any time, provided the order has not been executed.\35\
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\33\ See Notice, supra note 3, at 45292.
\34\ See proposed Rule 4000B(g)(2).
\35\ See id.
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The Nasdaq Bond Exchange will be an electronic order-driven
matching system.\36\ Orders submitted by Users will be displayed,
matched, and executed on a price/time priority basis.\37\ Orders that
are marketable at the time of entry will be matched and executed.\38\
An order will be marketable when it enters the Nasdaq Bond Exchange
system if contra side interest is available at that price or a better
price.\39\ Nasdaq Bond Exchange Good for Day Limit Orders that are not
marketable at the time of entry would post to the Nasdaq Bond Exchange
order book.\40\
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\36\ See Notice, supra note 3, at 45292.
\37\ Specifically, buy and sell orders in the Nasdaq Bond
Exchange will be displayed, matched, and executed in the Bond
Trading Session in the following sequence: (i) According to price,
with the highest bid price and the lowest offer price receiving
highest priority; and (b) within each price, according to the time
of the order entry in the Nasdaq Bond Exchange. See proposed Rule
4000(g)(1).
\38\ See Notice, supra note 3, at 45292.
\39\ See id.
\40\ See id.
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The Nasdaq Bond Exchange will provide an exception to its normal
price/time system to allow Users to avoid internalizing orders.\41\
Pursuant to proposed Rule 4000B(g)(1)(C), Users may direct that orders
entered into the Nasdaq Bond Exchange not execute against orders
entered under the same MPID, and Users using the FIX order entry
protocol (discussed below) may assign to orders entered through a
specific order entry port a unique group identification modifier that
will prevent orders with such modifier from executing against each
other. In such a case, a User may elect from the following options: (i)
Regardless of the size of the interacting orders, cancelling the oldest
order in full; or (ii) regardless of the size of the interacting
orders, cancelling the most recent of the orders in full.\42\ The
foregoing options may be applied to all orders entered under the same
MPID or through a specific order entry port (i.e., the FIX order entry
protocol).\43\
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\41\ The Exchange states that Users may be interested in self-
match prevention in order to run multiple strategies at once that
may sit on opposite sides of the book. See Notice, supra note 3, at
45292.
\42\ See proposed Rule 4000B(g)(1)(C).
\43\ See id.
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The Exchange will charge no fees for posting orders or executing
trades on the Nasdaq Bond Exchange.\44\
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\44\ See Notice, supra note 3, at 45292.
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4. Clearing
According to the Exchange, most orders matched on the Nasdaq Bond
Exchange will be locked-in trades and will be submitted without an
omnibus account to the National Securities Clearing Corporation using
Universal Trade Capture and then to the Depository Trust Company
(``DTC'') for clearance and settlement.\45\ Settlement of corporate
bond trades will be consistent with current convention, i.e., two day
settlement, and bonds that are not eligible for settlement at DTC will
be settled manually (``ex-clearing'') between the two
counterparties.\46\
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\45\ See id.
\46\ See id.
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5. Bond Trading Session
The Nasdaq Bond Exchange will have one trading session per trading
day from 8:30 a.m. until 4:00 p.m. E.T. (``Bond Trading Session'')
during which non-convertible bonds will be available for trading.\47\
There will be no pre-market or post-market session; the Nasdaq Bond
Exchange will immediately start processing orders as they are entered
upon opening.\48\ Orders submitted outside of the Bond Trading Session
will not be accepted.\49\
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\47\ See proposed Rule 4000B(f).
\48\ See Notice, supra note 3, at 45293.
\49\ See proposed Rule 4000B(f).
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6. Clearly Erroneous Executions
All matters related to clearly erroneous transactions executed on
the Nasdaq Bond Exchange will be initiated and adjudicated pursuant to
Nasdaq Rule 11890, which governs the process for addressing clearly
erroneous trades.\50\ A ``Clearly Erroneous Execution'' on the Nasdaq
Bond Exchange refers to an execution involving an obvious error in any
term of an order participating in such execution, such as price, unit
of trading, or identification of the non-convertible bond.\51\
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\50\ See proposed Rule 4000B(h).
\51\ See proposed Rule 4000B(b)(2)(C).
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A User that receives an erroneous execution may request the
Exchange to review the transaction.\52\ A request for review of an
execution must include certain information, including the time of the
transaction, security symbol, number of bonds, price, side (bought or
sold), and factual basis for believing that the trade is clearly
erroneous.\53\ The request for review must be submitted within 30
minutes of the trade in question.\54\ The other party (or parties) to
the trade will be notified of the request for review.\55\ Thereafter,
an Exchange official will review the transaction and make a
determination as to whether it was clearly erroneous within 30 minutes
of receipt of the complaint, but in no case later than the start of the
Bond Trading Session on the following trading day.
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\52\ See Nasdaq Rule 11890(a).
\53\ See Rule 11890(a)(2) (as proposed to be amended).
\54\ See Rule 11890(a)(2)(A).
\55\ See Rule 11890(a)(2).
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The Exchange proposes that, when determining whether a trade in
non-convertible bonds listed on the Nasdaq Bond Exchange is clearly
erroneous, a Nasdaq official may consider any and all relevant factors
of an execution on a case by case basis including, but not limited to,
the following: (i) Execution price; (ii) volume and volatility of a
non-convertible bond; (iii) news released for the issuer of the non-
convertible bond and/or the related equity security; (iv) trading
halts; (v) corporate actions; (vi) general market conditions; (vii) the
rating of the non-convertible bond; (viii) interest and/or coupon rate;
(ix) maturity date; (x) yield curves; (xi) prior print, if available
within a reasonable time frame; (xii) executions inconsistent with the
trading pattern of a non-convertible bond; (xiii) current day's trading
high/low; (xiv) recent day's and week's trading high/low; (xv)
executions outside the 52-week high/low; (xvi) effect of a single large
order creating several prints at various prices; and (xvii) quotes and
executions of other market centers.\56\
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\56\ See proposed Rule 11890(a)(2)(C)(4). These criteria would
be in lieu of the criteria presently used to determine clearly
erroneous executions of equity securities, which are set forth in
Rule 11890(a)(2)(C)(1)-(C)(3). See id.
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The parties will be promptly notified of the reviewer's
determination and, in the event that the Nasdaq official determines
that the transaction in dispute is clearly erroneous, the official will
declare the transaction null and void.\57\ If the reviewer determines
that the execution is not clearly erroneous, then no corrective action
will be taken in relation to the transaction.\58\ If one party does not
agree with the determination, then that party may request further
review or an appeal to the Nasdaq Review Council pursuant to

[[Page 58312]]

the procedures set forth in Rule 11890(c).\59\
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\57\ See Rule 11890(a)(2)(B).
\58\ See Notice, supra note 3, at 45293.
\59\ The Exchange states that it expects that the existing
Member representatives of the Nasdaq Review Council will adequately
represent the interests of Users in appeals of clearly erroneous
determinations. The Exchange represents that, if it becomes apparent
to the Exchange that the roster of the Nasdaq Review Council does
not adequately represent the interests of Users, then it will, at
the appropriate time, consider nominating one or more Users to the
Nasdaq Review Council. See Notice, supra note 3, at 45293, n. 33.
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Rule 11890(b) provides that, in the event of any disruption or a
malfunction in the operation of any electronic communications and
trading facilities of the Exchange, including the Nasdaq Bond Exchange,
in which the nullification of transactions may be necessary for the
maintenance of a fair and orderly market or the protection of investors
and the public interest, the President of the Exchange or any
designated officer or senior level employee of the Exchange (each, a
``Senior Official'') may, without the need for a request for review,
review such transactions and determine if any are erroneous.\60\ In
addition, Rule 11890(b) further provides that a Senior Official may, on
his or her own motion, review potentially erroneous executions.\61\ In
such situations, the Senior Official will rely on the criteria set
forth in proposed Rule 11890(a)(2)(C)(4). Any such action of the Senior
Official must be taken within 30 minutes of detection of the erroneous
transaction (in extraordinary circumstances, no later than the start of
the Bond Trading Session on the trading day following the date of
execution(s) under review), and each party to the erroneous transaction
will be notified of the situation and the specific action as soon as
practicable.\62\ Subject to certain exceptions, a User may appeal an
erroneous determination made by a Senior Official acting on his or her
own motion or pursuant to a system disruption or malfunction to the
Nasdaq Review Council.\63\
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\60\ See Nasdaq Rule 11890(b)(i).
\61\ See Nasdaq Rule 11890(b)(ii).
\62\ See Nasdaq Rules 11890(b)(i)-(ii).
\63\ See Nasdaq Rule 11890(c).
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7. Halting and Suspending Bond Trading on the Exchange
The Exchange proposes to halt or suspend trading in a non-
convertible bond on the Nasdaq Bond Exchange in certain
circumstances.\64\ Proposed Rule 4000B(i)(1) provides that the Exchange
may halt or suspend trading in non-convertible bonds listed on the
Nasdaq Bond Exchange when: (1) In the exercise of its regulatory
function, the Exchange determines such action is necessary and
appropriate to maintain a fair and orderly market, to protect
investors, or is in the public interest, due to extraordinary
circumstances or unusual market conditions; (2) a class of equity that
is issued by the same issuer as the non-convertible bond has been
halted or suspended by, or delisted from, the Exchange or its primary
listing market (NYSE or NYSE American), as applicable; (3) news reports
have a material impact on the non-convertible bond, its issuer, or
related stock of its issuer; or (4) the non-convertible bond is to be
called for redemption or will mature or become subject to retirement,
and thereafter it will be subject to delisting. In the event of a
trading halt or suspension under any of the foregoing circumstances, a
halt or suspension message will be disseminated by the Exchange to
subscribers to the Nasdaq Corporates Totalview Data Feed (discussed
below) to signal the commencement and end of the halt or
suspension.\65\ Upon commencement of a halt or suspension, all pending
orders in the Nasdaq Bond Exchange will be cancelled and new orders
entered into the Nasdaq Bond Exchange during a bond halt or suspension
will not be accepted.\66\ The Nasdaq Bond Exchange will resume
accepting new orders and trading once the Exchange declares an end to a
bond halt or suspension.\67\
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\64\ See proposed Rule 4000B(i)(1).
\65\ See proposed Rule 4000B(i)(2).
\66\ See id.
\67\ See id.
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8. Dissemination of Trading Information
The Exchange will disseminate via the Nasdaq Corporates Totalview
Data Feed, a real-time data feed, best bid and offer information for
non-convertible bonds for which there are orders posted to the Nasdaq
Bond Exchange's order book, as well as last sale information (including
sale price and trade size) for trades executed on the Nasdaq Bond
Exchange.\68\ The Exchange states that the Nasdaq Corporates Totalview
Data Feed would reflect all orders in time sequence in the Nasdaq Bond
Exchange's order book.\69\ The Exchange states that the Nasdaq
Corporates Totalview Data Feed will be available free of charge to
those who request access and agree to the Exchange's terms.\70\
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\68\ See proposed Rule 7050. The Exchange represents that,
pursuant to FINRA Rule 6730(e)(2), transactions on the Nasdaq Bond
Exchange need not be reported to FINRA's Trade Reporting and
Compliance Engine because only bonds listed on Nasdaq may be traded
on the Nasdaq Bond Exchange and the transaction information will be
disseminated publicly. See Notice, supra note 3, at 45294 n. 43.
\69\ See Notice, supra note 3, at 45294.
\70\ See proposed Rule 7050. See also Notice, supra note 3, at
45294.
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9. Access to the Nasdaq Bond Exchange System
The Exchange proposes that Members \71\ of the Exchange that enter
into a Nasdaq U.S. Services Agreement and elect to receive access to
the Nasdaq Bond Exchange on their Member application form will be
authorized Users and able to access the Nasdaq Bond Exchange.\72\ The
Exchange states that existing Members of the Exchange will not be
required to amend their Nasdaq U.S. Services Agreements to obtain
access to the Nasdaq Bond Exchange; rather, they will be required to
complete a form expressing their interest in becoming a Nasdaq Bond
Exchange User.\73\
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\71\ A ``Member'' means any registered broker or dealer that has
been admitted to membership in Nasdaq. See Rule 0120(i).
\72\ See proposed Rule 4000B(b)(2)(D) (defining ``User''). See
also Notice, supra note 3, at 45294.
\73\ See id.
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The Exchange states that Users of the Nasdaq Bond Exchange will
gain access to the system via direct or indirect electronic linkages
utilizing the Financial Information Exchange or ``FIX'' protocol.\74\
The Nasdaq Bond Exchange will use the FIX protocol for message
transmittal, including for the entry, modification, and cancellation of
orders in non-convertible bonds.\75\ The Exchange states that Users may
establish connectivity to the Nasdaq Bond Exchange either directly or
through third-party connectivity providers.\76\ The Exchange will not
charge any fees for FIX port connectivity to the Nasdaq Bond Exchange
or to its disaster recovery system.\77\
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\74\ See id.
\75\ See id.
\76\ See id. The Exchange notes that Users that purchase FIX
port connectivity to the Exchange will need to obtain one or more
additional FIX ports to connect to the Nasdaq Bond Exchange.
Separately from port connectivity, the Exchange notes that Users
will need to establish physical connections to the Nasdaq Bond
Exchange, as set forth in General 8 of the Nasdaq Rules. In
addition, the Exchange states that, to the extent that a User
already purchases physical connectivity to the Exchange, that
purchase will also provide for the User to connect to the Nasdaq
Bond Exchange, and the User will not incur an additional fee for the
new connection. The Exchange states that new Users that do not
already purchase physical connectivity to the Exchange will need to
do so pursuant to General 8 of the Nasdaq Rules. See id. at nn. 44-
45.
\77\ See proposed Rule 7015(b).
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10. Reports and Recordkeeping
The Exchange proposes that Users of the Nasdaq Bond Exchange will
have to comply with all relevant rules of the

[[Page 58313]]

Exchange and the Commission in relation to reports and recordkeeping of
transactions on the Nasdaq Bond Exchange, including, but not limited
to, Rules 17a-3 and 17a-4 under the Act.\78\
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\78\ See proposed Rule 4000B(j).
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11. Regulation and Surveillance
The Exchange represents that it will regulate the Nasdaq Bond
Exchange and enforce compliance with its rules by leveraging its
existing infrastructure for operating a national securities exchange in
compliance with Section 6 of the Act.\79\ The Exchange states that its
existing disciplinary rules and processes, set forth in its Rule 8000
and 9000 Series, will govern the discipline of Members that participate
in corporate bond trading.\80\ The Exchange further represents that it
will enforce its non-convertible bond listing requirements as well as
perform real-time surveillance of trading on the Nasdaq Bond
Exchange.\81\
---------------------------------------------------------------------------

\79\ See Notice, supra note 3, at 45294.
\80\ See id.
\81\ See id.
---------------------------------------------------------------------------

The Exchange states that its MarketWatch Department
(``MarketWatch'') monitors real time trading in all Nasdaq securities
during the trading day for price and volume activity.\82\ The Exchange
states that MarketWatch will also perform real-time surveillance of the
Nasdaq Bond Exchange for the purpose of maintaining a fair and orderly
market at all times.\83\ For example, the MarketWatch will monitor
trading on the Nasdaq Bond Exchange market on a real-time basis to
identify unusual trading patterns and determine whether particular
trading activity requires further regulatory investigation.\84\
---------------------------------------------------------------------------

\82\ See Notice, supra note 3, at 45291.
\83\ See Notice, supra note 3, at 45294.
\84\ See id.
---------------------------------------------------------------------------

The Exchange further notes that Nasdaq Regulation will oversee the
process for determining and implementing trade halts and identifying
and responding to unusual market conditions.\85\
---------------------------------------------------------------------------

\85\ See id.
---------------------------------------------------------------------------

12. System Information
The Exchange states that the Nasdaq Bond Exchange will operate out
of the same data center in Carteret, New Jersey, as does Nasdaq and
other exchanges owned by Nasdaq, Inc., but it will use equipment
separate from that used by those other exchanges.\86\
---------------------------------------------------------------------------

\86\ See id. The Nasdaq Bond Exchange backup data center will be
in Chicago, Illinois, and the Exchange represents that it will be
designed to resume operations of the Nasdaq Bond Exchange, in the
event of a system failure, in accordance with the requirements of
Regulation Systems Compliance and Integrity. See id.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

After careful review, the Commission finds that the proposed rule
change, as modified by Amendment Nos. 1, 2, and 3, is consistent with
the requirements of Section 6 of the Act \87\ and the rules and
regulations thereunder applicable to the Exchange.\88\ Specifically,
the Commission finds that the proposed rule change is consistent with
Section 6(b)(4) of the Act,\89\ which requires that the rules of a
national securities exchange provide for the equitable allocation of
reasonable dues, fees, and other charges among its members and issuers
and other persons using its facilities, and Section 6(b)(5) of the
Act,\90\ which requires, among other things, that the rules of an
exchange be 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 regulating,
clearing, settling, processing information with respect to, and
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,
and not be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

\87\ 15 U.S.C. 78f(b).
\88\ In approving these proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\89\ 15 U.S.C. 78f(b)(4).
\90\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

A. Listing Rules

The development and enforcement of adequate initial and continued
listing standards for securities listed on a national securities
exchange is of critical importance to financial markets and the
investing public. The Commission believes that the Exchange's proposal
is reasonably designed to determine which non-convertible bonds warrant
listing on the Exchange and ensure that investors receive the
protections of the Exchange's listing standards. Specifically, the
Exchange's initial listing standards are reasonably designed to ensure
that only companies capable of meeting their financial obligations are
eligible to have their non-convertible bonds listed on Nasdaq, as the
proposal requires these issuers to also have one class of equity
security listed on Nasdaq, NYSE, or NYSE American. In addition, by
limiting listing to non-convertible bond issues with a principal amount
outstanding or a market value of at least $5 million, the proposal is
reasonably designed to exclude from Nasdaq Bond Exchange securities
that would not have sufficient liquidity for a fair and orderly market.
Furthermore, as noted by the Exchange, the proposed initial listing
standards for non-convertible bonds are substantially similar to those
of NYSE and NYSE American.\91\
---------------------------------------------------------------------------

\91\ See Notice, supra note 3, at 45289-90. Both NYSE and NYSE
American require that a debt issue have an aggregate market value or
principal amount of no less than $5 million for initial listing. See
Section 102.03 of the NYSE Listed Company Manual and Section 104 of
the NYSE American Company Guide. NYSE also requires that the issuer
of the debt security has equity securities listed on the exchange or
the debt security meets an alternative standard. See Section 102.03
of the NYSE Listed Company Manual. NYSE American requires that the
issuer of the debt security has equity securities listed on the
exchange, NYSE, or Nasdaq, or meets an alternative standard. See
Section 104 of the NYSE American Company Guide.
---------------------------------------------------------------------------

For continued listing standards, the Exchange requires that the
market value or principal amount of non-convertible bonds outstanding
is at least $400,000 and the issuer must be able to meet its
obligations on the listed non-convertible bonds. The Commission
believes that such continued listing requirements for non-convertible
bonds are reasonably designed to enable the Exchange to identify listed
issuers that may have insufficient resources to meet their financial
obligations or whose non-convertible bonds may lack adequate trading
depth and liquidity. In addition, as noted by the Exchange, the
proposed continued listing standards for non-convertible bonds are
identical to the continued listing requirements for bonds imposed by
NYSE American.\92\ Furthermore, the Commission notes that the
Exchange's current rules allow Nasdaq to request additional
information, either public or non-public, that it deems necessary to
make a determination regarding a company's continued listing.\93\
---------------------------------------------------------------------------

\92\ See Notice, supra note 3, at 45290. See also Section
1003(b)(iv) of the NYSE American Company Guide.
\93\ See id. at 45290. See also Nasdaq Rule 5250(a)(1).
---------------------------------------------------------------------------

The Exchange represents that its proposal to amend Rule 5250(e)(3)
to require an issuer to provide at least 10 calendar days advance
notice of certain corporate actions related to non-convertible bonds
listing on the Exchange will aid its Listings Qualification Department
in assessing an issuer's compliance with the continued listing
standards.\94\ The Commission believes that requiring an issuer of non-
convertible bonds to

[[Page 58314]]

report such events, as well as requiring an issuer of a convertible or
non-convertible bond to report a change in the obligor of a listed debt
security as a Substitution Listing event, is appropriate and consistent
with the Act, as such information will help the Exchange make
determinations regarding the suitablility of a debt security to stay
listed on its market.
---------------------------------------------------------------------------

\94\ See Notice, supra note 3, at 45295, n. 58.
---------------------------------------------------------------------------

The Commission further believes it is consistent with the Act for
the Exchange to immediately institute delisting proceedings if the
Exchange determines that an issuer is unable to meet its obligations on
its non-convertible bonds, as bonds with little or no value may not be
appropriate for continued listing on the Exchange. Furthermore, the
Commission believes that providing a 180-day compliance period for an
issuer that fails to meet the $400,000 market value or principal amount
outstanding requirement is reasonably designed to ensure that the
Exchange has an adequate procedure to permit an issuer to regain
compliance before delisting a non-convertible bond that may lack
adequate trading depth and liquidity and for which continued exchange
trading may not be in the best interests of investors.

B. Trading Rules

The Exchange proposes to establish a new electronic trading
platform, the Nasdaq Bond Exchange, to trade non-convertible bonds and
to implement rules governing the trading of such bonds. The Commission
believes that the establishment of the Nasdaq Bond Exchange to trade
non-convertible bonds is generally consistent with the Act and may
foster price discovery and competition in the non-convertible bonds
market. As described above, the proposal includes provisions regarding
access, order entry, order types, manner of execution, priority,
trading sessions, trading units, clearing, trade halt and suspension
procedures, clearly erroneous executions, reports and recordkeeping,
dissemination of trading information, and regulation and surveillance.
The Commission finds that these provisions are reasonably designed to
promote the efficient functioning of the Nasdaq Bond Exchange and are
generally consistent with the Act. The Commission notes that the
proposed rules closely parallel, and are substantially similar to,
current NYSE Rule 86, which governs trading on NYSE Bonds, and which
was filed with and approved by the Commission pursuant to Section 19(b)
of the Act.\95\ In addition, the proposed anti-internalization
exception to price-time priority execution set forth in proposed Rule
4000B(g)(1)(C) is substantially similar to Nasdaq's anti-
internalization exception.\96\
---------------------------------------------------------------------------

\95\ See Securities Exchange Act Release No. 55496 (March 20,
2007), 72 FR 14631 (March 28, 2007). The Commission notes that the
Exchange's proposed trading rules and the Nasdaq Bond Exchange
functionality are more limited in scope than NYSE Rule 86 and NYSE
Bonds. The Nasdaq Bond Exchange, like NYSE Bonds, will display,
match, and execute buy and sell orders on a price/time basis;
however, unlike NYSE Bonds, the Nasdaq Bond Exchange will not
conduct auctions or establish prices collars for orders. The Nasdaq
Bond Exchange, like NYSE Bonds, will accept good-for-day limit
orders and fill-or-kill orders; however, unlike NYSE Bonds, the
Nasdaq Bond Exchange will not have additional order types (e.g.,
reserve orders, minimum quantity orders, good-til-cancelled orders,
and timed orders). The Nasdaq Bond Exchange will have only one
trading session each day as opposed to NYSE Bonds, which has three
sessions. Furthermore, unlike NYSE Bonds, the Exchange is not
proposing sponsored access to the Nasdaq Bond Exchange, nor is the
Exchange proposing to have market makers on the Nasdaq Bond
Exchange. See NYSE Rule 86. See also, Notice, supra note 3, at
45292.
\96\ See Nasdaq Rule 4757(a)(4). The Exchange states that
proposed Rule 4000B(g)(1)(C) is based on Nasdaq Rule 4757(a)(4). See
Notice, supra note 3, at 45292.
---------------------------------------------------------------------------

The Commission notes that the Nasdaq Bond Exchange will only trade
non-convertible bonds that are listed on Nasdaq. The Commission further
notes that the Exchange is not charging any fees to post or execute
trades on the Nasdaq Bond Exchange or for FIX port connectivity to the
Nasdaq Bond Exchange or for connectivity to the Nasdaq Bond Exchange's
disaster recovery system. In addition, the Nasdaq Corporates Totalview
Data Feed will be available free of charge to those who request access.
Section 11(a) of the Act \97\ prohibits a member of a national
securities exchange from effecting transactions on that exchange for
its own account, the account of an associated person, or an account
over which it or its associated person exercises investment discretion,
unless an exception applies. The Commission notes that this general
prohibition would not generally impact trading on the Nasdaq Bond
Exchange because Rule 11a1-4(T) under the Act \98\ deems transactions
in bonds on a national securities exchange for a member's own account
to be consistent with Section 11(a). Similarly, the Commission notes
that Section 11(b) of the Act \99\ and Rule 11b-1 thereunder,\100\
which pertain to specialists and market-makers, would not be implicated
because there would be no specialists or market makers on the Nasdaq
Bond Exchange.
---------------------------------------------------------------------------

\97\ 15 U.S.C. 78k(a).
\98\ 17 CFR 240.11a1-4(T).
\99\ 15 U.S.C. 78k(b).
\100\ 17 CFR 240.11b-1.
---------------------------------------------------------------------------

C. Listing Fees

The Commission believes that the proposed listing fees for non-
convertible bonds are an equitable allocation of reasonable fees. The
Exchange states that the proposed $5,000 application fee and $5,000
annual fee for listing non-convertible bonds will support the
Exchange's regulatory program to review and qualify debt issuances for
listing.\101\ In addition, the Exchange states that the proposed fees
are competitive with the initial and annual fees that are currently
assessed by NYSE American for the listing of bonds,\102\ and that the
proposed $5,000 application fee is the same as the application fee it
currently charges for convertible bonds.\103\
---------------------------------------------------------------------------

\101\ See Notice, supra note 3, at 45295.
\102\ See id. NYSE American charges an initial listing fee for
bonds of $100 per $1 million principal amount (or fraction thereof)
with a minimum fee of $5,000 and a maximum fee of $10,000. NYSE
American charges an annual fee of $5,000 for listed bonds and
debentures of companies whose equity securities are not listed on
NYSE American. See NYSE American Listed Company Guide Sections 140
and 141.
\103\ See Nasdaq Rule 5920.
---------------------------------------------------------------------------

The proposed application listing fees will be applicable to all
issuers seeking to list non-convertible bonds on the Exchange, other
than issuers that switch their listing to the Exchange from NYSE or
NYSE American. The Commission believes that the proposed waiver of the
application fee and the first year's annual fee for issuers that switch
their listings to Nasdaq from NYSE or NYSE American is reasonable and
not unfairly discriminatory. The Exchange states that less work is
required to process a listing application for a security that is
already listed on another exchange than it is to process an application
for listing a new security.\104\ In addition, the Exchange states that
issuers that have already paid their annual fees to NYSE or NYSE
American would be disincentivized to switch their listings to the
Exchange without the waiver.\105\ Finally, the Exchange notes that it
currently waives certain listing and annual fees for issuers of equity
securities who transfer their listings to the Exchange from another
national securities exchange.\106\
---------------------------------------------------------------------------

\104\ See Notice, supra note 3, at 45295.
\105\ See Notice, supra note 3, at 45296.
\106\ See Securities Exchange Act Release No. 34-70418 (Sept.
16, 2013), 78 FR 57909 (Sept. 20, 2013) (SR-NASDAQ-2013-115).
---------------------------------------------------------------------------

IV. Solicitation of Comments on Amendment Nos. 1, 2, and 3 to the
Proposed Rule Change

Interested persons are invited to submit written data, views, and

[[Page 58315]]

arguments concerning whether Amendment Nos. 1, 2, and 3 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-NASDAQ-2018-070 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-NASDAQ-2018-070. 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. All submissions
should refer to File Number SR-NASDAQ-2018-070 and should be submitted
on or before December 10, 2018.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment Nos. 1, 2, and 3

The Commission finds good cause to approve the proposed rule
change, as modified by Amendment Nos. 1, 2, and 3 prior to the
thirtieth day after the date of publication of notice of the filing of
Amendment Nos. 1, 2, and 3 in the Federal Register. The Commission
notes that Amendment Nos. 1, 2, and 3 provide clarifications and
additional information to the proposed rule change. The changes and
additional information in Amendment Nos. 1, 2, and 3 assist the
Commission in finding that the proposal is consistent with the Act.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\107\ to approve the proposed rule change, as
modified by Amendment Nos. 1, 2, and 3, on an accelerated basis.VI.
---------------------------------------------------------------------------

\107\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\108\ that the proposed rule change (SR-NASDAQ-2018-070), as
modified by Amendment Nos. 1, 2, and 3, be, and it hereby is, approved.
---------------------------------------------------------------------------

\108\ 15 U.S.C. 78s(b)(2).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\109\
---------------------------------------------------------------------------

\109\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25093 Filed 11-16-18; 8:45 am]
BILLING CODE P

Federal Register / Vol. 83, No. 223 / Monday, November 19, 2018 / Notices 58315

arguments concerning whether Amendment Nos. 1, 2, and 3 in the Register on October 1, 2018.3 The
Amendment Nos. 1, 2, and 3 is Federal Register. The Commission notes Commission has received no comment
consistent with the Act. Comments may that Amendment Nos. 1, 2, and 3 letters on the proposed rule change.
be submitted by any of the following provide clarifications and additional Section 19(b)(2) of the Act 4 provides
methods: information to the proposed rule that, within 45 days of the publication
change. The changes and additional of notice of the filing of a proposed rule
Electronic Comments
information in Amendment Nos. 1, 2, change, or within such longer period up
• Use the Commission’s internet and 3 assist the Commission in finding to 90 days as the Commission may
comment form (http://www.sec.gov/ that the proposal is consistent with the designate if it finds such longer period
rules/sro.shtml); or Act. Accordingly, the Commission finds to be appropriate and publishes its
• Send an email to rule-comments@ good cause, pursuant to Section 19(b)(2) reasons for so finding or as to which the
sec.gov. Please include File Number SR– of the Act,107 to approve the proposed self-regulatory organization consents,
NASDAQ–2018–070 on the subject line. rule change, as modified by Amendment the Commission shall either approve the
Paper Comments Nos. 1, 2, and 3, on an accelerated proposed rule change, disapprove the
basis.VI. proposed rule change, or institute
• Send paper comments in triplicate
proceedings to determine whether the
to Secretary, Securities and Exchange VI. Conclusion proposed rule change should be
Commission, 100 F Street NE,
It is therefore ordered, pursuant to disapproved. The 45th day after
Washington, DC 20549–1090.
Section 19(b)(2) of the Act,108 that the publication of the notice for this
All submissions should refer to File proposed rule change is November 15,
Number SR–NASDAQ–2018–070. This proposed rule change (SR–NASDAQ–
2018–070), as modified by Amendment 2018. The Commission is extending this
file number should be included on the 45-day time period.
subject line if email is used. To help the Nos. 1, 2, and 3, be, and it hereby is,
approved. The Commission finds that it is
Commission process and review your appropriate to designate a longer period
comments more efficiently, please use For the Commission, by the Division of within which to take action on the
only one method. The Commission will Trading and Markets, pursuant to delegated
proposed rule change so that it has
post all comments on the Commission’s authority.109
sufficient time to consider the proposed
internet website (http://www.sec.gov/ Eduardo A. Aleman,
rule change. Accordingly, the
rules/sro.shtml). Copies of the Assistant Secretary. Commission, pursuant to Section
submission, all subsequent [FR Doc. 2018–25093 Filed 11–16–18; 8:45 am] 19(b)(2) of the Act,5 designates
amendments, all written statements BILLING CODE P December 30, 2018, as the date by
with respect to the proposed rule
which the Commission shall either
change that are filed with the
approve or disapprove or institute
Commission, and all written SECURITIES AND EXCHANGE proceedings to determine whether to
communications relating to the COMMISSION disapprove the proposed rule change
proposed rule change between the
(File Number SR–NYSEArca–2018–67).
Commission and any person, other than [Release No. 34–84576; File No. SR–
those that may be withheld from the For the Commission, by the Division of
NYSEArca–2018–67] Trading and Markets, pursuant to delegated
public in accordance with the
authority.6
provisions of 5 U.S.C. 552, will be Self-Regulatory Organizations; NYSE
available for website viewing and Eduardo A. Aleman,
Arca, Inc.; Notice of Designation of a
printing in the Commission’s Public Longer Period for Commission Action Assistant Secretary.
Reference Room, 100 F Street NE, on Proposed Rule Change To Amend [FR Doc. 2018–25094 Filed 11–16–18; 8:45 am]
Washington, DC 20549, on official NYSE Arca Rule 5.2–E(j)(6) Relating to BILLING CODE 8011–01–P
business days between the hours of Equity Index-Linked Securities Listing
10:00 a.m. and 3:00 p.m. Copies of the Standards Set Forth in NYSE Arca Rule
filing also will be available for 5.2–E(j)(6)(B)(I) SECURITIES AND EXCHANGE
inspection and copying at the principal COMMISSION
office of the Exchange. All comments November 13, 2018.
[Investment Company Act Release No.
received will be posted without change. On September 10, 2018, NYSE Arca, 33295; 812–14920]
Persons submitting comments are Inc. (‘‘Exchange’’) filed with the
cautioned that we do not redact or edit Securities and Exchange Commission ABR Dynamic Funds, LLC, et al.
personal identifying information from (‘‘Commission’’), pursuant to Section November 14, 2018.
comment submissions. You should 19(b)(1) of the Securities Exchange Act
submit only information that you wish AGENCY: Securities and Exchange
of 1934 (‘‘Act’’) 1 and Rule 19b–4
to make available publicly. All Commission (‘‘Commission’’).
thereunder,2 a proposed rule change to
submissions should refer to File ACTION: Notice.
amend listing standards set forth in
Number SR–NASDAQ–2018–070 and NYSE Arca Rule 5.2–E (j)(6)(B)(I) Notice of an application for an order
should be submitted on or before relating to criteria applicable to under section 6(c) of the Investment
December 10, 2018. components of an index underlying an Company Act of 1940 (the ‘‘Act’’) for an
V. Accelerated Approval of Proposed issue of Equity Index-Linked Securities. exemption from sections 2(a)(32),
khammond on DSK30JT082PROD with NOTICES

Rule Change, as Modified by The proposed rule change was 5(a)(1), 22(d), and 22(e) of the Act and
Amendment Nos. 1, 2, and 3 published for comment in the Federal rule 22c–1 under the Act, under
The Commission finds good cause to 107 15 U.S.C. 78s(b)(2). 3 See Securities Exchange Act Release No. 84279
approve the proposed rule change, as 108 15 U.S.C. 78s(b)(2). (Sept. 25, 2018), 83 FR 49437.
modified by Amendment Nos. 1, 2, and 109 17 CFR 200.30–3(a)(12). 4 15 U.S.C. 78s(b)(2).

3 prior to the thirtieth day after the date 1 15 U.S.C. 78s(b)(1). 5 Id.

of publication of notice of the filing of 2 17 CFR 240.19b–4. 6 17 CFR 200.30–3(a)(31).

VerDate Sep<11>2014 17:20 Nov 16, 2018 Jkt 247001 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 E:\FR\FM\19NON1.SGM 19NON1

Document Created: 2018-11-17 02:46:35
Document Modified: 2018-11-17 02:46:35

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 58309