60 day notice

60 day notice for registration requirements for security based swap dealers.pdf

Registration Requirements for Security-based Swap Dealers and Major Security-based Swap Participants

60 day notice

OMB: 3235-0696

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Federal Register / Vol. 83, No. 224 / Tuesday, November 20, 2018 / Notices
Number SR–MIAX–2018–34, and
should be submitted on or before
December 11, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–25249 Filed 11–19–18; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA
Services, 100 F Street NE,
Washington, DC 20549–2736.
Extension:
Rules 15Fb1–1 through 15Fb6–2 and
Forms SBSE, SBSE–A, SBSE–BD,
SBSE–C and SBSE–W, SEC File No.
270–642, OMB Control No. 3235–
0696.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.) the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rules 15Fb1–1 through
15Fb6–2 and Forms SBSE, SBSE–A,
SBSE–BD, SBSE–C and SBSE–W (17
CFR 240.15Fb1–1 through 240.15Fb6–2,
and 17 CFR 249.1600, 249.1600a,
249.1600b, 249.1600c and 249.1601),
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.). The
Commission plans to submit this
existing collection of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
The Commission adopted Rules
15Fb1–1 through 15Fb6–2 and Forms
SBSE, SBSE–A, SBSE–BD, SBSE–C and
SBSE–W on August 5, 2015 to create a
process to register SBS Entities. Forms
SBSE, SBSE–A, and SBSE–BD and
SBSE–C were designed to elicit certain
information from applicants. The
Commission uses the information
disclosed by applicants through the SBS
Entity registration rules and forms to: (1)
Determine whether an applicant meets
the standards for registration set forth in
the provisions of the Exchange Act; and
(2) develop an information resource
regarding SBS Entities where members
of the public may obtain relevant, up-todate information about SBS Entities,
and where the Commission may obtain
information for examination and
22 17

CFR 200.30–3(a)(12).

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enforcement purposes. Without the
information provided through these SBS
Entity registration rules and forms, the
Commission could not effectively
determine whether the applicant meets
the standards for registration or
implement policy objectives of the
Exchange Act.
The information collected pursuant to
Rule 15Fb3–2 and Form SBSE–W allows
the Commission to determine whether it
is appropriate to allow an SBS Entity to
withdraw from registration and to
facilitate that withdrawal. Without this
information, the Commission would be
unable to effectively determine whether
it was appropriate to allow an SBS
Entity to withdraw. In addition, it
would be more difficult for the
Commission to properly regulate SBS
Entities if it were unable to quickly
identify those that have withdrawn from
the security-based swap business.
In 2017 there were approximately 55
entities that may need to register as SBS
Entities. The Commission estimates that
these Entities likely would incur a total
burden of 9,825 hours per year to
comply with Rules 15Fb1–1 through
15Fb6–2 and Forms SBSE, SBSE–A,
SBSE–BD, SBSE–C and SBSE–W.
In addition, Rules 15Fb1–1 through
15Fb6–2 and Forms SBSE, SBSE–A,
SBSE–BD, SBSE–C and SBSE–W may
impose certain costs on non-resident
persons that apply to be registered with
the Commission as SBS Entities,
including an initial and ongoing costs
associated with obtaining an opinion of
counsel indicating that it can, as a
matter of law, provide the Commission
with access to its books and records and
submit to Commission examinations,
and an ongoing cost associated with
establishing and maintaining a
relationship with a U.S. agent for
service of process.
The staff estimates, based on internet
research,1 that it would cost each
nonresident SBS Entity approximately
$176 annually to appoint and maintain
a relationship with a U.S. agent for
1 See, e.g., http://www.incorp.com/registeredagent-resident-agent-services.aspx (as of September
21, 2018, $99 per state per year), https://
ct.wolterskluwer.com/registered-agent-services?
mm_campaign=Enter_Campaign_Code_
Here&keyword=registered%20agent&utm_
source=Google&utm_medium=CPC&utm_
campaign=RegisteredAgent&jadid=69563123457&
jap=1t3&jk=registered%20
agent&jkId=gc:a8a8ae4cd4a6542cf014
a97541e8d183e:t1_p:k_registered%20agent:pl_
&jp=&js=1&jsid=35672&jt=1 (as of September 21,
2018, $279 per year), and https://www.ailcorp.com/
services/registered-agent (as of September 21, 2018,
$149 per year). The staff sought websites that
provided pricing information and a comprehensive
description of their registered agent services. We
calculated our estimate by averaging the costs
provided on these three websites—($99 + $279 +
$149) ÷ 3 = $176.

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58645

service of process. Consequently, the
total cost for all nonresident SBS
Entities to appoint and maintain
relationships with U.S. agents for
service of process is approximately
$3,872 per year.
Non-resident SBS Entities also would
incur outside legal costs associated with
obtaining an opinion of counsel. The
staff estimates that each of the estimated
22 non-resident persons that likely will
apply to register as SBS Entities with
the Commission would incur, on
average, approximately $25,000 in
outside legal costs to obtain the opinion
of counsel necessary to register, and that
the total annualized cost for all
nonresident SBS Entities to obtain this
opinion of counsel would be
approximately $183,333. Nonresident
SBS Entities would also need to obtain
a revised opinion of counsel after any
changes in the legal or regulatory
framework that would impact the SBS
Entity’s ability to provide, or manner in
which it provides, the Commission with
prompt access to its books and records
or that impacts the Commission’s ability
to inspect and examine the SBS Entity.
We do not believe this would occur
frequently, and therefore estimate that
one non-resident entity may need to
recertify annually. Thus, the total
ongoing cost associated with obtaining a
revised opinion of counsel regarding the
new regulatory regime would be
approximately $25,000 annually.
Consequently, the total annualized cost
burden associated with Rules 15Fb1–1
through 15Fb6–2 and Forms SBSE,
SBSE–A, SBSE–BD, SBSE–C and SBSE–
W would be approximately $212,205
per year.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.

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58646

Federal Register / Vol. 83, No. 224 / Tuesday, November 20, 2018 / Notices

Please direct your written comments
to: Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
[email protected].
Dated: November 14, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–25218 Filed 11–19–18; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84592; File No. SR–
PEARL–2018–23]

Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the MIAX
PEARL Fee Schedule
November 14, 2018.

Pursuant to the provisions of 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 31, 2018, MIAX PEARL, LLC
(‘‘MIAX PEARL’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.

1 15

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 ‘‘Market Maker’’ means a Member registered
with the Exchange for the purpose of making
markets in options contracts traded on the
Exchange. See the Definitions Section of the Fee
Schedule and Exchange Rule 100.
4 ‘‘Member’’ means an individual or organization
that is registered with the Exchange pursuant to
Chapter II of the Exchange Rules for purposes of
trading on the Exchange as an ‘‘Electronic Exchange
Member’’ or ‘‘Market Maker.’’ Members are deemed
‘‘members’’ under the Exchange Act. See the
Definitions Section of the Fee Schedule and
Exchange Rule 100.
5 ‘‘Excluded Contracts’’ means any contracts
routed to an away market for execution. See the
Definitions Section of the Fee Schedule.
6 ‘‘TCV’’ means total consolidated volume
calculated as the total national volume in those
classes listed on MIAX PEARL for the month for
which the fees apply, excluding consolidated
volume executed during the period time in which
the Exchange experiences an ‘‘Exchange System
Disruption’’ (solely in the option classes of the
affected Matching Engine (as defined below)). The
2 17

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1. Purpose
The Exchange proposes to amend the
Add/Remove Tiered Rebates/Fees set
forth in Section (a) of the Fee Schedule
that apply to MIAX PEARL Market
Makers 3 to (i) add a new, alternative
Volume Criteria to Tier 2 based upon
the total monthly volume executed by a
MIAX PEARL Market Maker in SPY,
QQQ, and IWM options (‘‘SPY/QQQ/
IWM options’’) volume on MIAX
PEARL, expressed as a percentage of

total consolidated national volume in
SPY/QQQ/IWM options; (ii) amend the
‘‘Definitions’’ section of the Fee
Schedule to add the following
definition, ‘‘SPY/QQQ/IWM TCV’’ and
(iii) amend the explanatory paragraph
beneath the tables in Section (a) of the
Fee Schedule, as described below.
The Exchange currently assesses
transaction rebates and fees to all
market participants which are based
upon the total monthly volume
executed by the Member 4 on MIAX
PEARL in the relevant, respective origin
type (not including Excluded
Contracts) 5 expressed as a percentage of
TCV.6 In addition, the per contract
transaction rebates and fees are applied
retroactively to all eligible volume for
that origin type once the respective
threshold tier (‘‘Tier’’) has been reached
by the Member. The Exchange
aggregates the volume of Members and
their Affiliates.7 Members that place
resting liquidity, i.e., orders resting on
the book of the MIAX PEARL System,8
are paid the specified ‘‘maker’’ rebate
(each a ‘‘Maker’’), and Members that
execute against resting liquidity are
assessed the specified ‘‘taker’’ fee (each
a ‘‘Taker’’). For opening transactions
and ABBO uncrossing transactions, per
contract transaction rebates and fees are
waived for all market participants.
Finally, Members are generally assessed
lower transaction fees and generally
receive lower rebates for order
executions in standard option classes in
the Penny Pilot Program 9 (‘‘Penny
classes’’) than for order executions in
standard option classes which are not in
the Penny Pilot Program (‘‘Non-Penny
classes’’), where Members generally are
assessed higher transaction fees and
generally receive higher rebates.

term Exchange System Disruption, which is defined
in the Definitions section of the Fee Schedule,
means an outage of a Matching Engine or collective
Matching Engines for a period of two consecutive
hours or more, during trading hours. The term
Matching Engine, which is also defined in the
Definitions section of the Fee Schedule, is a part of
the MIAX PEARL electronic system that processes
options orders and trades on a symbol-by-symbol
basis. Some Matching Engines will process option
classes with multiple root symbols, and other
Matching Engines may be dedicated to one single
option root symbol (for example, options on SPY
may be processed by one single Matching Engine
that is dedicated only to SPY). A particular root
symbol may only be assigned to a single designated
Matching Engine. A particular root symbol may not
be assigned to multiple Matching Engines. The
Exchange believes that it is reasonable and
appropriate to select two consecutive hours as the
amount of time necessary to constitute an Exchange
System Disruption, as two hours equates to
approximately 1.4% of available trading time per
month. The Exchange notes that the term
‘‘Exchange System Disruption’’ and its meaning
have no applicability outside of the Fee Schedule,
as it is used solely for purposes of calculating

volume for the threshold tiers in the Fee Schedule.
See the Definitions Section of the Fee Schedule.
7 ‘‘Affiliate’’ means (i) an affiliate of a Member of
at least 75% common ownership between the firms
as reflected on each firm’s Form BD, Schedule A,
or (ii) the Appointed Market Maker of an Appointed
EEM (or, conversely, the Appointed EEM of an
Appointed Market Maker). An ‘‘Appointed Market
Maker’’ is a MIAX PEARL Market Maker (who does
not otherwise have a corporate affiliation based
upon common ownership with an EEM) that has
been appointed by an EEM and an ‘‘Appointed
EEM’’ is an EEM (who does not otherwise have a
corporate affiliation based upon common
ownership with a MIAX PEARL Market Maker) that
has been appointed by a MIAX PEARL Market
Maker, pursuant to the process described in the Fee
Schedule. See the Definitions Section of the Fee
Schedule.
8 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
9 See Securities Exchange Act Release No. 79778
(January 12, 2017), 82 FR 6662 (January 19, 2017)
(SR–PEARL–2016–01).

I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX PEARL Fee Schedule
(the ‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
http://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal
office, 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

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