30 Day Notice

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

open SPX positions across numerous
series. RWA Packages may be executed
in the SPX crowd on the trading floor
if they meet certain conditions specified
in Rule 6.57, including that they be
initiated for the account(s) of a Cboe
Options market maker, result in a
change in beneficial ownership, and
include a certification concerning the
attributable net reduction of RWA.6
Further, Rule 6.57(c) sets forth a
trading procedure that requires the
entering firm to submit a list of the
individual SPX options series, their
size, and any net debit or credit bid
price received, as well as contact
information for the order.7 Cboe will
thereafter post a list of the individual
components of the RWA Package, the
proposed net price for the RWA Package
(if available), the contact information,
and the time at which the two-hour
request-for-quote period (‘‘RFQ Period’’)
concludes.8
Rule 6.57(c) further specifies that the
response that represents the best bid or
offer on a net debit or credit basis for the
RWA Package has priority.9 In the event
that equal bids or offers are received, the
first RFQ response at the best bid or
offer on a net debit or credit basis for the
RWA Package has priority.10 If
executed, the representing party must
report the details of the execution to the
Exchange.11
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act,12 and the rules and regulations
thereunder applicable to a national
securities exchange.13 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,14 which requires,
among other things, that the rules of a
national securities exchange be
designed to remove impediments to and
perfect the mechanism of a free and
open market and a national market
6 See

id. at 42726–27.
id. at 42727.
8 See id. The Exchange believed that this twohour period was sufficient to allow members to
review, price, and bid/offer for the RWA Package,
because the RWA Package will be available in an
electronic format and the Exchange believed that
firms had access to electronic systems that will aid
them in evaluating and pricing the SPX positions
contained in an RWA Package. See id.
9 See id.
10 See id. at 42727.
11 See id.
12 15 U.S.C. 78f.
13 In approving this 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).
14 15 U.S.C. 78f(b)(5).

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7 See

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system, and, in general, to protect
investors and the public interest and
that the rules are not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The proposed rule change is designed
to remove impediments to and perfect
the mechanism of a free and open
market and a national market system by
providing a mechanism to facilitate the
reduction of SPX options positions and
concomitant RWA.15 Specifically, the
Exchange represented that such a
mechanism would help market makers
to continue to provide critical liquidity
in the options market by reducing RWA
to comply with ‘‘bank capital
regulations that . . . are negatively
impacting the ability of [market makers]
clearing through bank-affiliated clearing
firms to provide liquidity.’’ 16 In
reducing RWA, bank-affiliated clearing
firms will be able to clear more market
maker activity during periods of
increased volume and volatility.17 In
turn, market makers may be better able
to continue quoting during those
periods, lessening the risk of market
dislocations or excess volatility that
could occur if market makers needed to
reduce their quoting activity during
such periods to the detriment of
investors.
Further, with respect to trading, the
Exchange’s rule is based on Rule 6.49A,
which establishes a similar process for
on-floor transfers, but improves upon
that rule by adding certifications to
assure compliance and increases
transparency by electronically
disseminating the list of series in a
proposed RWA Package. All Cboe
members will be given notice of and the
ability to participate in the RWA
Package trading process.
Finally, the Commission notes the
narrow scope of proposed Rule 6.57.
The proposed rule change would apply
only to SPX options, which are
particularly impacted by current bankcapital regulations, and any transaction
must result in a net reduction of RWA.
Furthermore, the proposed rule change
is only effective for a limited term,
ending two years from the approval
date.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,18 that the
proposed rule change (SR–CBOE–2018–
056) be, and hereby is, approved.
15 See

Notice, supra note 3, at 42726, 42730.
at 42726.
17 See id.
18 15 U.S.C. 78s(b)(2).
16 Id.

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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–21784 Filed 10–5–18; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
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:
Electronic Data Collection System; SEC
File No. 270–621, OMB Control No.
3235–0672

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit an extension for this
current collection of information to the
Office of Management and Budget for
approval.
The Commission invites comment on
updates to its Electronic Data Collection
System database (the Database), which
will support information provided by
members of the public who would like
to file an online tip, complaint or
referral (TCR) to the Commission. The
Database will be a web based e-filed
dynamic report based on technology
that pre-populates and establishes a
series of questions based on the data
that the individual enters. The
individual will then complete specific
information on the subject(s) and nature
of the suspicious activity, using the data
elements appropriate to the type of
complaint or subject. The information
collection is voluntary. The public
interface to the Database will be
available using the agency’s website,
www.sec.gov. The Commission
estimates that it takes a complainant, on
average, 30 minutes to submit a TCR
through the Database. Based on the
receipt of an average of approximately
16,000 annual TCRs for the past three
fiscal years, the Commission estimates
that the annual reporting burden is
8,000 hours.
Written comments are invited on: (a)
Whether this collection of information
is necessary for the proper performance
19 17

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CFR 200.30–3(a)(12).

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Federal Register / Vol. 83, No. 195 / Tuesday, October 9, 2018 / Notices
of the functions of the agency, including
whether the information will have
practical utility; (b) the accuracy of the
agency’s estimate of the burden imposed
by the collection of information; (c)
ways to enhance the quality, utility, and
clarity of the information 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.
Background documentation for this
information collection may be viewed at
the following website: www.reginfo.gov.
Comments should be directed to: (i)
Desk Officer for the Securities and
Exchange Commission, Office of
Information and Regulatory Affairs,
Office of Management and Budget,
Room 10102, New Executive Office
Building, Washington, DC 20503, or by
sending an email to: Shagufta_Ahmed@
omb.eop.gov; and (ii) Charles Riddle,
Acting Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Candace Kenner, 100 F
St. NE, Washington, DC 20549 or send
an email to: [email protected].
Comments must be submitted to OMB
within 30 days of this notice.
Dated: October 3, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–21831 Filed 10–5–18; 8:45 am]
BILLING CODE 8011–01–P

[Release No. 34–84354; File No. SR–BX–
2018–042]

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October 3, 2018.

Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 21, 2018, Nasdaq BX, Inc.
(‘‘BX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
U.S.C. 78s(b)(1).
CFR 240.19b–4.

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The Exchange proposes to a proposal
[sic] to align its existing investigatory
and disciplinary processes and related
rules with the investigatory and
disciplinary processes and related rules
of Nasdaq PHLX LLC (‘‘Phlx’’).
The text of the proposed rule change
is available on the Exchange’s website at
http://nasdaqbx.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.

1. Purpose

Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Align Existing
Investigatory and Disciplinary
Processes and Related Rules With the
Investigatory and Disciplinary
Processes and Related Rules of
Nasdaq PHLX LLC

2 17

I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change

A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change

SECURITIES AND EXCHANGE
COMMISSION

1 15

publishing this notice to solicit
comments on the proposed rule change
from interested persons.

BX proposes to amend certain of its
rules to align its existing investigatory
and disciplinary processes and related
rules with the investigatory and
disciplinary processes and related rules
of Phlx. BX notes that Phlx amended its
rules recently to adopt an investigatory
and disciplinary process identical in all
material respects to the investigatory
and disciplinary processes of Nasdaq,
Inc. and BX.3 The amendment also
vested the Phlx Regulation Department
with the same authority proposed
herein. The Exchange therefore
proposes the below changes to the 8000
and 9000 Series of the BX Rules in order
to conform its rules to those of Phlx
3 See Securities Exchange Act Release No. 82143
(November 22, 2017), 82 FR 56672 (November 29,
2017) (Notice of Filing and Immediate Effectiveness
of Proposed Rule Change To Adopt Investigatory
and Disciplinary Processes Substantially Similar to
Nasdaq BX, Inc. and The Nasdaq Stock Market LLC
for Phlx, which, among other things, similarly
enabled Phlx to retain discretion to perform these
functions).

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50723

8000 and 9000 Series rules in all
respects.4
Definition of Exchange Regulation
The Exchange proposes to revise the
definition of [sic] BX Current Rule
9120(w) (‘‘Exchange’s Regulation
Department’’) to expressly include the
Exchange’s Enforcement Department.
The Exchange’s Enforcement
Department is specifically charged with
pursuing disciplinary action against
members, persons associated with a
member, and persons subject to the
Exchange’s jurisdiction, in addition to
FINRA’s departments of Enforcement
and Market Regulation.
Similarly, the Exchange proposes to
add references to the ‘‘Exchange’s
Regulation Department’’ in BX Current
Rule 9120(aa) (definition of the term
‘‘Party’’). The Exchange also proposes to
add a definition for the term ‘‘Party’’ as
used in the BX Rule 9400 series,5 and
to add references to ‘‘FINRA’’ in BX
Current Rule 9120(aa)(4) to clarify that
FINRA falls under the definition of
‘‘Party’’ as used in the BX Rule 9550
series. In addition, the Exchange is
adding references to the Exchange’s
Regulation Department throughout the
BX Rule 8000 and 9000 series.6 These
amendments will conform the text of BX
8000 and 9000 rules to those of Phlx.7
4 The Exchange notes that the Financial Industry
Regulatory Authority (‘‘FINRA’’) amended its rules
recently to reflect an internal reorganization of
FINRA’s Enforcement Operations. See Securities
Exchange Act Release No. 83781 (August 6, 2018),
83 FR 39802 (August 10, 2018). In July 2017, FINRA
announced its plan to consolidate its existing
enforcement functions into a unified Department of
Enforcement. FINRA’s recent rule change makes
technical and other non-substantive changes to
FINRA Rules 9000 Series Code of Procedure (the
‘‘Code’’) to reflect the single Department of
Enforcement. The rule change removed references
to the Market Regulation department, its head and
employees from the Code where those references
reflect the previously separate Market Regulation
enforcement function. In light of FINRA’s
reorganization, the Exchange is likewise removing
references to the Market Regulation department, its
head and employees from the Code, and re-lettering
the remainder of those sections where such relettering is necessary (i.e. Rule 9120). Phlx will also
submit a similar rule filing to remove those
references in due course.
5 The Exchange notes that, like Phlx, it is likewise
including the Department of Enforcement as a
potential party to a matter under the Rule 9400
Series. The Exchange believes that including these
departments in Rule 9400 Series is appropriate
because they may be involved in the initiation of
such a matter for BX currently. The Exchange is
also adding FINRA to other parts of Rule 9400
where it is appropriate to show that FINRA may be
the entity that initiated an action under the rule.
6 See BX Current Rules 9120, 9212, 9213, 9215,
9216, 9251, 9253, 9264, 9269, 9270, 9311, 9400,
9810, 9820, 9830, and 9840.
7 The Exchange is also amending Current BX Rule
9120(aa)(2), to align that rule text with FINRA’s
recent rule change. The term ‘‘Party’’ when used in
the Rule 9520 Series, now means FINRA’s

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