Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to the Plan To Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS, 55696-55699 [2017-25227]
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55696
Federal Register / Vol. 82, No. 224 / Wednesday, November 22, 2017 / Notices
for the initial and continued listing of
the Shares of each Fund. Moreover, all
of the options contracts held by the
Funds will trade on markets that are a
member of ISG or affiliated with a
member of ISG or with which the
Exchange has in place a comprehensive
surveillance sharing agreement.
For the above reasons, the Exchange
believes that the proposed rule change
is consistent with the requirements of
Section 6(b)(5) of the Act.
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 that is not
necessary or appropriate in furtherance
of the purpose of the Act. The Exchange
notes that the proposed rule change will
facilitate the listing and trading of an
additional type of Managed Fund Shares
that will enhance competition among
market participants, to the benefit of
investors and the marketplace.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or up to 90 days (i) as the
Commission may designate if it finds
such longer period to be appropriate
and publishes its reasons for so finding
or (ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) by order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
asabaliauskas on DSKBBXCHB2PROD with NOTICES
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:
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–BatsBZX–2017–72. 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 Web site (https://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 Web site 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–BatsBZX–2017–72 and
should be submitted on or before
December 13, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–25226 Filed 11–21–17; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BatsBZX–2017–72 on the subject line.
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82098; File No. SR–CHX–
2017–14]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change Related to
the Plan To Address Extraordinary
Market Volatility Pursuant to Rule 608
of Regulation NMS
November 16, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on November
9, 2017, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ or the ‘‘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 publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CHX proposes to amend the Rules of
the Exchange (‘‘CHX Rules’’) related to
the Plan to Address Extraordinary
Market Volatility Pursuant to Rule 608
of Regulation NMS under the Act (the
‘‘Limit Up-Limit Down Plan’’ or
‘‘Plan’’).3 The text of this proposed rule
change is available on the Exchange’s
Web site at (www.chx.com) and in 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
CHX included statements concerning
the purpose of and basis for the
proposed rule changes 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
CHX has prepared summaries, set forth
in sections A, B and C below, of the
most significant aspects of such
statements.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012) (the
‘‘Limit Up-Limit Down Release’’).
2 17
32 17
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Federal Register / Vol. 82, No. 224 / Wednesday, November 22, 2017 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
The Exchange, together with the Cboe
BZX Exchange, Inc.,4 Cboe BYX
Exchange, Inc.,5 Cboe EDGA Exchange,
Inc.,6 Cboe EDGX Exchange, Inc.,7 the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’), Investors’
Exchange LLC, Nasdaq BX, Inc., Nasdaq
PHLX LLC, the Nasdaq Stock Market
LLC, New York Stock Exchange LLC,
NYSE American LLC,8 NYSE Arca, Inc.
and NYSE National, Inc.9 (collectively
with the Exchange, the ‘‘Plan
Participants’’) are parties to the Plan to
Address Extraordinary Market Volatility
Pursuant to Rule 608 of Regulation NMS
under the Exchange Act. The Plan
Participants initially filed the Plan with
the Commission on April 5, 2011, which
was published for notice and
comment.10 On May 24, 2012, the Plan
Participants filed an amendment to the
Plan and the Plan, as amended, was
approved by the Commission on May
31, 2012.11 The Plan Participants filed a
second amendment to the Plan, which
was immediately effective on January
23, 2013.12 On February 19, 2013, the
Plan Participants filed a third
amendment to the Plan, which the
Commission approved on April 3,
2013.13 The Plan Participants filed a
fourth amendment to the Plan, which
4 Bats BZX Exchange, Inc. has been renamed Cboe
BZX Exchange, Inc. See Exchange Act Release No.
81962 (October 26, 2017), 82 FR 50711 (November
1, 2017) (SR–BatsBZX–2017–70).
5 Bats BYX Exchange, Inc. has been renamed Cboe
BYX Exchange, Inc. See Exchange Act Release No.
81952 (October 26, 2017), 82 FR 50725 (November
1, 2017) (SR–BatsBYX–2017–27).
6 Bats EDGA Exchange, Inc. has been renamed
Cboe EDGA Exchange, Inc. See Exchange Act
Release No. 81957 (October 26, 2017), 82 FR 50716
(November 1, 2017) (SR–BatsEDGA–2017–28).
7 Bats EDGX Exchange, Inc. has been renamed
Cboe EDGX Exchange, Inc. See Exchange Act
Release No. 81963 (October 26, 2017), 82 FR 50697
(November 1, 2017) (SR–BatsEDGX–2017–41).
8 NYSE MKT LLC has been renamed NYSE
American LLC. See Exchange Act Release No.
80283 (March 21, 2017), 82 FR 15244 (March 27,
2017) (SR–NYSEMKT–2017–14).
9 National Stock Exchange, Inc. has been renamed
NYSE National, Inc. See Securities Exchange Act
Release No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb.
3, 2017) (SR–NSX–2016–16).
10 See Securities Exchange Act Release No. 64547
(May 25, 2011), 76 FR 31647 (June 1, 2011) (File
No. 4–631) (‘‘LULD Proposal’’).
11 See Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012) (File
No. 4–631) (‘‘Approval Order’’).
12 See Securities Exchange Act Release No. 68953
(February 20, 2013), 78 FR 13113 (February 26,
2013) (File No. 4–631).
13 See Securities Exchange Act Release No. 69287
(April 3, 2013), 78 FR 21483 (April 10, 2013) (File
No. 4–631).
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was immediately effective on July 18,
2013.14 On July 18, 2013, the Plan
Participants filed a fifth amendment to
the Plan, which the Commission
approved on September 26, 2013.15 The
Plan Participants filed a sixth
amendment to the Plan, which was
immediately effective on December 3,
2013.16 On February 24, 2014, the Plan
Participants filed a seventh amendment
to the Plan, which the Commission
approved on April 3, 2014.17 On
December 24, 2014, the Plan
Participants filed an eighth amendment
to the Plan, which the Commission
approved on February 19, 2015.18 On
July 31, 2015, the Plan Participants filed
a ninth amendment to the Plan to
extend the pilot through April 22, 2016,
and remove Chicago Board Options
Exchange as a Plan Participant, which
the Commission approved on October
22, 2015.19 On February 19, 2016, the
Plan Participants filed a tenth
amendment to the Plan to extend the
pilot through April 21, 2017 and make
one modification to the Plan, which the
Commission approved on April 21,
2016.20 On August 1, 2016, the Investors
Exchange LLC filed an amendment to
the Plan to be added to the roster of Plan
Participants.21 By letter dated
September 19, 2016,22 the Plan
Participants filed a twelfth amendment
to the Plan (‘‘Amendment 12’’), which
the Commission approved on January
19, 2017.23 On February 13, 2017, the
Plan Participants filed a thirteenth
amendment to the Plan, which was
approved on April 13, 2017.24 The Plan
14 See Securities Exchange Act Release No. 70273
(August 27, 2013), 78 FR 54321 (September 3, 2013)
(File No. 4–631).
15 See Securities Exchange Act Release No. 70530
(September, 26, 2013), 78 FR 60937 (October 2,
2013) (File No. 4–631).
16 See Securities Exchange Act Release No. 71247
(January 7, 2014), 79 FR 2204 (January 13, 2014)
(File No. 4–631).
17 See Securities Exchange Act Release No. 71851
(April 3, 2014), 79 FR 19687 (April 9, 2014) (File
No. 4–631).
18 See Securities Exchange Act Release No. 74323
(February 19, 2015), 80 FR 10169 (February 25,
2015) (File No. 4–631).
19 See Securities Exchange Act Release No. 76244
(October 22, 2015), 80 FR 66099 (October 28, 2015)
(File No. 4–631).
20 See Securities Exchange Act Release No. 77679
(April 21, 2016), 81 FR 24908 (April 27, 2016) (File
No. 4–631).
21 See Securities Exchange Act Release No. 78703
(August 26, 2016), 81 FR 60397 (September 1, 2016)
(File No. 4–631).
22 See letter from Elizabeth K. King, General
Counsel, NYSE, to Brent J. Fields, Secretary,
Commission, dated September 16, 2016
(‘‘Amendment 12 Letter’’).
23 See Securities Exchange Act Release No. 79845
(January 19, 2017), 82 FR 8551 (January 26, 2017)
(File No. 4–631).
24 See Exchange Act Release No. 80455 (April 13,
2017), 82 FR 18519 (April 19, 2017) (File No. 4–
631).
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55697
Participants filed a fourteenth
amendment to the Plan, which was
immediately effective on April 13,
2017.25 The Plan Participants filed a
fifteenth amendment to the Plan, which
was immediately effective on August 31,
2017.26
As of the date of this filing, the
Amendment 12 implementation date is
November 20, 2017. Amendment 12
provides that a Trading Pause 27 will
continue until the Primary Listing
Exchange has reopened trading using its
established reopening procedures, even
if such reopening is more than 10
minutes after the beginning of a Trading
Pause, and to require that trading
centers may not resume trading in an
NMS Stock following a Trading Pause
without Price Bands in such NMS
Stock.28 Amendment 12 also provides
that a Trading Pause will continue until
the Primary Listing Exchange has
reopened trading using its established
reopening procedures and reports a
Reopening Price. Furthermore,
Amendment 12 eliminated the current
allowance for a trading center to resume
trading in an NMS Stock following a
Trading Pause if the Primary Listing
Exchange has not reported a Reopening
Price within ten minutes after the
declaration of a Trading Pause and has
not declared a Regulatory Halt. In
addition, to preclude potential scenarios
when trading may resume without Price
Bands, Amendment 12 provides that a
trading center may not resume trading
in an NMS Stock following a Trading
Pause without Price Bands in such NMS
Stock. To address potential scenarios in
which there is no Reopening Price from
the Primary Listing Exchange to use to
calculate Price Bands, Amendment 12
adopted related provisions to the Plan to
address when trading may resume if the
Primary Listing Exchange is unable to
reopen due to a systems or technology
issue or if the Primary Listing Exchange
reopens trading on a zero bid or zero
quote, or both and how the Reference
Price would be determined in such a
scenario.
In conjunction with filing
Amendment 12, each Primary Listing
Exchange filed rule changes 29 with the
25 See Exchange Act Release No. 80549 (April 28,
2017), 82 FR 20928 (May 4, 2017) (File No. 4–631).
26 See Exchange Act Release No. 81720
(September 26, 2017), 82 FR 45922 (October 2,
2017) (File No. 4–631).
27 Unless otherwise specified, the terms used
herein have the same meaning as set forth in the
Plan.
28 See Amendment 12 Letter, supra note 22.
29 See Securities Exchange Act Release No. 81968
(October 27, 2017), 82 FR 50898 (November 2, 2017)
(SR–NYSEAMER–2017–30); see also Securities
Exchange Act Release No. 81880 (October 16, 2017),
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Federal Register / Vol. 82, No. 224 / Wednesday, November 22, 2017 / Notices
Commission under Section 19(b) of the
Exchange Act to amend their respective
trading practice for automated
reopenings following a Trading Pause
consistent with a standardized approach
agreed to by Plan Participants that
would allow for extensions of a Trading
Pause if equilibrium cannot be met for
a Reopening Price within specified
parameters. Accordingly, the Exchange
is proposing to adopt changes to its
rules, as described below, to implement
the reopening procedures agreed upon
by the Plan Participants that are
applicable to the Exchange.
a. Proposal
The Exchange proposes to amend
current Article 20, Rule 2A(c)(4) to
adopt a requirement of Amendment 12
to only resume trading after a Trading
Pause initiated by another exchange
upon receiving Price Bands from the
Processor. As noted above, Amendment
12 prohibits trading centers from
resuming trading in an NMS Stock
following a Trading Pause without Price
Bands in such NMS Stock. The Plan
provides that if the Primary Listing
Exchange is unable to reopen trading
due to a systems or technology issue,
trading should be permitted to resume
in that NMS Stock upon receiving Price
Bands from the processor. The Exchange
notes that amended Article 20, Rule
2A(c)(4) is based, in part, on approved
amendments to Nasdaq Rule
4120(a)(12)(H), which are not yet
operative.30
The Exchange does not propose to
amend CHX Rules to adopt other
requirements of Amendment 12 related
to reopening procedures as the
Exchange is not currently a Primary
Listing Exchange for any NMS Stocks
and its primary listing program is
currently dormant.
b. Operative Date
The Exchange proposes to implement
the proposed rule change in
coordination with other Plan
Participants on November 20, 2017.
2. Statutory Basis
asabaliauskas on DSKBBXCHB2PROD with NOTICES
The Exchange believes that the
proposed rule change is consistent with
82 FR 48870 (October 20, 2017) (SR–NYSE–2017–
51); see also Securities Exchange Act Release No.
79884 (January 26, 2017), 82 FR 8968 (February 1,
2017) (Approval Order for SR–BatsBZX–2016–61);
see also Securities Exchange Act Release No. 79876
(January 25, 2017), 82 FR 8888 (January 31, 2017)
(Approval Order for SR–NASDAQ–2016–131); see
also Securities Exchange Act Release No. 79846
(January 19, 2017), 82 FR 8548 (January 26, 2017)
(Approval Order for SR–NYSEArca–2016–130).
30 See Approval Order for SR–NASDAQ–2016–
131, supra note 29, at 8889–8890.
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Section 6(b) of the Act in general,31 and
furthers the objectives of Section 6(b)(5)
in particular,32 in that it is designed to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments and perfect the
mechanisms of a free and open market,
and, in general, to protect investors and
the public interest. The Exchange
believes that the proposed rule change,
together with the approved amendments
to the Plan, are necessary or appropriate
in the public interest, for the protection
of investors and the maintenance of fair
and orderly markets, to remove
impediments to and perfect the
mechanisms of, a national market
system, or otherwise in furtherance of
the purposes of the Act.
The Exchange believes the proposed
rule change would 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,
because they are designed, together with
the approved amendments to the Plan,
to address the issues experienced on
August 24, 2015 by reducing the
number of repeat Trading Pauses in a
single NMS Stock, and to harmonize
CHX Rules with the Plan and the rules
of other Plan Participants.33
The approved Plan amendments are
an essential component to Plan
Participants’ goal of more standardized
processes across Primary Listing
Exchanges in reopening trading
following a Trading Pause, and
facilitates the production of an
equilibrium Reopening Price by
centralizing the reopening process
through the Primary Listing Exchange,
which would also improve the accuracy
of the reopening Price Bands. The
approved Plan amendments support this
initiative by requiring trading centers to
wait to resume trading following
Trading Pause until there is a Reopening
Price. As such, the Exchange’s proposal
to amend Article 20, Rule 2A(c)(4) to
provide that, if a Trading Pause was
initiated by another exchange, CHX may
resume trading following the Trading
Pause upon receipt of the Price Bands
from the Processor would comport CHX
Rules with the approved Plan
Amendments and, thereby, harmonize
CHX Rules with the rules of other
national securities exchanges.
31 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
33 See supra note 29.
32 15
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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 rule change is not designed to
address any competitive issues, but
rather, to achieve the Plan Participants’
goal of more standardized processes
across Primary Listing Exchanges in
reopening trading following a Trading
Pause, and facilitates the production of
an equilibrium reopening price by
centralizing the reopening process
through the Primary Listing Exchange,
which would also improve the accuracy
of the reopening Price Bands. The
Exchange believes that the proposed
rule change reduces the burden on
competition for market participants
because it promotes a transparent and
consistent process for reopening trading
following a Trading Pause regardless of
where a security may be listed.
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 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 if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 34 and Rule 19b–4(f)(6)
thereunder.35
A proposed rule change filed under
Rule 19b–4(f)(6) 36 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii),37 the Commission
may designate a shorter time if such
34 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of 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.
36 17 CFR 240.19b–4(f)(6).
37 17 CFR 240.19b–4(f)(6)(iii).
35 17
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Federal Register / Vol. 82, No. 224 / Wednesday, November 22, 2017 / Notices
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative on
November 20, 2017. The Commission
believes that waiver of the operative
delay is consistent with the protection
of investors and the public interest
because the Exchange’s proposal does
not raise any new or novel issues, and
the waiver would permit the Exchange
to implement the proposed rule change
in coordination with other Plan
Participants on the Amendment 12
implementation date of November 20,
2017. Accordingly, the Commission
hereby waives the 30-day operative
delay requirement and designates the
proposed rule change as operative on
November 20, 2017.38
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
under Section 19(b)(2)(B) of the Act 39 to
determine whether the proposed rule
change 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 proposal is
consistent with the Act. Comments may
be submitted by any of the following
methods:
asabaliauskas on DSKBBXCHB2PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File No. SR–
CHX–2017–14 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File No.
SR–CHX–2017–14. This file number
should be included on the subject line
if email is used. To help the
38 For
purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
39 15 U.S.C. 78s(b)(2)(B).
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Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://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 changes 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 Web site 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 CHX. 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 No.
SR–CHX–2017–14 and should be
submitted on or before December 13,
2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.40
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–25227 Filed 11–21–17; 8:45 am]
55699
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 shares
(‘‘Shares’’) of ProShares QuadPro U.S.
Large Cap, ProShares QuadPro Short
U.S. Large Cap, ProShares QuadPro U.S.
Small Cap, and ProShares QuadPro
Short U.S. Small Cap (collectively,
‘‘Funds’’) under NYSE Arca Rule 8.200–
E. The proposed rule change was
published for comment in the Federal
Register on August 18, 2017.3 On
September 28, 2017, pursuant to Section
19(b)(2) of the Act,4 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.5 On September 29, 2017,
the Exchange filed Amendment No. 1 to
the proposed rule change, which
amended and superseded the proposed
rule change as originally filed. On
November 14, 2017, the Exchange filed
Amendment No. 2 to the proposed rule
change, which amended and superseded
the proposed rule change as modified by
Amendment No. 1.6 The Commission
has received no comments on the
proposed rule change. The Commission
is publishing this notice and order to
solicit comments on the proposed rule
change, as modified by Amendment No.
2, from interested persons and to
institute proceedings pursuant to
Section 19(b)(2)(B) of the Act 7 to
determine whether to approve or
disapprove the proposed rule change, as
modified by Amendment No. 2.
BILLING CODE 8011–01–P
1 15
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82105; File No. SR–
NYSEArca–2017–69]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of
Amendment No. 2, and Order
Instituting Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change, as Modified by
Amendment No. 2, To List and Trade
Shares of ProShares QuadPro Funds
Under NYSE Arca Rule 8.200–E
November 16, 2017.
I. Introduction
On July 31, 2017, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
40 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00147
Fmt 4703
Sfmt 4703
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 81388
(August 14, 2017), 82 FR 39477.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 81746,
82 FR 46315 (October 4, 2017). The Commission
designated November 16, 2017, as the date by
which the Commission shall either approve or
disapprove, or institute proceedings to determine
whether to disapprove, the proposed rule change.
6 In Amendment No. 2, the Exchange: (1) Changed
the names of the Funds; (2) provided the trading
hours of the Chicago Mercantile Exchange (‘‘CME’’);
(3) amended the description of the Funds’ holdings
of options and cash; (4) revised the description of
the rolling of futures contracts; (5) amended and
supplemented the description of the Funds’ Net
Asset Value (‘‘NAV’’) and Indicative Optimized
Portfolio Value; (6) amended and supplemented the
description of the availability of information
relating to the Funds; (7) decreased the creation
unit size from 50,000 Shares to 25,000 Shares; and
(8) made other clarifications, corrections, and
technical changes. Amendment No. 2 to the
proposed rule change is available at https://
www.sec.gov/comments/sr-nysearca-2017-69/
nysearca201769-2688277-161489.pdf.
7 15 U.S.C. 78s(b)(2)(B).
2 17
E:\FR\FM\22NON1.SGM
22NON1
Agencies
[Federal Register Volume 82, Number 224 (Wednesday, November 22, 2017)]
[Notices]
[Pages 55696-55699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25227]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82098; File No. SR-CHX-2017-14]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Related to the Plan To Address Extraordinary Market Volatility Pursuant
to Rule 608 of Regulation NMS
November 16, 2017.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on November 9, 2017, the Chicago Stock Exchange, Inc. (``CHX'' or
the ``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 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
CHX proposes to amend the Rules of the Exchange (``CHX Rules'')
related to the Plan to Address Extraordinary Market Volatility Pursuant
to Rule 608 of Regulation NMS under the Act (the ``Limit Up-Limit Down
Plan'' or ``Plan'').\3\ The text of this proposed rule change is
available on the Exchange's Web site at (www.chx.com) and in the
Commission's Public Reference Room.
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\3\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down
Release'').
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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 CHX included statements
concerning the purpose of and basis for the proposed rule changes 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 CHX has prepared summaries, set forth in sections A,
B and C below, of the most significant aspects of such statements.
[[Page 55697]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange, together with the Cboe BZX Exchange, Inc.,\4\ Cboe
BYX Exchange, Inc.,\5\ Cboe EDGA Exchange, Inc.,\6\ Cboe EDGX Exchange,
Inc.,\7\ the Financial Industry Regulatory Authority, Inc. (``FINRA''),
Investors' Exchange LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, the Nasdaq
Stock Market LLC, New York Stock Exchange LLC, NYSE American LLC,\8\
NYSE Arca, Inc. and NYSE National, Inc.\9\ (collectively with the
Exchange, the ``Plan Participants'') are parties to the Plan to Address
Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS
under the Exchange Act. The Plan Participants initially filed the Plan
with the Commission on April 5, 2011, which was published for notice
and comment.\10\ On May 24, 2012, the Plan Participants filed an
amendment to the Plan and the Plan, as amended, was approved by the
Commission on May 31, 2012.\11\ The Plan Participants filed a second
amendment to the Plan, which was immediately effective on January 23,
2013.\12\ On February 19, 2013, the Plan Participants filed a third
amendment to the Plan, which the Commission approved on April 3,
2013.\13\ The Plan Participants filed a fourth amendment to the Plan,
which was immediately effective on July 18, 2013.\14\ On July 18, 2013,
the Plan Participants filed a fifth amendment to the Plan, which the
Commission approved on September 26, 2013.\15\ The Plan Participants
filed a sixth amendment to the Plan, which was immediately effective on
December 3, 2013.\16\ On February 24, 2014, the Plan Participants filed
a seventh amendment to the Plan, which the Commission approved on April
3, 2014.\17\ On December 24, 2014, the Plan Participants filed an
eighth amendment to the Plan, which the Commission approved on February
19, 2015.\18\ On July 31, 2015, the Plan Participants filed a ninth
amendment to the Plan to extend the pilot through April 22, 2016, and
remove Chicago Board Options Exchange as a Plan Participant, which the
Commission approved on October 22, 2015.\19\ On February 19, 2016, the
Plan Participants filed a tenth amendment to the Plan to extend the
pilot through April 21, 2017 and make one modification to the Plan,
which the Commission approved on April 21, 2016.\20\ On August 1, 2016,
the Investors Exchange LLC filed an amendment to the Plan to be added
to the roster of Plan Participants.\21\ By letter dated September 19,
2016,\22\ the Plan Participants filed a twelfth amendment to the Plan
(``Amendment 12''), which the Commission approved on January 19,
2017.\23\ On February 13, 2017, the Plan Participants filed a
thirteenth amendment to the Plan, which was approved on April 13,
2017.\24\ The Plan Participants filed a fourteenth amendment to the
Plan, which was immediately effective on April 13, 2017.\25\ The Plan
Participants filed a fifteenth amendment to the Plan, which was
immediately effective on August 31, 2017.\26\
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\4\ Bats BZX Exchange, Inc. has been renamed Cboe BZX Exchange,
Inc. See Exchange Act Release No. 81962 (October 26, 2017), 82 FR
50711 (November 1, 2017) (SR-BatsBZX-2017-70).
\5\ Bats BYX Exchange, Inc. has been renamed Cboe BYX Exchange,
Inc. See Exchange Act Release No. 81952 (October 26, 2017), 82 FR
50725 (November 1, 2017) (SR-BatsBYX-2017-27).
\6\ Bats EDGA Exchange, Inc. has been renamed Cboe EDGA
Exchange, Inc. See Exchange Act Release No. 81957 (October 26,
2017), 82 FR 50716 (November 1, 2017) (SR-BatsEDGA-2017-28).
\7\ Bats EDGX Exchange, Inc. has been renamed Cboe EDGX
Exchange, Inc. See Exchange Act Release No. 81963 (October 26,
2017), 82 FR 50697 (November 1, 2017) (SR-BatsEDGX-2017-41).
\8\ NYSE MKT LLC has been renamed NYSE American LLC. See
Exchange Act Release No. 80283 (March 21, 2017), 82 FR 15244 (March
27, 2017) (SR-NYSEMKT-2017-14).
\9\ National Stock Exchange, Inc. has been renamed NYSE
National, Inc. See Securities Exchange Act Release No. 79902 (Jan.
30, 2017), 82 FR 9258 (Feb. 3, 2017) (SR-NSX-2016-16).
\10\ See Securities Exchange Act Release No. 64547 (May 25,
2011), 76 FR 31647 (June 1, 2011) (File No. 4-631) (``LULD
Proposal'').
\11\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (``Approval
Order'').
\12\ See Securities Exchange Act Release No. 68953 (February 20,
2013), 78 FR 13113 (February 26, 2013) (File No. 4-631).
\13\ See Securities Exchange Act Release No. 69287 (April 3,
2013), 78 FR 21483 (April 10, 2013) (File No. 4-631).
\14\ See Securities Exchange Act Release No. 70273 (August 27,
2013), 78 FR 54321 (September 3, 2013) (File No. 4-631).
\15\ See Securities Exchange Act Release No. 70530 (September,
26, 2013), 78 FR 60937 (October 2, 2013) (File No. 4-631).
\16\ See Securities Exchange Act Release No. 71247 (January 7,
2014), 79 FR 2204 (January 13, 2014) (File No. 4-631).
\17\ See Securities Exchange Act Release No. 71851 (April 3,
2014), 79 FR 19687 (April 9, 2014) (File No. 4-631).
\18\ See Securities Exchange Act Release No. 74323 (February 19,
2015), 80 FR 10169 (February 25, 2015) (File No. 4-631).
\19\ See Securities Exchange Act Release No. 76244 (October 22,
2015), 80 FR 66099 (October 28, 2015) (File No. 4-631).
\20\ See Securities Exchange Act Release No. 77679 (April 21,
2016), 81 FR 24908 (April 27, 2016) (File No. 4-631).
\21\ See Securities Exchange Act Release No. 78703 (August 26,
2016), 81 FR 60397 (September 1, 2016) (File No. 4-631).
\22\ See letter from Elizabeth K. King, General Counsel, NYSE,
to Brent J. Fields, Secretary, Commission, dated September 16, 2016
(``Amendment 12 Letter'').
\23\ See Securities Exchange Act Release No. 79845 (January 19,
2017), 82 FR 8551 (January 26, 2017) (File No. 4-631).
\24\ See Exchange Act Release No. 80455 (April 13, 2017), 82 FR
18519 (April 19, 2017) (File No. 4-631).
\25\ See Exchange Act Release No. 80549 (April 28, 2017), 82 FR
20928 (May 4, 2017) (File No. 4-631).
\26\ See Exchange Act Release No. 81720 (September 26, 2017), 82
FR 45922 (October 2, 2017) (File No. 4-631).
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As of the date of this filing, the Amendment 12 implementation date
is November 20, 2017. Amendment 12 provides that a Trading Pause \27\
will continue until the Primary Listing Exchange has reopened trading
using its established reopening procedures, even if such reopening is
more than 10 minutes after the beginning of a Trading Pause, and to
require that trading centers may not resume trading in an NMS Stock
following a Trading Pause without Price Bands in such NMS Stock.\28\
Amendment 12 also provides that a Trading Pause will continue until the
Primary Listing Exchange has reopened trading using its established
reopening procedures and reports a Reopening Price. Furthermore,
Amendment 12 eliminated the current allowance for a trading center to
resume trading in an NMS Stock following a Trading Pause if the Primary
Listing Exchange has not reported a Reopening Price within ten minutes
after the declaration of a Trading Pause and has not declared a
Regulatory Halt. In addition, to preclude potential scenarios when
trading may resume without Price Bands, Amendment 12 provides that a
trading center may not resume trading in an NMS Stock following a
Trading Pause without Price Bands in such NMS Stock. To address
potential scenarios in which there is no Reopening Price from the
Primary Listing Exchange to use to calculate Price Bands, Amendment 12
adopted related provisions to the Plan to address when trading may
resume if the Primary Listing Exchange is unable to reopen due to a
systems or technology issue or if the Primary Listing Exchange reopens
trading on a zero bid or zero quote, or both and how the Reference
Price would be determined in such a scenario.
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\27\ Unless otherwise specified, the terms used herein have the
same meaning as set forth in the Plan.
\28\ See Amendment 12 Letter, supra note 22.
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In conjunction with filing Amendment 12, each Primary Listing
Exchange filed rule changes \29\ with the
[[Page 55698]]
Commission under Section 19(b) of the Exchange Act to amend their
respective trading practice for automated reopenings following a
Trading Pause consistent with a standardized approach agreed to by Plan
Participants that would allow for extensions of a Trading Pause if
equilibrium cannot be met for a Reopening Price within specified
parameters. Accordingly, the Exchange is proposing to adopt changes to
its rules, as described below, to implement the reopening procedures
agreed upon by the Plan Participants that are applicable to the
Exchange.
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\29\ See Securities Exchange Act Release No. 81968 (October 27,
2017), 82 FR 50898 (November 2, 2017) (SR-NYSEAMER-2017-30); see
also Securities Exchange Act Release No. 81880 (October 16, 2017),
82 FR 48870 (October 20, 2017) (SR-NYSE-2017-51); see also
Securities Exchange Act Release No. 79884 (January 26, 2017), 82 FR
8968 (February 1, 2017) (Approval Order for SR-BatsBZX-2016-61); see
also Securities Exchange Act Release No. 79876 (January 25, 2017),
82 FR 8888 (January 31, 2017) (Approval Order for SR-NASDAQ-2016-
131); see also Securities Exchange Act Release No. 79846 (January
19, 2017), 82 FR 8548 (January 26, 2017) (Approval Order for SR-
NYSEArca-2016-130).
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a. Proposal
The Exchange proposes to amend current Article 20, Rule 2A(c)(4) to
adopt a requirement of Amendment 12 to only resume trading after a
Trading Pause initiated by another exchange upon receiving Price Bands
from the Processor. As noted above, Amendment 12 prohibits trading
centers from resuming trading in an NMS Stock following a Trading Pause
without Price Bands in such NMS Stock. The Plan provides that if the
Primary Listing Exchange is unable to reopen trading due to a systems
or technology issue, trading should be permitted to resume in that NMS
Stock upon receiving Price Bands from the processor. The Exchange notes
that amended Article 20, Rule 2A(c)(4) is based, in part, on approved
amendments to Nasdaq Rule 4120(a)(12)(H), which are not yet
operative.\30\
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\30\ See Approval Order for SR-NASDAQ-2016-131, supra note 29,
at 8889-8890.
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The Exchange does not propose to amend CHX Rules to adopt other
requirements of Amendment 12 related to reopening procedures as the
Exchange is not currently a Primary Listing Exchange for any NMS Stocks
and its primary listing program is currently dormant.
b. Operative Date
The Exchange proposes to implement the proposed rule change in
coordination with other Plan Participants on November 20, 2017.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act in general,\31\ and furthers the
objectives of Section 6(b)(5) in particular,\32\ in that it is designed
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments and perfect the
mechanisms of a free and open market, and, in general, to protect
investors and the public interest. The Exchange believes that the
proposed rule change, together with the approved amendments to the
Plan, are necessary or appropriate in the public interest, for the
protection of investors and the maintenance of fair and orderly
markets, to remove impediments to and perfect the mechanisms of, a
national market system, or otherwise in furtherance of the purposes of
the Act.
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\31\ 15 U.S.C. 78f(b).
\32\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule change would 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, because they are designed, together with the approved
amendments to the Plan, to address the issues experienced on August 24,
2015 by reducing the number of repeat Trading Pauses in a single NMS
Stock, and to harmonize CHX Rules with the Plan and the rules of other
Plan Participants.\33\
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\33\ See supra note 29.
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The approved Plan amendments are an essential component to Plan
Participants' goal of more standardized processes across Primary
Listing Exchanges in reopening trading following a Trading Pause, and
facilitates the production of an equilibrium Reopening Price by
centralizing the reopening process through the Primary Listing
Exchange, which would also improve the accuracy of the reopening Price
Bands. The approved Plan amendments support this initiative by
requiring trading centers to wait to resume trading following Trading
Pause until there is a Reopening Price. As such, the Exchange's
proposal to amend Article 20, Rule 2A(c)(4) to provide that, if a
Trading Pause was initiated by another exchange, CHX may resume trading
following the Trading Pause upon receipt of the Price Bands from the
Processor would comport CHX Rules with the approved Plan Amendments
and, thereby, harmonize CHX Rules with the rules of other national
securities exchanges.
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 rule change is not
designed to address any competitive issues, but rather, to achieve the
Plan Participants' goal of more standardized processes across Primary
Listing Exchanges in reopening trading following a Trading Pause, and
facilitates the production of an equilibrium reopening price by
centralizing the reopening process through the Primary Listing
Exchange, which would also improve the accuracy of the reopening Price
Bands. The Exchange believes that the proposed rule change reduces the
burden on competition for market participants because it promotes a
transparent and consistent process for reopening trading following a
Trading Pause regardless of where a security may be listed.
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 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 if consistent with the protection of investors
and the public interest, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \34\ and Rule 19b-4(f)(6)
thereunder.\35\
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\34\ 15 U.S.C. 78s(b)(3)(A).
\35\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of 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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A proposed rule change filed under Rule 19b-4(f)(6) \36\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\37\ the Commission may
designate a shorter time if such
[[Page 55699]]
action is consistent with the protection of investors and the public
interest. The Exchange has asked the Commission to waive the 30-day
operative delay so that the proposal may become operative on November
20, 2017. The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest
because the Exchange's proposal does not raise any new or novel issues,
and the waiver would permit the Exchange to implement the proposed rule
change in coordination with other Plan Participants on the Amendment 12
implementation date of November 20, 2017. Accordingly, the Commission
hereby waives the 30-day operative delay requirement and designates the
proposed rule change as operative on November 20, 2017.\38\
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\36\ 17 CFR 240.19b-4(f)(6).
\37\ 17 CFR 240.19b-4(f)(6)(iii).
\38\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 under
Section 19(b)(2)(B) of the Act \39\ to determine whether the proposed
rule change should be approved or disapproved.
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\39\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File No. SR-CHX-2017-14 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-CHX-2017-14. 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 Web site (https://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 changes 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 Web site 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 CHX. 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 No. SR-CHX-2017-14 and should be
submitted on or before December 13, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
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\40\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-25227 Filed 11-21-17; 8:45 am]
BILLING CODE 8011-01-P