Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 5701 Regarding the Requirements for Securities Listed on the Exchange Issued by Nasdaq, Inc. or Its Affiliates, 13168-13170 [2018-06098]
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13168
Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices
proposed rule change is not intended to
address competitive issues but rather to
reduce the paperwork received by the
Commission, ease the burden of
submitting the Quarterly and Annual
Reports, and provide greater clarity in
the Exchange’s rules, without changing
the information available to the
Commission.
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.
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.
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 15 U.S.C. 78s(b)(3)(A)(iii).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
12 15 U.S.C. 78s(b)(2)(B).
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SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–82919; File No. SR–BX–
2018–010]
• 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–
Phlx–2018–23 on the subject line.
Paper Comments
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 Because the
foregoing proposed rule change does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and
subparagraph (f)(6) of Rule 19b–4
thereunder.11
At any time within 60 days of the
filing of such 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) 12 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
8 15
Comments may be submitted by any of
the following methods:
• 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–Phlx–2018–23. 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 (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 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–Phlx–2018–23 and should
be submitted on or before April 17,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–06107 Filed 3–26–18; 8:45 am]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 5701
Regarding the Requirements for
Securities Listed on the Exchange
Issued by Nasdaq, Inc. or Its Affiliates
March 22, 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 March 9,
2018, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘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
The Exchange proposes to amend
Rule 5701 regarding the requirements
for securities listed on the exchange
issued by Nasdaq, Inc. (‘‘Nasdaq’’) or its
affiliates.
The text of the proposed rule change
is set forth below. Proposed new
language is italicized; deleted text is in
brackets.
*
*
*
*
*
5701. Additional Requirements for
Securities Listed on the Exchange
Issued by Nasdaq or Its Affiliates
(a) For purposes of this Rule 5701, the
terms below are defined as follows:
(1) No change.
(2) ‘‘Affiliate Security’’ means any
security issued by a Nasdaq Affiliate or
any Exchange-listed option on any such
security, with the exception of Portfolio
Depository Receipts as defined in Rule
4420(i)(1)(A) and Index Fund Shares as
defined in Rule 4420(j)(1)(A).
(b) Upon initial and throughout
continued listing and trading of the
Affiliate Security on the Exchange, the
Exchange shall:
(1) [file a report quarterly with the
Commission]provide a quarterly report
to the Exchange’s Regulatory Oversight
Committee detailing the Exchange’s
monitoring of:
(A)–(B) No change.
BILLING CODE 8011–01–P
1 15
13 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00050
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices
(2) engage an independent accounting
firm once a year to review and prepare
a report on the Affiliate Security to
ensure that the Nasdaq Affiliate is in
compliance with the listing
requirements contained in the Rule
5000, 5100, 5200, 5500 and 5600 Series
and promptly [forward to the
Commission]provide BX’s Regulatory
Oversight Committee with a copy of the
report prepared by the independent
accounting firm.
(c) No change.
*
*
*
*
*
(b) Not applicable.
(c) Not applicable.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
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The Exchange proposes to amend
Rule 5701 (Additional Requirements for
Securities Listed on the Exchange
Issued by Nasdaq or its Affiliates)
regarding the requirements for the
listing of securities that are listed on the
exchange issued by Nasdaq or its
affiliates.
Rule 5701 sets forth certain
monitoring requirements that must be
met throughout the continued listing of
securities issued by Nasdaq or its
affiliates. More specifically, Rule 5701
provides that, upon initial and
throughout continued listing of the
Affiliate Security 3 on the Exchange, the
Exchange shall:
3 Pursuant to Rule 5701(a)(2), ‘‘Affiliate Security’’
means any security issued by a Nasdaq Affiliate,
with the exception of Portfolio Depository Receipts
as defined in Rule 4420(i)(1)(A) and Index Fund
Shares as defined in Rule 4420(j)(1)(A), and
pursuant to Rule 5701(a)(1), ‘‘Nasdaq Affiliate’’
means Nasdaq, Inc. and any entity that directly or
indirectly, through one or more intermediaries,
controls, is controlled by, or is under common
control with Nasdaq, Inc., where ‘‘control’’ means
that the one entity possesses, directly or indirectly,
voting control of the other entity either through
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• File a report quarterly (‘‘Quarterly
Report’’) with the Commission detailing
the Exchange’s monitoring of (a) the
Nasdaq Affiliate’s compliance with the
listing requirements; and (b) the trading
of the Affiliate Security; and
• engage an independent accounting
firm once a year to review and prepare
a report on the Affiliate Security to
ensure that the Nasdaq Affiliate is in
compliance with the listing
requirements (‘‘Annual Report’’) and
promptly forward to the Commission a
copy of the report prepared by the
independent accounting firm.
In discussions with the Commission
Staff regarding the Exchange’s Rule
5701, it was determined that the
Exchange no longer needs to provide to
the Commission copies of the reports
specified in paragraphs (b)(1) and (b)(2)
thereunder; instead, the Exchange must
provide these reports to the Exchange’s
Regulatory Oversight Committee.
Accordingly, the Exchange proposes to
amend Rule 5701 to remove the
requirement that the Quarterly Report
be filed with the Commission and that
copies of the Annual Report be
forwarded to the Commission, and to
require instead that copies of each such
report be provided to BX’s Regulatory
Oversight Committee. In addition, the
Exchange proposes to modify the
definition of ‘‘Affiliate Security’’ in Rule
5701(a)(2) to include any Exchangelisted option on any such security.
Finally, the Exchange proposes to
modify Rule 5701(b) to require that the
Exchange also follow Rule 5701 upon
initial and throughout continued
trading, not just listing, of the ‘‘Affiliate
Security’’ on the Exchange.
No other changes would be made to
Rule 5701, which would continue to
require that BX file a report with the
Commission if it determines that the
Nasdaq Affiliate is not in compliance
with the listing requirements.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,4 in general, and furthers the
objectives of Section 6(b)(5) of the Act,5
in particular, in that it is 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
ownership of capital stock or other equity securities
or through majority representation on the board of
directors or other management body of such entity.
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
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13169
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.
The Exchange believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, 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 the proposed changes would
reduce the paperwork received by the
Commission and ease the burden of
submitting the Quarterly and Annual
Reports, while continuing to help
protect against concerns that the
Exchange will not effectively enforce its
rules with respect to the listing and
trading of Affiliate Securities. The
proposed rule change would not change
the information available to the
Commission. The Exchange understands
that these reports are subject to Section
17A of the Exchange Act 6 and that it
will be required to keep and preserve,
and to furnish to the Commission upon
request, copies of these reports in
accordance with Rule 17a–1
thereunder.7
The Exchange believes that the
proposed change adding Exchangelisted options to the definition of
‘‘Affiliate Security’’ in Rule 5701(a)(2)
and requiring that the Exchange also
follow Rule 5701 upon initial and
throughout continued trading, not just
listing, of the ‘‘Affiliate Security’’ on the
Exchange, will expand the scope of Rule
5701, which would help eliminate any
perception of a potential conflict of
interest if a Nasdaq Affiliate seeks to list
and/or trade an option on an Affiliate
Security on the Exchange and thus
promote just and equitable principles of
trade, remove impediments to a free and
open market and protect investors and
the public interest by helping protect
against concerns that the Exchange will
not effectively enforce its rules with
respect to the listing and trading of
these securities.
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
6 15
7 17
U.S.C. 78q.
CFR 240.17a–1.
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13170
Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices
of the purposes of the Act. The
proposed rule change is not intended to
address competitive issues but rather to
reduce the paperwork received by the
Commission, ease the burden of
submitting the Quarterly and Annual
Reports, and provide greater clarity in
the Exchange’s rules, without changing
the information available to the
Commission.
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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 15 U.S.C. 78s(b)(3)(A)(iii).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
12 15 U.S.C. 78s(b)(2)(B).
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SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
Proposed Collection; Comment
Request
• 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–
BX–2018–010 on the subject line.
Upon Written Request, Copies Available
From: U.S. Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Paper Comments
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 Because the
foregoing proposed rule change does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and
subparagraph (f)(6) of Rule 19b–4
thereunder.11
At any time within 60 days of the
filing of such 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) 12 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
8 15
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
• 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–BX–2018–010. 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 (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 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–BX–2018–010 and should
be submitted on or before April 17,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–06098 Filed 3–26–18; 8:45 am]
BILLING CODE 8011–01–P
13 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00052
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Extension:
Rule 10A–1, SEC File No. 270–425, OMB
Control No. 3235–0468
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 this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 10A–1 (17 CFR 240.10A–1)
implements the reporting requirements
in Section 10A of the Exchange Act (15
U.S.C. 78j–1) which was enacted by
Congress on December 22, 1995 as part
of the Private Securities Litigation
Reform Act of 1995, Public Law 104–67,
109 Stat 737. Under section 10A and
Rule 10A–1 reporting occurs only if a
registrant’s board of directors receives a
report from its auditor that (1) there is
an illegal act material to the registrant’s
financial statements, (2) senior
management and the board have not
taken timely and appropriate remedial
action, and (3) the failure to take such
action is reasonably expected to warrant
the auditor’s modification of the audit
report or resignation from the audit
engagement. The board of directors
must notify the Commission within one
business day of receiving such a report.
If the board fails to provide that notice,
then the auditor, within the next
business day, must provide the
Commission with a copy of the report
that it gave to the board.
Likely respondents are those
registrants filing audited financial
statements under the Securities
Exchange Act of 1934 (15 U.S.C. 78a, et
seq.) and the Investment Company Act
of 1940 (15 U.S.C. 80a–1, et seq.).
It is estimated that Rule 10A–1 results
in an aggregate additional reporting
burden of 5 hours per year. The
estimated average burden hours are
solely for purposes of the Paperwork
Reduction Act and are not derived from
a comprehensive or even a
representative survey or study of the
costs of SEC rules or forms.
Written comments are invited on: (a)
Whether the proposed collection of
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]]>Agencies
[Federal Register Volume 83, Number 59 (Tuesday, March 27, 2018)]
[Notices]
[Pages 13168-13170]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06098]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82919; File No. SR-BX-2018-010]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 5701
Regarding the Requirements for Securities Listed on the Exchange Issued
by Nasdaq, Inc. or Its Affiliates
March 22, 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 March 9, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 5701 regarding the requirements
for securities listed on the exchange issued by Nasdaq, Inc.
(``Nasdaq'') or its affiliates.
The text of the proposed rule change is set forth below. Proposed
new language is italicized; deleted text is in brackets.
* * * * *
5701. Additional Requirements for Securities Listed on the Exchange
Issued by Nasdaq or Its Affiliates
(a) For purposes of this Rule 5701, the terms below are defined as
follows:
(1) No change.
(2) ``Affiliate Security'' means any security issued by a Nasdaq
Affiliate or any Exchange-listed option on any such security, with the
exception of Portfolio Depository Receipts as defined in Rule
4420(i)(1)(A) and Index Fund Shares as defined in Rule 4420(j)(1)(A).
(b) Upon initial and throughout continued listing and trading of
the Affiliate Security on the Exchange, the Exchange shall:
(1) [file a report quarterly with the Commission]provide a
quarterly report to the Exchange's Regulatory Oversight Committee
detailing the Exchange's monitoring of:
(A)-(B) No change.
[[Page 13169]]
(2) engage an independent accounting firm once a year to review and
prepare a report on the Affiliate Security to ensure that the Nasdaq
Affiliate is in compliance with the listing requirements contained in
the Rule 5000, 5100, 5200, 5500 and 5600 Series and promptly [forward
to the Commission]provide BX's Regulatory Oversight Committee with a
copy of the report prepared by the independent accounting firm.
(c) No change.
* * * * *
(b) Not applicable.
(c) Not applicable.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 5701 (Additional Requirements
for Securities Listed on the Exchange Issued by Nasdaq or its
Affiliates) regarding the requirements for the listing of securities
that are listed on the exchange issued by Nasdaq or its affiliates.
Rule 5701 sets forth certain monitoring requirements that must be
met throughout the continued listing of securities issued by Nasdaq or
its affiliates. More specifically, Rule 5701 provides that, upon
initial and throughout continued listing of the Affiliate Security \3\
on the Exchange, the Exchange shall:
---------------------------------------------------------------------------
\3\ Pursuant to Rule 5701(a)(2), ``Affiliate Security'' means
any security issued by a Nasdaq Affiliate, with the exception of
Portfolio Depository Receipts as defined in Rule 4420(i)(1)(A) and
Index Fund Shares as defined in Rule 4420(j)(1)(A), and pursuant to
Rule 5701(a)(1), ``Nasdaq Affiliate'' means Nasdaq, Inc. and any
entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with Nasdaq, Inc., where ``control'' means that the one
entity possesses, directly or indirectly, voting control of the
other entity either through ownership of capital stock or other
equity securities or through majority representation on the board of
directors or other management body of such entity.
---------------------------------------------------------------------------
File a report quarterly (``Quarterly Report'') with the
Commission detailing the Exchange's monitoring of (a) the Nasdaq
Affiliate's compliance with the listing requirements; and (b) the
trading of the Affiliate Security; and
engage an independent accounting firm once a year to
review and prepare a report on the Affiliate Security to ensure that
the Nasdaq Affiliate is in compliance with the listing requirements
(``Annual Report'') and promptly forward to the Commission a copy of
the report prepared by the independent accounting firm.
In discussions with the Commission Staff regarding the Exchange's
Rule 5701, it was determined that the Exchange no longer needs to
provide to the Commission copies of the reports specified in paragraphs
(b)(1) and (b)(2) thereunder; instead, the Exchange must provide these
reports to the Exchange's Regulatory Oversight Committee. Accordingly,
the Exchange proposes to amend Rule 5701 to remove the requirement that
the Quarterly Report be filed with the Commission and that copies of
the Annual Report be forwarded to the Commission, and to require
instead that copies of each such report be provided to BX's Regulatory
Oversight Committee. In addition, the Exchange proposes to modify the
definition of ``Affiliate Security'' in Rule 5701(a)(2) to include any
Exchange-listed option on any such security. Finally, the Exchange
proposes to modify Rule 5701(b) to require that the Exchange also
follow Rule 5701 upon initial and throughout continued trading, not
just listing, of the ``Affiliate Security'' on the Exchange.
No other changes would be made to Rule 5701, which would continue
to require that BX file a report with the Commission if it determines
that the Nasdaq Affiliate is not in compliance with the listing
requirements.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\4\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\5\ in particular, in that it is 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.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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 the proposed changes would reduce the paperwork received by the
Commission and ease the burden of submitting the Quarterly and Annual
Reports, while continuing to help protect against concerns that the
Exchange will not effectively enforce its rules with respect to the
listing and trading of Affiliate Securities. The proposed rule change
would not change the information available to the Commission. The
Exchange understands that these reports are subject to Section 17A of
the Exchange Act \6\ and that it will be required to keep and preserve,
and to furnish to the Commission upon request, copies of these reports
in accordance with Rule 17a-1 thereunder.\7\
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\6\ 15 U.S.C. 78q.
\7\ 17 CFR 240.17a-1.
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The Exchange believes that the proposed change adding Exchange-
listed options to the definition of ``Affiliate Security'' in Rule
5701(a)(2) and requiring that the Exchange also follow Rule 5701 upon
initial and throughout continued trading, not just listing, of the
``Affiliate Security'' on the Exchange, will expand the scope of Rule
5701, which would help eliminate any perception of a potential conflict
of interest if a Nasdaq Affiliate seeks to list and/or trade an option
on an Affiliate Security on the Exchange and thus promote just and
equitable principles of trade, remove impediments to a free and open
market and protect investors and the public interest by helping protect
against concerns that the Exchange will not effectively enforce its
rules with respect to the listing and trading of these securities.
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
[[Page 13170]]
of the purposes of the Act. The proposed rule change is not intended to
address competitive issues but rather to reduce the paperwork received
by the Commission, ease the burden of submitting the Quarterly and
Annual Reports, and provide greater clarity in the Exchange's rules,
without changing the information available to the Commission.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
Because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \10\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\11\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of such 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) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 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 proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BX-2018-010 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-BX-2018-010. 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 (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 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-BX-2018-010 and should be submitted on
or before April 17, 2018.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-06098 Filed 3-26-18; 8:45 am]
BILLING CODE 8011-01-P
