Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4370 Regarding the Requirements for the Listing of Securities That Are Issued by the Exchange or Any of Its Affiliates, 13159-13161 [2018-06100]
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Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices
with the disclosure requirement of the
rule are accounted for in the burdens
associated with the Form N–1A
registration statement for funds.
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collection at the following website,
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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) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
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or send an email to: PRA_Mailbox@
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OMB within 30 days of this notice.
Dated: March 22, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–06121 Filed 3–26–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82921; File No. SR–
NASDAQ–2018–020]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
4370 Regarding the Requirements for
the Listing of Securities That Are
Issued by the Exchange or Any of Its
Affiliates
amozie on DSK30RV082PROD with NOTICES
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 20,
2018, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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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 4370 regarding the requirements
for the listing of securities that are
issued by the Exchange or any of its
affiliates.
The text of the proposed rule change
is set forth below. Proposed new
language is italicized; deleted text is in
brackets.
*
*
*
*
*
4370. Additional Requirements for
Nasdaq-Listed Securities Issued by
Nasdaq or Its Affiliates
(a) For purposes of this Rule 4370, 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
5705(a)(1)(A) and Index Fund Shares as
defined in Rule 5705(b)(1)(A).
(b) Upon initial and throughout
continued listing and trading of the
Affiliate Security on The Nasdaq Stock
Market, Nasdaq shall:
(1) [file a report quarterly with the
Commission]provide a quarterly report
to Nasdaq’s Regulatory Oversight
Committee detailing Nasdaq’s
monitoring of:
(A)–(B) No change.
(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, 5300, 5400, 5500, and
5600 Series and promptly [forward to
the Commission]provide Nasdaq’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
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13159
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 4370 (Additional Requirements for
Nasdaq-Listed Securities Issued by
Nasdaq or its Affiliates) regarding the
requirements for the listing of securities
that are issued by the Exchange or any
of its affiliates.
Rule 4370 sets forth certain
monitoring requirements that must be
met throughout the continued listing of
securities issued by Nasdaq or its
affiliates. More specifically, Rule 4370
provides that, upon initial and
throughout continued listing of the
Affiliate Security 3 on The Nasdaq Stock
Market, Nasdaq shall:
• File a report quarterly (‘‘Quarterly
Report’’) with the Commission detailing
Nasdaq’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
4370, 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
3 Pursuant to Rule 4370(a)(2), ‘‘Affiliate Security’’
means any security issued by a Nasdaq Affiliate,
with the exception of Portfolio Depository Receipts
as defined in Rule 5705(a)(1)(A) and Index Fund
Shares as defined in Rule 5705(b)(1)(A), and
pursuant to Rule 4370(a)(1), ‘‘Nasdaq Affiliate’’
means The Nasdaq Stock Market, Inc. and any
entity that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or
is under common control with The Nasdaq Stock
Market, 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.
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Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices
amozie on DSK30RV082PROD with NOTICES
Regulatory Oversight Committee.
Accordingly, the Exchange proposes to
amend Rule 4370 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 Nasdaq’s
Regulatory Oversight Committee. In
addition, the Exchange proposes to
modify the definition of ‘‘Affiliate
Security’’ in Rule 4370(a)(2) to include
any Exchange-listed option on any such
security. Finally, the Exchange proposes
to modify Rule 4370(b) to require that
the Exchange also follow Rule 4370
upon initial and throughout continued
trading, not just listing, of the ‘‘Affiliate
Security’’ on the Exchange.
No other changes would be made to
Rule 4370, which would continue to
require that Nasdaq 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 the
proposed rule change is consistent with
Section 6(b) of the Exchange Act 4 in
general, and Section 6(b)(5) 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.
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 4370(a)(2)
and requiring that the Exchange also
follow Rule 4370 upon initial and
throughout continued trading, not just
listing, of the ‘‘Affiliate Security’’ on the
Exchange, will expand the scope of Rule
4370, 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
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
6 15
U.S.C. 78q.
CFR 240.17a–1.
8 15 U.S.C. 78s(b)(3)(A)(iii).
4 15
U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
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7 17
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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.
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 rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2018–020 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2018–020. 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
9 17
CFR 240.19b–4(f)(6).
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).
10 15
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Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices
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–NASDAQ–2018–020 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. 2018–06100 Filed 3–26–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82923; File No. SR–
NYSEAMER–2018–10]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change Amending Certain Governing
Documents of the Exchange and NYSE
Market, Inc. To Make a Technical
Change Updating the Entities’
Registered Offices and Registered
Agents and Update the Date as
Required
amozie on DSK30RV082PROD with NOTICES
March 22, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March
13, 2018, NYSE American LLC (the
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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Jkt 244001
‘‘Exchange’’ or ‘‘NYSE American’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. 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
certain of governing documents of the
Exchange and NYSE Market (DE), Inc.
(‘‘NYSE Market (DE)’’) to make a
technical change updating the entities’
registered offices and registered agents
and update the date as required. In
addition, the Exchange proposes to
amend the Eleventh Amended and
Restated Operating Agreement of the
New York Stock Exchange LLC (‘‘NYSE
LLC’’). The proposed change is available
on the Exchange’s website at
www.nyse.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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
certain of governing documents of the
Exchange and NYSE Market (DE) to
make a technical change updating the
entities’ registered offices and registered
agents and update the date as required.
As discussed below, the Exchange
proposes to amend the following
documents (together, the ‘‘Governing
Documents’’):
• Certificate of Formation of the
Exchange (‘‘Certificate of Formation’’);
• Eleventh Amended and Restated
Operating Agreement of the Exchange
(‘‘NYSE American Operating
Agreement’’); and
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Fmt 4703
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13161
• Third Amended and Restated
Certificate of Incorporation of NYSE
Market (DE), Inc. (the ‘‘NYSE Market
(DE) Certificate’’).
The changes are non-substantive
technical administrative changes.
The NYSE LLC is an affiliate of the
Exchange, and NYSE Market (DE) is a
wholly-owned subsidiary of NYSE LLC.
NYSE Market (DE) in turn owns a
majority interest in NYSE Amex
Options LLC (‘‘NYSE Amex Options’’),
a facility of the Exchange. The Exchange
and NYSE Market (DE) are the only
members of NYSE Amex Options.4 The
Exchange filed the NYSE Market (DE)
Certificate as a ‘‘rule of the exchange’’
under Section 3(a)(27) of the Exchange
Act because NYSE Market (DE) has a
majority interest in a facility of the
Exchange.5
In addition, because of NYSE LLC’s
ownership of NYSE Market (DE), the
Exchange filed the Eleventh Amended
and Restated Operating Agreement of
the NYSE LLC (‘‘NYSE Operating
Agreement’’) as a ‘‘rule of the Exchange’’
under Section 3(a)(27) of the Exchange
Act.6 The Exchange proposes to amend
the NYSE Operating Agreement (as
amended, the ‘‘Amended NYSE
Operating Agreement’’) to update the
registered office and registered agent in
the state of New York and to make a
conforming change to the date.
Exchange Governing Documents
The Exchange is a limited liability
company organized under the laws of
the State of Delaware. As such, it is
required to have and maintain a
registered office and registered agent in
Delaware.7
Pursuant to Delaware law,8 the
Certificate of Formation is amended by
filing a ‘‘State of Delaware Certificate of
4 See Exchange Act Release No. 75301 (June 25,
2015), 80 FR 37695 (July 1, 2015) (SR–NYSEMKT–
2015–44) (notice of filing and immediate
effectiveness of proposed rule change amending the
members’ schedule of the Amended and Restated
Limited Liability Company Agreement of NYSE
Amex Options LLC).
5 See 15 U.S.C. 78c(a)(27); Securities Exchange
Act Release No. 75984 (September 25, 2015), 80 FR
59213, 59214 (October 1, 2015) (SR–NYSEMKT–
2015–71) (notice of filing and immediate
effectiveness of proposed rule change adding to the
rules of the Exchange the Third Amended and
Restated Certificate of Incorporation of NYSE
Market, Inc., and the Eighth Amended and Restated
Operating Agreement of New York Stock Exchange
LLC).
6 See 15 U.S.C. 78c(a)(27); Securities Exchange
Act Release No. 79232 (November 3, 2016), 81FR
78873, 78874 (November 9, 2016) (SR–NYSEMKT–
2016–96) (notice of filing and immediate
effectiveness of proposed rule change to add the
NYSE Operating Agreement to the rules of the
Exchange).
7 See Del. Code tit. 6, § 18–104(a).
8 See Del. Code tit. 6, § 18–202(a).
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]]>Agencies
[Federal Register Volume 83, Number 59 (Tuesday, March 27, 2018)]
[Notices]
[Pages 13159-13161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06100]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82921; File No. SR-NASDAQ-2018-020]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 4370 Regarding the Requirements for the Listing of
Securities That Are Issued by the Exchange or Any of 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 20, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' 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 4370 regarding the requirements
for the listing of securities that are issued by the Exchange or any of
its affiliates.
The text of the proposed rule change is set forth below. Proposed
new language is italicized; deleted text is in brackets.
* * * * *
4370. Additional Requirements for Nasdaq-Listed Securities Issued by
Nasdaq or Its Affiliates
(a) For purposes of this Rule 4370, 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
5705(a)(1)(A) and Index Fund Shares as defined in Rule 5705(b)(1)(A).
(b) Upon initial and throughout continued listing and trading of
the Affiliate Security on The Nasdaq Stock Market, Nasdaq shall:
(1) [file a report quarterly with the Commission]provide a
quarterly report to Nasdaq's Regulatory Oversight Committee detailing
Nasdaq's monitoring of:
(A)-(B) No change.
(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, 5300, 5400, 5500, and 5600 Series and
promptly [forward to the Commission]provide Nasdaq'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 4370 (Additional Requirements
for Nasdaq-Listed Securities Issued by Nasdaq or its Affiliates)
regarding the requirements for the listing of securities that are
issued by the Exchange or any of its affiliates.
Rule 4370 sets forth certain monitoring requirements that must be
met throughout the continued listing of securities issued by Nasdaq or
its affiliates. More specifically, Rule 4370 provides that, upon
initial and throughout continued listing of the Affiliate Security \3\
on The Nasdaq Stock Market, Nasdaq shall:
---------------------------------------------------------------------------
\3\ Pursuant to Rule 4370(a)(2), ``Affiliate Security'' means
any security issued by a Nasdaq Affiliate, with the exception of
Portfolio Depository Receipts as defined in Rule 5705(a)(1)(A) and
Index Fund Shares as defined in Rule 5705(b)(1)(A), and pursuant to
Rule 4370(a)(1), ``Nasdaq Affiliate'' means The Nasdaq Stock Market,
Inc. and any entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with The Nasdaq Stock Market, 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 Nasdaq'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 4370, 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
[[Page 13160]]
Regulatory Oversight Committee. Accordingly, the Exchange proposes to
amend Rule 4370 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 Nasdaq's Regulatory Oversight Committee. In
addition, the Exchange proposes to modify the definition of ``Affiliate
Security'' in Rule 4370(a)(2) to include any Exchange-listed option on
any such security. Finally, the Exchange proposes to modify Rule
4370(b) to require that the Exchange also follow Rule 4370 upon initial
and throughout continued trading, not just listing, of the ``Affiliate
Security'' on the Exchange.
No other changes would be made to Rule 4370, which would continue
to require that Nasdaq 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 the proposed rule change is consistent
with Section 6(b) of the Exchange Act \4\ in general, and Section
6(b)(5) \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
4370(a)(2) and requiring that the Exchange also follow Rule 4370 upon
initial and throughout continued trading, not just listing, of the
``Affiliate Security'' on the Exchange, will expand the scope of Rule
4370, 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 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-NASDAQ-2018-020 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2018-020. 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
[[Page 13161]]
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-NASDAQ-2018-020 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\
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\13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-06100 Filed 3-26-18; 8:45 am]
BILLING CODE 8011-01-P
