Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To Require Certain Member Organizations To Participate in Scheduled Market-Wide Circuit Breaker Testing, 32172-32174 [2018-14850]

Download as PDF 32172 Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments [FR Doc. 2018–14849 Filed 7–10–18; 8:45 am] • Use the Commission’s internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SRb–4CboeEDGX–2018–024 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. daltland on DSKBBV9HB2PROD with NOTICES For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. All submissions should refer to File Number SRb–4CboeEDGX–2018–024. 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 (http:// 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 SRb–4CboeEDGX–2018–024 and should be submitted on or before August 1, 2018. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83601; File No. SR–NYSE– 2018–31] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To Require Certain Member Organizations To Participate in Scheduled MarketWide Circuit Breaker Testing July 6, 2018. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on June 26, 2018, the New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change. On July 5, 2018, the Exchange filed Amendment No. 1 to the proposed rule change, as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to require certain member organizations to participate in scheduled Market-Wide Circuit Breaker testing. Amendment No.1 supersedes the original filing in its entirety. The proposed rule 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 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 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 NYSE Rule 49 to require certain member organizations to participate in scheduled Market-Wide Circuit Breaker (‘‘MWCB’’) testing. MWCBs are important, automatic mechanisms that are invoked to promote stability and investor confidence during a period of significant stress when securities markets experience extreme broad-based declines. MWCBs are designed to slow the effects of extreme price movement through coordinated trading halts across securities markets when severe price declines reach levels that may exhaust market liquidity. All U.S. equity and options exchanges have established procedures that allow for trading to be halted, or under extreme circumstances, for markets to be closed before the normal close of trading for a trading day. MWCBs provide for trading halts in all equities and options markets during a severe market decline as measured by a single-day decline in the S&P 500 Index. Pursuant to NYSE Rule 80B (Trading Halts Due to Extraordinary Market Volatility), a market-wide trading halt will be triggered if the S&P 500 Index declines in price by specified percentages from the prior day’s closing price of that index. Currently, the triggers are set at three circuit breaker thresholds: 7% (Level 1), 13% (Level 2) and 20% (Level 3). A market decline that triggers a Level 1 or Level 2 circuit breaker after 9:30 a.m. ET and before 3:25 p.m. ET would halt market-wide trading for 15 minutes, while a similar market decline at or after 3:25 p.m. ET would not halt market-wide trading. A market decline that triggers a Level 3 circuit breaker, at any time during the trading day, would halt market-wide trading for the remainder of the trading day. The Security [sic] Information Processors (‘‘SIP’’) for the U.S. equity markets have established a quarterly MWCB testing schedule.4 On the 16 17 1 15 VerDate Sep<11>2014 16:26 Jul 10, 2018 Jkt 244001 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 4 See https://www.nyse.com/publicdocs/ctaplan/ notifications/trader-update/CTS_CQS%202018_ Failover%20Testing_Q1.pdf. E:\FR\FM\11JYN1.SGM 11JYN1 Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices daltland on DSKBBV9HB2PROD with NOTICES scheduled dates, the Consolidated Tape Association Plan (‘‘CTA Plan’’) and the Consolidated Quotation Plan (‘‘CQ’’ Plan’’) (collectively ‘‘the CTA/CQ Plans’’) 5 and the Nasdaq/UTP Plan 6 conduct MWCB testing that allows market participants across the securities industry to test their ability to receive messages associated with MWCBs, including decline status, halt and resume messages. Market participants are also able to participate in testing of re-opening auctions following marketwide circuit breaker halts. The Exchange believes the quarterly tests are critical to ensure that securities markets halt trading and subsequently re-open in a manner consistent with the MWCB rules. To that end, the Exchange believes that certain member organizations should be required to participate in scheduled MWCB tests. The proposed rule would provide the Exchange with authority to require participation by member organizations in industry-wide tests to validate that their processing in the event of MWCB is as expected within their systems. In 2015, in connection with Regulation Systems Compliance and Integrity (‘‘Regulation SCI’’), the Exchange adopted rules to require certain member organizations to participate in testing of the operation of the Exchange’s business continuity and disaster recovery plans. The Exchange similarly believes that requiring member organizations to participate in mandatory MWCB testing because they, for example, account for a significant portion of the Exchange’s overall volume or maintain exclusive responsibilities with respect to Exchange-listed securities would be a reasonable means to ensure the maintenance of a fair and orderly market. Because member organizations required to participate in Regulation SCI testing have already been identified as essential for the maintenance of a fair and orderly market, the Exchange believes these same member organizations should also be required to participate in scheduled MWCB testing. 5 The CTA/CQ Plans govern the collection, consolidation, processing and dissemination of last sale and quotation information for Network A and Network B securities. Network A refers to securities listed on NYSE and Network B refers to securities listed on exchanges other than the Nasdaq Stock Market LLC (‘‘Nasdaq’’). 6 The Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis (‘‘Nasdaq/UTP Plan’’) governs the collection, consolidation, processing, and dissemination of last sale and quotation information for Network C securities. Network C refers to securities listed on Nasdaq. VerDate Sep<11>2014 16:26 Jul 10, 2018 Jkt 244001 Accordingly, the Exchange proposes new Rule 49(c)(1), which would provide that each member organization notified of its obligation to participate in mandatory testing pursuant to standards established under paragraphs (b)(1) and (3) 7 of Rule 49 would also be required to participate in scheduled MWCB testing, in the manner and frequency specified by the Exchange. Currently, the annual Regulation SCI test is conducted in October of each calendar year and at least three (3) months prior to such test, the Exchange provides a notice to member organizations that are required to participate in such test (‘‘SCI Notice’’). The Exchange proposes that future SCI Notices would also include notification to member organizations of their obligation to participate in a scheduled MWCB test. Finally, proposed Rule 49(c)(2) would provide that member organizations not required to participate in a scheduled MWCB test pursuant to standards established in paragraphs (b)(1) and (3) of Rule 49 would be permitted to participate in a scheduled MWCB test. The Exchange proposes to implement the proposed rule change at the same time that the Exchange notifies member organizations of required participation in the 2019 Regulation SCI industry test.8 The 2019 SCI Notice would identify the member organizations that would be required to participate in scheduled MWCB testing. Member organizations notified in the 2019 SCI Notice of their obligation to participate in a scheduled MWCB test would be required to participate in such test on at least one of the testing dates established by the SIPs.9 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,10 in general, and furthers the objectives of Section 6(b)(5) of the Act,11 in particular, because it is designed to prevent fraudulent and 7 Paragraph (b)(1) of Rule 49 establishes standards for the designation of member organizations that the Exchange determines are necessary to participate in business continuity and disaster recovery plans testing in connection with Regulation SCI. See Securities Exchange Act Release No. 76346 (November 4, 2015), 80 FR 69765 (November 10, 2015). 8 Member organizations were notified of required participation for the 2018 Regulation SCI test scheduled for October 13, 2018 in April 2018. As noted above, the Exchange encourages all member organizations to test voluntarily but believes that implementing the new rule in 2019 would provide member organizations with adequate time to prepare for a scheduled MWCB test. 9 See supra, note 4. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 32173 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 mechanisms of, a free and open market and a national market system and, in general, to protect investors and the public interest and because it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The proposed rule requiring member organizations to participate in mandatory MWCB testing would enable the Exchange, participating member organizations, and others to evaluate the readiness of such member organizations in the event of unanticipated market volatility. The proposal would also ensure that the member organizations necessary to ensure the maintenance of a fair and orderly market are properly designated as such designation would be determined by the same clear and objective standards used by the Exchange currently to determine which member organizations are required to participate in mandatory Regulation SCI testing. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that requiring participation in MWCB testing does not impose an undue burden on competition that is not necessary or appropriate because member organizations required to participate in MWCB testing under the proposal have been designated by the Exchange as essential to the maintenance of a fair and orderly market, such that their demonstrated ability to halt and subsequently re-open trading in response to an emergency should contribute to a fair and orderly market for the benefit of all market participants. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. E:\FR\FM\11JYN1.SGM 11JYN1 32174 Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices 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. 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 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–NYSE–2018–31 and should be submitted on or before August 1, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–14850 Filed 7–10–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33149; 812–14835] Blackstone/GSO Floating Rate Enhanced Income Fund, et al. Paper Comments daltland on DSKBBV9HB2PROD with NOTICES • Use the Commission’s internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2018–31 on the subject line. Notice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d–1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to permit business development companies (‘‘BDCs’’) and closed-end management investment companies to co-invest in portfolio companies with each other and with certain affiliated investment funds and accounts. APPLICANTS: Blackstone/GSO Floating Rate Enhanced Income Fund (‘‘BGFREI’’); Blackstone/GSO LongShort Credit Income Fund (‘‘BGX’’); Blackstone/GSO Senior Floating Rate Term Fund (‘‘BSL’’); Blackstone/GSO Strategic Credit Fund (‘‘BGB’’); Blackstone/GSO Secured Lending Fund (‘‘BGSL,’’ and together with BGFREI, BGX, BSL, BGB, the ‘‘GSO Regulated Funds’’); GSO/Blackstone Debt Funds Management LLC (‘‘GDFM’’), the investment adviser to BGFREI, BGX, BSL and BGB; GSO Asset Management LLC (‘‘GAM’’), the proposed investment • 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–NYSE–2018–31. 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 (http://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 VerDate Sep<11>2014 16:26 Jul 10, 2018 Jkt 244001 July 6, 2018. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. AGENCY: PO 00000 12 17 CFR 200.30–3(a)(12). Frm 00103 Fmt 4703 Sfmt 4703 adviser to BGSL; the investment advisers set forth in Schedule A to the application (together with GDFM and GAM, the ‘‘GSO Advisers’’); the Existing Affiliated Funds set forth on Schedule A to the application 1; and Blackstone Alternative Solutions L.L.C. (‘‘BAS’’). FILING DATES: The application was filed on October 13, 2017, and amended on June 25, 2018. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on July 30, 2018, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F St. NE, Washington, DC 20549–1090. Applicants: 345 Park Avenue, New York, New York 10154. FOR FURTHER INFORMATION CONTACT: Asen Parachkevov, Senior Counsel, or David J. Marcinkus, Branch Chief, at (202) 551–6821 (Chief Counsel’s Office, Division of Investment Management). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s website by searching for the file number, or for an applicant using the Company name box, at http:// 1 The Existing Affiliated Funds, together with their direct and indirect wholly-owned subsidiaries, are entities (i) (A) whose primary investment adviser is a GSO Adviser or (B) whose primary investment adviser is a registered investment adviser that controls, is controlled by or is under common control with an Adviser (as defined below), but is itself not an Adviser (each, an ‘‘Existing Primary Adviser’’), and whose subadviser is an Adviser (each, an ‘‘Existing SubAdvised Affiliated Fund’’) and (ii) that either (A) would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act or (B) rely on the rule 3a–7 exemption thereunder from investment company status. The sole Existing Primary Adviser is BAS. Each of the Existing Sub-Advised Affiliated Funds are sub-advised by GSO Capital Partners LP, a GSO Adviser. E:\FR\FM\11JYN1.SGM 11JYN1

Agencies

[Federal Register Volume 83, Number 133 (Wednesday, July 11, 2018)]
[Notices]
[Pages 32172-32174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14850]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83601; File No. SR-NYSE-2018-31]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 
1, To Require Certain Member Organizations To Participate in Scheduled 
Market-Wide Circuit Breaker Testing

July 6, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on June 26, 2018, the New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change. On July 5, 2018, the Exchange 
filed Amendment No. 1 to the proposed rule change, as described in 
Items I, II, and III, below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 require certain member organizations to 
participate in scheduled Market-Wide Circuit Breaker testing. Amendment 
No.1 supersedes the original filing in its entirety. The proposed rule 
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 NYSE Rule 49 to require certain 
member organizations to participate in scheduled Market-Wide Circuit 
Breaker (``MWCB'') testing.
    MWCBs are important, automatic mechanisms that are invoked to 
promote stability and investor confidence during a period of 
significant stress when securities markets experience extreme broad-
based declines. MWCBs are designed to slow the effects of extreme price 
movement through coordinated trading halts across securities markets 
when severe price declines reach levels that may exhaust market 
liquidity. All U.S. equity and options exchanges have established 
procedures that allow for trading to be halted, or under extreme 
circumstances, for markets to be closed before the normal close of 
trading for a trading day. MWCBs provide for trading halts in all 
equities and options markets during a severe market decline as measured 
by a single-day decline in the S&P 500 Index.
    Pursuant to NYSE Rule 80B (Trading Halts Due to Extraordinary 
Market Volatility), a market-wide trading halt will be triggered if the 
S&P 500 Index declines in price by specified percentages from the prior 
day's closing price of that index. Currently, the triggers are set at 
three circuit breaker thresholds: 7% (Level 1), 13% (Level 2) and 20% 
(Level 3). A market decline that triggers a Level 1 or Level 2 circuit 
breaker after 9:30 a.m. ET and before 3:25 p.m. ET would halt market-
wide trading for 15 minutes, while a similar market decline at or after 
3:25 p.m. ET would not halt market-wide trading. A market decline that 
triggers a Level 3 circuit breaker, at any time during the trading day, 
would halt market-wide trading for the remainder of the trading day.
    The Security [sic] Information Processors (``SIP'') for the U.S. 
equity markets have established a quarterly MWCB testing schedule.\4\ 
On the

[[Page 32173]]

scheduled dates, the Consolidated Tape Association Plan (``CTA Plan'') 
and the Consolidated Quotation Plan (``CQ'' Plan'') (collectively ``the 
CTA/CQ Plans'') \5\ and the Nasdaq/UTP Plan \6\ conduct MWCB testing 
that allows market participants across the securities industry to test 
their ability to receive messages associated with MWCBs, including 
decline status, halt and resume messages. Market participants are also 
able to participate in testing of re-opening auctions following market-
wide circuit breaker halts.
---------------------------------------------------------------------------

    \4\ See https://www.nyse.com/publicdocs/ctaplan/notifications/trader-update/CTS_CQS%202018_Failover%20Testing_Q1.pdf.
    \5\ The CTA/CQ Plans govern the collection, consolidation, 
processing and dissemination of last sale and quotation information 
for Network A and Network B securities. Network A refers to 
securities listed on NYSE and Network B refers to securities listed 
on exchanges other than the Nasdaq Stock Market LLC (``Nasdaq'').
    \6\ The Joint Self-Regulatory Organization Plan Governing the 
Collection, Consolidation and Dissemination of Quotation and 
Transaction Information for Nasdaq-Listed Securities Traded on 
Exchanges on an Unlisted Trading Privileges Basis (``Nasdaq/UTP 
Plan'') governs the collection, consolidation, processing, and 
dissemination of last sale and quotation information for Network C 
securities. Network C refers to securities listed on Nasdaq.
---------------------------------------------------------------------------

    The Exchange believes the quarterly tests are critical to ensure 
that securities markets halt trading and subsequently re-open in a 
manner consistent with the MWCB rules. To that end, the Exchange 
believes that certain member organizations should be required to 
participate in scheduled MWCB tests. The proposed rule would provide 
the Exchange with authority to require participation by member 
organizations in industry-wide tests to validate that their processing 
in the event of MWCB is as expected within their systems.
    In 2015, in connection with Regulation Systems Compliance and 
Integrity (``Regulation SCI''), the Exchange adopted rules to require 
certain member organizations to participate in testing of the operation 
of the Exchange's business continuity and disaster recovery plans. The 
Exchange similarly believes that requiring member organizations to 
participate in mandatory MWCB testing because they, for example, 
account for a significant portion of the Exchange's overall volume or 
maintain exclusive responsibilities with respect to Exchange-listed 
securities would be a reasonable means to ensure the maintenance of a 
fair and orderly market. Because member organizations required to 
participate in Regulation SCI testing have already been identified as 
essential for the maintenance of a fair and orderly market, the 
Exchange believes these same member organizations should also be 
required to participate in scheduled MWCB testing. Accordingly, the 
Exchange proposes new Rule 49(c)(1), which would provide that each 
member organization notified of its obligation to participate in 
mandatory testing pursuant to standards established under paragraphs 
(b)(1) and (3) \7\ of Rule 49 would also be required to participate in 
scheduled MWCB testing, in the manner and frequency specified by the 
Exchange.
---------------------------------------------------------------------------

    \7\ Paragraph (b)(1) of Rule 49 establishes standards for the 
designation of member organizations that the Exchange determines are 
necessary to participate in business continuity and disaster 
recovery plans testing in connection with Regulation SCI. See 
Securities Exchange Act Release No. 76346 (November 4, 2015), 80 FR 
69765 (November 10, 2015).
---------------------------------------------------------------------------

    Currently, the annual Regulation SCI test is conducted in October 
of each calendar year and at least three (3) months prior to such test, 
the Exchange provides a notice to member organizations that are 
required to participate in such test (``SCI Notice''). The Exchange 
proposes that future SCI Notices would also include notification to 
member organizations of their obligation to participate in a scheduled 
MWCB test.
    Finally, proposed Rule 49(c)(2) would provide that member 
organizations not required to participate in a scheduled MWCB test 
pursuant to standards established in paragraphs (b)(1) and (3) of Rule 
49 would be permitted to participate in a scheduled MWCB test.
    The Exchange proposes to implement the proposed rule change at the 
same time that the Exchange notifies member organizations of required 
participation in the 2019 Regulation SCI industry test.\8\ The 2019 SCI 
Notice would identify the member organizations that would be required 
to participate in scheduled MWCB testing. Member organizations notified 
in the 2019 SCI Notice of their obligation to participate in a 
scheduled MWCB test would be required to participate in such test on at 
least one of the testing dates established by the SIPs.\9\
---------------------------------------------------------------------------

    \8\ Member organizations were notified of required participation 
for the 2018 Regulation SCI test scheduled for October 13, 2018 in 
April 2018. As noted above, the Exchange encourages all member 
organizations to test voluntarily but believes that implementing the 
new rule in 2019 would provide member organizations with adequate 
time to prepare for a scheduled MWCB test.
    \9\ See supra, note 4.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\11\ in particular, because 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 mechanisms of, a free and open market and a national market 
system and, in general, to protect investors and the public interest 
and because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule requiring member organizations to participate in 
mandatory MWCB testing would enable the Exchange, participating member 
organizations, and others to evaluate the readiness of such member 
organizations in the event of unanticipated market volatility. The 
proposal would also ensure that the member organizations necessary to 
ensure the maintenance of a fair and orderly market are properly 
designated as such designation would be determined by the same clear 
and objective standards used by the Exchange currently to determine 
which member organizations are required to participate in mandatory 
Regulation SCI testing.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes that 
requiring participation in MWCB testing does not impose an undue burden 
on competition that is not necessary or appropriate because member 
organizations required to participate in MWCB testing under the 
proposal have been designated by the Exchange as essential to the 
maintenance of a fair and orderly market, such that their demonstrated 
ability to halt and subsequently re-open trading in response to an 
emergency should contribute to a fair and orderly market for the 
benefit of all market participants.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

[[Page 32174]]

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.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2018-31 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-NYSE-2018-31. 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 (http://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-NYSE-2018-31 and should be submitted on 
or before August 1, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14850 Filed 7-10-18; 8:45 am]
 BILLING CODE 8011-01-P