Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Risk Protections, 48660-48663 [2018-20881]
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Federal Register / Vol. 83, No. 187 / Wednesday, September 26, 2018 / Notices
docketed by the NRC as of the date of
issuance, as well as future applications
submitted after the issuance of this
regulatory guide. Such action would not
constitute backfitting as defined in the
Backfit Rule or be otherwise
inconsistent with the applicable issue
finality provision in 10 CFR part 52,
inasmuch as such applicants or
potential applicants, with certain
exceptions described below, are not
within the scope of entities that are the
subject of the Backfit Rule or the
relevant issue finality provisions in 10
CFR part 52. This RG may be used by
existing holders of combined licenses
and operating licenses in accordance
with their existing licensing basis and
applicable regulatory requirements.
The exceptions to the general
principle are applicable whenever a
combined license applicant references a
10 CFR part 52 license (i.e., an early site
permit or a manufacturing license) and/
or 10 CFR part 52 regulatory approval
(i.e., a design certification rule or design
approval). However, the matters
addressed in this RG (monitoring the
effectiveness of maintenance at nuclear
power plants) have not previously been
proposed for resolution in a 10 CFR part
52 license or regulatory approval. The
NRC staff does not, at this time, intend
to impose the positions represented in
the RG in a manner that is inconsistent
with any issue finality provisions in
these 10 CFR part 52 licenses and
regulatory approvals. If, in the future,
the NRC staff seeks to impose a position
in this RG in a manner that does not
provide issue finality as described in the
applicable issue finality provision, then
the NRC staff must address the criteria
for avoiding issue finality as described
in the applicable issue finality
provision.
Further information on the staff’s use
of the RG is contained in the RG under
Section D, ‘‘Implementation.’’
Dated at Rockville, Maryland, this 20th day
of September, 2018.
For the Nuclear Regulatory Commission.
Thomas H. Boyce,
Chief, Regulatory Guidance and Generic
Issues Branch, Division of Engineering, Office
of Nuclear Regulatory Research.
[FR Doc. 2018–20864 Filed 9–25–18; 8:45 am]
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BILLING CODE 7590–01–P
POSTAL REGULATORY COMMISSION
[Docket No. CP2017–254]
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
negotiated service agreements. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: September
28, 2018.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Table of Contents
I. Introduction
II. Docketed Proceeding(s)
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3007.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
New Postal Products
Postal Regulatory Commission.
ACTION: Notice.
AGENCY:
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1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: CP2017–254; Filing
Title: Notice of the United States Postal
Service of Filing Modification Two to a
Global Plus 1D Negotiated Service
Agreement; Filing Acceptance Date:
September 20, 2018; Filing Authority: 39
CFR 3015.5; Public Representative:
Christopher C. Mohr; Comments Due:
September 28, 2018.
This Notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
[FR Doc. 2018–20964 Filed 9–25–18; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84237; File No. SR–ISE–
2018–80]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Risk
Protections
September 20, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 11, 2018, Nasdaq ISE, LLC
(‘‘ISE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 83, No. 187 / Wednesday, September 26, 2018 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend ISE
Rules 100(a)(5) which contains
definitions, Rule 711, ‘‘Acceptance of
Quotes and Orders’’ and Rule 714,
‘‘Automatic Execution of Orders’’.
The text of the proposed rule change
is available on the Exchange’s website at
https://ise.cchwallstreet.com/, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
ISE proposes to amend Rule 714,
Automatic Execution of Orders, by
placing all risk protections within this
rule and further creating sections to
distinguish order protections, order and
quote protections and quote protections.
The Exchange believes that providing
Members with a single rule with all risk
protections will provide an easy
reference to the mandatory single leg
risk protections on ISE.
The Exchange is amending the first
sentence of the rule to indicate that the
information contained in Rule 714
applies to single leg orders. The
Exchange is amending Rule 714(b) to
rename the caption from ‘‘Other Order
Protections’’ to ‘‘Other Single Leg Risk
Protections.’’ The Exchange is amending
references to ‘‘order protections’’ to
‘‘risk protections’’ within that rule to
more broadly describe the type of
protections offered on ISE. Finally, the
Exchange is relocating rule text from
Rule 714(c) to the end of proposed Rule
714(b), which states, ‘‘In the event of
unusual market conditions and in the
interest of a fair and orderly market, the
Exchange may temporarily establish the
levels at which the order protections
contained in this paragraph are triggered
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as necessary and appropriate.’’ These
non-substantive rule changes are
intended to bring greater clarity to the
rule.
The Exchange proposes to add the
following to proposed Rule 714(b)(1),
‘‘The following are order risk
protections on ISE:’’ The Exchange
proposes to list all order protections
within Rule 714(b)(1). The Exchange
proposes to relocate Limit Order Price
Protection from Rule 714(b)(2) to
proposed Rule 714(b)(1)(A). The
Exchange also proposes to add a new
sentence to the end of proposed Rule
714(b)(1)(A) which provides, ‘‘Limit
Order Price Protection shall not apply to
the Opening Process or during a trading
halt.’’ The Exchange is adding this
sentence, which was not contained in
the initial rule change, to make clear the
limitations as to when this protection is
available on ISE. The Exchange notes
the Limit Order Price Protection rejects
orders to buy (sell) as the greater of the
Exchange’s best offer (bid) plus (minus)
either an absolute dollar or a percentage.
The Exchange notes that the bid or offer
is not established until after an option
series options for trading. Applying this
protection during the Opening Process
is not necessary as the quote width
allowance is tighter during the Opening
Process.3 With respect to trading halts,
Opening Process procedures will be
used to reopen an option series after a
trading halt, therefore, the same
protections noted for the Opening
Process will apply for a trading halt and
the same restrictive boundaries would
apply.4 This sentence memorializes the
Exchange’s current practice. The
Exchange believes that this rule text will
bring greater clarity to the Limit Order
Price Protection functionality.
The Exchange proposes to relocate
and re-number Market Order Spread
Protection from Rule 711(c) to proposed
Rule 714(b)(1)(B). The Exchange also
proposes to add a sentence which
provides, ‘‘Market Order Spread
Protection shall not apply to the
Opening Process or during a trading
halt.’’ The Exchange believes that the
Market Order Spread Protection is
unnecessary during the Opening Process
and during a trading halt because
protections are in place during the
Opening Process to ensure that the best
bid and offer displayed on the Exchange
3 With respect to the Opening Process, a Quality
Opening Market is required. A Quality Opening
Market a bid/ask differential applicable to the best
bid and offer from all Valid Width Quotes defined
in a table to be determined by the Exchange and
published on the Exchange’s website. See ISE Rule
701(a)(7).
4 See ISE Rule 701(d).
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48661
are within a reasonable range.5 The
Opening Process has more restrictive
boundaries than those proposed for the
Market Order Spread Protection. With
respect to the Opening Process, a
Quality Opening Market is required. A
Quality Opening Market requires a
bid/ask differential applicable to the
best bid and offer from all Valid Width
Quotes defined in a table 6 to be
determined by the Exchange.7 The
Exchange’s requirements during the
Opening Process are more restrictive
than the proposed initial setting for the
Market Order Spread Protection, which
is proposed at $5. As provided in ISE
Rule 701(d), trading halts are subject to
the reopening process as provided for in
ISE Rule 701(e). The same protections
noted for the Opening Process above
will apply for trading halts. The
Exchange believes that the Market Order
Spread Protection is unnecessary during
the Opening Process and during a
trading halt because other protections
are in place to ensure that the best bid
and offer displayed on the Exchange are
within a reasonable range. The
Exchange is adding this sentence to
make clear the limitations as to when
this protection is available on ISE. The
Exchange believes that this rule text will
bring greater clarity to the Market Order
Spread Protection functionality.
The Exchange is also memorializing a
sentence which was contained in the
filing which adopted Market Order
Spread Protection. The Exchange noted
in the adopting filing that the Exchange
may establish differences other than the
referenced threshold for one or more
series or classes of options.8 At this
time, the Exchange proposes to
memorialize this capability within Rule
714(b)(1)(B) by stating, ‘‘The Exchange
may establish different thresholds for
one or more series or classes of
options.’’ The Exchange believes that
5 See note 3 above. With respect to trading halts,
Opening Process procedures will be used to reopen
an option series after a trading halt, therefore, the
same protections noted for the Opening Process will
apply for a trading halt and the same restrictive
boundaries would apply. See ISE Rule 701(d).
6 The table is located at: https://
business.nasdaq.com/media/ISESystemSettings_
tcm5044-44183.pdf.
7 The calculation of Quality Opening Market is
based on the best bid and offer of Valid Width
Quotes. The differential between the best bid and
offer are compared to reach this determination. The
allowable differential, as determined by the
Exchange, takes into account the type of security
(for example, Standard Penny Issues, Non-Penny
Issues and Special Penny Issues), volatility, option
premium, and liquidity. The Quality Opening
Market differential is intended to ensure the price
at which the Exchange opens reflects current
market conditions. See ISE Rule 701(a)(7).
8 Securities Exchange Act Release No. 80432
(April 11, 2017), 82 FR 18193 (April 17, 2017) (SR–
ISE–2017–03).
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Federal Register / Vol. 83, No. 187 / Wednesday, September 26, 2018 / Notices
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adding this provision to the rule will
add transparency to the Exchange’s
capability to establish different
thresholds per options series or class.
The Exchange proposes to relocate
Size Limitation from Rule 714(b)(3) to
proposed Rule 714(b)(1)(C) without any
amendments. The Exchange proposes to
add the following to proposed Rule
714(b)(2), ‘‘The following are order and
quote risk protections on ISE:’’. The
Exchange proposes to list all order and
quote protections within Rule 714(b)(2).
The Exchange proposes to re-letter
Acceptable Trade Range from Rule
714(b)(1) to proposed Rule 714(b)(2)(A).
The Exchange proposes to relocate
Market Wide Risk Protection from Rule
714(d) to proposed Rule 714(b)(1)(D).
The Exchange is only amending cross
references within this rule to reflect the
new location of this text.
The Exchange proposes new rule text
at Rule 714(b)(3) which provides, ‘‘The
following are Market Maker risk
protections on ISE:’’. The Exchange
proposes to list all Market Maker
protections within Rule 714(b)(3). The
Exchange proposes to relocate AntiInternalization from Supplementary
Material .03 to Rule 804 to proposed
Rule 714(b)(3)(A). The Exchange
proposes to replace the words ‘‘market
participant identifier’’ with ‘‘Market
Maker identifiers.’’ The Exchange also
proposes to replace the words
‘‘Exchange account identifier’’ with
‘‘account number.’’ 9 The Exchange
believes these modifications will bring
more clarity to the functionality. The
Exchange is removing the words
‘‘Notwithstanding Rule 804(d)(1) above’’
which refer to the firm quote.10 The
Exchange notes that the submission of
bids and offers must be firm
notwithstanding any protection offered
by the Exchange, not just AntiInternalization. The Exchange does not
believe it is necessary to specifically cite
this caveat for this order protections.
The Exchange also proposes to
capitalize the defined term Market
Maker in this sentence.
The Exchange proposes to relocate
Automated Quotation Adjustments from
Rule 804(g) to proposed Rule
714(b)(3)(B). Rule 804(g) will be
reserved. The Exchange is amending
references in the rule to reflect the new
9 An ‘‘account number’’ shall mean a number
assigned to a Member. Members may have more
than one account number. See Rule 100(a)(1).
10 ISE Rule 804(d)(1) provides that Market Maker
bids and offers are firm for orders and Exchange
Market Maker quotations both under this Rule and
Rule 602 of Regulation NMS under the Exchange
Act (‘‘Rule 602 of Reg NMS’’) for the number of
contracts specified according to the requirements of
paragraph 804(b).
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placement within Rule 714 and
replacing the words ‘‘Exchange’s system
(‘‘System’’)’’ with the defined term
System.11 Finally, the term ‘‘member’’
was capitalized because it is a defined
term. The Exchange is also making clear
within Rule 715(b)(3)(B)(vi) that Market
Makers must request the Exchange
enable re-entry by contacting the
Exchange’s Operations Department.
Finally, the Exchange proposes to
amend the definition of badge within
Rule 100(a)(5) to state that a badge is an
account number, which may contain
letters and/or numbers, assigned to
Market Makers. The Exchange may from
time to time modify the manner in
which a badge is expressed
systemically. This proposed language
allows for latitude in establishing
badges within the System.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,12 in general, and furthers the
objectives of Section 6(b)(5) of the Act,13
in particular, in that it is designed to
promote just and equitable principles of
trade, 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, by
grouping the various risk protections
into a single rule for ease of reference
and adding headers to the rule to make
clear whether the risk protection is an
order protection, order or quote
protection or a protection applicable to
Market Makers. The Exchange believes
the reorganization of the existing rule
and relocation of various rules into Rule
714 is a non-substantive rule change.
The Exchange believes that this rule
change is consistent with the protection
of investors and the public interest
because it will bring greater
transparency to the protections offered
on ISE. The Exchange’s proposal to not
apply the Limit Order Price Protection
during the Opening Process is
consistent with the Act because the
Exchange rejects orders to buy (sell) as
the greater of the Exchange’s best offer
(bid) plus (minus) either an absolute
dollar or a percentage. The Exchange
notes that the bid or offer is not
established until after an option series
options for trading. Applying this
protection during the Opening Process
is not necessary as the quote width
allowance is tighter during the Opening
11 The term ‘‘System’’ means the electronic
system operated by the Exchange that receives and
disseminates quotes, executes orders and reports
transactions. See Rule 100(a)(63).
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
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Process.14 With respect to trading halts,
Opening Process procedures will be
used to reopen an option series after a
trading halt, therefore, the same
protections noted for the Opening
Process will apply for a trading halt and
the same restrictive boundaries would
apply.15
The Exchange’s proposal to not apply
the Market Order Spread Protection
during the Opening Process is
consistent with the Act because
protections exist during the Opening
Process to ensure that the best bid and
offer displayed on the Exchange are
within a reasonable range. The
Exchange’s Opening Process Rule 701 16
and the reopening process after a
trading halt 17 both contain more
restrictive boundaries than those
proposed or the Market Order Spread
Protection. With respect to the Opening
Process, a Quality Opening Market is
required. A Quality Opening Market
requires a bid/ask differential applicable
to the best bid and offer from all Valid
Width Quotes defined in a table to be
determined by the Exchange.18 The
Exchange’s requirements during the
Opening Process are more restrictive
than the proposed initial setting for the
Market Order Spread Protection, which
is set at $5. The same protections noted
for the Opening Process above will
apply for trading halts. The Exchange
believes that the Market Order Spread
Protection is unnecessary during the
Opening Process and during a trading
halt because other protections are in
place to ensure that the best bid and
offer displayed on the Exchange are
within a reasonable range.
Memorializing the ability of the
Exchange to establish different Market
Order Spread Protection thresholds per
options series or class will also bring
greater clarity to the rule. Today, the
Exchange has this ability, it is simply
adding that text to the rule. Utilizing
defined terms within the Rulebook will
also bring clarity to the rules. The
Exchange also believes using more
discrete language within the AntiInternalization rule will clarify the
functionality.
Finally, the Exchange believes that
expanding the definition of a badge is
consistent with the Act because it
14 See
note 3 above.
ISE Rule 701(d).
16 See note 3 above.
17 With respect to trading halts, Opening Process
procedures will be used to reopen an option series
after a trading halt, therefore, the same protections
noted for the Opening Process will apply for a
trading halt and the same restrictive boundaries
would apply. See ISE Rule 701(d).
18 The table is located at: https://
business.nasdaq.com/media/ISESystemSettings_
tcm5044-44183.pdf.
15 See
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Federal Register / Vol. 83, No. 187 / Wednesday, September 26, 2018 / Notices
allows the Exchange the flexibility to
administer the badges within its System.
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 proposal
does not impose an intra-market burden
on competition with respect to the
reorganization and relocation of the
various rules into Rule 714 because the
various risk protections are mandatory
and will continue to apply uniformly to
all market participants. The Exchange
also believes that the addition of
specific limitations to both the Limit
Order Price Protection and Market
Order Spread Protection rules will
provide market participants with greater
information as to when these
protections will apply. These
limitations apply uniformly to all
market participants. The remainder of
the rule changes are intended to bring
greater transparency to the current
operation of the Exchange’s rules.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the 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) of the Act 19 and Rule 19b–
4(f)(6) thereunder.20
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 21 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 22
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
19 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
21 17 CFR 240.19b–4(f)(6).
22 17 CFR 240.19b–4(f)(6)(iii).
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20 17
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48663
public interest. The Exchange has
requested that the Commission waive
the 30-day operative delay so that the
proposed rule change may become
operative upon filing. The Exchange
argues that waiver of the operative delay
would allow the Exchange to
immediately incorporate all risk
protections into Rule 714 and bring
greater transparency to the risk
protections offered on the Exchange.
The Commission believes that waiver of
the 30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the
operative delay and designates the
proposed rule change operative upon
filing.23
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
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
tomake available publicly. All
submissions should refer to File
Number SR–ISE–2018–80, and should
be submitted on or before October 17,
2018.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Brent J. Fields,
Secretary.
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–
ISE–2018–80 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–ISE–2018–80. 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
23 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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[FR Doc. 2018–20881 Filed 9–25–18; 8:45 am]
BILLING CODE 8011–01–P
[Investment Company Act Release No.
33243; File No. 812–14892]
Ares Credit and Income Trust and Ares
Capital Management III LLC; Notice of
Application
September 21, 2018.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
Notice of an application for an order
under section 12(d)(1)(J) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from sections
12(d)(1)(A), (B), and (C) of the Act and
under sections 6(c) and 17(b) of the Act
for an exemption from sections 17(a)(1)
and (2) of the Act. The requested order
would permit certain registered openend investment companies to acquire
shares of certain registered open-end
24 17
E:\FR\FM\26SEN1.SGM
CFR 200.30–3(a)(12).
26SEN1
]]>Agencies
[Federal Register Volume 83, Number 187 (Wednesday, September 26, 2018)]
[Notices]
[Pages 48660-48663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20881]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84237; File No. SR-ISE-2018-80]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to Risk
Protections
September 20, 2018.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 11, 2018, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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[[Page 48661]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend ISE Rules 100(a)(5) which contains
definitions, Rule 711, ``Acceptance of Quotes and Orders'' and Rule
714, ``Automatic Execution of Orders''.
The text of the proposed rule change is available on the Exchange's
website at https://ise.cchwallstreet.com/, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
ISE proposes to amend Rule 714, Automatic Execution of Orders, by
placing all risk protections within this rule and further creating
sections to distinguish order protections, order and quote protections
and quote protections. The Exchange believes that providing Members
with a single rule with all risk protections will provide an easy
reference to the mandatory single leg risk protections on ISE.
The Exchange is amending the first sentence of the rule to indicate
that the information contained in Rule 714 applies to single leg
orders. The Exchange is amending Rule 714(b) to rename the caption from
``Other Order Protections'' to ``Other Single Leg Risk Protections.''
The Exchange is amending references to ``order protections'' to ``risk
protections'' within that rule to more broadly describe the type of
protections offered on ISE. Finally, the Exchange is relocating rule
text from Rule 714(c) to the end of proposed Rule 714(b), which states,
``In the event of unusual market conditions and in the interest of a
fair and orderly market, the Exchange may temporarily establish the
levels at which the order protections contained in this paragraph are
triggered as necessary and appropriate.'' These non-substantive rule
changes are intended to bring greater clarity to the rule.
The Exchange proposes to add the following to proposed Rule
714(b)(1), ``The following are order risk protections on ISE:'' The
Exchange proposes to list all order protections within Rule 714(b)(1).
The Exchange proposes to relocate Limit Order Price Protection from
Rule 714(b)(2) to proposed Rule 714(b)(1)(A). The Exchange also
proposes to add a new sentence to the end of proposed Rule 714(b)(1)(A)
which provides, ``Limit Order Price Protection shall not apply to the
Opening Process or during a trading halt.'' The Exchange is adding this
sentence, which was not contained in the initial rule change, to make
clear the limitations as to when this protection is available on ISE.
The Exchange notes the Limit Order Price Protection rejects orders to
buy (sell) as the greater of the Exchange's best offer (bid) plus
(minus) either an absolute dollar or a percentage. The Exchange notes
that the bid or offer is not established until after an option series
options for trading. Applying this protection during the Opening
Process is not necessary as the quote width allowance is tighter during
the Opening Process.\3\ With respect to trading halts, Opening Process
procedures will be used to reopen an option series after a trading
halt, therefore, the same protections noted for the Opening Process
will apply for a trading halt and the same restrictive boundaries would
apply.\4\ This sentence memorializes the Exchange's current practice.
The Exchange believes that this rule text will bring greater clarity to
the Limit Order Price Protection functionality.
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\3\ With respect to the Opening Process, a Quality Opening
Market is required. A Quality Opening Market a bid/ask differential
applicable to the best bid and offer from all Valid Width Quotes
defined in a table to be determined by the Exchange and published on
the Exchange's website. See ISE Rule 701(a)(7).
\4\ See ISE Rule 701(d).
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The Exchange proposes to relocate and re-number Market Order Spread
Protection from Rule 711(c) to proposed Rule 714(b)(1)(B). The Exchange
also proposes to add a sentence which provides, ``Market Order Spread
Protection shall not apply to the Opening Process or during a trading
halt.'' The Exchange believes that the Market Order Spread Protection
is unnecessary during the Opening Process and during a trading halt
because protections are in place during the Opening Process to ensure
that the best bid and offer displayed on the Exchange are within a
reasonable range.\5\ The Opening Process has more restrictive
boundaries than those proposed for the Market Order Spread Protection.
With respect to the Opening Process, a Quality Opening Market is
required. A Quality Opening Market requires a bid/ask differential
applicable to the best bid and offer from all Valid Width Quotes
defined in a table \6\ to be determined by the Exchange.\7\ The
Exchange's requirements during the Opening Process are more restrictive
than the proposed initial setting for the Market Order Spread
Protection, which is proposed at $5. As provided in ISE Rule 701(d),
trading halts are subject to the reopening process as provided for in
ISE Rule 701(e). The same protections noted for the Opening Process
above will apply for trading halts. The Exchange believes that the
Market Order Spread Protection is unnecessary during the Opening
Process and during a trading halt because other protections are in
place to ensure that the best bid and offer displayed on the Exchange
are within a reasonable range. The Exchange is adding this sentence to
make clear the limitations as to when this protection is available on
ISE. The Exchange believes that this rule text will bring greater
clarity to the Market Order Spread Protection functionality.
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\5\ See note 3 above. With respect to trading halts, Opening
Process procedures will be used to reopen an option series after a
trading halt, therefore, the same protections noted for the Opening
Process will apply for a trading halt and the same restrictive
boundaries would apply. See ISE Rule 701(d).
\6\ The table is located at: https://business.nasdaq.com/media/ISESystemSettings_tcm5044-44183.pdf.
\7\ The calculation of Quality Opening Market is based on the
best bid and offer of Valid Width Quotes. The differential between
the best bid and offer are compared to reach this determination. The
allowable differential, as determined by the Exchange, takes into
account the type of security (for example, Standard Penny Issues,
Non-Penny Issues and Special Penny Issues), volatility, option
premium, and liquidity. The Quality Opening Market differential is
intended to ensure the price at which the Exchange opens reflects
current market conditions. See ISE Rule 701(a)(7).
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The Exchange is also memorializing a sentence which was contained
in the filing which adopted Market Order Spread Protection. The
Exchange noted in the adopting filing that the Exchange may establish
differences other than the referenced threshold for one or more series
or classes of options.\8\ At this time, the Exchange proposes to
memorialize this capability within Rule 714(b)(1)(B) by stating, ``The
Exchange may establish different thresholds for one or more series or
classes of options.'' The Exchange believes that
[[Page 48662]]
adding this provision to the rule will add transparency to the
Exchange's capability to establish different thresholds per options
series or class.
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\8\ Securities Exchange Act Release No. 80432 (April 11, 2017),
82 FR 18193 (April 17, 2017) (SR-ISE-2017-03).
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The Exchange proposes to relocate Size Limitation from Rule
714(b)(3) to proposed Rule 714(b)(1)(C) without any amendments. The
Exchange proposes to add the following to proposed Rule 714(b)(2),
``The following are order and quote risk protections on ISE:''. The
Exchange proposes to list all order and quote protections within Rule
714(b)(2). The Exchange proposes to re-letter Acceptable Trade Range
from Rule 714(b)(1) to proposed Rule 714(b)(2)(A).
The Exchange proposes to relocate Market Wide Risk Protection from
Rule 714(d) to proposed Rule 714(b)(1)(D). The Exchange is only
amending cross references within this rule to reflect the new location
of this text.
The Exchange proposes new rule text at Rule 714(b)(3) which
provides, ``The following are Market Maker risk protections on ISE:''.
The Exchange proposes to list all Market Maker protections within Rule
714(b)(3). The Exchange proposes to relocate Anti-Internalization from
Supplementary Material .03 to Rule 804 to proposed Rule 714(b)(3)(A).
The Exchange proposes to replace the words ``market participant
identifier'' with ``Market Maker identifiers.'' The Exchange also
proposes to replace the words ``Exchange account identifier'' with
``account number.'' \9\ The Exchange believes these modifications will
bring more clarity to the functionality. The Exchange is removing the
words ``Notwithstanding Rule 804(d)(1) above'' which refer to the firm
quote.\10\ The Exchange notes that the submission of bids and offers
must be firm notwithstanding any protection offered by the Exchange,
not just Anti-Internalization. The Exchange does not believe it is
necessary to specifically cite this caveat for this order protections.
The Exchange also proposes to capitalize the defined term Market Maker
in this sentence.
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\9\ An ``account number'' shall mean a number assigned to a
Member. Members may have more than one account number. See Rule
100(a)(1).
\10\ ISE Rule 804(d)(1) provides that Market Maker bids and
offers are firm for orders and Exchange Market Maker quotations both
under this Rule and Rule 602 of Regulation NMS under the Exchange
Act (``Rule 602 of Reg NMS'') for the number of contracts specified
according to the requirements of paragraph 804(b).
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The Exchange proposes to relocate Automated Quotation Adjustments
from Rule 804(g) to proposed Rule 714(b)(3)(B). Rule 804(g) will be
reserved. The Exchange is amending references in the rule to reflect
the new placement within Rule 714 and replacing the words ``Exchange's
system (``System'')'' with the defined term System.\11\ Finally, the
term ``member'' was capitalized because it is a defined term. The
Exchange is also making clear within Rule 715(b)(3)(B)(vi) that Market
Makers must request the Exchange enable re-entry by contacting the
Exchange's Operations Department.
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\11\ The term ``System'' means the electronic system operated by
the Exchange that receives and disseminates quotes, executes orders
and reports transactions. See Rule 100(a)(63).
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Finally, the Exchange proposes to amend the definition of badge
within Rule 100(a)(5) to state that a badge is an account number, which
may contain letters and/or numbers, assigned to Market Makers. The
Exchange may from time to time modify the manner in which a badge is
expressed systemically. This proposed language allows for latitude in
establishing badges within the System.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\13\ in particular, in that it is designed to
promote just and equitable principles of trade, 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, by grouping the various risk protections into a single rule
for ease of reference and adding headers to the rule to make clear
whether the risk protection is an order protection, order or quote
protection or a protection applicable to Market Makers. The Exchange
believes the reorganization of the existing rule and relocation of
various rules into Rule 714 is a non-substantive rule change. The
Exchange believes that this rule change is consistent with the
protection of investors and the public interest because it will bring
greater transparency to the protections offered on ISE. The Exchange's
proposal to not apply the Limit Order Price Protection during the
Opening Process is consistent with the Act because the Exchange rejects
orders to buy (sell) as the greater of the Exchange's best offer (bid)
plus (minus) either an absolute dollar or a percentage. The Exchange
notes that the bid or offer is not established until after an option
series options for trading. Applying this protection during the Opening
Process is not necessary as the quote width allowance is tighter during
the Opening Process.\14\ With respect to trading halts, Opening Process
procedures will be used to reopen an option series after a trading
halt, therefore, the same protections noted for the Opening Process
will apply for a trading halt and the same restrictive boundaries would
apply.\15\
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ See note 3 above.
\15\ See ISE Rule 701(d).
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The Exchange's proposal to not apply the Market Order Spread
Protection during the Opening Process is consistent with the Act
because protections exist during the Opening Process to ensure that the
best bid and offer displayed on the Exchange are within a reasonable
range. The Exchange's Opening Process Rule 701 \16\ and the reopening
process after a trading halt \17\ both contain more restrictive
boundaries than those proposed or the Market Order Spread Protection.
With respect to the Opening Process, a Quality Opening Market is
required. A Quality Opening Market requires a bid/ask differential
applicable to the best bid and offer from all Valid Width Quotes
defined in a table to be determined by the Exchange.\18\ The Exchange's
requirements during the Opening Process are more restrictive than the
proposed initial setting for the Market Order Spread Protection, which
is set at $5. The same protections noted for the Opening Process above
will apply for trading halts. The Exchange believes that the Market
Order Spread Protection is unnecessary during the Opening Process and
during a trading halt because other protections are in place to ensure
that the best bid and offer displayed on the Exchange are within a
reasonable range.
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\16\ See note 3 above.
\17\ With respect to trading halts, Opening Process procedures
will be used to reopen an option series after a trading halt,
therefore, the same protections noted for the Opening Process will
apply for a trading halt and the same restrictive boundaries would
apply. See ISE Rule 701(d).
\18\ The table is located at: https://business.nasdaq.com/media/ISESystemSettings_tcm5044-44183.pdf.
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Memorializing the ability of the Exchange to establish different
Market Order Spread Protection thresholds per options series or class
will also bring greater clarity to the rule. Today, the Exchange has
this ability, it is simply adding that text to the rule. Utilizing
defined terms within the Rulebook will also bring clarity to the rules.
The Exchange also believes using more discrete language within the
Anti-Internalization rule will clarify the functionality.
Finally, the Exchange believes that expanding the definition of a
badge is consistent with the Act because it
[[Page 48663]]
allows the Exchange the flexibility to administer the badges within its
System.
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 proposal does not impose an
intra-market burden on competition with respect to the reorganization
and relocation of the various rules into Rule 714 because the various
risk protections are mandatory and will continue to apply uniformly to
all market participants. The Exchange also believes that the addition
of specific limitations to both the Limit Order Price Protection and
Market Order Spread Protection rules will provide market participants
with greater information as to when these protections will apply. These
limitations apply uniformly to all market participants. The remainder
of the rule changes are intended to bring greater transparency to the
current operation of the Exchange's rules.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the 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) of the Act \19\ and Rule 19b-
4(f)(6) thereunder.\20\
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\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \21\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \22\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay so
that the proposed rule change may become operative upon filing. The
Exchange argues that waiver of the operative delay would allow the
Exchange to immediately incorporate all risk protections into Rule 714
and bring greater transparency to the risk protections offered on the
Exchange. The Commission believes that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest. Accordingly, the Commission hereby waives the operative delay
and designates the proposed rule change operative upon filing.\23\
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\21\ 17 CFR 240.19b-4(f)(6).
\22\ 17 CFR 240.19b-4(f)(6)(iii).
\23\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings 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 [email protected]. Please include
File Number SR-ISE-2018-80 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-ISE-2018-80. 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 tomake available publicly. All submissions
should refer to File Number SR-ISE-2018-80, and should be submitted on
or before October 17, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2018-20881 Filed 9-25-18; 8:45 am]
BILLING CODE 8011-01-P
