Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposal To Permit the Exchange To Look Back Only to July 2020 To Correct Certain Billing Errors Which Were Discovered in October 2020, 12993-12996 [2021-04531]
Download as PDF
<![CDATA[
jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices
electronic auctions. Specifically, the
Commission seeks public comment on
the following topics:
1. The NYSE proposal for Trading
Halt Auctions facilitated electronically
by DMMs would differ from other
primary listing markets’ reopening
processes after limit-up/limit-down
(LULD) pauses and market-wide circuit
breaker (MWCB) halts in that it would
permit a fully automated reopening of
trading at prices up to 10% away from
the auction reference price immediately
after a trading pauses or halts, whereas
Nasdaq, NYSE Arca, and Cboe BZX
establish 5% price bands for reopening
and then widen those price bands in
increments of 5%, with additional
auction extension messages associated
with each widening, until market
interest can be satisfied. Should the
primary listing exchanges harmonize
their respective processes for reopening
trading by fully automated auction after
an LULD pause or a Level 1 or Level 2
MWCB halt, and if so, why? If so, which
aspects of the reopening processes
following LULD pauses and MWCB
halts should be harmonized (e.g., period
of auction order entry, type of auction
information disseminated, length of
dissemination period, frequency of
dissemination, auction reference price,
determination of auction match price,
width of permitted price bands, or
expansions of permitted price bands)
and what are the appropriate
parameters? Should NYSE further
harmonize its proposed Trading Halt
Auction process for fully automated
auctions facilitated electronically by
DMMs to align with Nasdaq, NYSE
Arca, and Cboe BZX regarding the
establishment of permitted price bands,
and/or the limit (or lack thereof) on
price band adjustments?
2. Is it appropriate for the Exchange
to permit a DMM to reopen a security
up to 10% away from the reference
price immediately after an LULD pause
or MWCB halt without human
intervention? Are there any specific
data, statistics, or studies to support the
Exchange’s proposed price parameters
within which a DMM can electronically
facilitate a Trading Halt Auction?
3. Are there characteristics of the
NYSE market structure that warrant
divergence from the price parameters in
place for other exchanges’ fully
automated reopening auctions
immediately following an LULD pause
or MWCB halt? For example, does the
nature of DMM participation in a
Trading Halt Auction, whether the
DMM participates manually or
electronically, justify the ability of the
NYSE to conducted a fully automated
reopening auction 10% away from the
VerDate Sep<11>2014
20:30 Mar 04, 2021
Jkt 253001
reference price immediately after an
LULD pause or MWCB halt, rather than
5% away, as at other primary listing
exchanges?
4. Should the price parameters within
which DMMs are permitted to
electronically facilitate auctions be the
same for Core Open Auctions, Trading
Halt Auctions, and Closing Auctions?
IV. Procedure: Request for Written
Comments
The Commission requests that
interested persons provide written
submissions of their views, data, and
arguments with respect to the issues
identified above, as well as any other
concerns they may have with the
proposal. In particular, the Commission
invites the written views of interested
persons concerning whether the
proposal is consistent with Section
6(b)(5) 24 of the Act or any other
provision of the Act, or the rules and
regulations thereunder. Although there
do not appear to be any issues relevant
to approval or disapproval that would
be facilitated by an oral presentation of
views, data, and arguments, the
Commission will consider, pursuant to
Rule 19b–4 under the Act,25 any request
for an opportunity to make an oral
presentation.26
Interested persons are invited to
submit written data, views and
arguments regarding whether the
proposal should be disapproved by
March 26, 2021. Any person who
wishes to file a rebuttal to any other
person’s submission must file that
rebuttal by April 9, 2021.
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–
NYSE–2020–95 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
Numbers SR–NYSE–2020–95. The file
number should be included on the
subject line if email is used. To help the
24 15
U.S.C. 78f(b)(5).
CFR 240.19b–4.
26 Rule 700(c)(2) of the Commission’s Rules of
Practice provides that ‘‘[t]he Commission, in its sole
discretion, may determine whether any issues
relevant to approval or disapproval would be
facilitated by the opportunity for an oral
presentation of views.’’ 17 CFR 201.700(c)(2).
25 17
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
12993
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 proposal that are
filed with the Commission, and all
written communications relating to the
proposal 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 such
filings also will be available for
inspection and copying at the principal
office of the Exchanges. 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–2020–95 and should
be submitted on or before March 26,
2021. Rebuttal comments should be
submitted by April 9, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–04530 Filed 3–4–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91231; File No. SR–
CboeEDGX–2021–011]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposal To Permit the Exchange To
Look Back Only to July 2020 To
Correct Certain Billing Errors Which
Were Discovered in October 2020
March 1, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
18, 2021, Cboe EDGX Exchange, Inc.
(the ‘‘Exchange’’ or ‘‘EDGX’’) filed with
27 17
CFR 200.30–3(a)(57).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\05MRN1.SGM
05MRN1
12994
Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices
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 Exchange.
The Exchange filed the proposal as a
‘‘non-controversial’’ proposed rule
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder.4 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
Cboe EDGX Exchange, Inc. (‘‘EDGX’’
or the ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(the ‘‘Commission’’) a proposal to
permit the Exchange to look back only
to July 2020 to correct certain billing
errors which were discovered in
October 2020. This rule change does not
provide for any modifications to the text
of the Exchange’s rules or fees schedule.
The text of the proposal is also
available on the Exchange’s website
(https://markets.cboe.com/us/options/
regulation/rule_filings/edgx/), at the
Exchange’s Office of the Secretary, 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.
jbell on DSKJLSW7X2PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange recently amended its
equities and options fees schedules to
adopt a provision relating to billing
errors and fee disputes.5 Specifically,
the Exchange adopted a provision that
provides that all fees and rebates
3 15
U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 90901
(January 11, 2021), 86 FR 4137 (January 15, 2021)
(SR–CboeEDGX–2020–064).
VerDate Sep<11>2014
20:30 Mar 04, 2021
Jkt 253001
assessed prior to the three full calendar
months before the month in which the
Exchange becomes aware of a billing
error shall be considered final.
Particularly, the Exchange will resolve
an error by crediting or debiting
Members and Non-Members based on
the fees or rebates that should have been
applied in the three full calendar
months preceding the month in which
the Exchange became aware of the error,
including to all impacted transactions
that occurred during those months.6 The
Exchange will apply the three month
look back regardless of whether the
error was discovered by the Exchange or
by a Member or Non-Member that
submitted a fee dispute to the Exchange.
The Exchange’s fees schedules also
provide that all disputes concerning fees
and rebates assessed by the Exchange
would have to be submitted to the
Exchange in writing and accompanied
by supporting documentation. The
purpose of this policy is to provide both
the Exchange and Members and NonMembers subject to the Exchange’s fee
schedule finality and the ability to close
their books after a known period of
time. The Exchange further notes that
several other exchanges have adopted
similar provisions in their rules.7
The Exchange proposes to apply the
recently adopted billing policy to
transactions impacted by billing errors
that were discovered in October 2020.
Particularly, in October 2020, the
Exchange’s affiliate, Cboe BZX
Exchange, Inc. identified a billing error
relating to certain fee codes. As a result
of the discovery, the Exchange, along
with its affiliates, conducted a review of
additional fee code configurations
across each Exchange, which review
was only recently completed. The
review resulted in the discovery of
additional billing errors relating to
Exchange fee codes. These errors
resulted in various Members being overrebated or under-billed, and to a lesser
extent over-billed, over the course of
6 For example, if the Exchange becomes aware of
a transaction fee billing error on February 4, 2021,
the Exchange will resolve the error by crediting or
debiting Members based on the fees or rebates that
should have been applied to any impacted
transactions during November, 2020, December
2020 and January 2021. The Exchange notes that
because it bills in arrears, the Exchange would be
able to correct the error in advance of issuing the
February 2021 invoice and therefore, transactions
impacted through the date of discovery (in this
example, February 4, 2021) and thereafter, would be
billed correctly.
7 See e.g. Securities Exchange Act Release No.
87650 (December 3, 2019), 84 FR 67304 (December
9, 2019) (SR–NYSECHX–2019–024); Securities
Exchange Act Release No. 84430 (October 16, 2018),
83 FR 53347 (October 22, 2018) (SR–NYSENAT–
2018–23); and Securities Exchange Act Release No.
79060 (October 6, 2016), 81 FR 70716 (October 13,
2016) (SR–ISEGemini–2016–11).
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
several years. In the absence of applying
the recently adopted billing policy to
transactions impacted by the October
2020 billing errors, the Exchange would
be required to credit or debit Members
based on the fees or rebates that should
have been applied to all impacted
transactions, regardless of how far back
the transactions occurred (which as
noted above, is several years). If the
Exchange were permitted to apply the
current rule language to the billing
errors discovered in October 2020
however, then the Exchange could limit
its look back in correcting those errors
to only those transactions that occurred
in the three months preceding the
discovery of the errors (i.e., July 2020
through September 2020).8 Moreover,
the benefit to the Exchange of limiting
the impact of these particular errors to
three months is much smaller as
compared to the benefit that Members
would receive. Specifically, the nature
of these particular billing errors is such
that in correcting the errors, more
money would be owed to the Exchange
by Members due to over-rebating or
under-billing than is owed to Members
by the Exchange due to overbilling.
Accordingly, the Exchange believes it’s
appropriate and equitable to apply the
three-month look back for corrective
billing to the errors that were discovered
in October 2020.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.9 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 10 requirements that the rules of
an exchange be 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.
Additionally, the Exchange believes the
proposed rule change is consistent with
8 The Exchange corrected errors in advance of
issuing the October 2020 invoice and therefore,
transactions impacted through the date of discovery
and thereafter, were billed correctly.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
E:\FR\FM\05MRN1.SGM
05MRN1
jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices
the Section 6(b)(5) 11 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In adopting its currently policy, the
Exchange noted that it believed
providing that all fees are final after 3
months is reasonable as both the
Exchange and Members have an interest
in knowing when its fee assessments are
final and when reliance can be placed
on those assessments. Indeed, without
some deadline on fee disputes and
billing errors, the Exchange and market
participants would never be able to
close their books with any confidence.
Furthermore, as noted above, a number
of Exchanges similarly consider their
fees final after a similar period of time.12
As discussed above, in October 2020,
the Exchange became aware of certain
billings errors which resulted in various
Members being over-rebated or underbilled, and to a lesser extent over-billed
over the course of several years. The
Exchange believes it’s appropriate that
Members that were impacted by these
billing errors similarly be subject to the
recently adopted billing policy to not
resolve billing errors past three months
from the time a billing error was
discovered (in this case, not be invoiced
for impacted transactions that occurred
prior to July 2020).13 The Exchange does
not think it is appropriate or equitable
to have to correct billing errors for
transactions that occurred prior to July
2020. As discussed, the Exchange
believes it’s reasonable and important
for both Members and the Exchange to
rely on the finality of fees and rebates
assessed. Moreover, the proposed rule
change would apply to all Members
equally, in that the Exchange would be
precluded from invoicing any Member
for the correct amounts that should have
been applied to trades that were
otherwise billed incorrectly before July
2020. The Exchange also believes the
proposal would be consistent with the
protection of investors and the public
interest because it would allow
impacted market participants to benefit
from the same rule recently adopted by
the Exchange. Additionally, as
discussed, Members would receive a
greater benefit from the application of
the current billing errors policy as
compared to the Exchange with respect
to these particular billing errors.
Furthermore, the Exchange believes the
proposal to limit the time period it must
correct billing errors does not raise any
11 Id.
12 See
supra note 7.
the errors were discovered in October
2020, the three preceding months that would be
corrected are July, August, and September 2020.
13 Since
VerDate Sep<11>2014
20:30 Mar 04, 2021
Jkt 253001
new or novel issues that have not been
already been considered by the
Commission. Particularly, the proposal
to limit how far back an exchange must
go to correct billing errors is comparable
to other policies and practices that have
long been established at other
exchanges.14
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. First, the
Exchange notes the proposal is not
intended to address any competitive
issue, but rather provide finality to
Members with respect to billing errors
that were just recently discovered and
extend to them the applicability of a
recently adopted billing practice that
considers all fees final after three
months. Further, the Exchange does not
believe that the proposed rule change
will impose any burden on intramarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act because the
proposed changes apply equally to all
Members. The Exchange does not
believe that the proposed rule change
will impose any burden on intermarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act because the
proposed change only affects
transactions that occurred on the
Exchange. Additionally, other
exchanges have long established
policies in which fees shall be
considered final after a specified period
of time.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No comments were solicited or
received on the proposed rule change.
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
14 See
PO 00000
supra note 7.
Frm 00096
Fmt 4703
Sfmt 4703
12995
Act 15 and Rule 19b–4(f)(6) 16
thereunder.
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 will 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 rule-comments@
sec.gov. Please include File Number SR–
CboeEDGX–2021–011 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–CboeEDGX–2021–011. 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
15 15
U.S.C. 78s(b)(3)(A).
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.
16 17
E:\FR\FM\05MRN1.SGM
05MRN1
12996
Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Notices
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;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
CboeEDGX–2021–011 and should be
submitted on or before March 26, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–04531 Filed 3–4–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34218; 812–15174]
Rand Capital Corporation, et al.
March 1, 2021.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
jbell on DSKJLSW7X2PROD with NOTICES
AGENCY:
Notice of application for an order
(‘‘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 certain
business development companies and
closed-end management investment
companies to co-invest in portfolio
companies with each other and with
affiliated investment funds and
accounts. The Order would supersede
the prior order.1
Applicants: Rand Capital Corporation
(‘‘Company’’), BlueArc Mezzanine
Partners I, LP (‘‘BlueArc’’), Rand Capital
SBIC, Inc. (‘‘Existing Wholly-Owned
Subsidiary’’), Rand Capital
Management, LLC (‘‘BDC Adviser’’),
17 17
CFR 200.30–3(a)(12).
Capital Corporation, et al., Investment
Company Act Rel. No. 34006 (Sept. 11, 2020)
(notice) and Investment Company Act Rel. No.
34046 (October 7, 2020) (order).
1 Rand
VerDate Sep<11>2014
20:30 Mar 04, 2021
Jkt 253001
Callodine Strategic Credit, LLC (‘‘CSC
Adviser’’), Callodine Capital
Management, LP (‘‘Callodine Adviser,’’
and, together with the BDC Adviser and
the CSC Adviser, the ‘‘Existing
Advisers’’), Callodine Commercial
Finance, LLC (the ‘‘Existing Callodine
Proprietary Account’’), Callodine
Capital Master Fund, LP (‘‘Callodine
Capital Master Fund’’) and Callodine
Special Opportunity Fund, LP
(‘‘Callodine Special Opportunity Fund
and, together with the Callodine Capital
Master Fund, the ‘‘Callodine Private
Funds’’).
Filing Dates: The application was
filed on October 30, 2020, and amended
on January 5, 2021.
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 emailing the
Commission’s Secretary at SecretarysOffice@sec.gov and serving applicants
with a copy of the request by email.
Hearing requests should be received by
the Commission by 5:30 p.m. on March
26, 2021 and should be accompanied by
proof of service on the 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 emailing the
Commission’s Secretary at SecretarysOffice@sec.gov.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
bcollins@callodine.com and pgrum@
randcapital.com.
FOR FURTHER INFORMATION CONTACT:
Marc Mehrespand, Senior Counsel, at
(202) 551–8453 or Trace Rakestraw,
Branch Chief, at (202) 551–6825
(Division of Investment Management,
Chief Counsel’s Office).
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 https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Introduction
1. The applicants request an order of
the Commission under sections 17(d)
and 57(i) under the Act and rule 17d-1
under the Act to permit, subject to the
terms and conditions set forth in the
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
application (the ‘‘Conditions’’), one or
more Regulated Funds 2 and/or one or
more Affiliated Funds 3 to enter into CoInvestment Transactions with each
other. ‘‘Co-Investment Transaction’’
means any transaction in which one or
more Regulated Funds (or its WhollyOwned Investment Sub (defined below)
participated together with one or more
Affiliated Funds and/or one or more
other Regulated Funds in reliance on
the Order. ‘‘Potential Co-Investment
Transaction’’ means any investment
opportunity in which a Regulated Fund
(or its Wholly-Owned Investment Sub)
could not participate together with one
or more Affiliated Funds and/or one or
more other Regulated Funds without
obtaining and relying on the Order.4
Applicants
2. The Company is a New York
corporation and operates as a diversified
closed-end management investment
company that has elected to be
regulated as a business development
company (‘‘BDC’’) under the Act.5 The
Company is managed by a Board 6
2 ‘‘Regulated Funds’’ means the Company, the
Future Regulated Funds and the BDC Downstream
Funds. ‘‘Future Regulated Fund’’ means a closedend management investment company (a) that is
registered under the Act or has elected to be
regulated as a BDC, (b) whose investment adviser
(and sub-adviser(s), if any) are an Adviser, and (c)
that intends to participate in the proposed coinvestment program (the ‘‘Co-Investment
Program’’). ‘‘Adviser’’ means the Existing Advisers
together with any future investment adviser that (i)
controls, is controlled by or is under common
control with Callodine Group, LLC (‘‘Callodine’’),
(ii) (a) is registered as an investment adviser under
the Investment Advisers Act of 1940 (the ‘‘Advisers
Act’’) or (b) is an exempt reporting adviser pursuant
to rule 203(m) of the Advisers Act (‘‘Exempt
Reporting Adviser’’) and (iii) is not a Regulated
Fund or a subsidiary of a Regulated Fund.
3 ‘‘Affiliated Fund’’ means the Existing Affiliated
Funds, any Future Affiliated Fund or any Callodine
Proprietary Account. ‘‘Existing Affiliated Funds’’
means BlueArc, the Callodine Private Funds and
the Existing Callodine Proprietary Account. ‘‘Future
Affiliated Fund’’ means any entity (a) whose
investment adviser (and sub-adviser(s), if any) are
an Adviser, (b) that would be an investment
company but for Section 3(c)(1), 3(c)(5)(C) or 3(c)(7)
of the Act, (c) that intends to participate in the CoInvestment Program, and (d) that is not a BDC
Downstream Fund. ‘‘Callodine Proprietary
Account’’ means the Existing Callodine Proprietary
Account and any direct or indirect, wholly- or
majority-owned subsidiary of Callodine or any
Adviser that, from time to time, may hold various
financial assets in a principal capacity.
4 All existing entities that currently intend to rely
on the Order have been named as applicants and
any existing or future entities that may rely on the
Order in the future will comply with the terms and
Conditions set forth in the application.
5 Section 2(a)(48) defines a BDC to be any closedend investment company that operates for the
purpose of making investments in securities
described in section 55(a)(1) through 55(a)(3) and
makes available significant managerial assistance
with respect to the issuers of such securities.
6 ‘‘Board’’ means (i) with respect to a Regulated
Fund other than a BDC Downstream Fund, the
E:\FR\FM\05MRN1.SGM
05MRN1
]]>Agencies
[Federal Register Volume 86, Number 42 (Friday, March 5, 2021)]
[Notices]
[Pages 12993-12996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04531]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91231; File No. SR-CboeEDGX-2021-011]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposal To Permit the
Exchange To Look Back Only to July 2020 To Correct Certain Billing
Errors Which Were Discovered in October 2020
March 1, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 18, 2021, Cboe EDGX Exchange, Inc. (the ``Exchange''
or ``EDGX'') filed with
[[Page 12994]]
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 Exchange. The Exchange filed the
proposal as a ``non-controversial'' proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (``EDGX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (the ``Commission'') a
proposal to permit the Exchange to look back only to July 2020 to
correct certain billing errors which were discovered in October 2020.
This rule change does not provide for any modifications to the text of
the Exchange's rules or fees schedule.
The text of the proposal is also available on the Exchange's
website (https://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, 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
The Exchange recently amended its equities and options fees
schedules to adopt a provision relating to billing errors and fee
disputes.\5\ Specifically, the Exchange adopted a provision that
provides that all fees and rebates assessed prior to the three full
calendar months before the month in which the Exchange becomes aware of
a billing error shall be considered final. Particularly, the Exchange
will resolve an error by crediting or debiting Members and Non-Members
based on the fees or rebates that should have been applied in the three
full calendar months preceding the month in which the Exchange became
aware of the error, including to all impacted transactions that
occurred during those months.\6\ The Exchange will apply the three
month look back regardless of whether the error was discovered by the
Exchange or by a Member or Non-Member that submitted a fee dispute to
the Exchange. The Exchange's fees schedules also provide that all
disputes concerning fees and rebates assessed by the Exchange would
have to be submitted to the Exchange in writing and accompanied by
supporting documentation. The purpose of this policy is to provide both
the Exchange and Members and Non-Members subject to the Exchange's fee
schedule finality and the ability to close their books after a known
period of time. The Exchange further notes that several other exchanges
have adopted similar provisions in their rules.\7\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 90901 (January 11,
2021), 86 FR 4137 (January 15, 2021) (SR-CboeEDGX-2020-064).
\6\ For example, if the Exchange becomes aware of a transaction
fee billing error on February 4, 2021, the Exchange will resolve the
error by crediting or debiting Members based on the fees or rebates
that should have been applied to any impacted transactions during
November, 2020, December 2020 and January 2021. The Exchange notes
that because it bills in arrears, the Exchange would be able to
correct the error in advance of issuing the February 2021 invoice
and therefore, transactions impacted through the date of discovery
(in this example, February 4, 2021) and thereafter, would be billed
correctly.
\7\ See e.g. Securities Exchange Act Release No. 87650 (December
3, 2019), 84 FR 67304 (December 9, 2019) (SR-NYSECHX-2019-024);
Securities Exchange Act Release No. 84430 (October 16, 2018), 83 FR
53347 (October 22, 2018) (SR-NYSENAT-2018-23); and Securities
Exchange Act Release No. 79060 (October 6, 2016), 81 FR 70716
(October 13, 2016) (SR-ISEGemini-2016-11).
---------------------------------------------------------------------------
The Exchange proposes to apply the recently adopted billing policy
to transactions impacted by billing errors that were discovered in
October 2020. Particularly, in October 2020, the Exchange's affiliate,
Cboe BZX Exchange, Inc. identified a billing error relating to certain
fee codes. As a result of the discovery, the Exchange, along with its
affiliates, conducted a review of additional fee code configurations
across each Exchange, which review was only recently completed. The
review resulted in the discovery of additional billing errors relating
to Exchange fee codes. These errors resulted in various Members being
over-rebated or under-billed, and to a lesser extent over-billed, over
the course of several years. In the absence of applying the recently
adopted billing policy to transactions impacted by the October 2020
billing errors, the Exchange would be required to credit or debit
Members based on the fees or rebates that should have been applied to
all impacted transactions, regardless of how far back the transactions
occurred (which as noted above, is several years). If the Exchange were
permitted to apply the current rule language to the billing errors
discovered in October 2020 however, then the Exchange could limit its
look back in correcting those errors to only those transactions that
occurred in the three months preceding the discovery of the errors
(i.e., July 2020 through September 2020).\8\ Moreover, the benefit to
the Exchange of limiting the impact of these particular errors to three
months is much smaller as compared to the benefit that Members would
receive. Specifically, the nature of these particular billing errors is
such that in correcting the errors, more money would be owed to the
Exchange by Members due to over-rebating or under-billing than is owed
to Members by the Exchange due to overbilling. Accordingly, the
Exchange believes it's appropriate and equitable to apply the three-
month look back for corrective billing to the errors that were
discovered in October 2020.
---------------------------------------------------------------------------
\8\ The Exchange corrected errors in advance of issuing the
October 2020 invoice and therefore, transactions impacted through
the date of discovery and thereafter, were billed correctly.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ requirements that the rules of an exchange be
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. Additionally,
the Exchange believes the proposed rule change is consistent with
[[Page 12995]]
the Section 6(b)(5) \11\ requirement that the rules of an exchange not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ Id.
---------------------------------------------------------------------------
In adopting its currently policy, the Exchange noted that it
believed providing that all fees are final after 3 months is reasonable
as both the Exchange and Members have an interest in knowing when its
fee assessments are final and when reliance can be placed on those
assessments. Indeed, without some deadline on fee disputes and billing
errors, the Exchange and market participants would never be able to
close their books with any confidence. Furthermore, as noted above, a
number of Exchanges similarly consider their fees final after a similar
period of time.\12\ As discussed above, in October 2020, the Exchange
became aware of certain billings errors which resulted in various
Members being over-rebated or under-billed, and to a lesser extent
over-billed over the course of several years. The Exchange believes
it's appropriate that Members that were impacted by these billing
errors similarly be subject to the recently adopted billing policy to
not resolve billing errors past three months from the time a billing
error was discovered (in this case, not be invoiced for impacted
transactions that occurred prior to July 2020).\13\ The Exchange does
not think it is appropriate or equitable to have to correct billing
errors for transactions that occurred prior to July 2020. As discussed,
the Exchange believes it's reasonable and important for both Members
and the Exchange to rely on the finality of fees and rebates assessed.
Moreover, the proposed rule change would apply to all Members equally,
in that the Exchange would be precluded from invoicing any Member for
the correct amounts that should have been applied to trades that were
otherwise billed incorrectly before July 2020. The Exchange also
believes the proposal would be consistent with the protection of
investors and the public interest because it would allow impacted
market participants to benefit from the same rule recently adopted by
the Exchange. Additionally, as discussed, Members would receive a
greater benefit from the application of the current billing errors
policy as compared to the Exchange with respect to these particular
billing errors. Furthermore, the Exchange believes the proposal to
limit the time period it must correct billing errors does not raise any
new or novel issues that have not been already been considered by the
Commission. Particularly, the proposal to limit how far back an
exchange must go to correct billing errors is comparable to other
policies and practices that have long been established at other
exchanges.\14\
---------------------------------------------------------------------------
\12\ See supra note 7.
\13\ Since the errors were discovered in October 2020, the three
preceding months that would be corrected are July, August, and
September 2020.
\14\ See supra note 7.
---------------------------------------------------------------------------
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. First, the Exchange notes
the proposal is not intended to address any competitive issue, but
rather provide finality to Members with respect to billing errors that
were just recently discovered and extend to them the applicability of a
recently adopted billing practice that considers all fees final after
three months. Further, the Exchange does not believe that the proposed
rule change will impose any burden on intramarket competition that is
not necessary or appropriate in furtherance of the purposes of the Act
because the proposed changes apply equally to all Members. The Exchange
does not believe that the proposed rule change will impose any burden
on intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed change only
affects transactions that occurred on the Exchange. Additionally, other
exchanges have long established policies in which fees shall be
considered final after a specified period of time.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No comments were solicited or received on the proposed rule change.
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 \15\ and Rule 19b-
4(f)(6) \16\ thereunder.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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.
---------------------------------------------------------------------------
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 will 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-CboeEDGX-2021-011 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-CboeEDGX-2021-011. 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
[[Page 12996]]
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; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-CboeEDGX-2021-011 and should
be submitted on or before March 26, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04531 Filed 3-4-21; 8:45 am]
BILLING CODE 8011-01-P
