67418 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b-4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b-4(f)(4). 

5Capitalized terms not defined herein are defined 

in the Rules, By-Laws and Organization Certificate 

of DTC (‘‘Rules’’), available at www.dtcc.com/∼/ 

media/Files/Downloads/legal/rules/dtc_rules.pdf 

and the Guide. 

6Pursuant to the Rules, the term ‘‘Procedures’’ 

means the Procedures, service guides, and 

regulations of DTC adopted pursuant to Rule 27, as 

amended from time to time. See Rule 1, Section 1, 

supra note 5. Pursuant to Rule 27, each Participant 

and DTC is bound by the Procedures and any 

amendment thereto in the same manner as it is 

bound by the Rules. See Rule 27 at 98, supra note 

5. 

7Available at http://www.dtcc.com/∼/media/ 

Files/Downloads/legal/service-guides/Canadian_

Dollar_Settlement.pdf. 

8 Id. 

9The term ‘‘Collateral Value’’, as used with 

respect to the Collateral of a Participant, means, on 

any Business Day, (i) with respect to the Actual 

Participants Fund Deposit of a Participant, the 

amount of such Actual Participants Fund Deposit, 

(ii) with respect to the Actual Preferred Stock 

Investment of a Participant, the amount of such 

Actual Preferred Stock Investment, (iii) with respect 

to the Net Additions of a Participant, an amount 

determined by applying to the Market Value of such 

Net Additions a percentage determined by the 

Corporation, in its sole discretion, and (iv) with 

respect to any settlement progress payments wired 

by a Participant to the account of the Corporation 

at the Federal Reserve Bank of New York in the 

manner specified in the Procedures, the amount of 

such settlement progress payments. Rule 1, Section 

1 at 3, supra note 5. Net Additions in the definition 

of Collateral Value refers to the term ‘‘Net Addition 

Securities’’ as defined in Rule 1. The term ‘‘Net 

Addition Securities’’ (sometimes referred to as ‘‘Net 

Additions’’) of a Participant on any Business Day 

means (i) Securities subject of Deliveries Versus 

Payment to the Participant, (ii) Securities credited 

to the Account of the Participant (such as Deposits 

of Eligible Securities and Free Deliveries of 

Securities) and designated as Net Addition 

Securities by the Participant in the manner 

specified in the Procedures. Net Addition Securities 

shall cease to be such if (x) they become Pledged 

or Segregated Securities, (y) they are Delivered or 

Withdrawn by the Participant or (z) they are 

designated as Minimum Amount Securities by the 

Participant in the manner specified in the 

Procedures. Rule 1, Section 1 at 10, supra note 5. 

10See Securities Exchange Act Release No. 52784 

(November 16, 2005), 70 FR 70902 (November 23, 

2005) (SR–DTC–2005–08). 

11Supra note 5. 

12The Canadian-Link Service also provides for 

Cross-Border USD Securities Transactions between 

Participants and CDS Participants. See Rule 30, 

Section 1(a)(2), supra note 5. See also Securities 

Exchange Act Release No. 55239 (February 5, 2007), 

72 FR 6798 (February 13, 2007). 

13 DTC may determine the Securities that are 

eligible for the Canadian-Link Service. Some 

Securities may be eligible for all purposes of the 

Canadian-Link Service and some Securities may be 

eligible only for limited purposes (e.g., clearance 

and settlement through the facilities of CDS but 

only custody and asset servicing through the 

facilities of DTC). See Rule 30, Section 4, supra note 

5. 

approval while the role of the SubAdvisers is substantially similar to that 

of individual portfolio managers, so that 

requiring shareholder approval of SubAdvisory Agreements would impose 

unnecessary delays and expenses on the 

Subadvised Series. 

Applicants believe that the requested 

relief from the Disclosure Requirements 

meets this standard because it will 

improve the Adviser’s ability to 

negotiate fees paid to the Sub-Advisers 

that are more advantageous for the 

Subadvised Series. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28200 Filed 12–27–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84894; File No. SR–DTC– 

2018–013] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Revise the 

Service Guide for the Canadian-Link 

Service 

December 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 December 

19, 2018, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the clearing agency. DTC filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(4) thereunder.4 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change of DTC 5

consists of modifications to the text of 

the Procedures,6 specifically the service 

guide (‘‘Guide’’) 7 for the DTC CanadianLink Service (‘‘Canadian-Link Service’’), 

relating to the determination of a 

conversion rate applied by DTC for the 

conversion of Canadian dollar (‘‘CAD’’) 

amounts into the equivalent U.S. dollar 

(‘‘USD’’) amounts. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency 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 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The proposed rule change consists of 

modifications to the Guide 8 relating to 

the determination of a conversion rate 

applied by DTC for the conversion of 

CAD amounts into the equivalent USD 

amounts, which DTC uses in connection 

with the calculation of the Collateral 

Value 9 of Securities delivered, and CAD 

funds transfers processed through, the 

Canadian-Link Service, as described 

below. 

Background 

In 2006, DTC established a 

‘‘northbound’’ Canadian-Link Service 

that supports transactions settled in 

CAD.10 Rule 30 11 describes the 

operation of the Canadian-Link Service, 

which permits DTC Participants using 

the Canadian Link Service (‘‘CanadianLink Participants’’) to (A) settle valued 

Securities transactions with participants 

(‘‘CDS Participants’’) of The Canadian 

Depository for Securities Limited 

(‘‘CDS’’) and other Canadian-Link 

Participants in CAD and (B) transfer 

CAD to or receive CAD from CDS 

Participants and other Canadian-Link 

Participants without any corresponding 

delivery or receipt of securities.12

The Canadian-Link Service provides 

Participants with a single depository 

interface for CAD transactions. The link 

facilitates Participants’ ability to 

maintain U.S. and Canadian Security 

positions in their DTC accounts for 

securities listed in both Canada and the 

United States (i.e., dually listed). This 

eliminates the need for Participants to 

maintain separate positions in an 

eligible 13 Security in CDS for CAD 

settlements and in DTC for USD 

settlements. It also eliminates the need 

for Participants to reposition Securities 

inventory between DTC and CDS in 

preparation for corporate action events 

and or transaction processing for dually 

listed issues. 

Transactions between Canadian-Link 

Participants and CDS Participants are 

processed through an omnibus account 


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Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67419 

14The term ‘‘Collateral Monitor’’ of a Participant, 

as used with respect to its obligations to the 

Corporation, means, on any Business Day, the 

record maintained by the Corporation for the 

Participant which records, in the manner specified 

in Procedures, the algebraic sum of (i) the Net 

Credit or Debit Balance of the Participant and (ii) 

the aggregate Collateral Value of the Collateral of 

the Participant. Rule 1, Section 1 at 3, supra note 

5. 

15For purposes of the Canadian-Link Service, the 

Collateral Monitor of a Canadian-Link Participant is 

adjusted as follows: (1) CAD net credits from 

transactions processed for such Participant through 

the Canadian-Link Service are converted into USD 

equivalents and added to USD net credits from 

other transactions processed by DTC for such 

Participant; (2) CAD net debits from transactions 

processed for such Participant through the 

Canadian-Link Service are converted into USD 

equivalents and added to USD net debits from other 

transactions processed by DTC for such Participant; 

(3) The Collateral Value of Securities delivered by 

such Participant to CDS Participants through the 

DTC Omnibus Account and the Collateral Value of 

Securities delivered by such Participant to other 

Canadian-Link Participants through accounts at 

DTC are converted into USD equivalents and 

deducted from the Collateral Value of the Collateral 

of such Participant; and (4) Collateral Value in USD 

is given for Securities received by such Participant 

from other Canadian-Link Participants but no 

Collateral Value is given for Securities received by 

such Participant from CDS Participants unless and 

until such Securities are credited to an account of 

such Participant at DTC. See Rule 30, Section 9, 

supra note 5. 

16See Guide at 6, supra note 7. 

17 Id. 

18 Id. 

19 Id. 

20 Id. 

21See Securities Exchange Act Release No. 81485 

(August 25, 2017), 82 FR 41433 (August 31, 2017). 

22 In a case of the one-year stress period 

overlapping the ten-year lookback period, the data 

used for calibration would be the ten-year period 

plus the non-overlapping days in the stress period. 

maintained by DTC at CDS (‘‘DTC 

Omnibus Account’’) in accordance with 

the rules and procedures of CDS. 

Canadian-Link Participants are able (i) 

to deliver securities to or receive 

securities from CDS Participants against 

payment in CAD and (ii) to transfer 

funds to or receive funds from CDS 

Participants in CAD without any 

corresponding delivery or receipt of 

Securities. Transactions between 

Canadian-Link Participants and other 

Canadian-Link Participants are 

processed through accounts at DTC in 

accordance with the Rules. 

For both transactions (i) between 

Canadian-Link Participants and CDS 

Participants processed through the DTC 

Omnibus Account and (ii) between 

Canadian-Link Participants and other 

Canadian-Link Participants processed 

through accounts at DTC, there is a 

single end-of-day CAD money 

settlement between DTC and its 

Canadian-Link Participants (‘‘CanadianLink Money Settlement’’). For the 

transactions between Canadian-Link 

Participants and CDS Participants 

processed through the DTC Omnibus 

Account, there is a separate end-of-day 

CAD money settlement between CDS 

and DTC. 

As with all valued transactions 

processed at DTC, DTC maintains risk 

controls with respect to transactions 

processed by Canadian-Link 

Participants, including the Net Debit 

Cap and Collateral Monitor.14 With 

respect to Collateral Monitor, each 

Canadian-Link Participant has a single 

Collateral Monitor with respect to 

transactions processed for such 

Participant through the Canadian-Link 

Service and other transactions 

processed by DTC for such Participant. 

In connection with CAD transactions, 

DTC faces the risk of USD/CAD 

exchange rate movements that may 

affect the Collateral Value relating to 

transactions and Securities processed 

through the Collateral Monitor. 

Specifically, CDS Participants’ net 

settlement debits are expressed in CAD 

and DTC Collateral is expressed in USD, 

which presents the risk of adverse 

movement in the USD/CAD exchange 

rate which may impact the value of the 

Collateral Monitor.15 To address this 

exchange rate risk, DTC currently uses 

a haircut approach applied to CAD net 

debits (‘‘Haircut Approach’’). 

The Haircut Approach uses a 3 

percent fixed-rate factor. DTC converts 

CAD amounts into the equivalent USD 

amounts using a conversion rate 

(‘‘Collateral Monitor Conversion Rate’’) 

that is a published rate for exchanging 

CAD to USD on the prior Business Day 

plus (in the case of CAD debits) or 

minus (in the case of CAD credits) the 

3 percent fixed-rate factor.16 The 3 

percent fixed-rate factor is based on oneday, two-day and five-day exchange rate 

fluctuations over the ten years prior to 

implementation of the Collateral 

Monitor Conversion Rate.17 At the time, 

DTC determined that the 3 percent 

fixed-rate factor adequately accounted 

for over 99 percent of exchange rate 

fluctuations during such period.18

The Guide provides that DTC may 

from time to time, if necessary, change 

the 3 percent fixed-rate factor (‘‘Factor’’) 

used to calculate the Collateral Monitor 

Conversion Rate to appropriately 

account for exchange rate fluctuations.19

DTC has recently analyzed the Haircut 

Approach and has determined that it is 

necessary to amend the Guide with 

respect to text describing the Factor and 

the Collateral Monitor Conversion Rate. 

Proposed Rule Change 

While the Guide states that DTC may 

change the Factor, if necessary, to 

account for exchange rate fluctuations, 

it also refers to specific criteria, as 

described above, that were used to 

determine the 3 percent fixed-rate 

Factor at the time the Canadian-Link 

Service was implemented.20 While DTC 

has not changed the Factor since its 

implementation, the criteria originally 

used to determine the Factor may not 

continue to appropriately account for 

the risk of exchange rate fluctuations 

and their impact on the Collateral 

Monitor when changes to market 

conditions and risk management 

practices over time are taken into 

account. Therefore, DTC proposes to 

amend the Guide to remove specific 

references to (i) the Factor being 

established at 3 percent and (ii) 

references to time intervals used to 

calculate the Factor at the time the 

Canadian-Link service was established. 

In addition, DTC recently adopted its 

Clearing Agency Model Risk 

Management Framework 

(‘‘Framework’’), which is designed to 

assist DTC in identifying, measuring, 

monitoring, and managing the risks 

associated with the development, 

implementation, use and validation of 

quantitative models.21 In this regard, all 

models used by DTC, including that 

used to derive any change to the Factor 

used in the calculation of the Collateral 

Monitor Conversion Rate, must be 

developed, implemented, used and 

validated in accordance with the 

Framework. Therefore, DTC also 

proposes to amend the Guide to state 

that the Factor would be calculated in 

accordance with a methodology 

established by DTC, from time to time, 

in accordance with the Clearing Agency 

Model Risk Management Framework of 

DTC, that appropriately accounts for 

exchange rate fluctuations. 

DTC completed the Factor model 

validation process according to the 

Framework and would calibrate the 

Factor no less than semi-annually as 

follows: Four-day exchange rate returns 

would be calculated for a ten-year 

lookback period, plus a one-year stress 

period 22 which would be determined 

by calculating the evenly weighted 

volatility of the four-day exchange rate 

returns across rolling twelve-month 

periods. The twelve-month period with 

the highest resulting volatility would be 

selected as the one-year stress period. In 

addition, four-day exchange rate returns 

would be calculated for a ten-year 

lookback period. The factor would then 

be derived by estimating the 0.5th 

percentile from the combined sample of 

ten-year and one-year stress period 

returns. The factor would then be 

rounded up to a whole percentage. 


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67420 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 

23See Guide at 6, supra note 3. 

24 Id. 

25 15 U.S.C. 78q–1(b)(3)(F). 

26 Id. 

27See Guide at 6, supra note 7. 

28Supra note 21. 

29 15 U.S.C. 78s(b)(3)(A). 

30 17 CFR 240.19b-4(f). 

In this regard, the Guide currently 

states with respect to the Factor: 

‘‘For purposes of adjustments in the 

collateral monitor, DTC will convert 

Canadian dollar amounts into the 

equivalent U.S. dollar amounts using a 

conversion rate (Collateral Monitor 

Conversion Rate) that is a published rate 

for exchanging Canadian dollars to U.S. 

dollars on the prior business day plus 

(in the case of Canadian dollar debits) 

or minus (in the case of Canadian dollar 

credits) a factor of 3%. The 3% factor 

is based on one day, two day and five 

day exchange rate fluctuations over the 

past ten years. Such 3% factor 

adequately accounts for over 99% of 

exchange rate fluctuations during such 

period. DTC may from time to time if 

necessary change the factor used to 

calculate the Collateral Monitor 

Conversion Rate to appropriately 

account for exchange rate 

fluctuations.’’ 23

Pursuant to the authority currently set 

forth in the Guide for DTC to, from time 

to time if necessary, change the factor 

used to calculate the Collateral Monitor 

Conversion Rate to appropriately 

account for exchange rate fluctuations,24

DTC would amend the Guide text to 

read: 

‘‘For purposes of adjustments in the 

collateral monitor, on a given Business 

Day, DTC converts Canadian dollar 

amounts into the equivalent U.S. dollar 

amounts using a conversion rate 

(Collateral Monitor Conversion Rate) 

that is a published rate for exchanging 

Canadian dollars to U.S. dollars on the 

prior Business Day plus (in the case of 

Canadian dollar debits) or minus (in the 

case of Canadian dollar credits) a factor 

(‘‘Factor’’) of no less than 3%, 

calculated in accordance with a 

methodology established by DTC, from 

time to time, in accordance with the 

Clearing Agency Model Risk 

Management Framework of DTC, that 

appropriately accounts for exchange rate 

fluctuations. DTC will calibrate the 

Factor no less than semi-annually as 

follows: Four-day exchange rate returns 

will be calculated for a ten-year 

lookback period, plus a one-year stress 

period (Note: In a case where the oneyear stress period overlaps with the tenyear lookback period, the data used for 

calibration would be the ten-year period 

plus the non-overlapping days in the 

stress period.) which will be determined 

by calculating the evenly weighted 

volatility of the four-day exchange rate 

returns across rolling twelve-month 

periods. The twelve-month period with 

the highest resulting volatility will be 

selected as the one-year stress period. In 

addition, four-day exchange rate returns 

will be calculated for a ten-year 

lookback period. The factor will then be 

derived by estimating the 0.5th 

percentile from the combined sample of 

ten-year and one-year stress period 

returns. The factor will then be rounded 

up to a whole percentage. Except for 

extreme market conditions, the 

methodology and any changes in the 

Factor will be distributed by Important 

Notice at least 5 Business Days before 

becoming effective.’’ 

Effective Date 

The proposed rule change would 

become effective upon filing with the 

Commission. 

2. Statutory Basis 

Section 17A(b)(3)(F) of the Act 

requires that the rules of the clearing 

agency be designed, inter alia, to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions.25 DTC believes that the 

proposed rule change is consistent with 

this provision of the Act because, by 

revising the Guide to update the 

description of how changes to the Factor 

would be made in light of DTC’s 

adoption of the Framework, the 

proposed rule change would facilitate 

Participants’ ability to understand the 

calculation of the Collateral Monitor 

Conversion Rate and its impact on risk 

controls relating to their transaction 

activity. Therefore, the proposed rule 

change would promote the prompt and 

accurate clearance and settlement of 

securities transactions consistent with 

Section 17A(b)(3)(F) of the Act.26

(B) Clearing Agency’s Statement on 

Burden on Competition 

DTC does not believe that the 

proposed rule change would have any 

impact on competition. The proposed 

rule change would merely update the 

Guide with respect to existing 

Procedures relating to DTC’s discretion 

to change the Factor as necessary to 

account for exchange rate fluctuations.27

The proposed change would reflect that 

any change in the Factor would be made 

pursuant to a methodology established 

in accordance with the Framework, 

which is a Procedure previously 

approved by the Commission.28

Therefore, the proposed rule change 

would not affect the rights or obligations 

of Participants, and as such, would not 

impact competition. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

DTC has not received or solicited any 

written comments relating to this 

proposal. DTC will notify the 

Commission of any written comments 

received by DTC. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 29 and paragraph (f) of Rule 

19b–4 thereunder.30 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. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

DTC–2018–013 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–DTC–2018–013. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 


amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67421 

31 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78f. 

2See Securities Exchange Act Release No. 84313 

(September 28, 2018), 83 FR 49965 (‘‘Notice’’). 

3 15 U.S.C. 78f(b) and 15 U.S.C. 78s(a), 

respectively. 

4See 15 U.S.C. 78f(b)(3). 

5See 15 U.S.C. 78f(b)(5). 

6See 15 U.S.C. 78f(b)(8). 

7See MIAX EMERALD By-Laws, Section 2.1. See 

also Limited Liability Company Agreement of 

MIAX EMERALD, Section 8(b). 

8The MIAX EMERALD By-Laws are included in 

the Amended and Restated Limited Liability 

Company Agreement of MIAX EMERALD (‘‘MIAX 

EMERALD LLC Agreement’’). 

9See MIAX EMERALD By-Laws, Article II, 

Section 2.2(a). 

10See MIAX EMERALD By-Laws, Article II, 

Section 2.2(b). 

11 ‘‘Non-Industry Director’’ means a Director who 

is an Independent Director or any other individual 

who would not be an Industry Director. See MIAX 

EMERALD By-Laws, Article I(aa). 

12 ‘‘Independent Director’’ means a ‘‘Director who 

has no material relationship with [MIAX 

EMERALD] or any affiliate of [MIAX EMERALD], or 

any [MIAX EMERALD member] or any affiliate of 

any such [MIAX EMERALD member]; provided, 

however, that an individual who otherwise 

qualifies as an Independent Director shall not be 

disqualified from serving in such capacity solely 

because such Director is a Director of [MIAX 

EMERALD] or [Miami Holdings].’’ See MIAX 

EMERALD By-Laws, Article I(p). 

13An ‘‘Industry Director’’ is, among other things, 

a Director that is or has served within the prior 

three years as an officer, director, employee, or 

owner of a broker or dealer, as well as any Director 

who has, or has had, a consulting or employment 

relationship with MIAX EMERALD or any affiliate 

of MIAX EMERALD within the prior three years. 

See MIAX EMERALD By-Laws, Article I(r). This 

definition is consistent with what the Commission 

has approved for other exchanges. See Securities 

Exchange Act Release Nos. 79543 (December 13, 

2016), 81 FR 92901 (December 20, 2016) (File No. 

10–227) (order granting registration of MIAX 

PEARL, LLC) (‘‘MIAX PEARL Order’’); 68341 

(December 3, 2012), 77 FR 73065 (December 7, 

2012) (File No. 10–207) (order granting the 

registration of Miami International Securities 

Exchange, LLC (‘‘MIAX Exchange’’)) (‘‘MIAX 

Order’’); 58375 (August 18, 2008), 73 FR 49498 

(August 21, 2008) (File No. 10–182) (order granting 

the registration of BATS Exchange, Inc.) (‘‘BATS 

Order’’); and 66871 (April 27, 2012), 77 FR 26323 

(May 3, 2012) (File No. 10–206) (order granting the 

registration of BOX Options Exchange LLC 

(‘‘BOX’’)) (‘‘BOX Order’’). 

14See MIAX EMERALD By-Laws, Article II, 

Section 2.2 (b)(i). ‘‘Member Representative 

Director’’ means a Director who has been appointed 

by Miami International Holdings, Inc. as an initial 

Director pursuant to Section 2.5 of the MIAX 

EMERALD By-Laws to serve until the first annual 

meeting or who ‘‘has been elected by the Miami 

International Holdings, Inc. after having been 

Continued 

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 DTC and on DTCC’s website 

(http://dtcc.com/legal/sec-rulefilings.aspx). 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–DTC– 

2018–013 and should be submitted on 

or before January 18, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28191 Filed 12–27–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84891; File No. 10–233) 

In the Matter of the Application of MIAX 

EMERALD, LLC for Registration as a 

National Securities Exchange; 

Findings, Opinion, and Order of the 

Commission 

December 20, 2018. 

I. Introduction 

On August 16, 2018, MIAX 

EMERALD, LLC (‘‘MIAX EMERALD’’ or 

‘‘Exchange’’) submitted to the Securities 

and Exchange Commission 

(‘‘Commission’’) an application for 

Registration as a National Securities 

Exchange (‘‘Form 1 Application’’) under 

Section 6 of the Securities Exchange Act 

of 1934 (‘‘Act’’), seeking registration as 

a national securities exchange under 

Section 6 of the Act.1 Notice of the Form 

1 Application was published for 

comment in the Federal Register on 

October 3, 2018.2 The Commission 

received no comments. 

II. Statutory Standards 

Under Sections 6(b) and 19(a) of the 

Act,3 the Commission shall by order 

grant an application for registration as a 

national securities exchange if the 

Commission finds, among other things, 

that the proposed exchange is so 

organized and has the capacity to carry 

out the purposes of the Act and to 

comply, and to enforce compliance by 

its members and persons associated 

with its members, with the provisions of 

the Act, the rules and regulations 

thereunder, and the rules of the 

exchange. 

As discussed in greater detail below, 

the Commission finds that MIAX 

EMERALD’s application for exchange 

registration meets the requirements of 

the Act and the rules and regulations 

thereunder. Further, the Commission 

finds that the proposed rules of MIAX 

EMERALD are consistent with Section 6 

of the Act in that, among other things, 

they assure a fair representation of the 

Exchange’s members in the selection of 

its directors and administration of its 

affairs and provide that one or more 

directors will be representative of 

issuers and investors and not be 

associated with a member of the 

exchange, or with a broker or dealer; 4

and that they are designed to prevent 

fraudulent and manipulative acts and 

practices, promote just and equitable 

principles of trade, foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, and remove impediments to 

and perfect the mechanisms of a free 

and open market and a national market 

system and, in general, protect investors 

and the public interest and are not 

designed to permit unfair 

discrimination between customers, 

issuers, or broker-dealers.5 Finally, the 

Commission finds that MIAX 

EMERALD’s proposed rules do not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act.6

III. Discussion 

A. Governance of MIAX EMERALD 

1. MIAX EMERALD Board of Directors 

The board of directors of MIAX 

EMERALD (‘‘Exchange Board’’ or 

‘‘MIAX EMERALD Board’’) will be its 

governing body and will possess all of 

the powers necessary for the 

management of its business and affairs, 

including governance of MIAX 

EMERALD as a self-regulatory 

organization (‘‘SRO’’).7

Under the By-Laws of MIAX 

EMERALD (‘‘MIAX EMERALD ByLaws’’): 8

• The Exchange Board will be 

composed of not less than ten 

directors; 9

• One director will be the Chief 

Executive Officer of MIAX 

EMERALD; 10

• The number of Non-Industry 

Directors,11 including at least one 

Independent Director,12 will equal or 

exceed the sum of the number of 

Industry Directors 13 and Member 

Representative Directors; 14 and 


amozie on DSK3GDR082PROD with NOTICES1