67440 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. 

3The 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). 

4See Securities Exchange Act Release No. 84741 

(December 6, 2018), 83 FR 63922 (December 12, 

2018) (SR–ISE–2018–97). 

5 If the previously placed order is already filled 

partially or in its entirety, the replacement order is 

automatically cancelled or reduced by the number 

of contracts that were executed. See Supplementary 

Material .02 to Rule 715. Supplementary Material 

.02 to Rule 715 further provides how the 

replacement portion may retain the priority of the 

original order, provided certain specified 

conditions are met. The manner in which the 

Exchange treats priority with respect to Cancel and 

Replace Orders is not changing under this proposal. 

6See Securities Exchange Act Release No. 80432 

(April 11, 2017), 82 FR 18191 (April 17, 2017) (SR– 

ISE–2017–03) (memorializing Cancel and Replace 

Orders in Supplementary Material .02 to Rule 715 

as part of the Exchange’s system migration to INET 

technology). 

7See note 4 above. 

8 Id. In this instance, the System would simply 

reject the cancel and replace message as an invalid 

instruction. The Exchange notes that the previous 

T7 system likewise treated Cancel and Replace 

Orders in this manner. 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28291 Filed 12–27–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84897; File No. SR–ISE– 

2018–100] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend 

Supplementary Material .02 to Rule 715 

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 

20, 2018, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Supplementary Material .02 to Rule 715, 

which relates to Cancel and Replace 

Orders, to correct an inadvertent error in 

the rule text. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://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 

The Exchange recently filed a 

proposal to amend Supplementary 

Material .02 to Rule 715 regarding 

Cancel and Replace Orders to correct an 

inconsistency between the Exchange’s 

rule text and the operation of the 

System 3 by removing the reference to 

Rule 710, which relates to minimum 

price variations applicable to single leg 

options series traded on the Exchange.4

The Exchange, however, inadvertently 

omitted the deletion of Rule 722(c)(1) 

from this rule. Rule 722(c)(1) 

corresponds to Rule 710 in that it relates 

to minimum price variations of complex 

strategies. Accordingly, the Exchange is 

proposing herein to delete the reference 

to Rule 722(c)(1) from Supplementary 

Material .02 to Rule 715. 

By way of background, a member 

currently has the option of either 

sending in a cancel order and then 

separately sending in a new order which 

serves as a replacement of the original 

order (two separate messages), or 

sending a single cancel and replace 

order in one message (i.e., a Cancel and 

Replace Order). Specifically, 

Supplementary Material .02 to Rule 715 

defines a Cancel and Replace Order as 

a single message for the immediate 

cancellation of a previously received 

order and the replacement of that order 

with a new order.5 The replacement 

portion of the Cancel and Replace Order 

is treated as a new order and as a result, 

goes through price or other reasonability 

checks conducted by the System to 

validate such order against current 

market conditions prior to proceeding 

with request to modify the order.6 If the 

replacement portion of a Cancel and 

Replace Order does not satisfy the 

System’s price or other reasonability 

checks, the existing order will be 

cancelled and not replaced. 

Accordingly, the reference to Rule 710, 

which relates to minimum price 

variations applicable to single leg 

options series traded on the Exchange, 

was deleted from Supplementary 

Material .02 to Rule 715 as part of SR– 

ISE–2018–97, because Rule 710 does not 

involve the System considering the 

current market at the time of the Cancel 

and Replace Order.7 The Exchange 

further explained in SR–ISE–2018–97 

that an incoming Cancel and Replace 

Order that fails the minimum price 

variation checks in Rule 710 would not 

result in the existing order being 

cancelled and not replaced.8

Accordingly, the Exchange removed the 

reference to Rule 710 from the list of 

price or other reasonability checks to 

conform its rule text to the System. 

As noted above, Rule 722(c)(1) relates 

to minimum price variations of complex 

strategies, and is therefore analogous to 

the single leg rule in ISE Rule 710. The 

Exchange therefore proposes to delete 

Rule 722(c)(1) from Supplementary 

Material .02 to Rule 715 for the same 

reasons provided above for Rule 710. 

Similar to Rule 710, Rule 722(c)(1) does 

not involve the System considering the 

current market at the time of the Cancel 

and Replace Order, and an incoming 

Cancel and Replace Order that fails the 

minimum price variation checks for 

complex strategies in Rule 722(c)(1) 

would likewise not result in the existing 


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Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67441 

9Similar to Rule 710, the System would also 

simply reject the cancel and replace message as an 

invalid instruction in this instance. Furthermore, 

the previous T7 system likewise treated Cancel and 

Replace Orders in this manner. 

10 15 U.S.C. 78f(b). 

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

12See note 9 above. 

13 15 U.S.C. 78s(b)(3)(A)(iii). 

14 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. 15 17 CFR 200.30–3(a)(12). 

order being cancelled and not replaced.9

As such, the Exchange proposes to 

remove the reference to Rule 722(c)(1) 

from the list of price or other 

reasonability checks to conform its rule 

text to the System. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,10 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,11

in particular, 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. The 

Exchange’s proposal corrects an 

inadvertent error in Supplementary 

Material .02 to Rule 715, which 

currently includes Rule 722(c)(1) within 

the list of price or other reasonability 

checks. As discussed above, including 

Rule 722(c)(1) is inconsistent with the 

operation of the Exchange’s System 

because an incoming Cancel and 

Replace Order which fails the minimum 

price variation checks in Rule 722(c)(1) 

does not result in the existing order 

getting cancelled and not replaced. This 

rule change would amend the rule text 

to reflect ISE’s current practice, and 

should avoid potential confusion about 

how the System processes Cancel and 

Replace Orders today.12

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change will bring greater 

transparency to the Exchange’s 

Rulebook, and therefore does not 

unduly burden competition. 

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)(iii) of the Act 13 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.14

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 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

ISE–2018–100 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–2018–100. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

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–ISE– 

2018–100 and should be submitted on 

or before January 18, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28194 Filed 12–27–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

33342; File No. 812–14811] 

AQR Trust and AQR Capital 

Management, LLC; Notice of 

Application 

December 21, 2018. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

under section 6(c) of the Investment 

Company Act of 1940 (the ‘‘Act’’) for an 

exemption from sections 2(a)(32), 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of 

the Act. The requested order would 

permit (a) actively-managed series of 

certain open-end management 


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