67768 Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices 

41 17 CFR 200.30–3(a)(12). 

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). 

5See Securities Exchange Act Release Nos. 79162 

(October 26, 2016), 81 FR 75875 (November 1, 2016) 

(Notice); 79884 (January 26, 2017), 82 FR 8968 

(February 2, 2017) (Approval Order) (SR–BatsBZX– 

2016–61). 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants or Others 

Written comments on the proposed 

rule change were not and are not 

intended to be solicited with respect to 

the proposed rule change and none have 

been received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self- regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

OCC–2018–015 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–OCC–2018–015. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of OCC and on OCC’s website at 

https://www.theocc.com/about/ 

publications/bylaws.jsp. 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–OCC–2018–015 and should 

be submitted on or before January 22, 

2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.41

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28385 Filed 12–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84927; File No. SR– 

CboeBZX–2018–090] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend the 

Halt Auction Process 

December 21, 2018. 

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 December 

18, 2018, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 BZX Exchange, Inc. (‘‘BZX’’ or 

the ‘‘Exchange’’) is filing with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) a proposed rule 

change to amend the Halt Auction 

process. The text of the proposed rule 

change is attached as Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), 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 purpose of the proposed rule 

change is to amend the Halt Auction 

process used to re-open BZX listed 

securities following certain Regulatory 

Halts. In 2017, the Exchange amended 

its Halt Auction process for re-opening 

a security following a Trading Pause 

initiated pursuant to the Plan to 

Address Extraordinary Market 

Volatility—i.e., the ‘‘Limit Up-Limit 

Down’’ or ‘‘LULD’’ Plan.5 Specifically, 

the Exchange modified its rules such 

that initial Halt Auction Collars 

following a Trading Pause would be 

calculated using a new methodology 

based on the Price Band that triggered 

the Trading Pause, and instituted a 

process for extending the auction and 

further widening the collars if necessary 

to accommodate buy or sell pressure 


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6The Exchange also modified its clearly 

erroneous rules to provide that executions as a 

result of a Halt Auction under Rule 11.23, which 

encompasses all Halt Auctions, including but not 

limited to those following a Trading Pause, are not 

eligible to for a request to review as clearly 

erroneous under Rule 11.23(d). 

7A marketwide circuit breaker is triggered if the 

price of the S&P 500 Index declines by a specified 

amount compared to the closing price for the 

immediately preceding trading day. See BZX Rule 

11.18(a). 

8See Securities Exchange Act Release Nos. 79107 

(October 18, 2016), 81 FR 73159 (October 24, 2016) 

(Notice); 79846 (January 19, 2017), 82 FR 8548 

(January 26, 2017) (Approval Order) (SR– 

NYSEArca–2016–130). 

9The term ‘‘Quote-Only Period’’ means a 

designated period of time prior to a Halt Auction, 

a Volatility Closing Auction, or an IPO Auction 

during which Users may submit orders to the 

Exchange for participation in the auction. See BZX 

Rule 11.23(a)(17). 

10A market order imbalance exists when there are 

unmatched market orders on the Auction Book 

associated with the auction. See BZX Rule 

11.23(d)(2)(B)(i). Since Rule 11.23(d)(2)(B), as 

amended, would apply solely to IPO Auctions to 

Halt Auctions following a Non-Regulatory Halt, the 

Exchange proposes to replace the reference to a 

market order imbalance under Rule 11.23(d)(2)(B)(i) 

with the text of the language included therein. 

11The term ‘‘Indicative Price’’ means the price at 

which the most shares from the Auction Book and 

the Continuous Book would match. In the event of 

a volume based tie at multiple price levels, the 

Indicative Price will be the price which results in 

the minimum total imbalance. In the event of a 

volume based tie and a tie in minimum total 

imbalance at multiple price levels, the Indicative 

Price will be the price closest to the Volume Based 

Tie Breaker. See BZX Rule 11.23(a)(10). 

12 In the event of any extension to the Quote-Only 

Period as set forth in Rule 11.23(d)(2)(B) or (C), the 

Exchange notifies market participants regarding the 

circumstances and length of the extension. See BZX 

Rule 11.23(d)(2)(D). 

13Arca’s halt auction collars are based on an 

auction reference price equal to the last 

consolidated round-lot price of that trading day 

and, if none, the prior trading day’s official closing 

price (except as provided for in Arca Rule 7.35– 

E(e)(7)(A)) for trading halt auctions other than 

auctions following a Trading Pause. See Arca Rule 

7.35E(a)(8)(A), (e)(7)(A). 

14The term ‘‘Final Last Sale Eligible Trade’’ or 

‘‘FLSET’’ means the last trade occurring during 

Regular Trading Hours on the Exchange if the trade 

was executed within the last one second prior to 

either the Closing Auction or, for Halt Auctions, 

trading in the security being halted. Where the trade 

was not executed within the last one second, the 

last trade reported to the consolidated tape received 

by BZX Exchange during Regular Trading Hours 

and, where applicable, prior to trading in the 

security being halted will be used. If there is no 

qualifying trade for the current day, the BZX 

Official Closing Price from the previous trading day 

will be used. See BZX Rule 11.23(a)(9). 

The FLSET is the Commission approved last sale 

formulation designed for use in BZX auctions, 

including the Halt Auction. See Securities 

Exchange Act Release Nos. 65266 (September 6, 

2011), 76 FR 56249 (September 12, 2011) (Notice); 

65619 (October 25, 2011), 76 FR 67238 (October 31, 

2011) (Approval Order) (SR–BATS–2011–032). The 

FLSET as defined in BZX Rule 11.23(a)(9) is 

equivalent to Arca’s reference price in substance, 

except that the most recent trade executed on BZX 

during Regular Trading Hours is used if such a 

trade is executed within the last one second prior 

to the halt. The Exchange believes that is 

appropriate to use the price of a trade on the 

primary listing market, i.e., BZX, to set the reference 

price for auctions in BZX-listed securities when 

such a trade has been executed recently. Using the 

FLSET as currently formulated and approved would 

therefore ensure that the reference price selected 

provides a familiar and desirable experience for 

member and investors participating in BZX 

auctions. 

15See Arca Rule 7.35E(e)(7)(B)(ii). 

outside of the collars then in effect.6 The 

Exchange believes that these changes 

have been effective in facilitating a fair 

and orderly market following Trading 

Pauses initiated pursuant to the Limit 

Up-Limit Down Plan, and has decided 

to implement similar functionality for 

all other Regulatory Halts, such as 

material news halts or trading halts 

following the initiation of the market 

wide circuit breaker mechanism (‘‘NonLULD Regulatory Halts’’).7 The 

Exchange believes that the proposed 

changes would promote price formation 

by providing a consistent and orderly 

Halt Auction process for members and 

investors following all Regulatory Halts, 

similar to the current implementation 

on NYSE Arca, Inc. (‘‘Arca’’).8

Currently, BZX Rule 11.23(d)(2)(B) 

describes the process for extending the 

Quote-Only Period for IPO and Halt 

Auctions, other than Halt Auctions 

following a Trading Pause, which are 

described in the recently added BZX 

Rule 11.23(d)(2)(C).9 As provided in 

BZX Rule 11.23(d)(2)(B), the QuoteOnly Period may be extended where: (i) 

There are unmatched market orders on 

the Auction Book associated with the 

auction; (ii) in an IPO Auction, the 

underwriter requests an extension; (iii) 

where the Indicative Price moves the 

greater of 10% or fifty cents in the 

fifteen seconds prior to the auction; or 

(iv) in the event of a technical or 

systems issue at the Exchange that may 

impair the ability of Users to participate 

in the IPO Auction or of the Exchange 

to complete the IPO Auction. The 

Exchange proposes to amend this rule 

such that this process would continue to 

be followed solely for IPO Auctions or 

Halt Auctions following a NonRegulatory Halt. For Halt Auctions 

following a Non-LULD Regulatory Halt, 

the Exchange proposes to follow a 

process similar to that currently applied 

for Halt Auctions following a Trading 

Pause, as described in BZX Rule 

11.23(d)(2)(C). 

BZX Rule 11.23(d)(2)(C), which 

describes the current process for 

incremental quote period extensions for 

Halt Auctions following a Trading 

Pause, provides that the Quote-Only 

Period commences five minutes prior to 

such Halt Auction, and is extended for 

an additional five minutes (‘‘Initial 

Extension Period’’) should a Halt 

Auction be unable to be performed due 

to a market order imbalance under BZX 

Rule 11.23(d)(2)(B)(i),10 or where the 

Indicative Price,11 before being adjusted 

for Halt Auction Collars, is outside the 

applicable Halt Auction Collars set forth 

in BZX Rule 11.23(d)(2)(C)(i) and (ii) 

(either, an ‘‘Impermissible Price’’). After 

the Initial Extension Period, the QuoteOnly Period is extended for additional 

five minute periods should a Halt 

Auction be unable to be performed due 

to an Impermissible Price until a Halt 

Auction occurs (‘‘Additional Extension 

Period’’).12 The Exchange attempts to 

conduct a Halt Auction during the 

course of each Additional Extension 

Period. Furthermore, the Halt Auction is 

cancelled at 3:50 p.m., at which time the 

auction for the security is conducted 

pursuant to the Volatility Closing 

Auction process under BZX Rule 

11.23(e). 

The Exchange now proposes to amend 

BZX Rule 11.23(d)(2)(C) to implement 

this process for Halt Auctions following 

a Non-LULD Regulatory Halt as well. 

The proposed process for re-opening a 

BZX listed security after a Non-LULD 

Regulatory Halt would be identical to 

the process employed today for Halt 

Auctions following a Trading Pause, 

with only two differences that relate to 

the calculation of initial Halt Auction 

Collars. First, today the Halt Auction 

Reference Price for Halt Auctions 

following a Trading Pause is equal the 

price of the Upper or Lower Price Band 

that triggered the halt. Similar to the 

current implementation on Arca,13 the 

Exchange proposes that the initial Halt 

Auction Collar following a Non-LULD 

Regulatory Halt would instead be based 

on a Halt Auction Reference Price equal 

to the price of the Final Last Sale 

Eligible Trade (‘‘FLSET’’).14 Second, 

today for Halt Auctions following a 

Trading Pause, if the Halt Auction 

Reference Price is the Lower (Upper) 

Price Band: (1) The initial upper (lower) 

Halt Auction Collar is the Upper 

(Lower) Price Band, and (2) the lower 

(upper) Halt Auction Collar is five 

percent less (greater) than the Halt 

Auction Reference Price, or $0.15 less 

(greater) than the Halt Auction 

Reference Price for securities with a 

Halt Auction Reference Price of $3.00 or 

less, in each case rounded to the nearest 

minimum price variation. Similar to the 

current implementation on Arca,15 the 

Exchange proposes that Halt Auction 

Collars following a Non-LULD 

Regulatory Halt, would be calculated as 

described in (2) above, with this 

calculation applied to both the lower 

and upper collar. For example, if the 

FLSET for a security subject to a NonVerDate Sep<11>2014 16:24 Dec 28, 2018 Jkt 247001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 E:\FR\FM\31DEN1.SGM 31DEN1

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16See infra note 18. 

17The most recently widened Halt Auction 

Collars calculated pursuant to Rule 11.23(d)(1)(C) 

would be used in all instances, including where the 

security goes directly into the Volatility Closing 

Auction without first being processed in a Halt 

Auction. 

18Arca also uses auction collars based on the 

most recently widened collars for the halt auction 

that did not occur when transitioning to a closing 

auction instead of the regular halt auction at the 

end of core trading hours. See Arca Rule 7.35– 

E(e)(10)(B). 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 

21Although there are minor differences between 

the FLSET and the reference price used by Arca, the 

Exchange believes that it is appropriate to use the 

FLSET as the reference price as this price represents 

the last sale calculation used for auctions in BZX 

listed securities pursuant to Rule 11.23. See supra 

note 14. 

LULD Regulatory Halt is $100.00, then 

the initial Halt Auction Collars would 

be $95.00 × $105.00—i.e., five percent 

below and above the FLSET. 

All other logic currently in place for 

Halt Auctions Collars following a 

Trading Pause would be used for Halt 

Auctions following a Non-LULD 

Regulatory Halt, including the process 

for initiating extensions. Specifically, as 

is the case for Halt Auctions following 

a Trading Pause today, at the beginning 

of the Initial Extension Period the upper 

(lower) Halt Auction Collar would be 

increased (decreased) by five percent in 

the direction of the Impermissible Price, 

rounded to the nearest minimum price 

variation. For securities with a Halt 

Auction Reference Price of $3.00 or less, 

the Halt Auction Collar would be 

increased (decreased) in $0.15 

increments in the direction of the 

Impermissible Price. At the beginning of 

each Additional Extension Period, the 

Halt Auction Collar would be widened 

in accordance with BZX Rule 

11.23(d)(2)(C)(ii) by the same amount as 

the Initial Extension Period. 

The Exchange also proposes to amend 

BZX Rule 11.23(d)(2)(E) to reflect the 

proposed changes to the Halt Auction 

Collars described above, and make other 

technical corrections to that rule. 

Currently, BZX Rule 11.23(d)(2)(E) 

provides that IPO Auctions for ETPs are 

executed within the Collar Price Range, 

and Halt Auctions for ETPs are executed 

within the Halt Auction Collars. 

Although the Exchange has traditionally 

been a listing venue for ETPs, the 

Exchange now lists one corporate 

security—i.e., the stock of its parent 

company, Cboe Global Markets, Inc. The 

Exchange therefore proposes to 

eliminate the outdated reference to ETPs 

in this section. Furthermore, as 

described in more detail in the prior 

paragraphs, the Halt Auction Collars 

provided in BZX Rule 11.23(d)(2)(C) 

would apply to Halt Auctions following 

a Regulatory Halt, including both 

Trading Pauses and Non-LULD 

Regulatory Halts. The Collar Price 

Range, meanwhile, is used for Halt 

Auctions following either an IPO 

Auction or a Non-Regulatory Halt. The 

Exchange therefore proposes to amend 

the rule to state that the applicable 

Collar Price Range will be used for IPO 

Auctions and Halt Auctions following a 

Non-Regulatory Halt, while the 

applicable Halt Auction Collar will be 

used for Halt Auctions following a 

Regulatory Halt. 

Finally, the Exchange proposes to 

amend its Volatility Closing Auction to 

account for the widened Halt Auction 

Collars following a Regulatory Halt, 

similar to handling on Arca.16 The 

Exchange conducts a Volatility Closing 

Auction for a halted security instead of 

the normal Closing Auction or Halt 

Auction, if the security halted between 

3:50 p.m. and 4:00 p.m. pursuant to 

BZX Rule 11.18, or the Quote-Only 

Period of a Halt Auction for a security 

halted before 3:50 p.m. pursuant to BZX 

Rule 11.18 would otherwise be 

extended by the Exchange after 3:50 

p.m. Currently, orders are executed in 

the Volatility Closing Auction at the 

price level within the Collar Price Range 

that maximizes the number of shares 

executed in the auction, with certain tiebreakers in the event that there is a 

volume based tie at multiple price 

levels. Instead of using the Collar Price 

Range, the Exchange proposes to 

preserve the widened collars discussed 

in this filing for Halt Auctions following 

either a Trading Pause or Non-LULD 

Regulatory Halt.17 As proposed, orders 

would be executed at the price level 

within the most recently widened Halt 

Auction Collar calculated pursuant to 

BZX Rule 11.23(d)(1)(C) that maximizes 

the number of shares executed in the 

auction.18

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

requirements of Section 6(b) of the 

Act,19 in general, and Section 6(b)(5) of 

the Act,20 in particular, in that it is 

designed to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest 

and not to permit unfair discrimination 

between customers, issuers, brokers, or 

dealers. 

The Exchange believes that the 

proposed rule change is consistent with 

the protection of investors and the 

public interest because it would amend 

the Halt Auction process following a 

Non-LULD Regulatory Halt to be more 

closely aligned with behavior currently 

implemented for Halt Auctions 

following a Trading Pause. The 

Exchange recently amended its reopening process following a Trading 

Pause to better account for buy or sell 

pressure by changing the manner in 

which initial Halt Auction Collars are 

established, and widening the collars as 

appropriate to accommodate trading 

interest submitted to participate in the 

auction. The Exchange believes that 

these changes have been generally 

successful in facilitating a fair and 

orderly process for re-opening securities 

following a Trading Pause. The 

Exchange has therefore decided to use a 

similar process for Halt Auctions 

following a Non-LULD Regulatory Halt. 

The Exchange believes that extending 

the current process for setting and 

widening Halt Auction Collars 

following a Trading Pause to Halt 

Auctions following a Non-LULD 

Regulatory Halt would benefit investors 

by facilitating price discovery and 

promoting consistency in how the 

Exchange conducts Halt Auctions 

following a Regulatory Halt. 

While the proposed process for Halt 

Auctions following a Non-LULD 

Regulatory Halt would largely follow 

the process in place today for Halt 

Auctions following a Trading Pause, 

there would be two notable differences. 

Both of these differences are designed to 

ensure that suitable Halt Auction 

Collars are utilized for Halt Auctions 

following Non-LULD Regulatory Halts. 

For instance, while an Auction 

Reference Price based on the Price Band 

that triggered the Trading Pause 

continues to be appropriate in the 

context of Halt Auctions following 

Trading Pauses, the Exchange believes 

that a different reference is necessary for 

Halt Auctions following Regulatory 

Halts that are unrelated to the LULD 

mechanism. The Exchange has chosen 

to use the FLSET as the Halt Auction 

Reference Price in these circumstances 

as this price is reflective of the current 

market for the halted security. Similarly, 

the Exchange believes that it is 

appropriate to calculate both upper and 

lower collars that are a specified 

percentage or dollar amount from this 

reference price because Non-LULD 

Regulatory Halts do not involve security 

specific buy or sell pressure. Both of 

these differences mirror the application 

of Halt Auction Collars on Arca today,21

and would therefore provide both a fair 

and familiar experience for members 


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22 15 U.S.C. 78s(b)(3)(A). 

23 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

and investors trading BZX listed 

securities. 

Similar to Halt Auctions following a 

Trading Pause, the Exchange believes 

that the proposed changes are consistent 

with the protection of investors and the 

public interest because they are 

designed to facilitate price discovery by 

ensuring that all market order interest 

could be satisfied in Halt Auctions 

following a Non-LULD Regulatory Halt. 

Furthermore, the Exchange believes that 

the standardized procedures to extend 

Halt Auctions an additional five 

minutes are appropriate because this 

would provide additional time to attract 

offsetting liquidity. If at the end of such 

extension, market orders still cannot be 

satisfied within the applicable Halt 

Auction Collar, or if the re-opening 

auction would be priced outside of the 

applicable collars, the Exchange would 

extend the Halt Auction an additional 

five minutes. The Exchange believes 

that extending the auction in these 

circumstances would protect investors 

and the public interest by reducing the 

potential for significant price disparity 

in post-auction trading. With each such 

extension, the Exchange believes that it 

is appropriate to widen the Halt Auction 

Collar on the side of the market on 

which there is buying or selling 

pressure as market conditions may 

prevent an imbalance from being 

resolved within the prior auction 

collars. 

The Exchange also believes that it is 

appropriate to amend its rules to 

properly indicate when the Collar Price 

Range and Halt Auction Collars are 

used. As discussed elsewhere in this 

proposed rule change, the applicable 

Collar Price Range would be used for 

IPO Auctions and Halt Auctions 

following a Non-Regulatory Halt, and 

the applicable Halt Auction Collar 

described in Rule 11.23(d)(2)(C) would 

be used for all Halt Auctions following 

a Regulatory Halt, including both 

Trading Pauses and Non-LULD 

Regulatory Halts. The proposed rule 

changes would remove unnecessary and 

outdated references to ETPs and make 

other changes consistent with the 

framework discussed in this proposed 

rule change for the calculation of 

auction collars. The Exchange therefore 

believes that the amended rule would 

increase transparency around the 

operation of the Exchange’s auctions, 

and is therefore consistent with the 

public interest and the protection of 

investors. 

Finally, the Exchange believes that it 

is consistent with the protection of 

investors and the public interest to 

preserve the widened Halt Auction 

Collars following a Regulatory Halt 

when no Halt Auction has occurred 

prior to 3:50 p.m. and the Exchange 

therefore performs a Volatility Closing 

Auction. Using the most recently 

widened Halt Auction Collars in these 

circumstances ensures that buy or sell 

pricing pressure that resulted in the 

Exchange widening the Halt Auction 

Collars is appropriately accounted for 

when the Exchange transitions to a 

Volatility Closing Auction. The 

Exchange believes that the process for 

setting Halt Auction Collars following a 

Regulatory Halt facilitates price 

discovery and the maintenance of a fair 

and orderly market. Allowing these 

collars to persist, similar to Arca, would 

further ensure that the collars used for 

the Volatility Closing Auction would 

appropriately reflect the market for the 

security in a manner that facilitates 

price discovery when the Exchange 

transitions to a closing process instead 

of re-opening the security pursuant to 

the Halt Auction process. 

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. The 

proposed rule change is designed to 

provide for a measured and transparent 

process for re-opening BZX listed 

securities after a Non-LULD Regulatory 

Halt that mirrors the current Halt 

Auction process following a Trading 

Pause initiated pursuant to the Limit 

Up-Limit Down Plan. A similar process 

is already used by Arca across all 

Regulatory Halts, and the Exchange 

believes that this handling would be 

beneficial for market participants that 

trade BZX listed securities. Rather than 

burden competition, the Exchange 

believes that the proposed rule change 

is evidence of the robust competition 

between equities markets that benefits 

members and investors. 

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: 

A. Significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. 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 22 and Rule 19b–4(f)(6) 

thereunder.23

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

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– 

CboeBZX–2018–090 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–CboeBZX–2018–090.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 


khammond on DSK30JT082PROD with NOTICES
67772 Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The MSRB is also proposing the question bank 

for the Series 54 examination, but based upon 

instructions from the Commission staff, the MSRB 

is not filing the question bank for Commission 

review. See letter to Diane G. Klinke, General 

Counsel, MSRB, from Belinda Blaine, Associate 

Director, Division of Market Regulation, SEC, dated 

July 24, 2000, attached as Exhibit 3b. The question 

bank is available for Commission review. 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(6). 

6 15 U.S.C. 78o–4(b)(2)(A). 

7 15 U.S.C. 78o–4(b)(2)(A)(iii). 

8 15 U.S.C. 78o–4(b)(2)(L)(iii). 

9See Exchange Act Release No. 84630 (November 

20, 2018), 83 FR 60927 (November 27, 2018) (File 

No. SR–MSRB–2018–07). 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2018–090 and 

should be submitted on or before 

January 22, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28397 Filed 12–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84926; File No. SR–MSRB– 

2018–10] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing and Immediate 

Effectiveness of the Content Outline 

for the Municipal Advisor Principal 

Qualification Examination and Its 

Associated Selection Specifications 

for the Examination 

December 21, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that on December 20, 2018 the 

Municipal Securities Rulemaking Board 

(the ‘‘MSRB’’ or ‘‘Board’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the MSRB. 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 MSRB filed with the Commission 

the content outline for the Municipal 

Advisor Principal Qualification 

Examination (‘‘Series 54 examination’’) 

and its associated selection 

specifications for the examination 

(‘‘selection specifications’’) 

(collectively, the ‘‘proposed rule 

change’’).3 The MSRB is not proposing 

any textual changes to its rules. The 

proposed rule change has been filed for 

immediate effectiveness pursuant to 

Section 19(b)(3)(A) of the Act 4 and Rule 

19b–4(f)(6) thereunder.5

The text of the proposed rule change 

is available on the MSRB’s website at 

www.msrb.org/Rules-andInterpretations/SEC-Filings/2018- 

Filings.aspx, at the MSRB’s principal 

office, 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 

MSRB 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 MSRB 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 

Section 15B of the Act authorizes the 

MSRB to prescribe ‘‘standards of 

training, experience, competence, and 

such other qualifications as the Board 

finds necessary or appropriate in the 

public interest or for the protection of 

investors and municipal entities or 

obligated persons’’ 6 and requires 

persons in any such class to pass tests 

prescribed by the Board.7 Section 

15B(b)(2)(L)(iii) of the Act further 

requires the MSRB to establish 

professional standards for municipal 

advisors.8 A professional qualification 

examination is intended to determine 

whether an individual meets the 

MSRB’s required qualification 

standards. The MSRB believes that 

professional qualification examinations, 

such as the Municipal Advisor 

Representative Qualification 

Examination (‘‘Series 50 examination’’) 

and the Series 54 examination, are 

means for determining the competency 

of individuals in particular qualification 

classifications. 

On November 20, 2018, the 

Commission approved amendments 9 to 

MSRB Rule G–3, on professional 

qualification requirements, to require, 

among other things, that municipal 

advisor principals—those who engage in 

the management, direction or 

supervision of the municipal advisory 

activities of the municipal advisor and 

its associated persons (‘‘principal-level 

activity’’)—pass the Series 54 

examination, in addition to the Series 

50 examination, to become 

appropriately qualified as a municipal 

advisor principal. The Series 50 

examination is designed to establish 

that persons associated with a 

municipal advisor who engage in 

municipal advisory activities and 

persons who engage in principal-level 

activity demonstrate a baseline 

knowledge of the municipal market, 

municipal advisory activities, as well as 

the regulatory requirements. Conversely, 

the Series 54 examination is designed to 

establish that persons who engage in 

principal-level activity demonstrate a 

specified level of knowledge of the 

application of federal securities laws, 

including MSRB rules to the municipal 

advisory activities of a municipal 

advisor and that of its associated 

persons. 

The MSRB believes the establishment 

of qualification requirements for 

municipal advisor principals would 

assist in ensuring that such persons 

have a specified level of competency 

necessary with respect to the 

supervision of the municipal advisory 

activities of the municipal advisor that 

is appropriate in the public interest and 

for the protection of investors, and 

municipal entities and obligated 

persons. 

The MSRB has, in consultation with 

the MSRB’s Professional Qualification 

Advisory Committee (PQAC), and in 


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