Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 84397 

8See Guidance, available at https:// 

www.finra.org/arbitration-and-mediation/noticearbitrators-and-parties-expanded-expungementguidance. 

9 15 U.S.C. 78s(b)(2)(B). 

10 Id. 

11Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Pub. L. 94– 

29, 89 Stat. 97 (1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Acts Amendments of 

1975, Report of the Senate Committee on Banking, 

Housing and Urban Affairs to Accompany S. 249, 

S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 

12 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 

3(a)(57). 

1Citadel LLC and CEIF LLC, Investment Company 

Act Release Nos. 30589 (July 3, 2013) (notice) and 

30637 (July 30, 2013) (order). 

panel would be randomly selected to 

decide straight-in requests; (3) establish 

procedural requirements for 

expungement hearings; and (4) codify 

and update the best practices of the 

Notice to Arbitrators and Parties on 

Expanded Expungement Guidance 

(‘‘Guidance’’) that arbitrators and parties 

must follow.8 In addition, the Proposed 

Rule Change would amend the 

Customer Code to specify procedures for 

requesting expungement of customer 

dispute information arising from 

simplified arbitrations. The Proposed 

Rule Change would also amend the 

Codes to establish requirements for 

notifying state securities regulators and 

customers of expungement requests. 

III. Proceedings To Determine Whether 

To Approve or Disapprove File No. SR– 

FINRA–2020–030 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act to 

determine whether the Proposed Rule 

Change, as modified by Amendment 

No.1, should be approved or 

disapproved.9 Institution of proceedings 

is appropriate at this time in view of the 

legal and policy issues raised by the 

Proposed Rule Change, as modified by 

Amendment No.1. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to the 

Proposed Rule Change, as modified by 

Amendment No.1. 

Pursuant to Section 19(b)(2)(B) of the 

Exchange Act,10 the Commission is 

providing notice of the grounds for 

disapproval under consideration. The 

Commission is instituting proceedings 

to allow for additional analysis and 

input concerning whether the Proposed 

Rule Change, as modified by 

Amendment No.1, is consistent with the 

Exchange Act and the rules thereunder. 

IV. 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 

Proposed Rule Change, as modified by 

Amendment No. 1. In particular, the 

Commission invites the written views of 

interested persons concerning whether 

the Proposed Rule Change, as modified 

by Amendment No. 1, is consistent with 

the Exchange Act and the rules 

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, any 

request for an opportunity to make an 

oral presentation.11

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

Proposed Rule Change, as modified by 

Amendment No. 1, should be approved 

or disapproved by January 19, 2021. 

Any person who wishes to file a rebuttal 

to any other person’s submission must 

file that rebuttal by February 1, 2021. 

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 No. SR– 

FINRA–2020–030 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 No. 

SR- FINRA–2020–030. 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, as modified by Amendment No. 

1, that are filed with the Commission, 

and all written communications relating 

to the Proposed Rule Change, as 

modified by Amendment No. 1, 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 FINRA. 

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 

No. SR–FINRA–2020–030 and should be 

submitted on or before January 19, 2021. 

If comments are received, any rebuttal 

comments should be submitted on or 

before February 1, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28509 Filed 12–23–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34143; File No. 813–00397] 

Citadel Enterprise Americas LLC 

(formerly Citadel LLC) and CEIF LLC; 

Notice of Application 

December 18, 2020. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for an order 

under sections 6(b) and 6(e) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) granting an exemption from all 

provisions of the Act, except section 9 

and sections 36 through 53 and the rules 

and regulations under those sections. 

With respect to sections 17 and 30 of the 

Act, and the rules and regulations 

thereunder, and rule 38a-1 under the 

Act, the exemption is limited as set 

forth in the application. 

SUMMARY OF APPLICATION: Applicants 

request a superseding order under 

sections 6(b) and 6(e) of the Act that 

amends and restates an existing order 

(‘‘Existing Order’’) 1 to exempt certain 

limited liability companies, limited 

partnerships, companies and other 


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2 ‘‘Managing Member’’ means an Affiliate of 

Citadel Enterprise Americas LLC that is a managing 

member or manager of an ESC Fund (there being 

no distinction between the obligations of a 

managing member versus a manager of an ESC 

Fund) or acts in a similar capacity and is the 

functional equivalent of the ESC Funds’ board of 

directors. 

3A ‘‘carried interest’’ is a fee paid or allocation 

made to the Managing Member, a Member or the 

Citadel Entity acting as the investment adviser to an 

ESC Fund based on net gains in addition to the 

amount allocable to such entity in proportion to its 

invested capital. A Managing Member, Member or 

Citadel Entity that is registered as an investment 

adviser under the Advisers Act may be paid or 

allocated carried interest only if permitted by rule 

205–3 under the Advisers Act. 

4 ‘‘Citadel Third Party Fund’’ means an 

investment fund or separate account, organized in 

part for the benefit of investors who are not 

Affiliates of Citadel, over which a Citadel Affiliate 

exercises investment discretion. 

5An offer may be made pursuant to Regulation S 

to Eligible Employees who are not U.S. residents. 

investment vehicles formed for the 

benefit of eligible employees of Citadel 

Enterprise Americas LLC and its 

affiliates (‘‘ESC Funds’’) from certain 

provisions of the Act. Each ESC Fund 

will be an ‘‘employees’ securities 

company,’’ as defined in section 2(a)(13) 

of the Act. The requested order would 

(i) reflect general, clarifying updates to 

the incentive program pursuant to 

which Eligible Employees (defined 

below) are issued unvested membership 

interests, (ii) to permit voluntary capital 

contributions by Eligible Employees to 

certain ESC Funds, and (iii) to clarify 

that Eligible Employees may continue to 

be issued interests and/or make capital 

contributions to the ESC Fund in which 

it is invested after such Eligible 

Employee’s employment with Citadel 

has terminated. The terms and 

conditions of the application are 

materially the same as the terms and 

conditions of the Existing Order. 

APPLICANTS: Citadel Enterprise 

Americas LLC and CEIF LLC (‘‘CEIF’’). 

FILING DATES: The application was filed 

on December 13, 2019, and amended on 

May 7, 2020, July 10, 2020, and October 

15, 2020. 

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 January 

12, 2021, and should be accompanied 

by proof of service on 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. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

c/o David Form, by email to dform@

sidley.com. 

FOR FURTHER INFORMATION CONTACT: 

Joseph Toner, Senior Counsel, at (202) 

551–7595, or David Nicolardi, 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 an applicant using the 

Company’s name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Applicants’ Representations: 

1. Citadel is a global financial 

institution with a diverse business 

platform which includes two separate 

and distinct unites: (i) A global 

investment firm and (ii) a global market 

maker. Citadel Enterprise Americas 

LLC, a Delaware limited liability 

company, and its ‘‘Affiliates,’’ as 

defined in rule 12b–2 under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) other than an ESC 

Fund are referred to collectively as 

‘‘Citadel’’ or ‘‘Citadel Entities.’’ 

2. Citadel has established CEIF, a 

Delaware limited liability company, and 

will establish any other ESC Funds 

(collectively with CEIF, the ‘‘ESC 

Funds’’ and each, an ‘‘ESC Fund’’) for 

the benefit of Eligible Employees 

(defined below) as part of a program to 

create capital building opportunities 

that are competitive with those at other 

financial services firms and to facilitate 

the recruitment and retention of high 

caliber professionals. Each of the ESC 

Funds will be a limited liability 

company, limited partnership, 

corporation, business trust or other 

entity organized under the laws of the 

state of Delaware or another U.S. 

jurisdiction. Each ESC Fund will be 

identical in all material respects (other 

than investment objectives and 

strategies, vesting terms, form of 

organization and related structural and 

operative provisions contained in the 

constitutive documents of such ESC 

Funds). Each ESC Fund is or will be an 

‘‘employees’ security company’’ as such 

term is defined in section 2(a)(13) of the 

Act and will operate as a diversified or 

non-diversified management investment 

company. Citadel will control the ESC 

Funds within the meaning of section 

2(a)(9) of the Act. 

3. The Managing Member 2 of each 

ESC Fund will be an Affiliate of Citadel 

Enterprise Americas LLC. Any member 

or partner of, or other investor in, an 

ESC Fund is a ‘‘Member.’’ The 

Managing Member of each ESC Fund 

will manage, operate and control such 

ESC Fund, however, it will be 

authorized to delegate investment 

management responsibility with respect 

to the acquisition, management and 

disposition of Portfolio Investments 

(defined below) to a Citadel Entity. Any 

Citadel Entity that is delegated the 

responsibility of making investment 

decisions for an ESC Fund will be 

registered as an investment adviser 

under the Investment Advisers Act of 

1940 (the ‘‘Advisers Act’’), if required 

under applicable law. 

4. The Managing Member, a Member, 

Citadel or any employees of the 

Managing Member or Citadel will be 

eligible to receive any compensation, or 

any performance-based fee or profits 

allocation (such as a ‘‘carried 

interest’’ 3). All ESC Fund investments 

(which may be made directly or through 

a Citadel Third Party Fund 4) are 

referred to as ‘‘Portfolio Investments.’’ 

5. Interests in an ESC Fund will be 

issued without registration in 

transactions under a claim of exemption 

pursuant to section 4(a)(2) of the 

Securities Act of 1933 (the ‘‘Securities 

Act’’), Regulation D and/or Regulation 

S 5 and may be acquired only by (i) 

‘‘Eligible Employees’’ or (ii) at the 

request of Eligible Employees and in the 

discretion of the Managing Member of 

an ESC Fund, by Qualified Participants 

(defined below) of such Eligible 

Employees. Prior to issuing Interests 

(defined below) to an Eligible Employee 

or a Qualified Investment Vehicle 

(defined below) or prior to permitting an 

Eligible Employee or a Qualified 

Investment Vehicle to make an 

additional capital contribution, the 

Managing Member must reasonably 

believe that each Eligible Employee (or 

the Eligible Employee relating to the 

Qualified Investment Vehicle) is a 

sophisticated investor capable of 

understanding and evaluating the risks 

of participation in an ESC Fund (or class 

thereof) without the benefit of 

regulatory safeguards. 

6. An ‘‘Eligible Employee’’ is an 

individual who is (i) a current or former 

employee, officer or partner of Citadel 

or a director of Citadel that is an 

‘‘interested person’’ (as defined in 

Section 2(a)(19) of the Act) of Citadel 


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and (ii) meets the standards of an 

‘‘accredited investor’’ under rule 

501(a)(5) or (6) of Regulation D 

(‘‘Accredited Investor’’). A ‘‘Qualified 

Participant’’ is an entity that (i) is a 

Qualified Investment Vehicle and (ii) if 

such entity is purchasing an Interest 

directly from an ESC Fund, comes 

within one of the categories of an 

‘‘accredited investor’’ under rule 501(a) 

of Regulation D. A ‘‘Qualified 

Investment Vehicle’’ is (a) a trust of 

which the trustee, grantor and/or 

beneficiary is an Eligible Employee and 

over which the Eligible Employee or 

their designee exercises investment 

discretion, or (b) a partnership, 

corporation or other entity controlled by 

an Eligible Employee. Eligible 

Employees and/or their Qualified 

Investment Vehicle that are not 

accredited investors will not be 

permitted to invest in an ESC Fund. 

7. The terms of an ESC Fund will be 

fully disclosed to each Eligible 

Employee and, if applicable, a Qualified 

Participant, prior to the time such 

Eligible Employee is admitted to the 

ESC Fund. Each Eligible Employee and 

Qualified Participant will be furnished 

with the offering documents, including 

a copy of the operating agreement or 

other organizational documents 

(‘‘Operating Agreement’’) for the 

relevant ESC Fund. The Managing 

Member of each ESC Fund will send to 

each person who was a Member having 

an Interest in the ESC Fund at any time 

during the fiscal year then ended 

(except for the first year of operations of 

an ESC Fund if no investment activities 

took place in such fiscal year), audited 

financial statements with respect to 

those ESC Funds in which the Member 

held Interests within 120 days after the 

end of the fiscal year, or as soon as 

practicable thereafter. For purposes of 

this requirement ‘‘audit’’ shall have the 

meaning defined in rule 1–02(d) of 

Regulation S–X. In addition, as soon as 

practicable after the end of each tax year 

of an ESC Fund, a report will be 

transmitted to each Member showing 

such Member’s share of income, gains, 

losses, credits, deductions, and other tax 

items for U.S. federal income tax 

purposes, resulting from such ESC 

Fund’s operations during that year. 

8. Interests in each ESC Fund will be 

non-transferable except (i) to the extent 

cancelled or (ii) with the prior written 

consent of the Managing Member, and, 

in any event, no person or entity will be 

admitted into an ESC Fund as a Member 

unless such person or entity is (a) an 

Eligible Employee, (b) a Qualified 

Participant of an Eligible Employee, or 

(c) a Citadel Entity, including Citadel 

Enterprise Americas LLC. Interests in 

these ESC Funds will be issued without 

a sales load or similar fee. 

9. Ownership interests (‘‘Interests’’) in 

an ESC Fund may be acquired on a 

voluntary basis or through an incentive 

program pursuant to which incentive 

awards of cash and/or unvested 

membership interests are issued to 

Eligible Employees (the ‘‘Program’’). 

Interests in a ‘‘Program ESC Fund’’ may 

be acquired (i) through the Program or 

(ii) to the extent permitted by the 

Managing Member, by voluntary capital 

contributions from an Eligible 

Employee. Pursuant to the Program, 

Eligible Employees may be issued 

incentive awards on the basis of, among 

other things, personal performance and/ 

or firm-wide or relevant team 

performance results. An Eligible 

Employee may voluntarily acquire an 

Interest in a non-Program ESC Fund or, 

to the extent permitted by the Managing 

Member, in a Program ESC Fund. To the 

extent permitted by the Managing 

Member, an Eligible Employee and/or 

its Qualified Participant may be issued 

additional Interests (whether vested or 

unvested) and/or may make additional 

capital contributions to the ESC Fund in 

which it is invested after such Eligible 

Employee’s employment with Citadel 

has terminated. 

10. Both Program ESC Funds and nonProgram ESC Funds may be offered as 

part of an investment program that 

includes vesting and cancellation 

provisions. In such circumstances, some 

or all of an Eligible Employee’s Interest 

at the commencement of the investment 

program will be treated as being 

‘‘unvested,’’ and ‘‘vesting’’ will occur 

only as certain conditions are satisfied 

under the terms of the investment 

program. The portion of an Eligible 

Employee’s Interest that is ‘‘unvested’’ 

at the time of termination of such 

Eligible Employee’s employment by 

Citadel may be subject to (a) 

cancellation and/or (b) the imposition of 

different terms and conditions, which 

would be described in the Operating 

Agreement and/or offering documents of 

the relevant ESC Fund and/or in other 

written correspondence issued to such 

Eligible Employee. 

11. With respect to Program ESC 

Funds, a Member will become vested in 

his/her unvested membership interests 

if (a) he/she remains employed by 

Citadel through a specified date (the 

‘‘Determination Date’’) and he/she has 

satisfied, among other things, all of the 

certain applicable conditions (including 

non-competition, non-solicitation, nondisclosure and notice conditions) 

imposed on him/her throughout his/her 

employment up to the specified date or 

(b) in the case of certain specified 

Eligible Employees, he/she ceases to be 

employed by Citadel prior to the 

specified date but he/she has satisfied, 

among other things, all of the 

conditions, if any, imposed on him/her 

during his/her employment with Citadel 

and through any applicable postemployment period and affirms his/her 

compliance with the conditions, as 

applicable. Non-Program ESC Funds 

may or may not provide for vesting 

provisions. An Eligible Employee that 

purchases an Interest in a non-Program 

ESC Fund or makes a voluntary capital 

contribution to a Program ESC Fund 

will immediately vest in the portion of 

the Interest in such ESC Fund 

attributable to such purchase or 

contribution. 

12. With respect to a non-Program 

ESC Fund that does not provide for 

vesting provisions, an Eligible 

Employee’s entire Interest may be 

subject to repurchase by the Managing 

Member and/or the imposition of 

different terms and conditions upon 

termination of such Eligible Employee’s 

employment by Citadel, as described in 

the Operating Agreement and/or 

offering documents related to the 

relevant ESC Fund and/or in other 

written correspondence issued to such 

Eligible Employee. Upon any 

repurchase of an Eligible Employee’s 

vested membership interest, the 

Managing Member will at a minimum 

pay to the Eligible Employee the lesser 

of (a) the amount actually paid by the 

Eligible Employee to acquire the vested 

membership interest plus interest, 

provided that any prior distributions are 

subtracted from such combined amount, 

and (b) the fair market value of such 

vested membership interest as 

determined at the time of repurchase by 

the Managing Member in accordance 

with the relevant ESC Fund’s valuation 

policies and procedures. The terms of 

any repurchase or cancellation of 

Interests will apply equally to any 

Eligible Employee and any Qualified 

Participant of such Eligible Employee. 

13. With respect to Program ESC 

Funds, a Member who remains 

employed by Citadel may make a 

request to defer redemption of its 

unvested membership interests from the 

relevant Program ESC Fund beyond the 

relevant Determination Date, subject to 

approval by Citadel. If a Member does 

not make such a request, or Citadel does 

not approve such request, that portion 

of a Member’s Interest attributable to 

such unvested membership interests 

will be mandatorily redeemed as soon 

as reasonably practicable following the 


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6 In the event of such a mandatory redemption, 

subject to the availability of liquidity (including 

suspensions on withdrawals) in respect of the 

Citadel Third Party Funds in which the relevant 

Program ESC Fund is invested, the balance of such 

Member’s capital account in such Program ESC 

Fund relating to such redeemed Interest, as adjusted 

through the date of such redemption, will be 

distributed to such Member. 

7Applicants are not requesting any exemption 

from any provision of the Act or any rule 

thereunder that may govern the eligibility of an ESC 

Fund to invest in an entity relying on section 3(c)(1) 

or 3(c)(7) of the Act or any such entity’s status 

under the Act. 

relevant Determination Date.6 Citadel 

will endeavor to treat Members 

consistently in making the 

determination to approve such requests. 

A vested membership interest in a 

Program ESC Fund (including a vested 

membership interest received in respect 

of a voluntary capital contribution to 

such Program ESC Fund by an Eligible 

Employee) may be redeemed as of any 

calendar quarter-end upon not less than 

seventy days’ prior written notice or 

according to such other terms as may be 

described in such Program ESC Fund’s 

Operating Agreement and/or offering 

documents or election form, subject to 

the availability of liquidity (including 

suspensions on withdrawals) in respect 

of the Citadel Third Party Funds in 

which the relevant Participation Points 

ESC Fund is invested. 

14. Subject to the terms of the 

applicable Operating Agreement and/or 

offering documents, an ESC Fund will 

be permitted to enter into transactions 

involving (i) a Citadel Entity, (ii) any 

Member or person or entity affiliated 

with a Member or (iii) a Citadel Third 

Party Fund. Prior to entering into any of 

these transactions, the Managing 

Member will make the findings required 

in Condition 1 below. A Citadel Entity 

(including the Managing Member) also 

may provide a full range of financial, 

asset management or other services, and 

may also provide financing in the form 

of debt, equity or other financial 

instruments, and receive fees or other 

compensation and expense 

reimbursement in connection therewith, 

from entities in which an ESC Fund 

(directly or indirectly) makes an 

investment, from competitors of such 

entities or from other unaffiliated 

persons or entities. 

15. The investment objective of each 

ESC Fund and whether it will operate 

as a diversified or non-diversified and 

open-end or closed-end registered 

investment vehicle may vary from ESC 

Fund to ESC Fund, and will be set forth 

in the offering documents relating to the 

specific ESC Funds. Each ESC Fund 

(directly or indirectly through its 

investments in Citadel Third Party 

Funds) may engage in various 

investment strategies implemented by 

Citadel in markets around the world. An 

ESC Fund may invest directly in 

securities (including exchange-traded 

funds, mutual funds and index funds) 

and similar investments and/or may 

invest all or substantially all of its assets 

in Citadel Third Party Funds.7 An ESC 

Fund will not acquire any security 

issued by a registered investment 

company if immediately after the 

acquisition such ESC Fund will own 

more than 3% of the outstanding voting 

stock of the registered investment 

company. 

16. The offering documents will set 

forth, if applicable, whether the 

Managing Manager or a Citadel Entity 

will make any capital contributions or 

loans to such ESC Fund, and, if so, the 

terms applicable to the Managing 

Member’s or the Citadel Entity’s 

investment in such ESC Fund or its 

extension of credit to such ESC Fund, 

provided that the interest rate 

applicable to any such loan made to an 

ESC Fund will be no less favorable to 

such ESC Fund than the rate obtainable 

in an arm’s-length transaction, 

provided, further, that any indebtedness 

of such ESC Fund will be the debt of 

such ESC Fund and without recourse to 

the Members. An Eligible Employee will 

not borrow from any person if such 

borrowing would cause any person not 

named in section 2(a)(13) of the Act to 

own outstanding securities of an ESC 

Fund (other than short-term paper). No 

ESC Fund will borrow from any person 

if the borrowing would cause any 

person not named in section 2(a)(13) of 

the Act to own outstanding securities of 

the ESC Fund (other than short-term 

paper). 

APPLICANTS’ LEGAL ANALYSIS: 1. Section 

6(b) of the Act provides, in part, that the 

Commission will exempt employees’ 

securities companies from the 

provisions of the Act to the extent that 

the exemption is consistent with the 

protection of investors. Section 6(b) 

provides that the Commission will 

consider, in determining the provisions 

of the Act from which the employees’ 

securities companies should be exempt, 

the company’s form of organization and 

capital structure, the persons owning 

and controlling its securities, the price 

of the company’s securities and the 

amount of any sales load, how the 

company’s funds are invested, and the 

relationship between the company and 

the issuers of the securities in which it 

invests. Section 2(a)(13) defines an 

employees’ securities company, in 

relevant part, as any investment 

company all of whose securities (other 

than short-term paper) are beneficially 

owned (a) by current or former 

employees, or persons on retainer, of 

one or more affiliated employers, (b) by 

immediate family members of such 

persons, or (c) by such employer or 

employers together with any of the 

persons in (a) or (b). 

2. Section 7 of the Act generally 

prohibits investment companies that are 

not registered under section 8 of the Act 

from selling or redeeming their 

securities. Section 6(e) of the Act 

provides that the Commission may 

determine as necessary or appropriate in 

the public interest or for the protection 

of investors that, in connection with any 

order exempting an investment 

company from section 7 of the Act, 

certain provisions of the Act will be 

applicable to such investment company 

and to other persons in their 

transactions and relations with such 

investment company, as though such 

investment company were a registered 

investment company. Applicants 

request an order under sections 6(b) and 

6(e) of the Act that amends and restates 

the Existing Order exempting the 

Applicants and any ESC Funds from all 

provisions of the Act, except section 9 

and sections 36 through 53, and the 

rules and regulations under the Act. 

With respect to sections 17 and 30 of the 

Act, and the rules and regulations 

thereunder, and rule 38a-1 under the 

Act, the exemption is limited as set 

forth in the application. 

3. Section 17(a) of the Act, among 

other things, generally prohibits any 

affiliated person of a registered 

investment company, or any affiliated 

person of an affiliated person, acting as 

principal, from knowingly selling or 

purchasing any security or other 

property to or from the investment 

company. Applicants request an 

exemption from section 17(a) to the 

extent necessary to: (a) Permit a Citadel 

Entity or a Citadel Third Party Fund (or 

any affiliated person of such Citadel 

Entity or Citadel Third Party Fund), or 

any affiliated person of an ESC Fund (or 

affiliated persons of such persons) 

acting as principal, to engage in any 

transaction directly or indirectly with 

any ESC Fund or any company 

controlled by such ESC Fund; and (b) 

permit any ESC Fund to invest in or 

engage in any transaction with any 

Citadel Entity or Citadel Third Party 

Fund, acting as principal: (i) in which 

such ESC Fund, any company 

controlled by such ESC Fund or any 

Citadel Entity or Citadel Third Party 

Fund has invested or will invest; or (ii) 

with which such ESC Fund, any 

company controlled by such ESC Fund 

or any Citadel Entity or Citadel Third 


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Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 84401 

8Such Citadel investment will only be exempt 

from Condition 3 to the extent that the investment 

was necessitated by the contractual obligation to the 

Citadel Third Party Fund. 

Party Fund is or will otherwise become 

affiliated. 

4. Applicants submit that an 

exemption from section 17(a) is 

consistent with the purposes of each 

ESC Fund and the protection of 

investors, and is necessary to promote 

the basic purpose of such ESC Fund. 

Applicants state that the Members of 

each ESC Fund will be fully informed 

of the possible extent of such ESC 

Fund’s dealings with Citadel and of the 

potential conflicts of interest that may 

exist, and, as professionals with 

experience in investing, financial 

planning, securities brokerage, 

investment banking, asset management, 

business operations, banking, cash 

management or trust services or other 

similar areas, or in administrative, 

financial, tax, legal, accounting or 

operational activities related thereto, 

will be able to understand and evaluate 

the attendant risks. Applicants assert 

that the community of interest among 

the Members in each ESC Fund and 

Citadel is the best insurance against any 

risk of abuse. 

5. Section 17(d) of the Act and rule 

17d–1 under the Act prohibit any 

affiliated person of a registered 

investment company, or any affiliated 

person of such person, acting as 

principal, from participating in any joint 

enterprise or joint arrangement with the 

company unless authorized by the 

Commission. Applicants request relief 

to the extent necessary to permit 

affiliated persons of each ESC Fund 

(including the Managing Member, 

Citadel, and/or a Citadel Third Party 

Fund), or affiliated persons of any of 

these persons to participate in, or effect 

any transaction in connection with, any 

joint enterprise or other joint 

arrangement or profit-sharing plan in 

which an ESC Fund or a company 

controlled by such ESC Fund is a 

participant. 

6. Applicants assert that compliance 

with section 17(d) would cause an ESC 

Fund to forego investment opportunities 

simply because a Member in an ESC 

Fund or any other affiliated person of 

such ESC Fund (or any affiliate of such 

a person) also had, or contemplated 

making, a similar investment. 

Applicants also submit that coinvestment opportunities with Citadel 

are advantageous to Eligible Employees 

because (a) the resources of Citadel 

enable it to analyze investment 

opportunities to an extent that Eligible 

Employees would have neither the time 

nor resources to duplicate, (b) 

investments made by Citadel will not be 

generally available to investors even if 

the financial status of the Eligible 

Employees would enable them to 

otherwise participate in such 

opportunities, and (c) Eligible 

Employees will be able to pool their 

resources in co-investments, thus 

achieving greater diversification of their 

individual portfolios. Applicants note 

that each ESC Fund will primarily be 

organized for the benefit of Eligible 

Employees as an incentive for them to 

remain with Citadel and for the 

generation and maintenance of goodwill 

through an investment in Citadel Third 

Party Funds. Applicants assert that the 

flexibility to structure co-investments 

and joint investments as described in 

the application will not involve abuses 

of the type section 17(d) and rule 17d– 

1 were designed to prevent. 

7. All side-by-side investments held 

by Citadel Entities will be subject to the 

restrictions contained in Condition 3 

except for side-by-side investments held 

by a Citadel Third Party Fund, or by a 

Citadel Entity in a transaction in which 

the Citadel investment was made 

pursuant to a contractual obligation to a 

Citadel Third Party Fund.8 Applicants 

note that Citadel is likely to invest a 

portion of its own capital in Citadel 

Third Party Fund investments or on a 

side-by-side basis (which Citadel 

investments will be subject to 

substantially the same terms as those 

applicable to such Citadel Third Party 

Fund, except as otherwise disclosed in 

the offering documents and/or 

Operating Agreement of the relevant 

ESC Fund). In addition, applicants 

assert that the relationship of an ESC 

Fund to a Citadel Third Party Fund is 

fundamentally different from such ESC 

Fund’s relationship to Citadel. 

Applicants contend that the focus of, 

and the rationale for, the protections 

contained in the requested relief are to 

protect the ESC Funds from any 

overreaching by Citadel in the 

employer/employee context, whereas 

the same concerns are not present with 

respect to the ESC Funds vis-a`-vis the 

investors in a Citadel Third Party Fund. 

8. Section 17(f) of the Act designates 

the entities that may act as investment 

company custodians, and rule 17f–1 

under the Act imposes certain 

requirements when the custodian is a 

member of a national securities 

exchange. Applicants request an 

exemption from section 17(f) and rule 

17f–1 to the extent necessary to permit 

a Citadel Entity to act as custodian 

without a written contract because there 

will be such a close association between 

each ESC Fund and Citadel that 

requiring a detailed written contract 

would expose the ESC Funds to 

unnecessary burden and expense. 

Applicants also request an exemption 

from the rule 17f–1(b)(4) requirement 

that an independent accountant 

periodically verify the assets held by the 

custodian as Applicants do not believe 

the expense of such verifications is 

warranted given the community of 

interest of all the parties involved and 

the existing requirement for an 

independent audit, compliance with the 

rule’s requirement would be 

unnecessary. Except as requested, each 

ESC Fund will otherwise comply with 

the provisions of rule 17f–1. 

9. Applicants also request an 

exemption from section 17(f) and rule 

17f–2 to permit the following exceptions 

from the requirements of rule 17f–2: (a) 

An ESC Fund’s investments may be kept 

in the locked files of the Managing 

Member (or a Citadel Entity) for 

purposes of paragraph (b) of the rule; (b) 

for purposes of paragraph (d) of the rule, 

(i) employees of the Managing Member 

(or a Citadel Entity) will be deemed to 

be employees of the ESC Funds, (ii) 

officers or managers of the Managing 

Member of an ESC Fund (or a Citadel 

Entity) will be deemed to be officers of 

the ESC Fund, and (iii) the Managing 

Member will be deemed to be the board 

of directors of the ESC Fund; and (c) in 

place of the verification procedure 

under paragraph (f) of the rule, 

verification will be effected quarterly by 

two high level employees of the 

Managing Member (or another Citadel 

Entity), each of whom is a member of 

the administrative, legal, and/or 

compliance function for Citadel and has 

specific knowledge of the custody 

requirements, policies, and procedures 

of the ESC Funds. Applicants expect 

that with respect to certain ESC Funds, 

most of their investments may be 

evidenced only by partnership 

agreements, participation agreements or 

similar documents, rather than by 

negotiable certificates that could be 

misappropriated. Applicants believe 

that, for such an ESC Fund, these 

instruments are most suitably kept in 

the locked files of the Managing 

Member (or a Citadel Entity), where 

they can be referred to as necessary. 

Applicants will comply with all other 

provisions of rule 17f–2, including the 

recordkeeping requirements of 

paragraph (e). 

10. Section 17(g) of the Act and rule 

17g–1 under the Act generally require 

the bonding of officers and employees of 

a registered investment company who 

have access to its securities or funds. 

Rule 17g–1 requires that a majority of 

directors who are not interested persons 


tkelley on DSKBCP9HB2PROD with NOTICES
84402 Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 

9 ‘‘Section 17 Transaction’’ means a transaction 

that is otherwise prohibited by section 17(a), 

section 17(d) and/or rule 17d–1 under the Act to 

which an ESC Fund is a party. 

10 ‘‘Co-Investor’’ means with respect to any ESC 

Fund, any person who is: (a) An ‘‘affiliated person’’ 

(as defined in section 2(a)(3) of the Act) of the ESC 

Fund (other than a Citadel Third Party Fund); (b) 

a Citadel Entity; (c) an officer, director or partner 

of a Citadel Entity; or (d) an entity (other than a 

Citadel Third Party Fund) for which the Managing 

Member or an Affiliate acts as a managing member 

or in a similar capacity so as to control the sale or 

other disposition of the entity’s investments. 

take certain actions and give certain 

approvals relating to fidelity bonding. 

Applicants request an exemption to 

permit the Managing Member, 

regardless of whether it is deemed an 

interested person of the ESC Funds, to 

take actions and make determinations 

set forth in the rule. Applicants state 

that the ESC Funds are unable to 

comply with Rule 17g-1 because the 

ESC Funds will not have boards of 

directors and the Managing Member of 

the ESC Fund will be an interested 

person of the ESC Funds. Applicants 

also state that the ESC Funds will 

comply with all other requirements of 

rule 17g-1, except that the Applicants 

request an exemption from the 

requirements of paragraphs (g) and (h) 

of rule 17g–1 (relating to the filing of 

copies of fidelity bonds and related 

information with the Commission and 

relating to the provision of notices to the 

board of directors), and an exemption 

from the requirements of paragraph 

(j)(3) of rule 17g–1 that the ESCs comply 

with the fund governance standards 

defined in rule 0–1(a)(7). 

11. Section 17(j) of the Act and 

paragraph (b) of rule 17j–1 under the 

Act make it unlawful for certain 

enumerated persons to engage in 

fraudulent or deceptive practices in 

connection with the purchase or sale of 

a security held or to be acquired by a 

registered investment company. Rule 

17j–1 also requires that every registered 

investment company adopt a written 

code of ethics and that every access 

person of a registered investment 

company report personal securities 

transactions. Applicants request an 

exemption from the provisions of rule 

17j–1, except for the anti-fraud 

provisions of paragraph (b), because 

they are unnecessary and burdensome 

as applied to the ESC Funds. 

12. Applicants request an exemption 

from the requirements in sections 30(a), 

30(b), and 30(e) of the Act, and the rules 

under those sections, that registered 

investment companies prepare and file 

with the Commission and mail to their 

shareholders certain periodic reports 

and financial statements. Applicants 

contend that the forms prescribed by the 

Commission for periodic reports have 

little relevance to an ESC Fund and 

would entail administrative and legal 

costs that outweigh any benefit to the 

Members of such ESC Fund. Applicants 

request exemptive relief to the extent 

necessary to permit each ESC Fund to 

report annually to its Members. 

Applicants also request an exemption 

from section 30(h) of the Act to the 

extent necessary to exempt the 

Managing Member of each ESC Fund, 

directors and officers of the Managing 

Member and any other persons who 

may be deemed to be members of an 

advisory board or an investment adviser 

(and affiliated persons thereof) of such 

ESC Fund from filing Forms 3, 4, and 

5 under section 16 of the Exchange Act 

with respect to such ESC Fund. 

Applicants assert that, because there 

will be no trading market and the 

transfers of Interests will be severely 

restricted, these filings are unnecessary 

for the protection of investors and 

burdensome to those required to make 

them. 

13. Rule 38a–1 requires investment 

companies to adopt, implement and 

periodically review written policies and 

procedures reasonably designed to 

prevent violation of the federal 

securities laws and to appoint a chief 

compliance officer. Each ESC Fund will 

comply will rule 38a-1(a), (c) and (d), 

except that (a) because the ESC Funds 

do not have a board of directors, the 

Managing Member will fulfill the 

responsibilities assigned to a board of 

directors under the rule, (b) because the 

Managing Member does not have any 

disinterested members, approval by a 

majority of the disinterested board 

members required by rule 38a-1 will not 

be obtained, and (c) because the ESC 

Funds do not have any independent 

directors, the ESC Funds will comply 

with the requirement in rule 38a1(a)(4)(iv) that the chief compliance 

officer meet with the independent 

directors by having the chief 

compliance officer meet with the 

Managing Member. Each ESC Fund has 

adopted written policies and procedures 

reasonably designed to prevent 

violations of the terms and conditions of 

the application and appointed a chief 

compliance officer. 

APPLICANTS’ CONDITIONS: Applicants 

agree that any order granting the 

requested relief will be subject to the 

following conditions: 

1. Each proposed Section 17 

Transaction 9 will be effected only if the 

Managing Member determines that: 

(a) the terms of the Section 17 

Transaction, including the 

consideration to be paid or received, are 

fair and reasonable to the Members of 

the ESC Fund and do not involve 

overreaching of the ESC Fund or its 

Members on the part of any person 

concerned; and 

(b) the Section 17 Transaction is 

consistent with the interests of the 

Members of the ESC Fund, the ESC 

Fund’s organizational documents and 

the ESC Fund’s reports to its Members. 

(b) the Section 17 Transaction is 

consistent with the interests of the 

Memberws of the ESC Fund, the ESC 

Fund’s organizational documents and 

the ESC Fund’s reports to its Members. 

In addition, the Managing Member 

will record and will preserve a 

description of all Section 17 

Transactions, the Managing Member’s 

findings, the information or materials 

upon which the findings are based and 

the basis for the findings. All such 

records will be maintained for the life 

of the ESC Fund and at least six years 

thereafter, and will be subject to 

examination by the Commission and its 

staff. Each ESC Fund will preserve the 

accounts, books and other documents 

required to be maintained in an easily 

accessible place for at least the first two 

years. 

2. The Managing Member will adopt, 

and periodically review and update, 

procedures designed to ensure that 

reasonable inquiry is made, prior to the 

consummation of any Section 17 

Transaction, with respect to the possible 

involvement in the transaction of any 

affiliated person or promoter of or 

principal underwriter for any ESC Fund, 

or any ‘‘affiliated person’’ of such an 

‘‘affiliated person,’’ promoter or 

principal underwriter. 

3. The Managing Member of each ESC 

Fund will not cause any of the funds of 

the ESC Fund to be invested in any 

investment in which a Co-Investor 10 has 

acquired or proposes to acquire the 

same class of securities of the same 

issuer and where the investment 

involves a joint enterprise or other joint 

arrangement within the meaning of rule 

17d-1 in which the ESC Fund and the 

Co-Investor are participants, unless 

prior to such investment any such CoInvestor, prior to disposing of all or part 

of its investment: agrees to (a) give the 

Managing Member sufficient, but not 

less than one day’s notice of its intent 

to dispose of its investment; and (b) 

refrain from disposing of its investment 

unless the ESC Fund has the 

opportunity to dispose of its investment 

prior to or concurrently with, and on the 

same terms as, and pro rata with, the 

Co-Investor. 

The restrictions contained in this 

condition, however, shall not be 


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Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 84403 

11 ‘‘Parent’’ means any company of which an 

entity is a direct or indirect wholly-owned 

subsidiary. 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 88946 

(May 26, 2020), 85 FR 33454 (June 1, 2020) (SR– 

BOX–2020–14) (‘‘Notice’’). Comments received on 

the proposed rule change are available at: https:// 

www.sec.gov/comments/sr-box-2020-14/ 

srbox202014.htm. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 89328 

(July 16, 2020), 85 FR 44338 (July 22, 2020). The 

Commission designated August 30, 2020, as the 

date by which it should approve, disapprove, or 

institute proceedings to determine whether to 

disapprove the proposed rule change. 

6 In Amendment No. 1, the Exchange revised the 

proposal to: (i) Change the name used to refer to 

BSTX-listed securities from ‘‘security tokens’’ to 

‘‘Securities’’; (ii) eliminate the proposed 

requirement for trades on the Exchange to settle one 

business day after the trade date (‘‘T+1’’), which is 

not the settlement cycle for NMS stock; (iii) add 

proposed rule text that the Exchange describes as 

containing measures to ensure the accuracy of endof-day Security balance reports; (iv) add proposed 

rule text specifying that the time by which 

Exchange members must report end-of-day Security 

balances to the Exchange will be set forth by the 

Exchange via regulatory circular; (v) provide 

additional description of several aspects of the 

proposal, including end-of-day Security balance 

reporting and implications of the trading of BSTXlisted Securities on other national securities 

exchanges on the end-of-day reporting process; and 

(vi) make technical and conforming changes. 

Amendment No. 1 is available on the Commission’s 

website at: https://www.sec.gov/comments/sr-box2020-14/srbox202014-7570237-222233.pdf. On July 

31, 2020, the Exchange also submitted a letter to the 

Commission requesting that the Commission concur 

with the Exchange’s conclusion that members that 

enter orders into BSTX’s trading system satisfy the 

conditions of Rule 11a2–2(T) under the Exchange 

Act (17 CFR 240.11a2–2(T)). See Letter from Lisa 

Fall, President, BOX, to Vanessa Countryman, 

Secretary, Commission, and Tyler Raimo, Assistant 

Director, Division of Trading and Markets, 

Commission (July 31, 2020), available at https://

www.sec.gov/comments/sr-box-2020-14/ 

srbox202014-7506169-221931.pdf. 

7See Securities Exchange Act Release No. 89536 

(August 12, 2020), 85 FR 51250 (August 19, 2020) 

(‘‘Order Instituting Proceedings’’ or ‘‘OIP’’). 

deemed to limit or prevent the 

disposition of an investment by a CoInvestor: 

(a) To its direct or indirect whollyowned subsidiary, to a Parent 11 of 

which the Co-Investor is a direct or 

indirect wholly-owned subsidiary or to 

a direct or indirect wholly-owned 

subsidiary of such Parent; 

(b) to immediate family members of 

the Co-Investor or to a trust or other 

investment vehicle established for any 

such family member; and 

(c) when the investment is comprised 

of securities that are (i) listed on any 

exchange registered as a national 

exchange under section 6 of the 

Exchange Act; (ii) NMS stocks, pursuant 

to section 11A(a)(2) of the Exchange Act 

and rule 600(a) of Regulation NMS 

thereunder; (iii) government securities 

as defined in section 2(a)(16) of the Act, 

or (iv) listed or traded on any foreign 

securities exchange or board of trade 

that satisfies regulatory requirements 

under the law of the jurisdiction in 

which such foreign securities exchange 

or board of trade is organized similar to 

those that apply to a national securities 

exchange or a national market system 

for securities. 

4. Each ESC Fund and its Managing 

Member will maintain and preserve, for 

the life of such ESC Fund and at least 

six years thereafter, such accounts, 

books, and other documents as 

constitute the record forming the basis 

for the audited financial statements that 

are to be provided to the Members of 

such ESC Fund, and each annual report 

of such ESC Fund required to be sent to 

such Members, and agree that all such 

records will be subject to examination 

by the Commission and its staff. Each 

ESC Fund will preserve the accounts, 

books and other documents required to 

be maintained in an easily accessible 

place for the first two years after the life 

of such ESC Fund. 

5. Within 120 days after the end of the 

fiscal year of each ESC Fund, or as soon 

as practicable thereafter, the Managing 

Member of each ESC Fund will send to 

each person who was a Member having 

an Interest in the ESC Fund at any time 

during the fiscal year then ended 

(except for the first fiscal year of 

operations of an ESC Fund if no 

investment activities took place in such 

fiscal year), audited financial statements 

with respect to those ESC Funds in 

which the Member held Interests. At the 

end of each fiscal year, the Managing 

Member will make a valuation or have 

a valuation made of all of the assets of 

the ESC Fund as of such fiscal year end 

in a manner consistent with customary 

practice with respect to the valuation of 

assets of the kind held by the ESC Fund. 

In addition, within 120 days after the 

end of each fiscal year of each ESC Fund 

or as soon as practicable thereafter, the 

Managing Member will send a report to 

each person who was a Member at any 

time during the fiscal year then ended, 

setting forth such tax information as 

shall be necessary for the preparation by 

the Member of his, her or its U.S. federal 

and state income tax returns and a 

report of the investment activities of the 

ESC Fund during that fiscal year. 

6. If an ESC Fund makes purchases 

from, or sales to, an entity affiliated 

with the ESC Fund by reason of an 

officer, director or employee of Citadel 

(a) serving as an officer, director, 

managing member, general partner or 

investment adviser of the entity, or (b) 

having a 5% or more investment in the 

entity, such individual will not 

participate in the ESC Fund’s 

determination of whether or not to effect 

the purchase or sale. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28492 Filed 12–23–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90735; File No. SR–BOX– 

2020–14] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Order Disapproving 

Proposed Rule Change, as Modified by 

Amendment No. 1, To Adopt Rules 

Governing the Trading of Equity 

Securities on the Exchange Through a 

Facility of the Exchange Known as the 

Boston Security Token Exchange LLC 

December 18, 2020. 

Introduction 

On May 21, 2020, BOX Exchange LLC 

(‘‘Exchange’’ or ‘‘BOX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to adopt rules governing the 

listing and trading of equity securities 

that would be National Market System 

(‘‘NMS’’) stocks on the Exchange 

through a facility of the Exchange 

known as the Boston Security Token 

Exchange LLC (‘‘BSTX’’). The proposed 

rule change was published for comment 

in the Federal Register on June 1, 2020.3

On July 16, 2020, pursuant to Section 

19(b)(2) of the Exchange Act,4 the 

Commission designated a longer period 

within which to either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.5

On July 31, 2020, the Exchange filed 

Amendment No. 1 to the proposed rule 

change, which replaced and superseded 

the proposed rule change as originally 

filed.6 On August 12, 2020, the 

Commission published the proposed 

rule change, as modified by Amendment 

No. 1, for notice and comment and 

instituted proceedings to determine 

whether to approve or disapprove the 

proposed rule change, as modified by 

Amendment No. 1.7 On November 24, 

2020, pursuant to Section 19(b)(2) of the 

Exchange Act, the Commission 


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