Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 81163 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 96930, 

Investment Advisers Act Release No. 6239 

(February 15, 2023), 88 FR 13872 (March 6, 2023) 

(‘‘T+1 Adopting Release’’). 

4See supra note 3. 

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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–Phlx–2023–49 and should be 

submitted on or before December 12, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25668 Filed 11–20–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98958; File No. SR–BX– 

2023–028] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Shorten the Standard 

Settlement Cycle 

November 15, 2023. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

13, 2023, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) 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 Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend BX 

Rules 11140 (Transactions in Securities 

‘‘Ex-Dividend,’’ ‘‘Ex-Rights’’ or ‘‘ExWarrants’’), 11150 (Transactions ‘‘ExInterest’’ in Bonds Which Are Dealt in 

‘‘Flat’’), 11210 (Sent by Each Party), 

11320 (Dates of Delivery), and 11620 

(Computation of Interest), to conform 

them to the Commission’s amendment 

to Rule 15c6–1(a) of the Act 3 to shorten 

the standard settlement cycle for most 

broker-dealer transactions from two 

business days after the trade date 

(‘‘T+2’’) to one business days after the 

trade date (‘‘T+1’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Effective May 5, 2023, the 

Commission adopted rule amendments 

to shorten the standard settlement cycle 

for most broker-dealer transactions from 

T+2 to T+1.4 In light of the recently 

adopted rule amendments to Rule 15c6– 

1(a) of the Act to require standard 

settlement no later than T+1, BX 

proposes to amend its rules pertaining 

to securities settlement by, among other 

things, amending the definition of 

‘‘standard’’ settlement as occurring on 

T+1. 

Specifically, BX proposes to amend 

the following Rules: 11140 

(Transactions in Securities ‘‘ExDividend,’’ ‘‘Ex-Rights’’ or ‘‘ExWarrants’’), 11150 (Transactions ‘‘ExInterest’’ in Bonds Which Are Dealt in 

‘‘Flat’’), 11210 (Sent by Each Party), 

11320 (Dates of Delivery), and 11620 

(Computation of Interest). The details of 

the proposed rule changes are described 

below. 

Rule 11140 

Rule 11140(b)(1) currently provides 

that for dividends or distributions, and 

the issuance or distribution of warrants, 

that are less than 25 percent of the value 

of the subject security, if definitive 

information is received sufficiently in 

advance of the record date, the date 

designated as the ‘‘ex-dividend date’’ 

shall be the first business day preceding 

the record date if the record date falls 

on a business day, or the second 

business day preceding the record date 

if the record date falls on a day 

designated by BX Regulation as a nondelivery date. BX proposes to amend 

Rule 11140(b)(1) to shorten the time 

frames by one business day. With this 

change the ex-dividend date would be 

the same business day as the record date 

if the record date falls on a business 

day, or the first business day preceding 

the record date if the record date falls 

on a day designated by BX Regulation 

as a non-delivery date. 

Rule 11150 

Rule 11150(a) currently prescribes the 

manner for establishing ‘‘ex-interest 

dates’’ for transactions in bonds or other 

similar evidence of indebtedness which 

are traded ‘‘flat.’’ Such transactions are 

‘‘ex-interest’’ on the first business day 

preceding the record date if the record 

date falls on a business day, on the 

second business day preceding the 

record date if the record date falls on a 

day other than a business day, or on the 

third business day preceding the date on 

which an interest payment is to be made 

if no record date has been fixed. BX 

proposes to amend Rule 11150(a) to 

shorten the time frames by one business 

day. 

Rule 11210 

Paragraphs (c) and (d) of Rule 11210 

set forth the ‘‘Don’t Know’’ (‘‘DK’’) 

voluntary procedures for using ‘‘DK 

Notices’’ or other forms of notices, 

respectively. When a party to a 

transaction sends a comparison or 

confirmation of a trade, but does not 

receive a comparison or confirmation or 

a signed DK, from the contra-member by 

the close of one business day following 

the trade date of the transaction, the 

confirming member shall send a DK 

Notice to the contra-member. Thereafter, 

the contra-member has two business 

days after receipt of the confirming 

member’s notice to either confirm or 

‘‘DK’’ the transaction. 

BX proposes to amend paragraphs (c) 

and (d) of Rule 11210 to provide that the 

‘‘DK’’ procedures may be used by the 


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81164 Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 

5See supra note 3. 

6See supra note 3. Transactions with a trade date 

of Friday, May 24, 2024 would settle on 

Wednesday, May 29, 2024 because these 

transactions occurred before the rule was effective 

and continue to settle two days after the trade date. 

Additionally, transactions with a trade date of 

Tuesday, May 28, 2024 would also settle on 

Wednesday, May 29, 2024 because these 

transactions occurred when the T + 1 rule was 

effective and would settle one day after the trade 

date. Of note, May 27, 2024 is Memorial Day and 

not a business day counted for purposes of 

settlement. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9See supra note 3. 

10Of note, pursuant to (a) and (d) of Rule 15c6– 

1, the parties may expressly agree to a different 

settlement date at the time of the transaction. 

confirming member if it does not receive 

a comparison or confirmation or signed 

‘‘DK’’ from the contra-member by the 

close of the business day of the trade 

date of the transaction, rather than the 

current time frame of one day after the 

trade date. In addition, BX proposes to 

amend paragraphs (c)(2)(A), (c)(3), and 

(d)(5) of Rule 11210 to adjust the time 

in which a contra-member has to 

respond to a ‘‘DK Notice’’ (or similar 

notice) from two business days after the 

contra-member’s receipt of the notice to 

one business day after the contramember’s receipt of the notice. 

Rule 11320 

Rule 11320 currently prescribes 

delivery dates for various transactions. 

Currently, paragraph (b) states that for a 

‘‘regular way’’ transaction, delivery 

must be made on, but not before, the 

second business day after the date of the 

transaction. BX proposes to amend Rule 

11320(b) to change the reference from 

the second business day to the first 

business day following the date of the 

transaction. Currently, paragraph (c) 

provides that in a ‘‘seller’s option’’ 

transaction, delivery may be made by 

the seller on any business day after the 

second business day following the date 

of the transaction. BX proposes to 

amend Rule 11320(c) to change the 

reference from the second business day 

to the first business day following the 

date of the transaction and prior to the 

expiration of the option. 

Rule 11620 

In the settlement of contracts in 

interest-paying securities other than for 

cash, Rule 11620(a) currently requires 

the calculation of interest at the rate 

specified in the security up to but not 

including the second business day after 

the date of the transaction. The 

proposed amendment would shorten the 

time frame to the first business day 

following the date of the transaction. 

Implementation 

The operative date of this proposed 

rule change will be Tuesday, May 28, 

2024, which is the compliance date 

specified in the Commission’s 

amendment to Rule 15c6–1(a) of the 

Act 5 to require standard settlement no 

later than T+1.6 With the 

implementation of the T+1 settlement 

cycle, the ex-dividend date for ‘‘normal’’ 

distributions pursuant to Rule 

11140(b)(1) will be the same business 

day as the record date. Accordingly, BX 

proposes to interpret Rule 11140(b)(1) 

so that the first record date to which this 

new ex-dividend date rationale will be 

applied will be Wednesday, May 29, 

2024. During the implementation of the 

T+1 settlement cycle, the ‘‘regular’’ exdividend dates will be as follows: 

Record Date May 24, 

2024.

Ex date May 23, 2024. 

Record Date May 28, 

2024.

Ex date May 24, 2024. 

Record Date May 29, 

2024.

Ex date May 29, 2024.* 

* May 27, 2024 is Memorial Day and not a 

business day. 

By way of explanation, a record date 

of Friday, May 24, 2024 would be a date 

prior to the effective date of the adopted 

T + 1 rules. Current Rule 1140(b) [sic] 

would apply to this record date, and, 

therefore, the ‘‘ex-dividend date’’ would 

be the first business day preceding the 

record date or Thursday, May 23, 2024. 

Monday, May 27, 2024 is Memorial Day 

is a federal holiday and not a business 

day; there would be no record date on 

a holiday. As noted above, BX proposes 

to interpret Rule 11140(b)(1) so that the 

first record date to which this new exdividend date rationale will be applied 

would be Wednesday, May 29, 2024. 

Therefore, a record date of Tuesday, 

May 28, 2024 would fall under current 

Rule 1140(b) [sic] and the first business 

day preceding the record date would be 

Friday, May 24, 2024. Finally, as noted 

above, Wednesday, May 29, 2024 is the 

first record date pursuant to the new T 

+ 1 rules, therefore, proposed Rule 

1140(b) [sic] applies to this date and the 

‘‘ex-dividend date’’ would be the same 

business day as the record date (May, 

29, 2024). 

The ex-dividend date for ‘‘large’’ 

distributions under Rule 11140(b)(2) is 

not being amended with the adoption of 

the T+1 settlement cycle. Therefore, the 

ex-dividend date for large’’ distributions 

under Rule 11140(b)(2) will continue to 

be the first business day following the 

payable date as provided in the current 

rule text. In order to ensure that no 

securities will be ex-dividend on May 

28, 2024 for purposes of ‘‘large’’ 

distributions, BX similarly proposes to 

interpret Rule 11140(b) so that, if an 

issuer sets May 28, 2024 as the payment 

date for a large distribution, the exdividend date would be May 29, 2024, 

not May 28, 2024. BX will issue an 

Issuer Alert addressing the application 

of the T+1 implementation date on Rule 

11140(b). 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,7 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,8

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 

and, in general, to protect investors and 

the public interest. The proposed rule 

change seeks to conform BX’s rules with 

the adopted rule amendments to shorten 

the standard settlement cycle for most 

broker-dealer transactions from T+2 to 

T+1.9 The proposal is consistent with 

the Commission’s amendment to Rule 

15c6–1(a) of the Act to require standard 

settlement no later than T+1. This 

proposal will provide BX members with 

regulatory certainty as to the settlement 

cycle that will be utilized to settle 

transactions executed on the Exchange. 

As noted herein, BX will announce 

the operative date of the proposed rule 

change in an Equity Regulatory Alert, 

which date would correspond with the 

industry-led transition to a T+1 

standard settlement, and the compliance 

date of the Commission’s amendment to 

Rule 15c6–1(a) of the Act to require 

standard settlement no later than T+1. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The proposal 

amends BX’s rules pertaining to 

securities settlement and is intended to 

facilitate the implementation of the 

industry-led transition to a T+1 

settlement cycle. The shortened 

settlement cycle will apply uniformly to 

all contracts for the purchase or sale of 

a security (other than exempted 

securities) that provide for payment of 

funds and delivery of securities that 

occur on BX or other self-regulatory 

organizations.10 Moreover, the proposal 

is consistent with the Commission’s 

amendment to Rule 15c6–1(a) of the Act 

to require standard settlement no later 

than T+1. Accordingly, BX believes that 


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Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 81165 

11See supra note 3. 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 14 17 CFR 200.30–3(a)(12). 

the proposed amendments do not 

impose any intra-market or inter-market 

burdens on competition because the 

amendments conform BX’s rules with 

the adopted rule amendments to shorten 

the standard settlement cycle for most 

broker-dealer transactions from T+2 to 

T+1.11 Specifically, the proposed 

amendments include changes to rules 

that specifically establish the settlement 

cycle as well as rules that establish time 

frames based on settlement dates, 

including for certain post-settlement 

rights and obligations. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 12 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.13

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

BX–2023–028 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–BX–2023–028. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–BX–2023–028 and should be 

submitted on or before December 12, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25671 Filed 11–20–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–385, OMB Control No. 

3235–0441] 

Proposed Collection; Comment 

Request; Extension: Rule 18f–3 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (‘‘Paperwork 

Reduction Act’’), the Securities and 

Exchange Commission (the 

‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget (‘‘OMB’’) for 

extension and approval. 

Rule 18f–3 (17 CFR 270.18f–3) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a–1 et seq.) exempts from 

sections 18(f)(1) and 18(f)(i), a fund that 

issues multiple classes of shares 

representing interests in the same 

portfolio of securities (a ‘‘multiple class 

fund’’) if the fund satisfies the 

conditions of the rule. In general, each 

class must differ in its arrangement for 

shareholder services or distribution or 

both, must pay the related expenses of 

that different arrangement, and must 

satisfy certain voting rights provisions. 

The rule includes one requirement for 

the collection of information. A 

multiple class fund must prepare, and 

fund directors must approve, a written 

plan setting forth the separate 

arrangement and expense allocation of 

each class, and any related conversion 

features or exchange privileges (‘‘rule 

18f–3 plan’’). Approval of the plan must 

occur before the fund issues any shares 

of multiple classes and whenever the 

fund materially amends the plan. In 

approving the plan, the fund board, 

including a majority of the independent 

directors, must determine that the plan 

is in the best interests of each class and 

the fund as a whole. 

The requirement that the fund 

prepare, and directors approve, a 

written rule 18f–3 plan is intended to 

ensure that the fund compiles 

information relevant to the fairness of 

the separate arrangement and expense 

allocation for each class, and that 

directors review and approve the 

information. Without a blueprint that 

highlights material differences among 

classes, directors might not perceive 

potential conflicts of interests when 


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