Federal Register / Vol. 83, No. 110 / Thursday, June 7, 2018 / Notices 26511 

3The 974 responses are: 1 (one) response to draft 

and adopt the resolution and 973 notations. 

Estimates of the number of hours are based on 

conversations with individuals in the fund 

industry. The actual number of hours may vary 

significantly depending on individual fund assets. 

4This estimate is based on the following 

calculation: 0.5 (burden hours per fund) × $204 

(senior accountant’s hourly rate) = $102. Unless 

otherwise indicated, the hourly wage figures used 

herein are from the Securities Industry and 

Financial Markets Association’s Management & 

Professional Earnings in the Securities Industry 

2013, modified by Commission staff to account for 

an 1800-hour work-year and inflation, and 

multiplied by 5.35 to account for bonuses, firm size, 

employee benefits and overhead. 

5The estimate for the cost of board time as a 

whole is derived from estimates made by the staff 

regarding typical board size and compensation that 

is based on information received from fund 

representatives and publicly available sources. 

6Respondents estimated that each fund makes 

974 responses on an annual basis and spends a total 

of 0.25 hours per response. The fund personnel 

involved are Accounts Payable Manager ($192 

hourly rate), Operations Manager ($345 hourly rate) 

and Accounting Manager ($274 hourly rate). The 

average hourly rate of these personnel is $270. The 

estimated cost of preparing notations is based on 

the following calculation: 974 × 0.25 × $270 = 

$65,745. 

7This estimate is based on the following 

calculation: 7 × $204 (senior accountant’s hourly 

rate) = $1,428. 

8On average, each year approximately 206 funds 

filed Form N–17f–2 with the Commission during 

calendar years 2015–2017. 

9This estimate is based on the following 

calculation: 206 (funds) × 252 (total annual hourly 

burden per fund) = 51,912 hours for rule. The 

annual burden for rule 17f–2 does not include time 

spent preparing Form N–17f–2. The burden for 

Form N–17f–2 is included in a separate collection 

of information. 

10This estimate is based on the following 

calculation: $65,745 (total annual cost per fund) × 

206 funds = $13,543,470. 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Rule 17f–2’s requirement that 

directors designate access persons is 

intended to ensure that directors 

evaluate the trustworthiness of insiders 

who handle fund assets. The 

requirements that access persons act 

jointly in handling fund assets, prepare 

a written notation of each transaction, 

and transmit the notation to another 

designated person are intended to 

reduce the risk of misappropriation of 

fund assets by access persons, and to 

ensure that adequate records are 

prepared, reviewed by a responsible 

third person, and available for 

examination by the Commission. The 

requirement that auditors verify fund 

assets without notice twice each year is 

intended to provide an additional 

deterrent to the misappropriation of 

fund assets and to detect any 

irregularities. 

The Commission staff estimates that 

each fund makes 974 responses and 

spends an average of 252 hours annually 

in complying with the rule’s 

requirements.3 Commission staff 

estimates that on an annual basis it 

takes: (i) 0.5 hours of fund accounting 

personnel at a total cost of $102 to draft 

director resolutions; 4 (ii) 0.5 hours of 

the fund’s board of directors at a total 

cost of $2,233 to adopt the resolution; 5

(iii) 244 hours for the fund’s accounting 

personnel at a total cost of $65,745 to 

prepare written notations of 

transactions; 6 and (iv) 7 hours for the 

fund’s accounting personnel at a total 

cost of $1,428 to assist the independent 

public accountants when they perform 

verifications of fund assets.7

Commission staff estimates that 

approximately 206 funds file Form N– 

17f–2 each year.8 Thus, the total annual 

hour burden for rule 17f–2 is estimated 

to be 51,912 hours.9 Based on the total 

costs per fund listed above, the total 

cost of rule 17f–2’s collection of 

information requirements is estimated 

to be approximately $13.5 million.10

The estimate of average burden hours 

is made solely for the purposes of the 

Paperwork Reduction Act, and is not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules and forms. 

Complying with the collections of 

information required by rule 17f–2 is 

mandatory for those funds that maintain 

custody of their own assets. Responses 

will not be kept confidential. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless it 

displays a currently valid control 

number. 

The public may view the background 

documentation for this information 

collection at the following website, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) Pamela 

Dyson, Director/Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

100 F Street NE, Washington, DC 20549 

or send an email to: PRA_Mailbox@

sec.gov. Comments must be submitted to 

OMB within 30 days of this notice. 

Dated: June 1, 2018. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12192 Filed 6–6–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83360; File No. SR–NYSE– 

2018–24] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

NYSE Proprietary Market Data Fee 

Schedule Regarding the NYSE Best 

Quote and Trades Market Data Feed 

June 1, 2018. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on May 21, 

2018, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE Proprietary Market Data Fee 

Schedule (‘‘Fee Schedule’’) regarding 

the NYSE Best Quote and Trades 

(‘‘BQT’’) market data feed. The 

Exchange proposes to make the fee 

change effective May 21, 2018. The 

proposed rule change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 those 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 parts of such 

statements. 


sradovich on DSK3GMQ082PROD with NOTICES
26512 Federal Register / Vol. 83, No. 110 / Thursday, June 7, 2018 / Notices 

4See Securities Exchange Act Release No. 34– 

73553 (Nov. 6, 2014), 79 FR 67491 (Nov. 13, 2014) 

(SR–NYSE–2014–40) (‘‘NYSE BQT Approval 

Order’’). 

5See SR–NYSE–2018–22. 

6See SR–NYSENat–2018–09. 

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

8 15 U.S.C. 78f(b)(4), (5). 

9 15 U.S.C. 78k–1. 

10See 17 CFR 242.603. 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(2). 13 78 U.S.C. 78f(b)(8). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule regarding the NYSE BQT 

market data feed. The NYSE BQT data 

feed provides best bid and offer and last 

sale information for the Exchange and 

its affiliates, NYSE Arca, Inc. (‘‘NYSE 

Arca’’) and NYSE American LLC 

(‘‘NYSE American’’).4 In connection 

with the re-launch of operations of 

another affiliate of the Exchange, NYSE 

National, Inc. (‘‘NYSE National’’), the 

Exchange recently filed a proposed rule 

change to amend the content of the 

NYSE BQT market data feed 5 to include 

NYSE National BBO and NYSE National 

Trades market data feeds.6

The Exchange currently charges an 

access fee of $250 per month for the 

NYSE BQT data feed. The Exchange is 

not proposing any change to the access 

fee. The purpose of this filing is to 

amend footnote 5 to the Fee Schedule to 

provide that to subscribe to NYSE BQT, 

subscribers must also subscribe to, and 

pay applicable fees for, NYSE National 

BBO and NYSE Trades in addition to 

subscribing to, and paying for, NYSE 

BBO, NYSE Trades, NYSE Arca BBO, 

NYSE Arca Trades, NYSE American 

BBO and NYSE American Trades. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,7

in general, and Sections 6(b)(4) and 

6(b)(5) of the Act,8 in particular, in that 

it provides an equitable allocation of 

reasonable fees among its members, 

issuers, and other persons using its 

facilities and is not designed to permit 

unfair discrimination among customers, 

issuers, brokers, or dealers. The 

Exchange also believes that the 

proposed rule change is consistent with 

Section 11(A) of the Act 9 in that it is 

consistent with (i) fair competition 

among brokers and dealers, among 

exchange markets, and between 

exchange markets and markets other 

than exchange markets; and (ii) the 

availability to brokers, dealers, and 

investors of information with respect to 

quotations for and transactions in 

securities. Furthermore, the proposed 

rule change is consistent with Rule 603 

of Regulation NMS,10 which provides 

that any national securities exchange 

that distributes information with respect 

to quotations for or transactions in an 

NMS stock do so on terms that are not 

unreasonably discriminatory. 

The Exchange further believes that 

requiring market data recipients to 

separately subscribe to and pay for the 

eight underlying data feeds to NYSE 

BQT is reasonable because by design, 

NYSE BQT represents an aggregated and 

consolidated version of those existing 

eight data feeds. The Exchange notes 

that it is not seeking with this filing to 

establish fees relating to the underlying 

BBO and Trades data feeds, as those fees 

have already been established consistent 

with Section 19(b)(3)(A) of the Act 11

and Rule 19b–4(f)(2) 12 thereunder, and 

which may be amended from time to 

time. However, the Exchange believes it 

would be unfair if it did not require 

NYSE BQT data feed recipients to 

separately subscribe to and pay for those 

underlying feeds because otherwise, 

NYSE BQT data feed recipients would 

be receiving a data product that 

includes such underlying data at a 

lower cost than separately subscribing 

to the underlying data feeds. The 

Exchange therefore believes that the fee 

structure for NYSE BQT would not be 

lower than the cost to another party to 

create a comparable product, including 

the cost of receiving the underlying data 

feeds. 

The Exchange further believes that the 

proposed NYSE BQT fee structure is 

equitable and not unfairly 

discriminatory because all vendors and 

subscribers that elect to purchase NYSE 

BQT would be subject to the same fees. 

In addition, vendors and subscribers 

that do not wish to purchase NYSE BQT 

may separately purchase the individual 

underlying data feed, and if they so 

choose, perform a similar aggregation 

and consolidation function that the 

Exchange performs in creating NYSE 

BQT. To enable such competition, the 

Exchange would continue to offer NYSE 

BQT on terms that a subscriber of the 

underlying feeds could offer a 

competing product if it so chooses. 

The Exchange also notes that the use 

of NYSE BQT is entirely optional. Firms 

have a wide variety of alternative 

market data products from which to 

choose, including the Exchanges’ own 

underlying data products, and 

proprietary data products offered by the 

Exchange’s competitors, and 

consolidated data. Moreover, the 

Exchange is not required to make any 

proprietary data products available or to 

offer any specific pricing alternatives to 

any customers. 

As explained below in the Exchange’s 

Statement on Burden on Competition, 

the existence of alternatives to these 

data products further ensures that the 

Exchange cannot set unreasonable fees, 

or fees that are unreasonably 

discriminatory, when vendors and 

subscribers can elect such alternatives. 

That is, the Exchange competes with 

other exchanges (and their affiliates) 

that provide similar ‘‘best quote and 

trade’’ market data products. If another 

exchange (or its affiliate) were to charge 

less to consolidate and distribute its 

similar product than the Exchange 

charges to consolidate and distribute 

NYSE BQT, prospective users likely 

would not subscribe to, or would cease 

subscribing to, NYSE BQT. In addition, 

the Exchange would compete with 

unaffiliated market data vendors who 

would be in a position to consolidate 

and distribute the same data that 

comprises the NYSE BQT feed into the 

vendor’s own comparable market data 

product. If the third-party vendor is able 

to provide the exact same data for a 

lower cost, prospective users would 

avail themselves of that lower cost and 

elect not to take NYSE BQT. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,13 the Exchange does not believe 

that the proposed rule change will 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

As noted above, the NYSE BQT data 

feed represents aggregated and 

consolidated information of eight 

existing market data feeds. Although the 

Exchange, NYSE Arca, NYSE American 

and NYSE National are the exclusive 

distributors of the underlying BBO and 

Trades feeds from which certain data 

elements are taken to create NYSE BQT, 

the Exchange may not be the exclusive 

distributor of the aggregated and 

consolidated information that comprises 

the NYSE BQT data feed. Any other 

market data recipient of the underlying 

data feeds would be able, if they chose, 

to create a data feed with the same 

information as NYSE BQT and 

distribute it to their clients on a level 

playing field with respect to latency and 

cost as compared to the Exchange’s 

product. 

The market for proprietary data 

products is competitive and inherently 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 110 / Thursday, June 7, 2018 / Notices 26513 

14 ‘‘Press Release, U.S. Department of Justice, 

Assistant Attorney General Christine Varney Holds 

Conference Call Regarding NASDAQ OMX Group 

Inc. and IntercontinentalExchange Inc. Abandoning 

Their Bid for NYSE Euronext (May 16, 2011), 

available at http://www.justice.gov/iso/opa/atr/ 

speeches/2011/at-speech-110516.html; see also 

Complaint in U.S. v. Deutsche Borse AG and NYSE 

Euronext, Case No. 11–cv–2280 (D.C. Dist.) ¶ 24 

(‘‘NYSE and Direct Edge compete head-to-head . . . 

in the provision of real-time proprietary equity data 

products.’’). 

15Concept Release on Equity Market Structure, 

Securities Exchange Act Release No. 61358 (Jan. 14, 

2010), 75 FR 3594 (Jan. 21, 2010) (File No. S7–02– 

10). This Concept Release included data from the 

third quarter of 2009 showing that no market center 

traded more than 20% of the volume of listed 

stocks, further evidencing the dispersal of and 

competition for trading activity. Id. at 3598. Data 

available on ArcaVision show that from June 30, 

2013 to June 30, 2014, no exchange traded more 

than 12% of the volume of listed stocks by either 

trade or dollar volume, further evidencing the 

continued dispersal of and fierce competition for 

trading activity. See https://www.arcavision.com/ 

Arcavision/arcalogin.jsp. 

16Mary Jo White, Enhancing Our Equity Market 

Structure, Sandler O’Neill & Partners, L.P. Global 

Exchange and Brokerage Conference (June 5, 2014) 

(available on the Commission website), citing 

Tuttle, Laura, 2014, ‘‘OTC Trading: Description of 

Non-ATS OTC Trading in National Market System 

Stocks,’’ at 7–8. 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(2). 

19 15 U.S.C. 78s(b)(2)(B). 

contestable because there is fierce 

competition for the inputs necessary for 

the creation of proprietary data and 

strict pricing discipline for the 

proprietary products themselves. 

Numerous exchanges compete with one 

another for listings and order flow and 

sales of market data itself, providing 

ample opportunities for entrepreneurs 

who wish to compete in any or all of 

those areas, including producing and 

distributing their own market data. 

Proprietary data products are produced 

and distributed by each individual 

exchange, as well as other entities, in a 

vigorously competitive market. Indeed, 

the U.S. Department of Justice (‘‘DOJ’’) 

(the primary antitrust regulator) has 

expressly acknowledged the aggressive 

actual competition among exchanges, 

including for the sale of proprietary 

market data. In 2011, the DOJ stated that 

exchanges ‘‘compete head to head to 

offer real-time equity data products. 

These data products include the best bid 

and offer of every exchange and 

information on each equity trade, 

including the last sale.’’ 14

Moreover, competitive markets for 

listings, order flow, executions, and 

transaction reports impose pricing 

discipline for the inputs of proprietary 

data products and therefore constrain 

markets from overpricing proprietary 

market data. Broker-dealers send their 

order flow and transaction reports to 

multiple venues, rather than providing 

them all to a single venue, which in turn 

reinforces this competitive constraint. 

As a 2010 Commission Concept Release 

noted, the ‘‘current market structure can 

be described as dispersed and complex’’ 

with ‘‘trading volume . . . dispersed 

among many highly automated trading 

centers that compete for order flow in 

the same stocks’’ and ‘‘trading centers 

offer[ing] a wide range of services that 

are designed to attract different types of 

market participants with varying trading 

needs.’’ 15 More recently, former SEC 

Chair Mary Jo White reported that 

competition for order flow in exchangelisted equities is ‘‘intense’’ and divided 

among many trading venues, including 

exchanges, more than 40 alternative 

trading systems, and more than 250 

broker-dealers.16 And as the 

Commission’s own Chief Administrative 

Law Judge found after considering 

extensive fact and expert testimony and 

documentary evidence on the subject, 

‘‘there is fierce competition for trading 

services (or ‘order flow’)’’ among 

exchanges, and ‘‘the record evidence 

shows that competition plays a 

significant role in restraining exchange 

pricing of depth-of-book products.’’ In 

the Matter of the Application of 

Securities Industry And Financial 

Markets Association For Review of 

Actions Taken By Self-Regulatory 

Organizations, Initial Decision Release 

No. 1015, Administrative Proceeding 

File No. 3–15350 (June 1, 2016), at pp. 

8 and 33. 

If an exchange succeeds in competing 

for quotations, order flow, and trade 

executions, then it earns trading 

revenues and increases the value of its 

proprietary market data products 

because they will contain greater quote 

and trade information. Conversely, if an 

exchange is less successful in attracting 

quotes, order flow, and trade 

executions, then its market data 

products may be less desirable to 

customers in light of the diminished 

content and data products offered by 

competing venues may become more 

attractive. Thus, competition for 

quotations, order flow, and trade 

executions puts significant pressure on 

an exchange to maintain both execution 

and data fees at reasonable levels. 

In addition, in the case of products 

that are also redistributed through 

market data vendors, such as Bloomberg 

and Thompson Reuters, the vendors 

themselves provide additional price 

discipline for proprietary data products 

because they control the primary means 

of access to certain end users. These 

vendors impose price discipline based 

upon their business models. For 

example, vendors that assess a 

surcharge on data they sell are able to 

refuse to offer proprietary products that 

their end users do not or will not 

purchase in sufficient numbers. Vendors 

will not elect to make NYSE BQT 

available unless their customers request 

it, and customers will not elect to pay 

for NYSE BQT unless the product can 

provide value by sufficiently increasing 

revenues or reducing costs in the 

customer’s business in a manner that 

will offset the fees. All of these factors 

operate as constraints on pricing 

proprietary data products. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 17 of the Act and 

subparagraph (f)(2) of Rule 19b–4 18

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 

under Section 19(b)(2)(B) 19 of the Act 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– 

NYSE–2018–24 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 


sradovich on DSK3GMQ082PROD with NOTICES
26514 Federal Register / Vol. 83, No. 110 / Thursday, June 7, 2018 / Notices 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. FICC also filed the Proposed 

Rule Change as advance notice SR–FICC–2018–801 

(‘‘Advance Notice’’) pursuant to Section 806(e)(1) of 

the Payment, Clearing, and Settlement Supervision 

Act of 2010, 12 U.S.C. 5465(e)(1), and Rule 19b– 

4(n)(1)(i) under the Exchange Act, 17 CFR 240.19b– 

4(n)(1)(i). Notice of Filing of the Advance Notice 

was published for comment in the Federal Register 

on March 2, 2018. Securities Exchange Act Release 

No. 82779 (February 26, 2018), 83 FR 9055 (March 

2, 2018) (SR–FICC–2018–801). The Commission 

extended the deadline for its review period of the 

Advance Notice for an additional 60 days on March 

7, 2018. Securities Exchange Act Release No. 82820 

(March 7, 2018), 83 FR 10761 (March 12, 2018) (SR– 

FICC–2018–801). On April 25, 2018, FICC filed 

Amendment No.1 to the Advance Notice. Available 

at https://www/sec/gov/comments/sr-ficc-2018-801/ 

ficc2018801.htm. The Commission issued a notice 

of filing of Amendment No. 1 and notice of no 

objection to the Advance Notice, as modified by 

Amendment No. 1, on May 11, 2018. Securities 

Exchange Act Release No. 83223 (May 11, 2018), 83 

FR 23020 (May 17, 2018). 

3Securities Exchange Act Release No. 82588 

(January 26, 2018), 83 FR 4687 (February 1, 2018) 

(SR–FICC–2018–001). 

4Letter from Robert E. Pooler, Chief Financial 

Officer, Ronin Capital LLC (‘‘Ronin’’), dated 

February 22, 2018, to Robert W. Errett, Deputy 

Secretary, Commission (‘‘Ronin Letter I’’); letter 

from Michael Santangelo, Chief Financial Officer, 

Amherst Pierpont Securities LLC (‘‘Amherst’’), 

dated February 22, 2018, to Brent J. Fields, 

Secretary, Commission (‘‘Amherst Letter I’’); letter 

from Timothy Cuddihy, Managing Director, FICC, 

dated March 19, 2018, to Robert W. Errett, Deputy 

Secretary, Commission (‘‘FICC Letter I’’); letter from 

James Tabacchi, Chairman, Independent Dealer and 

Trader Association (‘‘IDTA’’), dated March 29, 

2018, to Eduardo A. Aleman, Assistant Secretary, 

Commission (‘‘IDTA Letter’’); letter from Michael 

Santangelo, Chief Financial Officer, Amherst 

Pierpont Securities LLC, dated April 4, 2018, to 

Brent J. Fields, Secretary, Commission (‘‘Amherst 

Letter II’’); letter from Levent Kahraman, Chief 

Executive Officer, KGS-Alpha Capital Markets 

(‘‘KGS’’), dated April 4, 2018, to Brent J. Fields, 

Secretary, Commission (‘‘KGS Letter’’); letter from 

Timothy Cuddihy, Managing Director, FICC, dated 

April 13, 2018, to Robert W. Errett, Deputy 

Secretary, Commission (‘‘FICC Letter II’’); and letter 

from Robert E. Pooler, Chief Financial Officer, 

Ronin, dated April 13, 2018, to Eduardo A. Aleman, 

Assistant Secretary, Commission (‘‘Ronin Letter 

II’’). Since the proposal contained in the Proposed 

Rule Change was also filed as an Advance Notice, 

supra note 2, the Commission is considering all 

public comments received on the proposal 

regardless of whether the comments were submitted 

to the Advance Notice or the Proposed Rule 

Change. 

5See Securities Exchange Act Release No. 34– 

82876 (March 14, 2018), 83 FR 12229 (March 20, 

2018) (SR–FICC–2018–001). The order instituting 

proceedings re-opened the comment period and 

extended the Commission’s period of review of the 

Proposed Rule Change. See id. 

6Available at https://www.sec.gov/comments/srficc-2018-001/ficc2018001.htm. FICC filed related 

amendments to the related Advance Notice. Supra 

note 2. 

7Available at http://www.dtcc.com/legal/rulesand-procedures. 

8Notice, supra note 3, at 4688. 

9 GCF Repo Transactions refer to transactions 

made on FICC’s GCF Repo Service that enable 

dealers to trade general collateral repos, based on 

rate, term, and underlying product, throughout the 

day, without requiring intra-day, trade-for-trade 

settlement on a Delivery-versus-Payment basis. Id. 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2018–24. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

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–NYSE–2018–24, and 

should be submitted on or before June 

28, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12194 Filed 6–6–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83362; File No. SR–FICC– 

2018–001] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing of Amendment No. 1 and Order 

Granting Accelerated Approval of a 

Proposed Rule Change, as Modified by 

Amendment No. 1, To Implement 

Changes to the Required Fund Deposit 

Calculation in the Government 

Securities Division Rulebook 

June 1, 2018. 

I. Introduction 

The Fixed Income Clearing 

Corporation (‘‘FICC’’) filed with the U.S. 

Securities and Exchange Commission 

(‘‘Commission’’) on January 12, 2018 

proposed rule change SR–FICC–2018– 

001 (‘‘Proposed Rule Change’’) pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

Act’’) 1 and Rule 19b–4 thereunder.2 The 

Proposed Rule Change was published 

for comment in the Federal Register on 

February 1, 2018.3 The Commission 

received eight comments on the 

proposal.4 On March 14, 2018, the 

Commission issued an order instituting 

proceedings to determine whether to 

approve or disapprove the Proposed 

Rule Change.5 On April 25, 2018, FICC 

filed Amendment No. 1 to the Proposed 

Rule Change (‘‘Amendment No. 1’’).6

The Commission is publishing this 

notice to solicit comment on 

Amendment No. 1 from interested 

persons and to approve the Proposed 

Rule Change, as modified by 

Amendment No. 1, on an accelerated 

basis. 

II. Description of the Proposed Rule 

Change 

FICC proposes to change the FICC 

GSD Rulebook (‘‘GSD Rules’’) 7 to adjust 

GSD’s method of calculating GSD 

netting members’ (‘‘Members’’) margin.8

Specifically, FICC proposes to (1) 

change GSD’s method of calculating the 

Value-at-Risk (‘‘VaR’’) Charge 

component; (2) add a new component 

referred to as the ‘‘Blackout Period 

Exposure Adjustment;’’ (3) eliminate the 

existing Blackout Period Exposure 

Charge and the Coverage Charge 

components; (4) adjust the existing 

Backtesting Charge component to (i) 

include the backtesting deficiencies of 

certain GCF Repo Transaction 9

counterparties during the Blackout 

Period, and (ii) give GSD the ability to 

assess the Backtesting Charge on an 

intraday basis for all Members; and (5) 

adjust the calculation for determining 


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