Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31241 

47 17 CFR 240.17Ad–22(e)(7)(ii). 

48 17 CFR 240.17Ad–22(a)(14). 

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

2 17 CFR 240.19b–4. 

3Recently, the Exchange added a shell structure 

to its Rulebook with the purpose of improving 

efficiency and readability and to align its rules 

closer to those of its five sister exchanges: The 

Nasdaq Stock Market, LLC; Nasdaq PHLX LLC; 

Nasdaq ISE, LLC; Nasdaq GEMX, LLC; and Nasdaq 

MRX, LLC (together with BX, the ‘‘Affiliated 

Exchanges’’). See Securities Exchange Act Release 

No. 82174 (November 29, 2017), 82 FR 57492 

(December 5, 2017) (SR–BX–2017–054). 

4See Securities Exchange Act Release No. 34– 

82628 (Feb. 5, 2018). 83 FR 5818 (Feb. 9, 2018) (SR– 

BX–2018–006). 

payment obligations with a high degree 

of confidence under a wide range of 

foreseeable stress scenarios that 

includes, but is not limited to, the 

default of the participant family that 

would generate the largest aggregate 

payment of obligation for the covered 

clearing agency in extreme but plausible 

conditions.’’ 

As described above, the currently 

proposed credit facility would provide 

OCC with a readily available liquidity 

resource that would enable OCC to 

continue to meet its respective 

obligations in a timely fashion in the 

event of a Member default, thereby 

helping to contain losses and liquidity 

pressures from that default. 

Additionally, the currently proposed 

credit facility would allow OCC to avoid 

a gap in liquidity coverage and better 

allow OCC to continually maintain 

sufficient liquidity resources. Therefore, 

the Commission believes that the 

proposal is consistent with Rule 17Ad– 

22(e)(7)(i). 

Rule 17Ad–22(e)(7)(ii) under the Act 

requires OCC to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

hold qualifying liquid resources 

sufficient to satisfy payment obligations 

owed to clearing members.47 Rule 

17Ad–22(a)(14) of the Act defines 

‘‘qualifying liquid resources’’ to include, 

among other things, lines of credit 

without material adverse change 

provisions, that are readily available 

and convertible into cash.48 As 

described above, the currently proposed 

credit facility would permit OCC to 

enter into a single credit facility 

designed to help ensure that OCC has 

sufficient, readily-available qualifying 

liquid resources to meet the cash 

settlement obligations of its largest 

family of affiliated members. Therefore, 

the Commission believes that the 

proposal is consistent with Rule 17Ad– 

22(e)(7)(ii). 

VI. Conclusion 

It is therefore noticed, pursuant to 

Section 806(e)(1)(I) of the Clearing 

Supervision Act, that the Commission 

does not object to the advance notice 

SR–OCC–2018–802 and OCC can and 

hereby is authorized to implement the 

change as of the date of this notice. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–14233 Filed 7–2–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83535; File No. SR–BX– 

2018–024] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Relocate the 

Exchange’s Rules Pertaining to CoLocation and Direct Connectivity 

June 28, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on June 13, 

2018, 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 relocate the 

Exchange’s rules pertaining to colocation and direct connectivity, which 

are presently at Rules 7034 and 7051, to 

Sections 1 and 2, respectively, under a 

new General 8 (‘‘Connectivity’’) heading 

within the Exchange’s new rulebook 

shell, entitled ‘‘General Equity and 

Options Rules.’’ The Exchange also 

proposes to correct an error in Rule 

7051(b). 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaqbx.cchwallstreet.com/, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to relocate its 

rules governing co-location and direct 

connectivity services, which presently 

comprise Rules 7034 and 7051, 

respectively. The Exchange proposes to 

establish, within its new rulebook 

shell,3 a new General 8 heading, entitled 

‘‘Connectivity,’’ to renumber Rule 7034 

as Section 1 thereunder, and to 

renumber Rule 7051 as Section 2 

thereunder. The Exchange furthermore 

proposes to amend Rules 7011, 7025, 

7030, and Options Rules Chapter XV to 

update cross references therein to Rules 

7034 and 7051, as applicable. The 

Exchange also proposes to update 

internal cross-references in the 

renumbered Rules. 

The Exchange considers it appropriate 

to relocate these Rules to better organize 

its Rulebook. The other Affiliated 

Exchanges intend to propose similar 

reorganizations of their co-location and 

direct connectivity rules so that these 

rules will be harmonized among all of 

the Affiliated Exchanges. 

The relocation of the co-location and 

direct connectivity rules is part of the 

Exchange’s continued effort to promote 

efficiency and conformity of its 

processes with those of its Affiliated 

Exchanges. The Exchange believes that 

moving the co-location and direct 

connectivity rules to their new location 

will facilitate the use of the Rulebook by 

Members of the Exchange who are 

members of other Affiliated Exchanges. 

In addition to the above, the Exchange 

proposes to correct an error in Rule 

7051(b), entitled ‘‘Direct Circuit 

Connection to Third Party Services.’’ 

The Exchange recently amended Rule 

7051 in an attempt to harmonize it with 

the corresponding rules of the other 

Affiliated Exchanges.4 However, the 

Exchange recently discovered one 

remaining unintended discrepancy that 

it now proposes to remedy. The other 

Affiliated Exchanges waive installation 

and ongoing monthly fees for 10Gb 

Ultra and 1 GB Ultra direct circuit 


sradovich on DSK3GMQ082PROD with NOTICES
31242 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 

5See Nasdaq Rule 7051(b), Phlx Pricing Schedule 

Section XI(b), Nasdaq ISE Schedule of Fees Section 

VI.G, Nasdaq GEMX Schedule of Fees Section IV.D 

[sic], Nasdaq MRX Schedule of Fees Section VI.C. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12See supra notes 4–5 and accompanying text. 

13For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

connections to third party services for 

the first two connections per client to 

UTP SIP feeds only (UQDF and UTDF).5

The Exchange’s Rule does not presently 

provide for such waivers; it now 

proposes to amend the Rule so that it 

does so. With this amendment, Rule 

7051(b) will be substantially the same as 

the corresponding rules of the other 

Affiliated Exchanges. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,6 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,7

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest, by 

improving the way its Rulebook is 

organized, providing ease of reference in 

locating co-location and direct 

connectivity rules, and harmonizing the 

Exchange’s Rules with those of the other 

Affiliated Exchanges. As previously 

stated, the proposed Rule relocation is 

non-substantive. 

The Exchange also believes that it is 

in the interests of investors and the 

public to remedy unintended errors in 

the Exchange’s rules. Investors and the 

public have clear interests in the 

Exchange maintaining an accurate 

rulebook and schedule of fees. 

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 intermarket or intramarket competition that is not necessary 

or appropriate in furtherance of the 

purposes of the Act. The proposed 

changes to relocate the Exchange’s rules 

do not impose a burden on competition 

because, as previously stated, they (i) 

are of a non-substantive nature, (ii) are 

intended to harmonize the Exchange’s 

rules with those of its Affiliated 

Exchanges, and (iii) are intended to 

organize the Rulebook in a way that it 

will ease the Members’ navigation and 

reading of the rules across the Affiliated 

Exchanges. Likewise, the Exchange’s 

proposal to amend Rule 7051(b) will not 

burden competition because it merely 

corrects an unintended error and 

renders the Exchange’s fees identical to 

those that the other Affiliated Exchanges 

charge. 

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) of the Act 8 and Rule 19b– 

4(f)(6) thereunder.9

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 10 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 11

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has 

requested that the Commission waive 

the 30-day operative delay so that the 

proposed rule change may become 

operative upon filing. The proposed rule 

change merely relocates the Exchange’s 

co-location and direct connectivity 

rules, updates rule cross-references, and 

corrects unintended errors from a 

previous proposed rule change.12

Accordingly, the Commission believes 

that waiver of the 30-day operative 

delay is consistent with the protection 

of investors and the public interest and 

hereby waives the operative delay and 

designates the proposed rule change 

operative upon filing.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 

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– 

BX–2018–024 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–2018–024. 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 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31243 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 82357 (December 

19, 2017), 82 FR 61065 (December 26, 2017) (SR– 

ISE–2017–107). 

4 15 U.S.C. 78f(b). 

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

6 15 U.S.C. 78f(b)(8). 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 17 CFR 240.19b–4(f)(6). 

to make available publicly. All 

submissions should refer to File 

Number SR–BX–2018–024, and should 

be submitted on or before July 24, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14277 Filed 7–2–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83531; File No. SR–ISE– 

2018–57] 

Self-Regulatory Organizations; Nasdaq 

ISE LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the Penny 

Pilot Program 

June 28, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on June 25, 

2018, Nasdaq ISE LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I 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 its 

rules to extend a pilot program to quote 

and to trade certain options classes in 

penny increments (‘‘Penny Pilot 

Program’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://ise.cchwallstreet.com/, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Under the Penny Pilot Program, the 

minimum price variation for all 

participating options classes, except for 

the Nasdaq-100 Index Tracking Stock 

(‘‘QQQQ’’), the SPDR S&P 500 Exchange 

Traded Fund (‘‘SPY’’) and the iShares 

Russell 2000 Index Fund (‘‘IWM’’), is 

$0.01 for all quotations in options series 

that are quoted at less than $3 per 

contract and $0.05 for all quotations in 

options series that are quoted at $3 per 

contract or greater. QQQQ, SPY and 

IWM are quoted in $0.01 increments for 

all options series. The Penny Pilot 

Program is currently scheduled to 

expire on June 30, 2018.3 The Exchange 

proposes to extend the Penny Pilot 

Program through December 31, 2018, 

and to provide a revised date for adding 

replacement issues to the Penny Pilot 

Program. The Exchange proposes that 

any Penny Pilot Program issues that 

have been delisted may be replaced on 

the second trading day following July 1, 

2018. The replacement issues will be 

selected based on trading activity for the 

most recent six month period excluding 

the month immediately preceding the 

replacement (i.e., beginning December 

1, 2017, and ending May 31, 2018). This 

filing does not propose any substantive 

changes to the Penny Pilot Program: All 

classes currently participating will 

remain the same and all minimum 

increments will remain unchanged. The 

Exchange believes the benefits to public 

customers and other market participants 

who will be able to express their true 

prices to buy and sell options have been 

demonstrated to outweigh any increase 

in quote traffic. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6(b) of the Act.4

Specifically, the proposed rule change is 

consistent with Section 6(b)(5) of the 

Act,5 because it is designed to promote 

just and equitable principles of trade, 

remove impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. In particular, the 

proposed rule change, which extends 

the Penny Pilot Program for an 

additional six months, will enable 

public customers and other market 

participants to express their true prices 

to buy and sell options to the benefit of 

all market participants. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

the Act,6 the Exchange does not believe 

that the proposed rule change will 

impose any burden on intermarket or 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Specifically, 

the Exchange believes that, by extending 

the expiration of the Penny Pilot 

Program, the proposed rule change will 

allow for further analysis of the Penny 

Pilot Program and a determination of 

how the Penny Pilot Program should be 

structured in the future. In doing so, the 

proposed rule change will also serve to 

promote regulatory clarity and 

consistency, thereby reducing burdens 

on the marketplace and facilitating 

investor protection. 

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 7 and Rule 

19b–4(f)(6) thereunder.8 Because the 

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 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 


sradovich on DSK3GMQ082PROD with NOTICES