31804 Federal Register / Vol. 83, No. 131 / Monday, July 9, 2018 / Notices 

9Cboe Options Rule 24.9(a)(4). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change along with a brief 

description and the 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. 

12 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(7). 

2 17 CFR 240.19b–7. 

to represent the then-current index 

value, but does not incorporate the 

closing prices of the components that 

will be used to determine the settlement 

value. This creates risk for MarketMakers and other liquidity providers, as 

they have no data they can use to price 

the expiring options based on the 

ultimate settlement value. This may 

result in trades at prices inconsistent 

with the settlement value of those 

options. The proposed rule change 

removes impediments to and perfects 

the mechanism of a free and open 

market by eliminating this pricing risk 

for liquidity providers on the last 

trading day of expiring series in these 

products. The Exchange believes this 

may encourage additional liquidity 

providers to participate on the last 

trading of expiring series, which may 

provide more competitive pricing and 

additional trading opportunities for 

expiring series, and ultimately benefits 

investors. 

Other options stop trading on the 

business day preceding expiration. For 

example, the last day of trading for nonvolatility a.m.-settled index options is 

the business day preceding the 

expiration date.9

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Cboe Options 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. The 

proposed rule change will apply to all 

market participants that trade EAFE and 

EM options. As discussed above, the 

proposed rule change may eliminate a 

pricing risk for Market-Makers and other 

liquidity providers, which may provide 

more competitive pricing and additional 

trading opportunities for expiring series 

and ultimately benefit investors. The 

proposed rule change applies to EAFE 

and EM options, which only trade on 

Cboe Options. Other options stop 

trading on the business day preceding 

expiration. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 10 and Rule 19b–4(f)(6) 11

thereunder. 

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– 

CBOE–2018–048 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–CBOE–2018–048. 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–CBOE–2018–048 and 

should be submitted on or before July 

30, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14548 Filed 7–6–18; 8:45 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83589; File No. SR–NFA– 

2018–03] 

Self-Regulatory Organizations; 

National Futures Association; Notice 

of Filing and Immediate Effectiveness 

of Proposed Change to the Interpretive 

Notice to NFA Compliance Rule 2– 

30(b): Risk Disclosure Statement for 

Security Futures Contracts 

July 3, 2018. 

Pursuant to Section 19(b)(7) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’),1 and Rule 19b–7 

under the Exchange Act 2 notice is 

hereby given that on June 19, 2018, 

National Futures Association (‘‘NFA’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change described in 

Items I, II, and III below, which Items 

have been prepared by NFA. The 

Commission is publishing this notice to 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 131 / Monday, July 9, 2018 / Notices 31805 

3See letter from Matthew Kulkin, Director CFTC, 

to Carol A. Wooding, General Counsel, NFA 

(‘‘Letter’’). 

4 15 U.S.C 78o(b)(11). 

5 15 U.S.C. 78o–3(k). 

6 15 U.S.C. 78o(b)(11). 

7 Id. 8 15 U.S.C. 78o–3(k). 

solicit comments on the proposed rule 

change from interested persons. 

On June 7, 2018, NFA also filed this 

proposed rule change with the 

Commodity Futures Trading 

Commission (‘‘CFTC’’) and requested 

that the CFTC make a determination 

that review of the proposed rule change 

of NFA is not necessary. By letter dated 

June 18, 2018, the CFTC notified NFA 

of its determination not to review the 

proposed rule change.3

The text of the proposed rule change 

is available at the self-regulatory 

organization’s office, on the NFA’s 

website at www.nfa.futures.org, and at 

the SEC’s Public Reference Room. 

I. Self-Regulatory Organization’s 

Description and Text of the Proposed 

Rule Change 

NFA’s Interpretive Notice 9050 

entitled ‘‘NFA Compliance Rule 2– 

30(b): Risk Disclosure Statement for 

Security Futures Contracts’’ 

(‘‘Interpretive Notice 9050’’) requires 

NFA Members and Associates 

(‘‘Member’’) who are registered as 

brokers or dealers under Section 

15(b)(11) of the Exchange Act 4 to 

provide a disclosure statement for 

security futures products (‘‘SFPs’’) to a 

customer at or before the time the 

Member approves the account to trade 

SFPs. This risk disclosure statement 

contains, among other things, a section 

on settlement by physical delivery, 

which indicates that the normal 

clearance and settlement cycle for 

securities transactions is three business 

days. NFA is amending Section 5.2 of 

Interpretive Notice 9050 to update the 

disclosure statement for SFPs to reflect 

the shortened settlement cycle from 

three business days to two business 

days. 

NFA is also amending Section 6.1 of 

Interpretive Notice 9050 to reflect the 

current address for the Securities 

Investor Protection Corporation 

(‘‘SIPC’’). Further, NFA is amending 

Interpretive Notice 9050 to incorporate 

other non-substantive changes. The text 

of the proposed rule changes to 

Interpretive Notice 9050 is found in 

Exhibit 4. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for the Proposed Rule 

Change 

In its filing with the Commission, 

NFA 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. NFA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for the Proposed Rule 

Change 

1. Purpose 

Section 15A(k) of the Exchange Act 5

makes NFA a national securities 

association for the limited purpose of 

regulating the activities of NFA 

Members who are registered as brokers 

or dealers in security futures products 

under Section 15(b)(11) of the Exchange 

Act.6 NFA’s Interpretive Notice 9050 

applies to all NFA Members who meet 

the criteria outlined in Interpretive 

Notice 9050, including those that are 

registered as security futures brokers or 

dealers under Section 15(b)(11) of the 

Exchange Act.7

The risk disclosure statement for SFPs 

is a uniform statement that was jointly 

developed in 2002 by NFA, FINRA, and 

a number of securities and futures 

exchanges. The statement discusses the 

characteristics and risk of standardized 

security futures contracts traded on 

regulated U.S. exchanges and indicates 

that the settlement by physical delivery 

is three business days. 

On September 5, 2017, the securities 

industry moved from a T+3 settlement 

cycle to a T+2 settlement cycle for inscope securities trades, including U.S. 

equity trades. Accordingly, NFA’s 

amendment to Section 5.2 of 

Interpretive Notice 9050 is nothing more 

than a technical amendment to update 

the disclosure statement for SFPs to 

reflect the shortened settlement cycle 

from three business days to two 

business days. 

NFA is also amending Section 6.1 of 

Interpretive Notice 9050 to provide the 

current contact information for SIPC 

and to change the spelling of ‘‘broker/ 

dealer’’ to ‘‘broker-dealer’’. To 

incorporate other non-substantive 

changes, NFA is amending Interpretive 

Notice 9050 in Section 2.4 to correct a 

cross-reference and in Section 8.2 to 

remove an extraneous word. FINRA has 

amended and submitted the proposed 

changes to the SEC for approval. 

Amendments to NFA Interpretive 

Notice 9050 were previously filed with 

the SEC in SR–NFA–2002–05, Exchange 

Act Release No. 34–46613 (Oct. 7, 2002), 

67 FR 64176 (Oct. 17, 2002); SR–NFA– 

2002–06, Exchange Act Release No. 34– 

47150 (Jan. 9, 2003), 68 FR 2381 (Jan. 

16, 2003); SR–NFA–2007–07, Exchange 

Act Release No. 34–57142 (Jan. 14, 

2008), 73 FR 3502 (Jan. 18, 2008); SR– 

NFA–2010–02, Exchange Act Release 

No. 34–62624 (Aug. 2, 2010), 75 FR 

47666 (Aug. 6, 2010); SR–NFA–2010– 

03, Exchange Act Release No. 34–62651 

(Aug. 4, 2010), 75 FR 48393 (Aug. 10, 

2010); and SR–NFA–2014–02, Exchange 

Act Release No. 34–71980 (Apr. 21, 

2014), 79 FR 23027 (Apr. 25, 2014) . 

2. Statutory Basis 

The proposed rule change is 

authorized by, and consistent with, 

Section 15A(k)(2)(B) of the Exchange 

Act.8 That Section requires NFA to have 

rules that are designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest, 

including rules governing sales 

practices and advertising of security 

futures products. The proposed rule 

change accomplishes this by requiring 

Members to provide customers trading 

in SFPs with a risk disclosure statement 

which reflects the shortened settlement 

date of two days after the transaction. 

Accordingly, NFA is amending 

Interpretive Notice 9050 to update the 

disclosure statement for SFPs to reflect 

the shortened settlement cycle from T+3 

to T+2. Further, NFA is amending 

Interpretive Notice 9050 to reflect the 

updated contact information for SIPC 

and other non-substantive stylistic 

changes. This proposal is not designed 

to regulate, by virtue of any authority 

conferred by the Exchange Act, matters 

not related to the purposes of the 

Exchange Act or the administration of 

the association. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NFA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed change would not impose any 

additional reporting requirements or 

costs on Members. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

NFA did not publish the rule change 

to the membership for comment. NFA 


sradovich on DSK3GMQ082PROD with NOTICES
31806 Federal Register / Vol. 83, No. 131 / Monday, July 9, 2018 / Notices 

9See Letter, Supra note 3. 

10 15 U.S.C. 78s(b)(1). 

11 17 CFR 200.30–3(a)(73). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 15 U.S.C. 78s(b)(1). 

5 17 CFR 240.19b–4. 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4. 

did not receive comment letters 

concerning the rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

On June 18, 2018, the CFTC notified 

NFA of its determination not to review 

the proposed rule change.9 The 

proposed rule change will become 

effective on July 18, 2018. 

At any time within 60 days of the date 

of effectiveness of the proposed rule 

change, the Commission, after 

consultation with the CFTC, may 

summarily abrogate the proposed rule 

change and require that the proposed 

rule change be refiled in accordance 

with the provisions of Section 19(b)(1) 

of the Exchange Act.10

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 Exchange 

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– 

NFA–2018–03 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–NFA–2018–03. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of NFA. 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 

publicly available. All submissions 

should refer to File Number SR–NFA– 

2018–03 and should be submitted on or 

before July 30, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14669 Filed 7–6–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83586; File No. SR–IEX– 

2018–12] 

Self-Regulatory Organizations: 

Investors Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

Rule 11.420 Concerning the Order 

Audit Trail System Requirements To 

Make Conforming and Technical 

Changes 

July 2, 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 June 21, 

2018, the Investors Exchange LLC 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory 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 Substance of 

the Proposed Rule Change 

Pursuant to the provisions of Section 

19(b)(1) under the Act,4 and Rule 19b– 

4 thereunder,5 the Exchange is filing 

with the Commission a proposed rule 

change to amend Rule 11.420 

concerning the Order Audit Trail 

System (‘‘OATS’’) requirements to make 

conforming and technical changes. The 

Exchange has designated this rule 

change as ‘‘non-controversial’’ under 

Section 19(b)(3)(A) of the Act 6 and 

provided the Commission with the 

notice required by Rule 19b–4(f)(6) 

thereunder.7

The text of the proposed rule change 

is available at the Exchange’s website at 

www.iextrading.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 the 

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 these statement [sic] may be 

examined at the places specified in Item 

IV below. The self-regulatory 

organization 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to make 

three changes to Rule 11.420 related to 

OATS reporting requirements to (1) 

amend Rule 11.420(a)(13) to permit 

members to route orders to two 

Reporting Members for a defined period 

of time provided certain conditions are 

met without losing the exception from 

the definition of ‘‘Reporting Member’’ in 

conformance to comparable provisions 

of the Financial Industry Regulatory 

Authority (‘‘FINRA’’) Rule 7410; (2) 

amend rule citations in Rule 11.420(c) 

to correct [sic] citation to FINRA Rule 

7430 to FINRA Rule 4590; and (3) 

amend the rule reference in Rule 

11.420(g) to correct the reference to 

FINRA Rule 7470A to FINRA Rule 7470. 

Each proposed change is described 

below. 

First Change 

IEX Rule 11.420 imposes an 

obligation on Exchange Members to 

record in electronic form and report to 

FINRA on a daily basis certain 


sradovich on DSK3GMQ082PROD with NOTICES