Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices 37569 

36 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. 83272 

(May 17, 2018), 83 FR 23978. 

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

5See Securities Exchange Act Release No. 83595, 

83 FR 32158 (July 11, 2018). The Commission 

designated August 21, 2018 as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

approve or disapprove, the proposed rule change. 

6See Letter to Brent J. Fields, Secretary, 

Commission, from Sal Arnuk and Joe Saluzzi, 

Partners, Co-Founders, and Co-Heads of Equity 

Trading, Themis Trading LLC, dated June 12, 2018. 

7See Letter to Brent J. Fields, Secretary, 

Commission, from Brett M. Kitt, Senior Associate 

General Counsel, Nasdaq, dated July 10, 2018. 

its investment objective and to equitize 

cash in the short term. 

With respect to any Fund holdings of 

exchange-traded or OTC equity 

securities issued upon conversion of 

fixed income convertible securities and 

Work Out Securities, such securities 

will not exceed 10% and 5%, 

respectively, of the Fund’s total assets. 

The Adviser and Sub-Adviser represent 

that the Fund generally will not actively 

invest in equity securities issued upon 

conversion of fixed income convertible 

securities or Work Out Securities, but 

may, at times, receive a distribution of 

such securities in connection with the 

Fund’s holdings in other securities. 

Therefore, the Fund’s holdings in equity 

securities issued upon conversion of 

fixed income convertible securities and 

Work Out Securities generally would 

not be acquired as the result of the 

Fund’s voluntary investment decisions. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of shares of an additional type of 

actively-managed exchange-traded 

product that will enhance competition 

among market participants, to the 

benefit of investors and the marketplace. 

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 that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The Exchange 

notes that the proposed rule change will 

facilitate the listing and trading of an 

additional type of actively-managed 

exchange-traded product that 

principally will hold fixed income 

securities and that will enhance 

competition among market participants, 

to the benefit of investors and the 

marketplace. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

NYSEArca–2018–43 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–NYSEArca-2018–43. 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–NYSEArca–2018–43 and 

should be submitted on or before 

August 22, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16424 Filed 7–31–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83721; File No. SR– 

NASDAQ–2018–038] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Withdrawal of Proposed Rule Change 

To Amend Rule 4702(b)(14) To 

Establish a Price Improvement Only 

Variation on the Midpoint Extended 

Life Order 

July 26, 2018. 

On May 4, 2018, The Nasdaq Stock 

Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

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

19b–4 thereunder,2 a proposed rule 

change to establish a price improvement 

only variation on the Midpoint 

Extended Life Order. The proposed rule 

change was published for comment in 

the Federal Register on May 23, 2018.3

On July 5, 2018, pursuant to Section 

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

designated a longer period within which 

to approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change.5 The Commission 

received one comment letter on the 

proposed rule change 6 and one 

response letter from the Exchange.7 On 

July 23, 2018, the Exchange withdrew 


sradovich on DSK3GMQ082PROD with NOTICES
37570 Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices 

8 17 CFR 200.30–3(a)(12). 

1 12 U.S.C. 5465(e)(1). 

2 17 CFR 240.19b–4(n)(1)(i). 

3 15 U.S.C. 78a et seq. 

4See Notice of Filing infra note 6, at 83 FR 31594. 

5 In Amendment No. 1, OCC corrected formatting 

errors in Exhibits 5A and 5B without changing the 

substance of the proposed rule change. 

6Securities Exchange Act Release No. 83561 (Jun. 

29, 2018), 83 FR 31594 (Jul. 6, 2018) (‘‘Notice of 

Filing’’). On May 30, 2018, OCC also filed a related 

proposed rule change (SR–OCC–2018–008) with the 

Commission pursuant to Section 19(b)(1) of the 

Exchange Act and Rule 19b–4 thereunder, seeking 

approval of changes to its rules necessary to 

implement the Advance Notice (‘‘Proposed Rule 

Change’’). 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b– 

4, respectively. The Proposed Rule Change was 

published in the Federal Register on June 15, 2018. 

Securities Exchange Act Release No. 83406 (Jun. 11, 

2018), 83 FR 28018 (Jun. 15, 2018). 

7 In Amendment No. 2, OCC made three nonsubstantive changes to the proposal. Specifically, 

OCC (1) updated a cross-reference in Article VI, 

Section 27 of the OCC By-Laws to reflect the 

relocation of OCC’s clearing fund-related rules, (2) 

added an Interpretation and Policy to proposed 

Rule 1001 to clarify the applicability of the 5 

percent month-over-month limitation in the 

reduction of clearing fund size is not intended to 

apply to the initial changes in to OCC’s clearing 

fund sizing resulting from implementation of the 

proposed methodology, and (3) clarified an 

implementation date of September 1, 2018 for the 

proposed changes in the filing. 

8See letter from Andrej Bolkovic, CEO, ABN 

AMRO Clearing Corporation LLC (‘‘AACC’’), dated 

June 26, 2018, to Brent Fields, Secretary, 

Commission (AACC Letter I) ; letter from Chris 

Concannon, President and COO, Cboe Global 

Markets (‘‘CBOE’’), dated July 6, 2018, to Brent 

Fields, Secretary, Commission (CBOE Letter I); 

letter from Matthew R. Scott, President, Merrill 

Lynch Professional Clearing Corp. (‘‘MLPRO’’), 

dated July 6, 2018, to Brent J. Fields, Secretary, 

Commission (MLPRO Letter I); letter from Kurt 

Eckert, Partner, Wolverine Execution Services 

(‘‘WEX’’), dated July 12, 2018, to Brent Fields, 

Secretary, Commission (WEX Letter I); and letter 

from Mark Dehnert, Managing Director, Goldman 

Sachs & Co. LLC (‘‘GS’’), dated July 17, 2018, to 

Brent J. Fields, Secretary, Commission (GS Letter I), 

available at https://www.sec.gov/comments/sr-occ2018-008/occ2018008.htm. 

Since the proposal contained in the Advance 

Notice was also filed as a proposed rule change, all 

public comments received on the proposal are 

considered regardless of whether the comments are 

submitted on the proposed rule change or the 

Advance Notice. 

9OCC’s By-Laws are available at https://

www.theocc.com/components/docs/legal/rules_

and_bylaws/occ_bylaws.pdf. 

10OCC’s Rules are available at https://

www.theocc.com/components/docs/legal/rules_

and_bylaws/occ_rules.pdf. 

11See Notice of Filing, 83 FR at 31594. 

12See id. 

the proposed rule change (SR– 

NASDAQ–2018–038). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16425 Filed 7–31–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83714; File No. SR–OCC– 

2018–803] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of No Objection to Advance Notice, as 

Modified by Amendments No. 1 and 2, 

Concerning Proposed Changes to the 

Options Clearing Corporation’s Stress 

Testing and Clearing Fund 

Methodology 

July 26, 2018. 

I. Introduction 

On May 30, 2018, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) advance 

notice SR–OCC–2018–803 (‘‘Advance 

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

Title VIII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, 

entitled Payment, Clearing and 

Settlement Supervision Act of 2010 

(‘‘Act’’) 1 and Rule 19b–4(n)(1)(i) 2 under 

the Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 3 to propose changes 

to OCC’s By-Laws and Rules, the 

formalization of a substantially new 

Clearing Fund Methodology Policy 

(‘‘Policy’’), and the adoption of a 

document describing OCC’s new 

Clearing Fund and stress testing 

methodology (‘‘Methodology 

Description’’).4 The proposed changes 

are primarily designed to enhance 

OCC’s overall resiliency, particularly 

with respect to the level of OCC’s prefunded financial resources. Specifically, 

the proposed changes would: 

(1) Reorganize, restate, and 

consolidate the provisions of OCC’s ByLaws and Rules relating to the Clearing 

Fund into a newly revised Chapter X of 

OCC’s Rules; 

(2) modify the coverage level of OCC’s 

Clearing Fund sizing requirement to 

protect OCC against losses stemming 

from the default of the two Clearing 

Member Groups that would potentially 

cause the largest aggregate credit 

exposure for OCC in extreme but 

plausible market conditions (i.e., adopt 

a ‘‘Cover 2 Standard’’ for sizing the 

Clearing Fund); 

(3) adopt a new risk tolerance for OCC 

to cover a 1-in-50 year hypothetical 

market event at a 99.5% confidence 

level over a two-year look-back period; 

(4) adopt a new Clearing Fund and 

stress testing methodology, which 

would be underpinned by a new 

scenario-based one-factor risk model 

stress testing approach, as detailed in 

the newly proposed Policy and 

Methodology Description; 

(5) document governance, monitoring, 

and review processes related to Clearing 

Fund and stress testing; 

(6) provide for certain anti-procyclical 

limitations on the reduction in Clearing 

Fund size from month to month; 

(7) increase the minimum Clearing 

Fund contribution requirement for 

Clearing Members to $500,000; 

(8) modify OCC’s allocation weighting 

methodology for Clearing Fund 

contributions; 

(9) reduce from five to two business 

days the timeframe within which 

Clearing Members are required to fund 

Clearing Fund deficits due to monthly 

or intra-month resizing or due to Rule 

amendments; 

(10) provide additional clarity in 

OCC’s Rules regarding certain antiprocyclicality measures in OCC’s 

margin model; and 

(11) make a number of other nonsubstantive clarifying, conforming, and 

organizational changes to OCC’s ByLaws, Rules, Collateral Risk 

Management Policy, Default 

Management Policy, and filed 

procedures, including retiring OCC’s 

existing Clearing Fund Intra-Month Resizing Procedure, Financial Resources 

Monitoring and Call Procedure (‘‘FRMC 

Procedure’’), and Monthly Clearing 

Fund Sizing Procedure, as these 

procedures would no longer be relevant 

to OCC’s proposed Clearing Fund and 

stress testing methodology and would 

be replaced by the proposed Rules, 

Policy, and Methodology Description 

described herein. 

On June 7, 2018, OCC filed 

Amendment No. 1 to the Advance 

Notice.5 The Advance Notice, as 

amended, was published for public 

comment in the Federal Register on July 

6, 2018.6 On July 11, 2018, OCC filed 

Amendment No. 2 to the Advance 

Notice.7 The Commission received five 

comment letters in support of the 

proposal contained in the Advance 

Notice.8 This publication serves as 

notice of no objection to the Advance 

Notice. 

II. Background 

The Advance Notice concerns 

proposed changes to OCC’s By-Laws 9

and Rules,10 the formalization of the 

substantially new Policy, and the 

adoption of OCC’s new Methodology 

Description.11 According to OCC, the 

changes comprising the Advance Notice 

are primarily designed to enhance 

OCC’s overall resiliency, particularly 

with respect to the level of OCC’s prefunded financial resources.12


sradovich on DSK3GMQ082PROD with NOTICES