Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Notices 38327 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 82705 

(February 13, 2018), 83 FR 7256. 

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

5See Securities Exchange Act Release No. 82984, 

83 FR 15181 (April 9, 2018). 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 83293, 

83 FR 24367 (May 25, 2018). 

8See letters to Brent J. Fields, Secretary, 

Commission, from: (1) Todd J. Broms, Chief 

Executive Officer, Broms & Company LLC, dated 

March 13, 2018; (2) Simon P. Goulet, Co-Founder, 

Blue Tractor Group, LLC, dated March 19, 2018; (3) 

Terence W. Norman, Founder, Blue Tractor Group, 

LLC, dated March 20, 2018; and (4) Terence W. 

Norman, Founder, Blue Tractor Group, LLC, dated 

May 8, 2018. The comment letters are available at 

https://www.sec.gov/comments/sr-cboebzx-2018- 

010/cboebzx2018010.htm. 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

David R. Strickler 

United States Copyright Royalty Judge. 

Jesse M. Feder 

United States Copyright Royalty Judge. 

Dated: July 27, 2018. 

Suzanne M. Barnett, 

Chief United States Copyright Royalty Judge. 

Dr. Carla D. Hayden, 

Librarian of Congress. 

[FR Doc. 2018–16780 Filed 8–3–18; 8:45 am] 

BILLING CODE 1410–72–P 

NATIONAL SCIENCE FOUNDATION 

Proposal Review; Notice of Meetings 

In accordance with the Federal 

Advisory Committee Act (Pub. L. 92– 

463, as amended), the National Science 

Foundation (NSF) announces its intent 

to hold proposal review meetings 

throughout the year. The purpose of 

these meetings is to provide advice and 

recommendations concerning proposals 

submitted to the NSF for financial 

support. The agenda for each of these 

meetings is to review and evaluate 

proposals as part of the selection 

process for awards. The review and 

evaluation may also include assessment 

of the progress of awarded proposals. 

These meetings will primarily take 

place at NSF’s headquarters, 2415 

Eisenhower Avenue, Alexandria, VA 

22314. 

These meetings will be closed to the 

public. The proposals being reviewed 

include information of a proprietary or 

confidential nature, including technical 

information; financial data, such as 

salaries; and personal information 

concerning individuals associated with 

the proposals. These matters are exempt 

under 5 U.S.C. 552b(c), (4) and (6) of the 

Government in the Sunshine Act. NSF 

will continue to review the agenda and 

merits of each meeting for overall 

compliance of the Federal Advisory 

Committee Act. 

These closed proposal review 

meetings will not be announced on an 

individual basis in the Federal Register. 

NSF intends to publish a notice similar 

to this on a quarterly basis. For an 

advance listing of the closed proposal 

review meetings that include the names 

of the proposal review panel and the 

time, date, place, and any information 

on changes, corrections, or 

cancellations, please visit the NSF 

website: https://www.nsf.gov/events/ 

advisory.jsp. This information may also 

be requested by telephoning, 703/292– 

8687. 

Dated: August 1, 2018. 

Crystal Robinson, 

Committee Management Officer. 

[FR Doc. 2018–16729 Filed 8–3–18; 8:45 am] 

BILLING CODE 7555–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83750; File No. SR– 

CboeBZX–2018–010] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of 

Withdrawal of a Proposed Rule Change 

To Adopt BZX Rule 14.11(k) To Permit 

the Listing and Trading of Managed 

Portfolio Shares and To List and Trade 

Shares of the ClearBridge Appreciation 

ETF, ClearBridge Large Cap ETF, 

ClearBridge Mid Cap Growth ETF, 

ClearBridge Select ETF, and 

ClearBridge All Cap Value ETF 

July 31, 2018. 

On February 5, 2018, Cboe BZX 

Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

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

proposed rule change to adopt BZX Rule 

14.11(k) to permit the listing and trading 

of Managed Portfolio Shares, and to list 

and trade shares of the ClearBridge 

Appreciation ETF, ClearBridge Large 

Cap ETF, ClearBridge Mid Cap Growth 

ETF, ClearBridge Select ETF, and 

ClearBridge All Cap Value ETF under 

proposed BZX Rule 14.11(k). The 

proposed rule change was published for 

comment in the Federal Register on 

February 20, 2018.3 On April 3, 2018, 

pursuant to Section 19(b)(2) of the 

Exchange 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 disapprove the proposed 

rule change.5 On May 21, 2018, the 

Commission instituted proceedings 

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

Exchange Act 6 to determine whether to 

approve or disapprove the proposed 

rule change.7 The Commission has 

received four comment letters on the 

proposed rule change.8

On July 27, 2018, the Exchange 

withdrew the proposed rule change 

(SR–CboeBZX–2018–010). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16722 Filed 8–3–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83752; File No. SR–FINRA– 

2018–019] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change Creating Fee 

and Honorarium for Late Cancellation 

of a Prehearing Conference 

July 31, 2018. 

I. Introduction 

On May 4, 2018, Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

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

proposed rule change to amend FINRA 

Rules 12500 and 12501 of the Code of 

Arbitration Procedure for Customer 

Disputes (‘‘Customer Code’’) and FINRA 

Rules 13500 and 13501 of the Code of 

Arbitration Procedure for Industry 

Disputes (‘‘Industry Code’’ and together, 

‘‘Codes’’), to charge a $100 per-arbitrator 

fee to parties who request cancellation 

of a prehearing conference within three 

business days before a scheduled 

prehearing conference. The proposed 

rule change would also amend FINRA 

Rules 12214(a) and 13214(a) of the 

Codes to create a $100 honorarium to 

pay each arbitrator scheduled to attend 

a prehearing conference that was 

cancelled within three business days of 

the prehearing conference. 


sradovich on DSK3GMQ082PROD with NOTICES
38328 Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Notices 

3See Exchange Act Release No. 83227 (May 4, 

2018), 83 FR 23306 (May 14, 2018) (File No. SR– 

FINRA–2018–019 (‘‘Notice’’). 4See Letter from Steven B. Caruso, Maddox 

Hargett Caruso, P.C., dated May 15, 2018 (‘‘Caruso 

Letter’’), available at https://www.sec.gov. 

5The subsequent description of the proposed rule 

change is substantially excerpted from FINRA’s 

description in the Notice. See Notice, 83 FR at 

23306–23308. 

6See FINRA Rules 12100(w) and 13100(w). 

7See FINRA Rules 12500(c) and 13500(c). 

8See FINRA Rules 12501(b) and 13501(b). 

9See Notice, 83 FR at 23309. 

10 Id. 

11 In the past, arbitrators have resigned from the 

roster because FINRA’s dispute resolution forum 

does not provide a payment to arbitrators for 

cancellations of prehearing conferences. FINRA 

notes that one reason former arbitrators have given 

for their resignation is the lack of compensation for 

prehearing conferences that are cancelled on short 

notice. FINRA has identified 17 separate complaints 

relating to 22 arbitrators with respect to the late 

cancellations of prehearing conferences. See Notice, 

83 FR at 23307, note 12. 

12To simplify this explanation, FINRA’s 

discussion of the proposed changes focuses on 

changes to the Customer Code. However, the 

proposed changes also apply to the Industry Code. 

See Notice, 83 FR at 23307, note 13. 

13References to cancellations of prehearing 

conferences include postponements of such 

conferences. See Notice, 83 FR at 23309, note 29. 

14See Notice, 83 FR at 23307. 

15A decision would be required if only one party 

requests that the prehearing conference be 

cancelled. See Notice, 83 FR at 23307, note 14. 

16See Notice, 83 FR at 23307. 

17See Notice, 83 FR at 23307. 

18See Notice, 83 FR at 23307. See also FINRA 

Rules 12904(e)(8) and 13904(e)(8); see generally 

FINRA Rules 12601(b) and 13601(b). 

19See Notice, 83 FR at 23307. 

20 Id. 

21 Id. 

22See supra note 4. 

23Caruso Letter. 

24 Id. 

25 In approving this rule change, the Commission 

has considered the rule’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 

26 15 U.S.C. 78o–3(b)(6). 

The proposed rule change was 

published for comment in the Federal 

Register on May 14, 2018.3 The public 

comment period closed on June 8, 2018. 

The Commission received one comment 

letter in response to the Notice, 

supporting the proposed rule change.4

This order approves the proposed rule 

change. 

II. Description of the Proposed Rule 

Change 5

Cancellation Fee 

Parties to an arbitration typically 

schedule prehearing conferences with 

the arbitrator(s) before the hearing on 

the merits of the claim.6 During these 

conferences, the participants set 

discovery, briefing and motions 

deadlines, schedule subsequent hearing 

sessions, and address other preliminary 

matters.7 A prehearing conference may 

also address other outstanding matters, 

such as discovery disputes or 

substantive motions (e.g., motions to 

dismiss or motions to amend).8

FINRA stated that its arbitrators 

devote considerable time preparing for 

prehearing conferences and forgo other 

opportunities by reserving time on their 

schedules.9 Currently, however, parties 

can cancel prehearing conferences up 

to, and including, the day of the 

conference without penalty.10

Consequently, FINRA has found that 

late cancellations (in particular, those 

that occur within three or fewer 

business days of a scheduled prehearing 

conference) have negatively impacted 

its roster of arbitrators by creating 

scheduling inconveniences for, and 

uncompensated work by, arbitrators.11

To help alleviate these burdens, 

FINRA is proposing to amend FINRA 

Rules 12500 and 12501 of the Customer 

Code and FINRA Rules 13500 and 

13501 of the Industry Code,12 which 

govern prehearing conferences, to 

provide that if a cancellation 13 request 

is agreed to by the parties or requested 

by one or more parties within three 

business days before a scheduled 

prehearing conference and granted, the 

party or parties shall be charged a fee of 

$100 per arbitrator scheduled to attend 

the prehearing conference (‘‘late 

cancellation fee’’).14 The date of the 

party’s or parties’ cancellation request 

would control whether the fee is 

assessed, not the date of the arbitrator or 

arbitrators’ decision on such a request, 

if a decision is required.15 If the 

arbitrator(s) cancel a prehearing 

conference on their own, the parties 

would not be charged.16

Under the proposal, if more than one 

party requests the cancellation of a 

prehearing conference, the arbitrator(s) 

would have the authority to allocate the 

fee in the award between or among the 

requesting parties.17 However, 

depending on the facts and 

circumstances of the request, the 

arbitrator(s) could assess the fee to one 

party or to a non-requesting party or 

parties if the arbitrator(s) determine that 

these parties caused or contributed to 

the need for the cancellation.18

Under the proposal, however, if an 

extraordinary circumstance prevents a 

party from making a timely cancellation 

request, the arbitrator(s) would have the 

discretion to waive the late cancellation 

fee, provided they receive a written 

explanation of the circumstance.19

FINRA would notify parties and 

arbitrator(s) that the prehearing 

conference was cancelled and remind 

parties to provide an explanation, if 

applicable, before the close of the 

arbitration case.20 If the fee is waived, 

the party’s or parties’ obligation to pay 

the fee would be eliminated. FINRA, 

however, would pay the $100 perarbitrator honorarium (discussed below) 

to the arbitrator(s) scheduled to attend 

the prehearing conference.21

Honorarium 

In addition, FINRA is proposing to 

amend FINRA Rules 12214(a) and 

13214(a) to provide that FINRA would 

pay an honorarium of $100 to each 

arbitrator scheduled to attend a 

prehearing conference that was 

cancelled within three business days of 

the prehearing conference by agreement 

of the parties or was requested by one 

or more parties within three business 

days of the prehearing conference and 

granted. As discussed above, if the 

arbitrator(s) waive the fee, the obligation 

to pay the fee would be eliminated, but 

FINRA would still pay the $100 perarbitrator honorarium to the arbitrator(s) 

scheduled to attend the prehearing 

conference. 

III. Comment Summary 

As noted above, the Commission 

received one comment letter on the 

proposed rule change, supporting the 

proposal.22 The commenter states that 

late cancellations often result in 

scheduling inconvenience for, and 

uncompensated work by, arbitrators. 

The commenter believes that the 

proposal represents a ‘‘fair, equitable 

and reasonable’’ solution to these 

concerns because the fee and 

honorarium recognize the ‘‘considerable 

preparation by arbitrators . . . that is 

required prior to a prehearing 

conference.’’ 23 Accordingly, the 

commenter believes that the proposal 

would ‘‘lead to an improved and 

expanded roster of arbitrators.’’ 24

IV. Discussion and Commission 

Findings 

After careful review of the proposed 

rule change and the comment letter, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Exchange Act and the rules and 

regulations thereunder that are 

applicable to a national securities 

association.25 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

15A(b)(6) of the Exchange Act,26 which 

requires, among other things, that 

FINRA rules be 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, 

and Exchange Act Section 15A(b)(5) of 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Notices 38329 

27 15 U.S.C. 78o–3(b)(5). 

28See Notice, 83 FR at 23308. 

29 Id. See also Caruso Letter. 

30See Notice, 83 FR at 23308. 

31 Id. 

32 Id. 

33See Notice, 83 FR at 23308. 

34 15 U.S.C. 78s(b)(2). 

35 17 CFR 200.30–3(a)(12). 

1 12 U.S.C. 5465(e)(1) and 17 CFR 240.19b– 

4(n)(1)(i), respectively. On December 18, 2017, 

NSCC filed the Advance Notice as a proposed rule 

change (SR–NSCC–2017–017) with the Commission 

pursuant to Section 19(b)(1) of the Act and Rule 

19b–4 thereunder (‘‘Proposed Rule Change’’). (17 

CFR 240.19b–4 and 17 CFR 240.19b–4, 

respectively.) The Proposed Rule Change was 

published in the Federal Register on January 8, 

2018. See Securities Exchange Act Release No. 

82430 (January 2, 2018), 83 FR 841 (January 8, 

2018) (SR–NSCC–2017–017). On February 8, 2018, 

the Commission designated a longer period within 

which to approve, disapprove, or institute 

proceedings to determine whether to approve or 

disapprove the Proposed Rule Change. See 

Securities Exchange Act Release No. 82669 

(February 8, 2018), 83 FR 6653 (February 14, 2018) 

(SR–DTC–2017–021; SR–FICC–2017–021; SR– 

NSCC–2017–017). On March 20, 2018, the 

Commission instituted proceedings to determine 

whether to approve or disapprove the Proposed 

Rule Change. See Securities Exchange Act Release 

No. 82908 (March 20, 2018), 83 FR 12986 (March 

26, 2018) (SR–NSCC–2017–017). On June 25, 2018, 

the Commission designated a longer period for 

Commission action on the proceedings to determine 

whether to approve or disapprove the Proposed 

Rule Change. Therefore, September 5, 2018 is the 

date by which the Commission should either 

approve or disapprove the Proposed Rule Change. 

See Securities Exchange Act Release No. 83509 

(June 25, 2018), 83 FR 30785 (June 29, 2018) (SR– 

DTC–2017–021; SR–FICC–2017–021; SR–NSCC– 

2017–017). On June 28, 2018, NSCC filed 

Amendment No. 1 to the Proposed Rule Change. 

See Securities Exchange Act Release No. 83632 

(July 13, 2018), 83 FR 34166 (July 19, 2018) (SR– 

NSCC–2017–017). As of the date of this release, the 

Commission has not received any comments on the 

Proposed Rule Change. 

2Securities Exchange Act Release No. 82581 

(January 24, 2018), 83 FR 4327 (January 30, 2018) 

(SR–NSCC–2017–805). Pursuant to Section 

Continued 

the Exchange Act,27 which requires, 

among other things, that FINRA rules 

provide for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility or system that 

FINRA operates or controls. 

Public Interest 

The Commission agrees with FINRA 

and the commenter that the proposed 

rule change would protect investors and 

the public interest by improving 

FINRA’s ability to recruit and retain 

qualified arbitrators willing to devote 

the time and effort necessary to consider 

prehearing issues, which FINRA asserts 

is an essential element for it to operate 

an effective arbitration forum.28

Currently, parties can cancel prehearing 

conferences up to, and including, the 

same day of the conference without 

penalty. Late cancellations of prehearing 

conferences do, however, penalize the 

arbitrators who would not receive 

compensation for the time and effort 

devoted to preparing for the conference, 

as well as the potential for lost personal 

or professional opportunities caused by 

reserving the scheduled meeting time. 

These burdens could negatively impact 

an arbitrator’s decision to remain on the 

FINRA arbitrator roster or an 

individual’s decision to join the roster. 

The proposed rule change would 

eliminate these disincentives by 

compensating arbitrators in the event of 

a late cancellation. For these reasons, 

the Commission believes the proposed 

rule change is consistent with the 

Section 15A(b)(6) requirement that 

FINRA rules be designed to protect the 

public interest. 

Equitable Allocation of Fees 

The Commission also agrees that the 

proposed rule change represents an 

equitable allocation of the fees 

associated with using the FINRA 

arbitration forum.29 In particular, the 

Commission notes the proposed late 

cancellation fee would be allocated 

among those parties responsible for 

canceling the meeting within three days 

of the prehearing conferences. Even if a 

party or parties did not request the 

cancellation, the proposed rule change 

would permit arbitrators to allocate all, 

or a portion of the fee, to those parties 

if the arbitrators determine that they 

caused or contributed to the late 

cancellation.30

The Commission recognizes that the 

proposed rule change could increase the 

cost to parties of using the arbitration 

forum.31 However, the Commission also 

recognizes that the late cancellation fee 

would compensate arbitrators directly 

inconvenienced by the late cancellation 

of a prehearing conference and address 

a practice that negatively impacts the 

roster of arbitrators. In particular, the 

Commission notes that FINRA would 

compensate arbitrators for their 

preparation time and opportunity cost 

associated with reserving a meeting date 

when a prehearing conference is 

cancelled on short notice.32 The 

Commission believes that it is 

reasonable to compensate the 

inconvenienced arbitrators for the time 

and opportunity cost. Furthermore, the 

Commission notes that parties to an 

arbitration could avoid the proposed 

late termination fee by, among other 

ways, providing notice of cancellation 

more than three business days prior to 

a scheduled prehearing conference.33

Furthermore, the Commission notes that 

the arbitrator(s) could assess the fee to 

one party or to a non-requesting party or 

parties if the arbitrator(s) determine that 

these parties caused or contributed to 

the need for the cancellation. Finally, if 

an extraordinary circumstance prevents 

a party from making a timely 

cancellation request, the arbitrator(s) 

would have the discretion to waive the 

late cancellation fee, provided they 

receive a written explanation of the 

circumstance 

For these reasons, the Commission 

believes the proposed rule change is 

also consistent with the Section 

15A(b)(5) requirement that FINRA rules 

provide for the equitable allocation of 

reasonable fees among persons using 

any facility or system that FINRA 

operates or controls. 

V. Conclusion 

It is therefore ordered pursuant to 

Section 19(b)(2) of the Exchange Act 34

that the proposal (SR–FINRA–2018– 

019), be and hereby is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16721 Filed 8–3–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83745; File No. SR–NSCC– 

2017–805] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing of 

Amendment No. 1 to an Advance 

Notice To Adopt a Recovery & WindDown Plan and Related Rules 

July 31, 2018. 

On December 18, 2017, National 

Securities Clearing Corporation 

(‘‘NSCC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

advance notice SR–NSCC–2017–805 

(‘‘Advance Notice’’) pursuant to Section 

806(e)(1) of Title VIII of the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act entitled the Payment, 

Clearing, and Settlement Supervision 

Act of 2010 (‘‘Clearing Supervision 

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

Securities Exchange Act of 1934 

(‘‘Act’’).1 The notice of filing and 

extension of the review period of the 

Advance Notice was published for 

comment in the Federal Register on 

January 30, 2018.2


sradovich on DSK3GMQ082PROD with NOTICES