37864 Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 

130 17 CFR 240.17Ad–22(e)(1). 

131Securities Exchange Act Release 78961 (Sep. 

28, 2016), 81 FR 70786, 70802 (Oct. 13, 2016) (S7– 

03–14) (‘‘Covered Clearing Agency Standards’’). 

132 17 CFR 240.17Ad–22(e)(1). 

133 In approving this Proposed Rule Change, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

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

134 15 U.S.C. 78s(b)(2). 

135 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3On December 8, 2017, OCC also filed a related 

advance notice (SR–OCC–2017–810) with the 

Commission 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 

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

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

4(n)(1)(i), respectively. The Advance Notice was 

published in the Federal Register on January 23, 

2018. Securities Exchange Act Release No. 82513 

(Jan. 17, 2018), 83 FR 3224 (Jan. 23, 2018) (SR– 

OCC–2017–810). 

4Securities Exchange Act Release No. 82352 (Dec. 

19, 2017), 82 FR 61072 (Dec. 26, 2017) (SR–OCC– 

2017–021) (‘‘Initial Filing’’). 

5 15 U.S.C. 78s(b)(2)(B)(i). 

6See Securities Exchange Act Release No. 82927 

(March 22, 2018), 83 FR 13176 (March 27, 2018) 

(SR–OCC–2018–021). 

7See Securities Exchange Act Release No. 83485 

(Jun. 20, 2018), 83 FR 29843 (Jun. 26, 2018) (SR– 

OCC–2017–021). 

8 15 U.S.C. 78s(b)(1). 

9 17 CFR 240.19b–4. 

10The amendment to the list of Critical Support 

Functions would be made to the confidential and 

redacted portions of the RWD Plan. 

11See Amendment No. 2 to SR–OCC–2017–020. 

The three amendments to Chapter 5 also would be 

made to the confidential and redacted portions of 

the RWD Plan. 

provide for a well-founded, clear, 

transparent, and enforceable legal basis 

for each aspect of its activities in all 

relevant jurisdictions.130 The 

Commission has stated that, in 

establishing and maintaining policies 

and procedures to address legal risk, a 

covered clearing agency generally 

should consider whether its rules, 

policies and procedures, and contracts 

are clear, understandable, and 

consistent with relevant laws and 

regulations.131

The Commission believes that the 

proposed consolidation and 

reorganization of OCC’s Rules described 

above would improve readability by 

locating all rules related to the clearing 

fund in one place, thereby enhancing 

the clarity, transparency, consistency, 

and understandability of OCC’s Rules 

related to the clearing fund. 

Additionally, by amending the Rules to 

accurately reflect OCC’s current margin 

practices, the Commission believes 

OCC’s Rules will be more transparent 

and understandable. 

Accordingly, the Commission finds 

that the proposed textual reorganization 

and clarifications are consistent with 

Rule 17Ad–22(e)(1).132

V. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Act, and in 

particular, the requirements of Section 

17A of the Act 133 and the rules and 

regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,134 that the 

Proposed Rule Change (SR–OCC–2018– 

008), as modified by Amendments No. 

1 and 2, be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.135

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16529 Filed 8–1–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83732; File No. SR–OCC– 

2017–021] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing of Partial Amendments No. 1 

and 2 to Proposed Rule Change 

Concerning Updates to and 

Formalization of OCC’s Recovery and 

Orderly Wind-Down Plan 

July 27, 2018. 

On December 8, 2017, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–OCC–2017–021 

(‘‘Proposed Rule Change’’) pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 concerning 

enhanced and new tools for recovery 

scenarios.3 The Proposed Rule Change 

was published for comment in the 

Federal Register on December 26, 

2017.4 On March 22, 2018, the 

Commission instituted proceedings 

under Section 19(b)(2)(B)(i) of the Act 5

to determine whether to approve or 

disapprove the Proposed Rule Change.6

On June 20, 2018 the Commission 

designated a longer period for 

Commission action on proceedings to 

determine whether to approve or 

disapprove the Proposed Rule Change.7

On July 11, 2018, OCC filed Partial 

Amendment No. 1 to the Proposed Rule 

Change. On July 13, 2018, OCC filed 

Partial Amendment No. 2 to the 

Proposed Rule Change to supersede and 

replace Partial Amendment No. 1 in its 

entirety, due to technical defects in 

Partial Amendment No. 1. Therefore, 

the Initial Filing, as modified by 

Amendment No. 2, reflects the changes 

proposed. 

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

Act 8 and Rule 19b–4 thereunder 9 the 

Commission is publishing notice of 

these Partial Amendments No. 1 and 2 

to the Proposed Rule Change as 

described in Items I and II below, which 

Items have been prepared by OCC. The 

Commission is publishing this notice to 

solicit comments on the Proposed Rule 

Change, as modified by Amendments 

No. 1 and 2, from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of Partial 

Amendments to the Proposed Rule 

Change 

This Partial Amendment No. 2 would 

make the following three amendments 

to the Initial Filing: (1) Removal of 

sections of the RWD Plan concerning 

OCC’s proposed authority to require 

cash settlement of certain physically 

delivered options and single stock 

futures; (2) updating the list of OCC’s 

Critical Support Functions; 10 and (3) 

making three changes to Chapter 5 of 

the RWD Plan in order to conform to a 

change contemporaneously proposed in 

Amendment No. 2 to OCC proposed rule 

change SR–OCC–2017–020 concerning 

enhanced and new tools for recovery 

scenarios.11

With regard to the removal of sections 

of the RWD Plan concerning OCC’s 

proposed authority to require cash 

settlement of certain physically 

delivered options and single stock 

futures, OCC proposes to amend the 

following text on pages 16 and 55–56 of 

the Initial Filing (new text is underlined 

and proposed deletions are marked in 

strikethrough text). 


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OCC also proposes to amend the 

following text on pages 22–23 and 61– 

63 of the Initial Filing (including 

associated footnotes). 


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37866 Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 

12See Amendment No. 2 to SR–OCC–2017–020. 

OCC plans to resubmit the proposed 

cash settlement tool previously filed in 

SR–OCC–2017–018 and SR–OCC–2017– 

807 on a separate timeline from the rest 

of its enhanced and new tools for 

recovery scenarios and would submit a 

subsequent filing to the Commission to 

amend the RWD Plan at that time. 

In addition, OCC proposes to make 

the following amendments on pages 32 

and 72 of the Initial Filing. 

With regard to updating the list of 

OCC’s Critical Support Functions, the 

amendment would revise OCC’s RWD 

Plan to consistently identify one of 

OCC’s internal functions as a Critical 

Support Function. 

Finally, OCC proposes to make two 

changes to Chapter 5 of the RWD Plan, 

which would align an exhibit, a related 

list and a related paragraph with the 

certain changes OCC is 

contemporaneously proposing in 

Amendment No. 2 to proposed rule 

change SR–OCC–2017–020 concerning 

enhanced and new tools for recovery 

scenarios.12 Specifically, OCC would 

change the aforementioned exhibit, list 

and paragraph in Chapter 5 to recognize 

that while OCC does not intend, in the 

first instance for its tear-up process to 

serve as a means of loss allocation, 

circumstances may arise such that, 

despite best efforts, OCC has inadequate 

remaining financial resources to 

extinguish torn-up positions at their 

assigned Tear-Up Price without forcing 

a reduction in the amount of unpaid 

value of such positions (e.g., despite 

best efforts, market movements not 

accounted for by monitoring, additional 

Clearing Member defaults occur 

immediately preceding a tear-up). In 

such circumstances, despite best efforts, 


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Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 37867 

13See Securities Exchange Act Release No. 83485 

(June 20, 2018), 83 FR 29843 (June 26, 2018) (SR– 

OCC–2017–021). 

14 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. 80649 

(May 10, 2017), 82 FR 22595 (May 16, 2017) (SR– 

GEMX–2017–07). 

4A ‘‘Sponsored Customer’’ is a non-member of 

the Exchange that trades under a sponsoring 

member’s execution and clearing identity pursuant 

to a sponsorship arrangement between such nonContinued 

OCC would use its partial tear-up 

process as a means of loss allocation. 

OCC has included an updated Exhibit 

5 containing its RWD Plan as well as an 

Exhibit 4 showing the changes proposed 

in this Partial Amendment No. 2 to the 

proposed rule text in the Initial Filing, 

with the proposed changes in the Initial 

Filing marked in underlined and 

strikethrough text. Exhibits 4 and 5 have 

been redacted and filed separately with 

the Commission and confidential 

treatment for Exhibits 4 and 5 is 

requested pursuant to 17 CFR 240.24b– 

2. 

The partial amendment would not 

change the purpose of or basis for the 

proposed rule change. All other 

representations in the Initial Filing 

remain as stated therein and no other 

changes are being made. 

II. Date of Effectiveness of Proposed 

Rule Change and Timing for 

Commission Action 

As the Commission stated in 

Securities Exchange Act Release No. 

83485, the Commission shall by order 

approve or disapprove the proposed 

rule change by August 23, 2018.13

III. 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 Commissions internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

OCC–2017–021 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–OCC–2017–021. 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 OCC and on OCC’s website at 

http://www.theocc.com/about/ 

publications/bylaws.jsp. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal or 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–OCC–2017–021 and should 

be submitted on or before August 17, 

2018. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16533 Filed 8–1–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83731; File No. SR–GEMX– 

2018–26] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Codify the Protocol 

Definitions That Members Use To Enter 

Quotes and Orders 

July 27, 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 July 16, 

2018, Nasdaq GEMX, LLC (‘‘GEMX’’ 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 codify the 

definitions of the protocols that 

Members can use to enter quotes and 

orders on the Exchange. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaqgemx.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 purpose of the proposed rule 

change is to codify the definitions of the 

protocols that Members use to enter 

quotes and orders on the Exchange, 

specifically, the Specialized Quote Feed 

(‘‘SQF’’), Ouch to Trade Options 

(‘‘OTTO’’), Financial Information 

eXchange (‘‘FIX’’), and Nasdaq Precise 

(‘‘Precise’’). On April 27, 2017, the 

Exchange filed a proposed rule change 

that established the ports that Members 

use to connect to the Exchange, 

including ports used for quote and order 

entry—i.e., SQF, OTTO and FIX.3 The 

Exchange has also filed proposed rule 

changes that briefly describe the 

availability of Precise, which is the 

Exchange’s proprietary front-end 

interface used by Electronic Access 

Members (‘‘EAMs’’) and their Sponsored 

Customers 4 to send orders to the 


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