44098 Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Notices 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f). 19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

no impact on the transaction fees 

actually assessed to Members. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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, as amended. 

The proposed changes to the Add/ 

Remove Tiers are designed to 

incentivize Members to bring more 

order flow to BYX as the Exchange 

competes for order flow with other 

equities markets. Furthermore, the 

proposed changes to the IEX routing 

fees are meant to recoup costs 

associated with executing orders on that 

market, and to increase transparency by 

properly reflecting the routing strategies 

available for IEX, and are therefore not 

designed to have any significant impact 

on competition. The Exchange operates 

in a highly competitive market in which 

market participants can readily direct 

their order flow to competing venues. In 

such an environment, the Exchange 

must continually review, and consider 

adjusting, its fees and rebates to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed fee 

changes reflect this competitive 

environment. 

(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 foregoing rule change has become 

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

of the Act 17 and paragraph (f) of Rule 

19b–4 thereunder.18 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. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposal 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– 

CboeBYX–2018–017 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–CboeBYX–2018–017. 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 will also 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–CboeBYX–2018–017 and 

should be submitted on or before 

September 19, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–18676 Filed 8–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83923; File No. SR–CBOE– 

2018–059] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Delay the 

Implementation Date of Changes to 

Cboe Options Rule 24A.4, 

Interpretation and Policy .02, 

Concerning FLEX Options 

August 23, 2018. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on August 

14, 2018, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) 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 Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

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

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 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 delay the 

implementation date of rule change SR– 

CBOE–2018–008 to permit all FLEX 

series to be fungible with the 

corresponding non-FLEX series once an 

identical non-FLEX series becomes 

listed. 

(additions are in italics; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 24A.4. Terms of FLEX Options 

* * * * * 

. . . Interpretations and Policies: 

.01 No change. 

.02 

The below version of Interpretation 

and Policy .02 will remain in effect until 

[an effective date specified by the 

Exchange in a Regulatory Circular. The 

effective date shall be no later than July 

31, 2018, and the Regulatory Circular 

announcing the effective date shall be 


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Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Notices 44099 

5Securities Exchange Act Release No. 83205 (May 

9, 2018), 83 FR 22550 (May 15, 2018) (SR–CBOE– 

2018–008). 

6See id. 

7Securities Exchange Act Release No. 83724 (July 

27, 2018), 83 FR 37875 (August 2, 2018) (SR–OCC– 

2018–010). 

8Exchange Notice C2018072002 announcing the 

implementation date of rule change SR–CBOE– 

2018–008 is available at: http://

cdn.batstrading.com/resources/release_notes/2018/ 

Exchange-Notice-on-Open-Interest-Consolidationfor-Quarterly-and-Short-term-FLEX-products.pdf, 

which can be accessed through the 

markets.cboe.com website. Cboe Options previously 

informed market participants of its change in 

company practice to announce information such as 

the proposed rule change in SR–CBOE–2018–008 

by Exchange Notice rather than Regulatory Circular: 

https://www.cboe.com/publish/RegCir/RG17- 

191.pdf. 

9 Id. 

10 15 U.S.C. 78f(b). 

issued at least 30 days prior to the 

effective date] August 21, 2018. 

Provided the options on an 

underlying security or index are 

otherwise eligible for FLEX trading, 

FLEX Options shall be permitted in puts 

and calls that do not have the same 

exercise style, same expiration date and 

same exercise price as Non-FLEX 

Options that are already available for 

trading on the same underlying security 

or index. FLEX Options shall also be 

permitted before the options are listed 

for trading as Non-FLEX Options. Once 

and if the option series are listed for 

trading as Non-FLEX Options, (i) all 

existing open positions established 

under the FLEX trading procedures 

shall be fully fungible with transactions 

in the respective Non-FLEX Option 

series and (ii) any further trading in the 

series would be as Non-FLEX Options 

subject to the Non-FLEX trading 

procedures and rules. However, in the 

event the Non-FLEX series is added 

intra-day, a position established under 

the FLEX trading procedures would be 

permitted to be closed using the FLEX 

trading procedures for the balance of the 

trading day on which the Non-FLEX 

series is added against another closing 

only FLEX position. For such FLEX 

series, the FLEX Official will make an 

announcement that the FLEX series is 

now restricted to closing transactions; a 

FLEX Request for Quotes may not be 

disseminated for any order representing 

a FLEX series having the same terms as 

a Non-FLEX series, unless such FLEX 

Order is a closing order (and it is the 

day the Non-FLEX series has been 

added); and only responses that close 

out an existing FLEX position are 

permitted. Any transactions in a 

restricted series that occur that do not 

conform to these requirements will be 

nullified by the FLEX Official pursuant 

to Rule 24A.14. 

The below version of Interpretation 

and Policy .02 shall be in effect on [the 

effective date specified by the Exchange 

in a Regulatory Circular. The effective 

date shall be no later than July 31, 2018, 

and the Regulatory Circular announcing 

the effective date shall be issued at least 

30 days prior to the effective 

date]August 21, 2018. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), at the Exchange’s Office of 

the Secretary, 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 

On May 9, 2018, the Securities and 

Exchange Commission (the 

‘‘Commission’’) approved certain 

changes to Rule 24A.4, Interpretation 

and Policy .02 (SR–CBOE–2018–008), 

which changes allowed flexibility 

structured options (‘‘FLEX Options’’) 

with quarterly expirations, short-term 

expirations, weekly expirations, and 

End-of-Month expirations to be fungible 

with Non-FLEX Options that have 

identical terms.5 Pursuant to SR–CBOE– 

2018–008, the proposed changes would 

not take effect until a date specified by 

the Exchange in a Regulatory Circular, 

which date would be no later than July 

31, 2018. The Regulatory Circular 

announcing the effective date was 

required to be issued at least 30 days 

prior to the effective date. 

As noted in SR–CBOE–2018–008, to 

give effect to the Cboe Options rule 

change, the Options Clearing 

Corporation (‘‘OCC’’) would need to 

amend its By-Laws after Cboe Options 

amended its Rules.6 However, OCC did 

not submit proposed changes to its ByLaws until July 16, 2018, on which date 

those changes became effective.7 Cboe 

Options understands that OCC does not 

intend to implement those changes as to 

Cboe Options until the implementation 

date Cboe Options announced for the 

proposed rule change in SR–CBOE– 

2018–008. Because Cboe Options was 

unable to determine an implementation 

date for the proposed changes until it 

knew the effective time of OCC’s ByLaw amendments, Cboe Options was 

unable to announce an implementation 

date until after OCC amended its ByLaws (and thus not until after July 16, 

2018). On July 20, 2018, after the OCC 

By-Law amendment was filed, Cboe 

Options announced an implementation 

date of August 21, 2018, which was 

more than 30 days after the notice to 

Trading Permit Holders.8 Because this 

implementation date is past July 31, 

2018, the Exchange proposes to extend 

the implementation date of the rule 

changes in SR–CBOE–2018–008 to 

August 21, 2018. 

Historically, Cboe Options would 

have announced this information 

pursuant to a Regulatory Circular as 

required by the rule text. However, Cboe 

Options announced the implementation 

date pursuant to an Exchange Notice in 

accordance with new company 

practice.9 This is merely a change in the 

name of the document issued to market 

participants to announce this 

information. The substance of the 

announcement in the Exchange Notice 

was the same as it would have been if 

announced in a Regulatory Circular. 

Exchange Notices are distributed to the 

same group of market participants to 

which Regulatory Circulars were 

distributed before this change in 

company practice. Additionally, 

Exchange Notices are posted to Cboe 

Options’ website, just as Regulatory 

Circulars are posted. As a result, the 

Exchange believes announcement of the 

implementation date by Exchange 

Notice provided market participants 

with sufficient notice of the proposed 

rule change in SR–CBOE–2018–008. 

The Exchange plans to issue a reminder 

of the implementation date to market 

participants by Regulatory Circular. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.10 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 


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44100 Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Notices 

11 15 U.S.C. 78f(b)(5). 

12 Id. 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires Cboe Options 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. Cboe Options has 

satisfied this requirement. 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6)(iii). 

17For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

6(b)(5) 11 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 12 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The proposed rule change is merely 

delaying the implementation date of a 

proposed rule change, the rule filing for 

which addressed why that change and 

the need for at least 30 days’ notice of 

implementation of that change was 

consistent with the Act and was 

previously approved by the 

Commission. This will ensure market 

participants receive sufficient notice of 

the implementation date of the 

proposed rule change. 

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 is merely delaying 

the implementation date of a proposed 

rule change, the rule filing for which 

addressed any potential competitive 

impact that change and the need for at 

least 30 days’ notice of implementation 

of that change may have and was 

previously approved by the 

Commission. The proposed delay to the 

implementation date ensures market 

participants receive sufficient notice of 

the implementation date of the 

proposed rule change, which ultimately 

protects investors. The Exchange 

believes the proposed delay to the 

implementation date will have no 

impact on competition. 

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: (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 13 and Rule 19b– 

4(f)(6) thereunder.14

A proposed rule change filed under 

Rule 19b–4(f)(6) 15 normally does not 

become operative prior to 30 days after 

the date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),16 the Commission 

may 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. The Commission is waiving the 

30-day operative delay so that the 

proposal may become operative 

immediately upon filing. The 

Commission believes that waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest because such waiver will allow 

the rule change to be implemented as 

detailed in the Exchange Notice whereas 

keeping the 30-day operative delay in 

place could create confusion. Therefore, 

the Commission designates the proposal 

operative upon filing.17

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 

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–2018–059 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–2018–059. 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–2018–059 and 

should be submitted on or before 

September 19, 2018. 


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Federal Register / Vol. 83, No. 168 / Wednesday, August 29, 2018 / Notices 44101 

18 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 77f(b). 

2 15 U.S.C. 78m(e). 

3 15 U.S.C. 78n(g). 

4 15 U.S.C. 77f(b)(2). The annual adjustments are 

designed to adjust the fee rate in a given fiscal year 

so that, when applied to the aggregate maximum 

offering price at which securities are proposed to 

be offered for the fiscal year, it is reasonably likely 

to produce total fee collections under Section 6(b) 

equal to the ‘‘target fee collection amount’’ specified 

in Section 6(b)(6)(A) for that fiscal year. 

5 15 U.S.C. 78m(e)(4) and 15 U.S.C. 78n(g)(4). 

6Appendix A explains how we determined the 

‘‘baseline estimate of the aggregate maximum 

offering price’’ for fiscal year 2019 using our 

methodology, and then shows the arithmetical 

process of calculating the fiscal year 2019 annual 

adjustment based on that estimate. The appendix 

includes the data used by the Commission in 

making its ‘‘baseline estimate of the aggregate 

maximum offering price’’ for fiscal year 2019. 

7 15 U.S.C. 77f(b)(4), 15 U.S.C. 78m(e)(6) and 15 

U.S.C. 78n(g)(6). 

8 15 U.S.C. 77f(b), 78m(e) and 78n(g). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–18675 Filed 8–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release Nos. 33–10538; 34–83935/August 

24, 2018] 

Order Making Fiscal Year 2019 Annual 

Adjustments to Registration Fee Rates 

I. Background 

The Commission collects fees under 

various provisions of the securities 

laws. Section 6(b) of the Securities Act 

of 1933 (‘‘Securities Act’’) requires the 

Commission to collect fees from issuers 

on the registration of securities.1 Section 

13(e) of the Securities Exchange Act of 

1934 (‘‘Exchange Act’’) requires the 

Commission to collect fees on specified 

repurchases of securities.2 Section 14(g) 

of the Exchange Act requires the 

Commission to collect fees on specified 

proxy solicitations and statements in 

corporate control transactions.3 These 

provisions require the Commission to 

make annual adjustments to the 

applicable fee rates. 

II. Fiscal Year 2019 Annual Adjustment 

to Fee Rates 

Section 6(b)(2) of the Securities Act 

requires the Commission to make an 

annual adjustment to the fee rate 

applicable under Section 6(b).4 The 

annual adjustment to the fee rate under 

Section 6(b) of the Securities Act also 

sets the annual adjustment to the fee 

rates under Sections 13(e) and 14(g) of 

the Exchange Act.5

Section 6(b)(2) sets forth the method 

for determining the annual adjustment 

to the fee rate under Section 6(b) for 

fiscal year 2019. Specifically, the 

Commission must adjust the fee rate 

under Section 6(b) to a ‘‘rate that, when 

applied to the baseline estimate of the 

aggregate maximum offering prices for 

[fiscal year 2019], is reasonably likely to 

produce aggregate fee collections under 

[Section 6(b)] that are equal to the target 

fee collection amount for [fiscal year 

2019].’’ That is, the adjusted rate is 

determined by dividing the ‘‘target fee 

collection amount’’ for fiscal year 2019 

by the ‘‘baseline estimate of the 

aggregate maximum offering prices’’ for 

fiscal year 2019. 

Section 6(b)(6)(A) specifies that the 

‘‘target fee collection amount’’ for fiscal 

year 2019 is $660,000,000. Section 

6(b)(6)(B) defines the ‘‘baseline estimate 

of the aggregate maximum offering 

prices’’ for fiscal year 2019 as ‘‘the 

baseline estimate of the aggregate 

maximum offering price at which 

securities are proposed to be offered 

pursuant to registration statements filed 

with the Commission during [fiscal year 

2019] as determined by the 

Commission, after consultation with the 

Congressional Budget Office and the 

Office of Management and Budget 

. . . .’’ 

To make the baseline estimate of the 

aggregate maximum offering price for 

fiscal year 2019, the Commission is 

using a methodology that has been used 

in prior fiscal years and that was 

developed in consultation with the 

Congressional Budget Office and Office 

of Management and Budget.6 Using this 

methodology, the Commission 

determines the ‘‘baseline estimate of the 

aggregate maximum offering price’’ for 

fiscal year 2019 to be 

$5,447,649,888,566. Based on this 

estimate, the Commission calculates the 

fee rate for fiscal 2019 to be $121.20 per 

million. This adjusted fee rate applies to 

Section 6(b) of the Securities Act, as 

well as to Sections 13(e) and 14(g) of the 

Exchange Act. 

III. Effective Dates of the Annual 

Adjustments 

The fiscal year 2019 annual 

adjustments to the fee rates applicable 

under Section 6(b) of the Securities Act 

and Sections 13(e) and 14(g) of the 

Exchange Act will be effective on 

October 1, 2018.7

IV. Conclusion 

Accordingly, pursuant to Section 6(b) 

of the Securities Act and Sections 13(e) 

and 14(g) of the Exchange Act,8

It is hereby ordered that the fee rates 

applicable under Section 6(b) of the 

Securities Act and Sections 13(e) and 

14(g) of the Exchange Act shall be 

$121.20 per million effective on October 

1, 2018. 

By the Commission. 

Brent J. Fields, 

Secretary. 

Appendix A 

Congress has established a target amount of 

monies to be collected from fees charged to 

issuers based on the value of their 

registrations. This appendix provides the 

formula for determining such fees, which the 

Commission adjusts annually. Congress has 

mandated that the Commission determine 

these fees based on the ‘‘aggregate maximum 

offering prices,’’ which measures the 

aggregate dollar amount of securities 

registered with the Commission over the 

course of the year. In order to maximize the 

likelihood that the amount of monies targeted 

by Congress will be collected, the fee rate 

must be set to reflect projected aggregate 

maximum offering prices. As a percentage, 

the fee rate equals the ratio of the target 

amounts of monies to the projected aggregate 

maximum offering prices. 

For 2019, the Commission has estimated 

the aggregate maximum offering prices by 

projecting forward the trend established in 

the previous decade. More specifically, an 

ARIMA model was used to forecast the value 

of the aggregate maximum offering prices for 

months subsequent to July 2018, the last 

month for which the Commission has data on 

the aggregate maximum offering prices. 

The following sections describe this 

process in detail. 

A. Baseline estimate of the aggregate 

maximum offering prices for fiscal year 

2019. 

First, calculate the aggregate maximum 

offering prices (AMOP) for each month in the 

sample (July 2008–July 2018). Next, calculate 

the percentage change in the AMOP from 

month to month. 

Model the monthly percentage change in 

AMOP as a first order moving average 

process. The moving average approach 

allows one to model the effect that an 

exceptionally high (or low) observation of 

AMOP tends to be followed by a more 

‘‘typical’’ value of AMOP. 

Use the estimated moving average model to 

forecast the monthly percent change in 

AMOP. These percent changes can then be 

applied to obtain forecasts of the total dollar 

value of registrations. The following is a 

more formal (mathematical) description of 

the procedure: 

1. Begin with the monthly data for AMOP. 

The sample spans ten years, from July 2008 

to July 2018. 

2. Divide each month’s AMOP (column C) 

by the number of trading days in that month 

(column B) to obtain the average daily AMOP 

(AAMOP, column D). 

3. For each month t, the natural logarithm 

of AAMOP is reported in column E. 

4. Calculate the change in log(AAMOP) 

from the previous month as Dt = log 


sradovich on DSK3GMQ082PROD with NOTICES