Federal Register / Vol. 89, No. 16 / Wednesday, January 24, 2024 / Notices 4641 

13The Exchange notes ISOs will continue to 

receive price protection, such as from the limit 

order fat finger check. See Rule 5.34(c)(1). 

14See SR–CboeEDGX–2023–082 (December 21, 

2023). 

15See Miami International Securities Exchange, 

LLC (‘‘MIAX’’) Rule 515(c)(1) (ISOs excluded from 

MIAX’s price protection on non-market maker 

orders in non-proprietary products, which prevents 

orders from executing more than a specified 

number of increments away from the national best 

bid or offer (‘‘NBBO’’) at the time the order is 

received). 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. 19 17 CFR 200.30–3(a)(12). 

change will enhance the Exchange 

system by aligning its drill-through 

protection with the intended purpose of 

ISOs.13 The Exchange believes the 

proposed rule change may ultimately 

result in additional executions 

consistent with the expectations of users 

that submit ISOs, which ultimately 

benefits investors. The Exchange further 

believes the proposed rule change is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers, as it will 

apply to ISOs of all users. 

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 purposes of the Act. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act, 

because it will apply in the same 

manner to ISOs of all Trading Permit 

Holders. The Exchange does not believe 

that the proposed rule change will 

impose any burden on intermarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act, because it relates 

solely to the application of one of the 

Exchange’s price protection 

mechanisms to ISOs. Additionally, the 

proposed rule change substantively 

identical to a recent rule change by Cboe 

EDGX Exchange, Inc. (‘‘EDGX 

Options’’).14 The Exchange also notes at 

least one other options exchange 

excludes ISOs from certain of its price 

protection measures.15

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 16 and Rule 19b–4(f)(6) 17

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. If the 

Commission takes such action, the 

Commission will 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– 

C2–2024–003 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–C2–2024–003. 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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–C2–2024–003 and should be 

submitted on or before February 14, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01305 Filed 1–23–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–821, OMB Control No. 

3235–0776] 

Proposed Collection; Comment 

Request; Extension: Rule 18f–4 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission (the 

‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit the existing collection 

of information to the Office of 


ddrumheller on DSK120RN23PROD with NOTICES1
4642 Federal Register / Vol. 89, No. 16 / Wednesday, January 24, 2024 / Notices 

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). 

Management and Budget (‘‘OMB’’) for 

extension and approval. 

Rule 18f–4 (17 CFR 270.18f–4) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a–1 et seq.) (the 

‘‘Investment Company Act’’) permits a 

fund to enter into derivatives 

transactions, notwithstanding the 

prohibitions and restrictions on the 

issuance of senior securities under 

section 18 of the Investment Company 

Act. A fund that relies on rule 18f–4 to 

enter into derivatives transactions 

generally is required to: adopt a 

derivatives risk management program; 

have its board of directors approve the 

fund’s designation of a derivatives risk 

manager and receive direct reports from 

the derivatives risk manager about the 

derivatives risk management program; 

and comply with a VaR-based test 

designed to limit a fund’s leverage risk 

consistent with the investor protection 

purposes underlying section 18 of the 

Investment Company Act. Rule 18f–4 

includes an exception from the 

derivatives risk management program 

requirement and limit on fund leverage 

risk if a fund limits its derivatives 

exposure to 10% of its net assets (the 

fund may exclude from this calculation 

derivatives transactions that it uses to 

hedge certain currency and interest rate 

risks). A fund relying on this exception 

will be required to adopt policies and 

procedures that are reasonably designed 

to manage its derivatives risks. 

Rule 18f–4 also includes an exception 

from the VaR-based limit on leverage 

risk for a leveraged/inverse fund that 

cannot comply with rule 18f–4’s limit 

on fund leverage risk and that, as of 

October 28, 2020, is: (1) in operation, (2) 

has outstanding shares issued in one or 

more public offerings to investors, and 

(3) discloses in its prospectus that it has 

a leverage multiple or inverse multiple 

that exceeds 200% of the performance 

or the inverse of the performance of the 

underlying index (for purposes of this 

Supporting Statement, such a fund is an 

‘‘over-200% leveraged/inverse fund’’). A 

fund relying on this exception must 

disclose in its prospectus that it is not 

subject to rule 18f–4’s limit on fund 

leverage risk. 

Finally, rule 18f–4 permits funds to 

enter into reverse repurchase 

agreements (and similar financing 

transactions) and ‘‘unfunded 

commitments’’ to make certain loans or 

investments, and to invest in securities 

on a when-issued or forward-settling 

basis, or with a non-standard settlement 

cycle, subject to conditions tailored to 

these transactions. 

The respondents to rule 18f–4 are 

registered open- and closed-end 

management investment companies and 

BDCs. Compliance with rule 18f–4 is 

mandatory for all funds that seek to 

engage, in reliance on the rule, in 

derivatives transactions and certain 

other transactions that the rule 

addresses, which would otherwise be 

subject to the restrictions of section 18 

of the Investment Company Act. 

The information collection 

requirements of rule 18f–4 are designed 

to ensure that funds maintain the 

required written derivatives risk 

management programs that promote 

compliance with the federal securities 

laws and protect investors, and 

otherwise comply with the requirements 

of the rule. The information collections 

also assist the Commission’s 

examination staff in assessing the 

adequacy of funds’ derivatives risk 

management programs and their 

compliance with the other requirements 

of the rule, and identifying weaknesses 

in a fund’s derivatives risk management 

if violations occur or are uncorrected. 

The respondents to rule 18f–4 are 

registered open- and closed-end 

management investment companies and 

BDCs. Compliance with rule 18f–4 is 

mandatory for all funds that seek to 

engage, in reliance on the rule, in 

derivatives transactions and certain 

other transactions that the rule 

addresses, which would otherwise be 

subject to the restrictions of section 18 

of the Investment Company Act. To the 

extent that records required to be 

created and maintained by funds under 

the rule are provided to the Commission 

in connection with examinations or 

investigations, such information will be 

kept confidential subject to the 

provisions of applicable law. 

Written comments are invited on: (a) 

whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimate of the burden of the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

by March 25, 2024. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: David Bottom, Chief Information 

Officer, Securities and Exchange 

Commission, c/o John Pezzullo, 100 F 

Street NE, Washington, DC 20549 or 

send an email to: PRA_Mailbox@

sec.gov. 

Dated: January 18, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01282 Filed 1–23–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99385; File No. SR–CBOE– 

2024–004] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 5.34 

January 18, 2024. 

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 January 3, 

2024, 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, II, and III below, which Items 

have been prepared by the Exchange. 

The Exchange filed the proposal as a 

‘‘non-controversial’’ 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 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

Rule 5.34. The text of the proposed rule 

change is provided below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 5.34. Order and Quote Price 

Protection Mechanisms and Risk 

Controls 

The System’s acceptance and 

execution of orders, quotes, and bulk 

messages, as applicable, pursuant to the 

Rules, including Rules 5.31 through 


ddrumheller on DSK120RN23PROD with NOTICES1