Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices 18405 

of the fund, who would otherwise be required to 

report solely by reason of being a fund director and 

who does not have information with respect to the 

fund’s transactions in a particular security, does not 

have to file an initial holdings report or a quarterly 

transaction report; (iii) an Access Person of a 

principal underwriter of the fund does not have to 

file reports if the principal underwriter is not 

affiliated with the fund (unless the fund is a unit 

investment trust) or any investment adviser of the 

fund and the principal underwriter of the fund does 

not have any officer, director, or general partner 

who serves in one of those capacities for the fund 

or any investment adviser of the fund; (iv) an 

Access Person to an investment adviser need not 

make quarterly reports if the report would duplicate 

information provided under the reporting 

provisions of the Investment Adviser’s Act of 1940; 

(v) an Access Person need not make quarterly 

transaction reports if the information provided in 

the report would duplicate information received by 

the 17j–1 organization in the form of broker trade 

confirmations or account statements or information 

otherwise in the records of the 17j–1 organization; 

and (vi) an Access Person need not make quarterly 

transaction reports with respect to transactions 

effected pursuant to an Automatic Investment Plan. 

7 If information collected pursuant to the rule is 

reviewed by the Commission’s examination staff, it 

will be accorded the same level of confidentiality 

accorded to other responses provided to the 

Commission in the context of its examination and 

oversight program. See section 31(c) of the 

Investment Company Act (15 U.S.C. 80a–30(c)). 

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

2 17 CFR 240.19b–4. 

Within 10 days of becoming an Access 

Person, a dated initial holdings report 

that sets forth certain information with 

respect to the Access Person’s securities 

and accounts; (ii) dated quarterly 

transaction reports within 30 days of the 

end of each calendar quarter providing 

certain information with respect to any 

securities transactions during the 

quarter and any account established by 

the Access Person in which any 

securities were held during the quarter; 

and (iii) dated annual holding reports 

providing information with respect to 

each Covered Security the Access 

Person beneficially owns and accounts 

in which securities are held for his or 

her benefit. In addition, rule 17j–1 

requires investment personnel of a fund 

or its investment adviser, before 

acquiring beneficial ownership in 

securities through an initial public 

offering (IPO) or in a private placement, 

to obtain approval from the fund or the 

fund’s investment adviser. 

The requirements that the 

management of a rule 17j–1 organization 

provide the fund’s board with new and 

amended codes of ethics and an annual 

issues and certification report are 

intended to enhance board oversight of 

personal investment policies applicable 

to the fund and the personal investment 

activities of Access Persons. The 

requirements that Access Persons 

provide initial holdings reports, 

quarterly transaction reports, and 

annual holdings reports and request 

approval for purchases of securities 

through IPOs and private placements 

are intended to help fund compliance 

personnel and the Commission’s 

examinations staff monitor potential 

conflicts of interest and detect 

potentially abusive activities. The 

requirement that each rule 17j–1 

organization maintain certain records is 

intended to assist the organization and 

the Commission’s examinations staff in 

determining if there have been 

violations of rule 17j–1. 

We estimate that annually there are 

approximately 85,297 respondents 

under rule 17j–1, of which 15,297 are 

rule 17j–1 organizations and 70,000 are 

Access Persons. In the aggregate, these 

respondents make approximately 

107,363 responses annually. We 

estimate that the total annual burden of 

complying with the information 

collection requirements in rule 17j–1 is 

approximately 376,628 hours. This hour 

burden represents time spent by Access 

Persons that must file initial and annual 

holdings reports and quarterly 

transaction reports, investment 

personnel that must obtain approval 

before acquiring beneficial ownership in 

any securities through an IPO or private 

placement, and the responsibilities of 

Rule 17j–1 organizations arising from 

information collection requirements 

under rule 17j–1. These include 

notifying Access Persons of their 

reporting obligations, preparing an 

annual rule 17j–1 report and 

certification for the board, documenting 

their approval or rejection of IPO and 

private placement requests, maintaining 

annual rule 17j–1 records, maintaining 

electronic reporting and recordkeeping 

systems, amending their codes of ethics 

as necessary, and, for new fund 

complexes, adopting a code of ethics. 

We estimate that there is an annual 

cost burden of approximately $5,000 per 

fund complex, for a total of $4,020,000 

associated with complying with the 

information collection requirements in 

rule 17j–1. This represents the costs of 

purchasing and maintaining computers 

and software to assist funds in carrying 

out rule 17j–1 recordkeeping. 

These burden hour and cost estimates 

are based upon the Commission staff’s 

experience and discussions with the 

fund industry. The estimates of average 

burden hours and costs are made solely 

for the purposes of the Paperwork 

Reduction Act. These estimates are not 

derived from a comprehensive or even 

a representative survey or study of the 

costs of Commission rules. 

Compliance with the collection of 

information requirements of the rule is 

mandatory and is necessary to comply 

with the requirements of the rule in 

general. An agency may not conduct or 

sponsor, and a person is not required to 

respond to a collection of information 

unless it displays a currently valid 

control number. Rule 17j–1 requires that 

records be maintained for at least five 

years in an easily accessible place.7

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 

estimates of the burden of the proposed 

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 in 

writing within 60 days of this 

publication by May 31, 2022. 

Please direct your written comments 

to David Bottom, Director/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: March 25, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06706 Filed 3–29–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94492; File No. SR– 

NASDAQ–2022–020] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

4756(a)(3), in Light of Planned 

Changes to the System as Well as To 

Address Existing Issues 

March 23, 2022. 

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 March 11, 

2022, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 


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3An ‘‘Order Type’’ is a standardized set of 

instructions associated with an Order that define 

how it will behave with respect to pricing, 

execution, and/or posting to the Nasdaq Book when 

submitted to Nasdaq. See Equity 1, Section 1(a)(7). 

4An ‘‘Order Attribute’’ is a further set of variable 

instructions that may be associated with an Order 

to further define how it will behave with respect to 

pricing, execution, and/or posting to the Nasdaq 

Book when submitted to Nasdaq. See id. 

5The RASH (Routing and Special Handling) 

Order entry protocol is a proprietary protocol that 

allows members to enter Orders, cancel existing 

Orders and receive executions. RASH allows 

participants to use advanced functionality, 

including discretion, random reserve, pegging and 

routing. See http://nasdaqtrader.com/content/ 

technicalsupport/specifications/TradingProducts/ 

rash_sb.pdf. 

6The OUCH Order entry protocol is a Nasdaq 

proprietary protocol that allows subscribers to 

quickly enter orders into the System and receive 

executions. OUCH accepts limit Orders from 

members, and if there are matching Orders, they 

will execute. Non-matching Orders are added to the 

Limit Order Book, a database of available limit 

Orders, where they are matched in price-time 

priority. OUCH only provides a method for 

members to send Orders and receive status updates 

on those Orders. See https://www.nasdaqtrader.

com/Trader.aspx?id=OUCH. 

7The Exchange designed the OUCH protocol to 

enable members to enter Orders quickly into the 

System. As such, the Exchange developed OUCH 

with simplicity in mind, and it therefore lacks more 

complex order handling capabilities. By contrast, 

the Exchange specifically designed RASH to 

support advanced functionality, including 

discretion, random reserve, pegging and routing. 

Once the System upgrades occur, then the Exchange 

intends to propose further changes to its Rules to 

permit participants to utilize OUCH, in addition to 

RASH, to enter order types that require advanced 

functionality. 

8The Exchange notes that its sister exchanges, 

Nasdaq BX and Nasdaq PSX, plan to file similar 

proposed rule changes with the Commission 

shortly. However, certain Order Types affected by 

the proposed rule change are associated with the 

Nasdaq Opening and Closing Crosses (LOC, MOC, 

LOO, MOO, IO, and OIO Orders, discussed below), 

and thus are not applicable to either Nasdaq BX or 

Nasdaq PSX. 

9See Securities Exchange Act Release No. 34– 

93245 (October 4, 2021), 86 FR 56302 (October 8, 

2021) (SR–NASDAQ–2021–075); Securities 

Exchange Act Release No. 34–92180 (June 15, 

2021), 86 FR 33420 (June 24, 2021) (SR–NASDAQ– 

2021–044); Securities Exchange Act Release No. 34– 

91109 (February 11, 2021), 86 FR 10141 (February 

18, 2021) (SR–NASDAQ–2020–090); Securities 

Exchange Act Release No. 34–90389 (November 10, 

2020), 85 FR 73304 (November 17, 2020) (SR– 

NASDAQ–2020–071). 

10The Exchange notes that while the QIX Order 

Entry Protocol still exists, the Exchange plans to 

retire it in the near future and has begun 

transitioning participants away from its use. 

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 amend 

Rule 4756(a)(3), in light of planned 

changes to the System as well as to 

address existing issues, as described 

further below. The text of the proposed 

rule change is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/ 

nasdaq/rules, 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 

Presently, the Exchange is making 

functional enhancements and 

improvements to specific Order Types 3

and Order Attributes 4 that are currently 

only available via the RASH Order entry 

protocol.5 Specifically, the Exchange 

will be upgrading the logic and 

implementation of these Order Types 

and Order Attributes so that the features 

are more streamlined across the Nasdaq 

Systems and order entry protocols, and 

will enable the Exchange to process 

these Orders more quickly and 

efficiently. Additionally, this System 

upgrade will pave the way for the 

Exchange to enhance the OUCH Order 

entry protocol 6 so that Participants may 

enter such Order Types and Order 

Attributes via OUCH, in addition to the 

RASH Order entry protocol.7 The 

Exchange plans to implement its 

enhancement of the OUCH protocol 

sequentially, by Order Type and Order 

Attribute.8

To support and prepare for these 

upgrades and enhancements, the 

Exchange previously submitted four 

rule filings to the Commission that 

amended its rules pertaining to, among 

other things, Market Maker Peg Orders, 

Orders with Reserve Size, Orders with 

Pegging and Trade Now Attributes, and 

Discretionary Orders.9 The Exchange 

now proposes to amend Rule 4756(a)(3), 

which governs the entry of Orders, so 

that it aligns with how the System, once 

upgraded, will handle the partial 

cancellation of Orders to reduce their 

share size. The proposed filing also 

addresses issues with the existing Rule 

text and the current implementation of 

that Rule text by the System. 

In pertinent part, existing Rule 

4756(a)(3) states as follows, with respect 

how the Exchange handles partial Order 

cancellations to reduce share size: 

In addition, a partial cancellation of an 

Order to reduce its share size will not affect 

the priority of the Order on the book; 

provided, however, that such a partial 

cancellation may not be made with respect to 

an MOO Order, an LOO Order, an OIO Order, 

an MOC Order, an LOC Order, an IO Order, 

or a Pegged Order (including a Discretionary 

Order that is Pegged). 

The first clause of this text states the 

general rule that participants may 

instruct the Exchange to partially cancel 

their Orders to reduce share size, and 

when handling such partial cancellation 

instructions, the Exchange will adjust 

the size of the Orders without affecting 

their existing priority. The second 

clause states an exception to this general 

rule, which the Exchange intends to 

mean that when the Exchange processes 

partial cancellations of Market On Open 

(‘‘MOO’’), Limit on Open (‘‘LOO’’), 

Opening Imbalance Only (‘‘OIO’’), 

Market on Close (‘‘MOC’’), Limit on 

Close (‘‘LOC’’), and Imbalance Only 

Orders (‘‘IO’’), as well as Orders with 

the Pegging Attribute (including 

Discretionary Orders with Pegging) that 

participants enter via RASH or FIX or 

QIX (as opposed to OUCH or FLITE), the 

partially cancelled Orders will lose their 

priority. 

Going forward, planned upgrades will 

provide for the Exchange to process 

partial cancellations of all Order Types 

and Attributes entered through all of its 

available and applicable Order Entry 

Protocols, including RASH, OUCH, FIX, 

QIX and FLITE,10 and it will do so 

without loss of priority, such that the 

existing exception to the general rule in 

4756(a)(3) will no longer be necessary. 

Thus, the Exchange proposes to 

eliminate this exception by deleting the 

following text from the Rule: ‘‘provided, 

however, that such a partial cancellation 

may not be made with respect to an 

MOO Order, an LOO Order, an OIO 

Order, an MOC Order, an LOC Order, an 

IO Order, or a Pegged Order (including 

a Discretionary Order that is Pegged).’’ 

This proposal will provide better 

outcomes to participants by enabling 

them to reduce the share size of their 

Orders without the need to sacrifice the 

priority of their Orders. 

The Exchange believes that it is 

reasonable to allow the partial 


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

12 15 U.S.C. 78f(b)(5). 

cancellation of an Order without the 

Order losing priority because the 

participant that entered the Order 

continues to express its willingness to 

trade at the price entered when the 

Order first came onto the Book. 

Moreover, if the Order is displayed, 

other participants quoting at the same 

price are aware of the priority of their 

Orders relative to the partially cancelled 

Order. While a partial cancellation may 

provide these other participants with 

greater opportunities to provide a fill, 

the Exchange does not believe that it 

would be reasonable for these 

participants to jump ahead of an Order 

with time priority merely because the 

size of the Order has been reduced. 

Similarly, if the partially cancelled 

Order is non-displayed, other 

participants would have no awareness 

of its price, its original size, or its 

reduced size. Again, while other 

participants at that price may have an 

increased opportunity to provide a fill 

when the Order’s size is reduced, they 

would not have an expectation that the 

priority of their Orders would change 

vis-a`-vis that of an Order that arrived on 

the Book at an earlier time. 

Moreover, the Exchange notes that the 

proposal will simplify and harmonize 

the Exchange’s processing of partial 

cancellations across its Order Entry 

Protocols. 

Additionally, the proposed Rule 

change will address ambiguities in the 

existing Rule text. The existing Rule text 

does not state expressly the Exchange’s 

current practice of restricting the loss of 

priority following a partial cancellation 

to LOO, MOO, MOC, LOC, and Pegged 

Orders when such Orders are entered 

through RASH or FIX or QIX. The 

existing language suggests that partial 

cancellations of these Orders cause a 

loss of priority in all cases, regardless of 

the Exchange’s Order Entry Protocol 

utilized to enter the Orders. In fact, the 

Exchange does process partial 

cancellations of these Orders without 

loss of priority when the Orders are 

entered through OUCH and FLITE. The 

proposed Rule change will address this 

issue by providing for consistent 

handling of partial cancellations across 

all Orders and all applicable and 

available Order Entry Protocols and by 

eliminating exceptions in the existing 

Rule text. 

Similarly, the existing Rule is 

ambiguous as to the intended scope of 

its exception to the general rule for 

‘‘Pegged Orders.’’ Although the Rule 

states that the exception applies to 

‘‘Pegged Orders (including a 

Discretionary Order that is Pegged),’’ the 

Exchange does not intend for Orders 

with Midpoint Pegging to be part of this 

exception, and it applies the Rule 

accordingly. In other words, the 

Exchange processes partial cancellations 

for Orders with Midpoint Pegging (i.e., 

Midpoint Peg Post-Only Orders, 

Midpoint Extended Life Orders, and 

Midpoint Extended Life Plus 

Continuous Book Orders, as well as 

Non-Display Orders assigned the 

Midpoint Peg Attribute) without loss of 

priority. The Exchange recognizes that 

the Rule text does not specifically 

address Orders with Midpoint Pegging. 

Again, the proposed Rule change will 

eliminate this issue going forward 

because the Exchange will adopt 

consistent handling of partial 

cancellations across all Orders and 

available and applicable Order Entry 

Protocols. 

Finally, the proposed Rule change 

will address a problem that the 

Exchange has uncovered with the 

manner in which the System presently 

processes OIO and IO Orders entered 

though RASH and FIX and QIX. As 

noted above, the Exchange intends for 

the existing Rule to mean that partially 

cancelled OIO and IO Orders entered 

through RASH or FIX or QIX lose 

priority. Nevertheless, the Exchange 

discovered, during the course of 

preparing its upgrades that the System 

presently processes partial cancellations 

of OIO and IO Orders entered through 

RASH or FIX or QIX without loss of 

priority. The Exchange believes that the 

proposed Rule will render the existing 

Rule text problem moot, and will better 

serve participants by improving the 

efficiency of their activity on the 

Exchange as well as their potential 

outcomes. 

The Exchange intends to implement 

the foregoing changes during the Second 

Quarter of 2022. The Exchange will 

issue an Equity Trader Alert at least 7 

days in advance of implementing the 

changes. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,11 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,12

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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. 

The Exchange believes that its 

proposed amendment to Rule 4756(a)(3) 

is consistent with the Act. Eliminating 

the exception to the general Rule 

providing for the Exchange to process 

partial cancellations without loss of 

priority will benefit participants by 

enabling them to reduce the share size 

of their Orders without the need to 

sacrifice the priority of their Orders. 

The Exchange believes that it is 

reasonable to allow the partial 

cancellation of an Order without the 

Order losing priority because the 

participant that entered the Order 

continues to express its willingness to 

trade at the price entered when the 

Order first came onto the Book. 

Moreover, if the Order is displayed, 

other participants quoting at the same 

price are aware of the priority of their 

Orders relative to the partially cancelled 

Order. While a partial cancellation may 

provide these other participants with 

greater opportunities to provide a fill, 

the Exchange does not believe that it 

would be reasonable for these 

participants to jump ahead of an Order 

with time priority merely because the 

size of the Order has been reduced. 

Similarly, if the partially cancelled 

order is non-displayed, other 

participants would have no awareness 

of its price, its original size, or its 

reduced size. Again, while other 

participants at that price may have an 

increased opportunity to provide a fill 

when the Order’s size is reduced, they 

would not have an expectation that the 

priority of their Orders would change 

vis-a`-vis that of an Order that arrived on 

the Book at an earlier time. 

Moreover, the proposal will simplify 

and harmonize the Exchange’s 

processing of partial cancellations 

across its Order Entry Protocols. This 

proposed amendment reflects planned 

upgrades that will allow the Exchange 

to process partial cancellation of Orders 

entered through all pertinent and 

available Order Entry Protocols without 

loss of priority. 

Additionally, the proposed Rule 

change is consistent with the Act 

because it will eliminate ambiguities in 

the existing Rule text that do not fully 

reflect the Exchange’s intended meaning 

or application of the Rule. As noted 

above, the existing Rule text does not 

state that the Exchange limits the loss of 

priority for partially cancelled Orders to 

LOO, MOO, MOC, LOC, and Pegged 

Orders when such Orders are entered 

through RASH or FIX or QIX. The 

existing language suggests that partial 

cancellations of these Orders lose 

priority in all cases, regardless of the 

Exchange’s Order Entry Protocol 

utilized to enter the Orders. In fact, the 

Exchange does process partial 

cancellations of these Orders without 

loss of priority when the Orders are 

entered through OUCH or FLITE. The 


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

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

4(f)(6)(iii) requires a self-regulatory organization 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. The Exchange 

has satisfied this requirement. 

proposed Rule change will address this 

issue by providing for consistent 

handling of partial cancellations across 

all applicable and available Orders and 

Order Entry Protocols and by 

eliminating exceptions in the existing 

Rule text. 

Similarly, the existing Rule does not 

reflect the Exchange’s intent that Orders 

with Midpoint Pegging are not included 

in this exception, even though it applies 

the Rule in this manner. In other words, 

the Exchange processes partial 

cancellations for Midpoint Pegging 

Orders without loss of priority. The 

Exchange recognizes that the Rule text 

does not specifically address Orders 

with Midpoint Pegging. Again, the 

proposed Rule change will eliminate 

this issue going forward because the 

Exchange will adopt consistent 

handling of partial cancellations across 

all Orders and applicable and available 

Order Entry Protocols. 

The proposed Rule change is 

consistent with the Act because it will 

address a problem that the Exchange has 

uncovered with the manner in which 

the System presently processes OIO and 

IO Orders entered though RASH and 

FIX and QIX. As noted above, the 

Exchange intends for the existing Rule 

to mean that partially cancelled OIO 

and IO Orders entered through RASH or 

FIX or QIX lose priority. Nevertheless, 

during the course of preparing its 

upgrades, the Exchange discovered that 

the System presently does process 

partial cancellations of OIO and IO 

Orders entered through RASH and FIX 

and QIX without loss of priority. The 

Exchange believes that the proposed 

Rule will render the existing Rule text 

problem moot, and will better serve 

participants by improving the efficiency 

of their activity on the Exchange as well 

as their potential outcomes. 

Furthermore, it is consistent with the 

Act to ensure that the Exchange’s Rules 

and practices are, and remain, in sync. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that its 

proposed rule change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. As a general 

principle, the proposed changes are 

reflective of the significant competition 

among exchanges and non-exchange 

venues for order flow. In this regard, 

proposed changes that facilitate 

enhancements to the Exchange’s System 

and Order Entry Protocols as well as 

those that amend and clarify the 

Exchange’s Rules regarding its Order 

Types and Attributes, are procompetitive because they bolster the 

efficiency, integrity, and overall 

attractiveness of the Exchange in an 

absolute sense and relative to its peers. 

Moreover, the proposed changes will 

not unduly burden intra-market 

competition among various Exchange 

participants. The Exchange’s proposal to 

allow the partial cancellation of an 

Order without the Order losing priority 

will not impact intra-market 

competition because the participant that 

entered the Order continues to express 

its willingness to trade at the price 

entered when the Order first came onto 

the Book. Moreover, if the Order is 

displayed, other participants quoting at 

the same price are aware of the priority 

of their Orders relative to the partially 

cancelled Order. While a partial 

cancellation may provide these other 

participants with greater opportunities 

to provide a fill, the Exchange does not 

believe that it would be reasonable for 

these participants to jump ahead of an 

Order with time priority merely because 

the size of the Order has been reduced. 

Similarly, if the partially cancelled 

Order is non-displayed, other 

participants would have no awareness 

of its price, its original size, or its 

reduced size. Again, while other 

participants at that price may have an 

increased opportunity to provide a fill 

when the Order’s size is reduced, they 

would not have an expectation that the 

priority of their Orders would change 

vis-a`-vis that of an Order that arrived on 

the Book at an earlier time. 

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 

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

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– 

NASDAQ–2022–020 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–NASDAQ–2022–020. 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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices 18409 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 93857 

(December 22, 2021), 86 FR 74130 (December 29, 

2021) (SR–FICC–2021–009) (‘‘Notice’’). 

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

5Securities Exchange Act Release No. 94066 

(January 26, 2022), 87 FR 5523 (February 1, 2022) 

(SR–FICC–2021–009). 

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

7The description of the Proposed Rule Change is 

based on the statements prepared by FICC in the 

Notice. See Notice, supra note 3. Capitalized terms 

used herein and not otherwise defined herein are 

defined in the Rules, available at https://

www.dtcc.com/legal/rules-and-procedures. 

8 15 U.S.C. 78s(b)(2)(B). 

9 Id. 

10 15 U.S.C. 78q–1. 

11 15 U.S.C. 78q–1(b)(3)(F). 

12 15 U.S.C. 78q–1(b)(3)(I). 

13 17 CFR 240.17Ad–22(e)(18). 

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–NASDAQ–2022–020, and 

should be submitted on or before April 

20, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06511 Filed 3–29–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94497; File No. SR–FICC– 

2021–009] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Enhance 

Capital Requirements and Make Other 

Changes 

March 23, 2022. 

I. Introduction 

On December 13, 2021, Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–FICC–2021–009 (the 

‘‘Proposed Rule Change’’) pursuant to 

Section 19(b)(1) of the Securities 

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

19b–4 thereunder.2 The Proposed Rule 

Change was published for comment in 

the Federal Register on December 29, 

2021,3 and the Commission received no 

comment letters regarding the changes 

proposed in the Proposed Rule Change. 

On January 26, 2022, pursuant to 

Section 19(b)(2) of the Act,4 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.5 This order 

institutes proceedings, pursuant to 

Section 19(b)(2)(B) of the Act,6 to 

determine whether to approve or 

disapprove the Proposed Rule Change. 

II. Summary of the Proposed Rule 

Change 

As described in the Notice, FICC 

proposes to amend the Government 

Securities Division (‘‘GSD’’) Rulebook 

(the ‘‘GSD Rules’’) and the MortgageBacked Securities Division (‘‘MBSD’’) 

Clearing Rules (the ‘‘MBSD Rules,’’ and 

together with the GSD Rules, the 

‘‘Rules’’) of FICC in order to (1) revise 

its capital requirements for GSD 

members and MBSD members 

(collectively, ‘‘members’’), (2) 

streamline its two credit risk monitoring 

systems, Watch List and enhanced 

surveillance list, and (3) make certain 

other clarifying, technical, and 

supplementary changes to implement 

items (1) and (2).7

First, FICC proposes to revise various 

aspects of its capital requirements for 

several types of members. FICC 

proposes to increase minimum capital 

requirements for certain members. FICC 

also proposes to revise how it measures 

certain members’ capital by 

incorporating common equity tier 1 

capital and the standards established in 

the capital adequacy rules and 

regulations of the Federal Deposit 

Insurance Corporation. FICC would 

revise the reporting requirements 

concerning the capital requirements for 

certain members. In addition, for certain 

types of members who currently do not 

have specific amounts for their 

minimum capital requirements, the 

proposal would establish such a 

requirement. 

Second, FICC proposes to revise its 

Watch List and enhanced surveillance 

list, which are both currently used to 

identify participants who would receive 

additional or enhanced credit risk 

monitoring. FICC proposes to revise its 

Watch List and delete its enhanced 

surveillance list. FICC also proposes to 

clarify that members on the Watch List 

are reported to FICC’s management 

committees and regularly reviewed by 

FICC’s senior management. 

Third, FICC proposes to (1) revise or 

add headings and sub-headings and 

renumbering sections as appropriate, (2) 

revise defined terms and add 

appropriate defined terms to facilitate 

the proposed changes, (3) rearrange and 

consolidate paragraphs to promote 

readability, (4) fix typographical and 

other errors, and (5) other changes in 

order to improve the accessibility and 

transparency of the Rules. 

III. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Change and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 8 to determine 

whether the Proposed Rule Change 

should be approved or disapproved. 

Institution of proceedings is appropriate 

at this time in view of the legal and 

policy issues raised by the Proposed 

Rule Change. Institution of proceedings 

does not indicate that the Commission 

has reached any conclusions with 

respect to any of the issues involved. 

Rather, the Commission seeks and 

encourages interested persons to 

comment on the Proposed Rule Change, 

providing the Commission with 

arguments to support the Commission’s 

analysis as to whether to approve or 

disapprove the Proposed Rule Change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,9 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of, and input from 

commenters with respect to, the 

Proposed Rule Change’s consistency 

with Section 17A of the Act,10 and the 

rules thereunder, including the 

following provisions: 

• Section 17A(b)(3)(F) of the Act,11

which requires, among other things, that 

the rules of a clearing agency must be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions, to assure the 

safeguarding of securities and funds 

which are in the custody or control of 

the clearing agency or for which it is 

responsible, and to protect investors and 

the public interest; 

• Section 17A(b)(3)(I) of the Act,12

which requires that the rules of a 

clearing agency do not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act; 

• Rule 17Ad–22(e)(18) under the 

Act,13 which requires that a covered 

clearing agency establish, implement, 

maintain, and enforce written policies 

and procedures reasonably designed to 

establish objective, risk-based, and 

publicly disclosed criteria for 

participation, which permit fair and 


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