176 Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Notices 

1 12 U.S.C. 5465(e)(1). 

2 17 CFR 240.19b–4(n)(1)(i). 

3Terms not defined herein are defined in the 

Rules and Procedures of NSCC (‘‘Rules’’), available 

at http://www.dtcc.com/∼/media/Files/Downloads/ 

legal/rules/nscc_rules.pdf. 

4The principal terms of the Prefunded Liquidity 

Program are described in an advance notice (SR– 

NSCC–2015–802) (‘‘2015 Advance Notice’’) filed 

with the Commission pursuant to Section 806(e)(1) 

of the Clearing Supervision Act and Rule 19b– 

4(n)(1)(i) under the Act. See Securities Exchange 

Act Release No. 75730 (August 19, 2015), 80 FR 

51638 (August 25, 2015) (SR–NSCC–2015–802). 

5See Securities Exchange Act Release No. 79528 

(December 12, 2016), 81 FR 91232, (December 16, 

2016) (SR–DTC–2016–007; SR–FICC–2016–005; 

SR–NSCC–2016–003). The 2015 Advance Notice 

stated that the proceeds from the issuance of the 

Notes would be held in a cash deposit account at 

the Federal Reserve Bank of New York (‘‘FRBNY’’). 

NSCC subsequently adopted the Clearing Agency 

Investment Policy, which permits NSCC to invest 

such proceeds in bank deposits either at the FRBNY 

or at an approved bank counterparty. 

6Treasury is a part of the Chief Finance Office 

Organization of The Depository Trust & Clearing 

Corporation (‘‘DTCC’’), NSCC’s parent company. 

DTCC operates on a shared services model with 

respect to the NSCC and its affiliates. Most 

corporate functions are established and managed on 

an enterprise-wide basis pursuant to intercompany 

agreements under which it is generally DTCC that 

provides a relevant service to NSCC and its 

affiliates. 

9. Docket No(s).: MC2018–83 and 

CP2018–125; Filing Title: USPS Request 

to Add Priority Mail & First-Class 

Package Service Contract 68 to 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: December 22, 2017; 

Filing Authority: 39 U.S.C. 3642 and 39 

CFR 3020.30 et seq.; Public 

Representative: Timothy J. Schwuchow; 

Comments Due: January 4, 2018. 

10. Docket No(s).: MC2018–84 and 

CP2018–126; Filing Title: USPS Request 

to Add Priority Mail & First-Class 

Package Service Contract 69 to 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: December 22, 2017; 

Filing Authority: 39 U.S.C. 3642 and 39 

CFR 3020.30 et seq.; Public 

Representative: Katalin K. Clendenin; 

Comments Due: January 4, 2018. 

11. Docket No(s).: MC2018–85 and 

CP2018–127; Filing Title: USPS Request 

to Add Priority Mail & First-Class 

Package Service Contract 70 to 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: December 22, 2017; 

Filing Authority: 39 U.S.C. 3642 and 39 

CFR 3020.30 et seq.; Public 

Representative: Katalin K. Clendenin; 

Comments Due: January 4, 2018. 

12. Docket No(s).: MC2018–86 and 

CP2018–128; Filing Title: USPS Request 

to Add Priority Mail Express & Priority 

Mail Contract 56 to Competitive Product 

List and Notice of Filing Materials 

Under Seal; Filing Acceptance Date: 

December 22, 2017; Filing Authority: 39 

U.S.C. 3642 and 39 CFR 3020.30 et seq.; 

Public Representative: Michael L. 

Leibert; Comments Due: January 5, 

2018. 

This notice will be published in the 

Federal Register. 

Ruth Ann Abrams, 

Acting Secretary. 

[FR Doc. 2017–28219 Filed 12–29–17; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82403; File No. SR–NSCC– 

2017–807] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing of 

Advance Notice To Increase the 

Authorized Amount Under the 

Prefunded Liquidity Program 

December 26, 2017. 

Pursuant to Section 806(e)(1) of Title 

VIII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act 

entitled the Payment, Clearing, and 

Settlement Supervision Act of 2010 

(‘‘Clearing Supervision Act’’) 1 and Rule 

19b–4(n)(1)(i) under the Securities 

Exchange Act of 1934, as amended 

(‘‘Act’’),2 notice is hereby given that on 

December 12, 2017, National Securities 

Clearing Corporation (‘‘NSCC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

advance notice SR–NSCC–2017–807 

(‘‘Advance Notice’’) as described in 

Items I, II and III below, which Items 

have been prepared by the clearing 

agency. The Commission is publishing 

this notice to solicit comments on the 

Advance Notice from interested 

persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Advance 

Notice 

The advance notice of NSCC proposes 

to increase the aggregate amount of 

short-term promissory notes 

(‘‘Commercial Paper’’) and extendibleterm promissory notes (‘‘Extendible 

Notes’’ and, together with the 

Commercial Paper, ‘‘Notes’’) that NSCC 

is authorized to issue and sell, as further 

described below.3

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Advance Notice 

In its filing with the Commission, the 

clearing agency included statements 

concerning the purpose of and basis for 

the Advance Notice and discussed any 

comments it received on the Advance 

Notice. The text of these statements may 

be examined at the places specified in 

Item IV below. The clearing agency has 

prepared summaries, set forth in 

sections A and B below, of the most 

significant aspects of such statements. 

(A) Clearing Agency’s Statement on 

Comments on the Advance Notice 

Received From Members, Participants, 

or Others 

NSCC has not solicited or received 

any written comments relating to this 

proposal. NSCC will notify the 

Commission of any written comments 

received by NSCC. 

(B) Advance Notice Filed Pursuant to 

Section 806(e) of the Payment, Clearing, 

and Settlement Supervision Act 

Description of the Proposal 

NSCC maintains a program to issue 

and sell the Notes (‘‘Prefunded 

Liquidity Program’’ or the ‘‘Program’’), 

and is currently authorized to issue and 

sell the Notes in an aggregate amount up 

to $5 billion.4 NSCC is proposing to 

increase the aggregate amount of Notes 

it would be authorized to issue and sell 

under the Program to $10 billion. 

Management of the Prefunded 

Liquidity Program. Pursuant to the terms 

and conditions described in the 2015 

Advance Notice, NSCC issues Notes to 

institutional investors, and invests the 

proceeds in accordance with the 

Clearing Agency Investment Policy.5

The Program is managed and monitored 

daily by the Treasury group 

(‘‘Treasury’’).6 NSCC has structured the 

Prefunded Liquidity Program such that 

the maturities of the issued Notes are 

staggered to avoid concentrations of 

maturing liabilities. The majority of the 

Notes issued and sold under the 

Program to date have been Commercial 

Paper, however, NSCC maintains the 

flexibility to issue and sell any 

combination of Commercial Paper and 

Extendible Notes up to the authorized 

amount in order to allow it to adjust to 

the market for each of these types of 

Notes and to stagger the maturities of 

the outstanding Notes. Treasury also 

maintains and adheres to internal 

guidelines that limit the amount of 

Notes that can mature within any oneweek period. The weighted average 

maturity of the aggregate Notes 

outstanding issued under the Prefunded 

Liquidity Program have generally 

ranged between one and two months, 

and, in order to maintain the staggered 

maturity structure, the weighted average 

maturity of the Notes would be expected 


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Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Notices 177 

7The Liquidity Product Risk Unit is a part of the 

Group Chief Risk Office of the DTCC and is 

responsible for NSCC’s liquidity risk management 

program. Id. 

8Rule 17Ad–22(e)(7)(i). 

9Rule 4 (Clearing Fund) and Procedure XV 

(Clearing Fund Formula and Other Matters), supra 

note 3. 

10Securities Exchange Act Release No. 80605 

(May 5, 2017), 82 FR 21850 (May 10, 2017) (SR– 

DTC–2017–802, SR–NSCC–2017–802). 

11Rule 4(A) (Supplemental Liquidity Deposits), 

supra note 3. The Supplemental Liquidity Deposits 

are designed to cover the heightened liquidity 

exposure arising around monthly option expiry 

periods and are required from those Members 

whose activity would pose the largest liquidity 

exposure to NSCC. 

12 In March 31, 2016, NSCC had issued 

approximately $1.4 billion in Commercial Paper to 

81 investors and, as of July 31, 2017, this increased 

to approximately $3 billion in Commercial Paper 

outstanding to 177 investors. Further, as NSCC’s 

investor base has grown, it has also diversified to 

include corporations, asset managers, governments, 

and financial institutions. 

13Supra note 4. 

to increase under the proposal to 

approximately three to six months. 

Because the cash proceeds from the 

Prefunded Liquidity Program are one of 

NSCC’s existing default liquidity 

resources, as described below, Treasury, 

in consultation with the Liquidity 

Product Risk Unit,7 makes decisions 

regarding the aggregate amount of Notes 

to be issued based on NSCC’s projected 

liquidity needs. 

NSCC Liquidity Risk Management. 

NSCC measures and manages its 

liquidity risks and needs on a daily 

basis. In compliance with its regulatory 

requirements, NSCC seeks to maintain 

liquid resources in a sufficient amount 

to meet its settlement obligations under 

a wide range of foreseeable stress 

scenarios that includes, but is not 

limited to, the default of the affiliated 

family of Members that would generate 

the largest aggregate payment obligation 

for NSCC in extreme but plausible 

market conditions.8 NSCC developed 

the Prefunded Liquidity Program in 

order to strengthen its liquidity risk 

management by supplementing its other 

liquid resources with additional, 

prefunded, readily available liquid 

resources. NSCC’s other liquid resources 

include (1) the cash in its Clearing 

Fund; 9 (2) the cash that would be 

obtained by drawing on NSCC’s 

committed 364-day credit facility with a 

consortium of banks (‘‘Credit 

Facility’’); 10 and (3) additional cash 

deposits, known as ‘‘Supplemental 

Liquidity Deposits.’’ 11 By maintaining 

multiple sources for liquidity, NSCC 

does not have to rely on any one source 

to meet its liquidity needs. 

Proposed Increase to the Program. 

NSCC is proposing to increase the 

aggregate amount of Notes it would be 

authorized to issue and sell under the 

Prefunded Liquidity Program to $10 

billion dollars. The proposal would 

enable NSCC to continue to maintain a 

sufficient amount of liquid resources in 

compliance with its regulatory 

requirements through the issuance of 

additional Notes in the event its 

liquidity needs increase. The proposal 

also would enable NSCC to meet its 

regulatory requirements with additional, 

prefunded, readily available liquid 

resources, which are available for NSCC 

to draw as needed to complete end-ofday settlement in the event of a Member 

default. 

Likewise, the proposal would provide 

NSCC with the flexibility to reduce its 

reliance on the Credit Facility as 

necessary. NSCC has observed varying 

levels of interest by the credit markets 

in recent years and cannot be certain 

that it will be able to continue to renew 

the Credit Facility at levels that would 

meet its projected liquidity needs in 

future years. Alternatively, the growth 

of the Prefunded Liquidity Program 

since its inception has been supported 

by a high, and growing, investor interest 

in high-rated Commercial Paper.12

Further, while the Credit Facility 

continues to be an important liquidity 

resource, it does not provide NSCC with 

prefunded, readily available liquidity, 

and incurs a greater cost to maintain 

than the Prefunded Liquidity Program. 

The Program would still be a more costeffective liquidity resources, as 

compared to the Credit Facility, after the 

proposed increase. Therefore, the 

proposal would give NSCC the 

flexibility to better diversify its reliance 

on the various liquidity resources, 

including the Prefunded Liquidity 

Program, as it deems necessary to 

continue to meet its liquidity needs and 

in order to manage the associated costs. 

NSCC believes the proposal to add $5 

billion to the authorized amount under 

the Program would provide it with 

adequate capacity to mitigate an 

unexpected increase in its liquidity 

needs and any potential decrease in the 

aggregate amount under its Credit 

Facility. NSCC does not anticipate 

issuing Notes up to the maximum 

authorized amount in the near term, and 

believes the proposal would allow it to 

grow the Program as necessary. NSCC is 

not proposing any other change to the 

Prefunded Liquidity Program, which 

will continue under the same terms and 

conditions as described in the 2015 

Advance Notice.13

Expected Effect on and Management of 

Risks 

As described above, NSCC believes 

the proposal to increase the authorized 

aggregate amount of Notes it can issue 

under the Prefunded Liquidity Program 

would enable it to better manage its 

liquidity risks by providing it with 

flexibility to increase its reliance on the 

Program, as necessary and appropriate, 

in meeting its liquidity needs and 

associated regulatory requirements. 

The Prefunded Liquidity Program, 

like other liquidity resources, involves 

certain risks that are standard in any 

commercial paper or extendible note 

program. Such risks were addressed in 

the 2015 Advance Notice and include 

the risk that NSCC does not have 

sufficient funds to repay issued Notes 

when they mature. By increasing the 

authorized aggregate amount of the 

Prefunded Liquidity Program, and thus 

potentially the aggregate amount of 

outstanding Notes that it will have to 

repay upon maturity, NSCC may be 

further exposed to this risk. However, as 

discussed in the 2015 Advance Notice, 

NSCC continues to believe this risk is 

remote, as the proceeds of the Program 

would be used only in the event of a 

Member default, and NSCC would 

replenish that cash, as it would 

replenish any of its liquidity resources 

that are used to facilitate settlement in 

the event of a Member default, with the 

proceeds of the close out of that 

defaulted Member’s portfolio. This 

notwithstanding, in the event that 

proceeds from the close out are 

insufficient to fully repay a liquidity 

borrowing, then NSCC would look to its 

loss waterfall to repay any outstanding 

liquidity borrowings. NSCC has also 

further mitigated this risk by structuring 

the Prefunded Liquidity Program so that 

the maturity dates of the issued Notes 

are sufficiently staggered, which would 

provide NSCC with time to complete the 

close out of a defaulted Member’s 

portfolio. As described above, NSCC 

would continue to follow its internal 

guidelines in the management of the 

Program to stagger the maturity dates of 

the issued Notes, and to extend the 

weighted average maturity of the issued 

Notes to maintain this staggered 

structure. 

A second risk is that NSCC may be 

unable to issue new Notes as issued 

Notes mature, or that there is a decrease 

in investor interest in commercial 

paper. As discussed in the 2015 

Advance Notice, this risk is mitigated by 

the fact that NSCC maintains a number 

of different liquidity resources, 

described above, and would not depend 


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178 Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Notices 

14See 12 U.S.C. 5461(b). 

15 12 U.S.C. 5464(a)(2). 

16 12 U.S.C. 5464(b). 

17 Id. 

18 17 CFR 240.17Ad–22(e)(7)(ii). 

19 Id. 

20 17 CFR 240.17Ad–22(a)(14). 

21 Id. 

22 Id. 

on the Prefunded Liquidity Program as 

its sole source of liquidity. 

NSCC believes that the significant 

systemic risk mitigation benefits of 

providing NSCC with additional, 

prefunded liquid resources outweigh 

these risks. 

Consistency With the Clearing 

Supervision Act 

Although the Clearing Supervision 

Act does not specify a standard of 

review for an advance notice, its stated 

purpose is instructive: To mitigate 

systemic risk in the financial system 

and promote financial stability by, 

among other things, promoting uniform 

risk management standards for 

systemically important financial market 

utilities and strengthening the liquidity 

of systemically important financial 

market utilities.14

Section 805(a)(2) of the Clearing 

Supervision Act 15 authorizes the 

Commission to prescribe risk 

management standards for the payment, 

clearing and settlement activities of 

designated clearing entities, like NSCC, 

and financial institutions engaged in 

designated activities for which the 

Commission is the supervisory agency 

or the appropriate financial regulator. 

Section 805(b) of the Clearing 

Supervision Act 16 states that the 

objectives and principles for the risk 

management standards prescribed under 

Section 805(a) shall be to, among other 

things, promote robust risk 

management, promote safety and 

soundness, reduce systemic risks, and 

support the stability of the broader 

financial system. 

The overall impact of the proposal is 

to reduce the liquidity risks associated 

with NSCC’s operation as a central 

counterparty by providing it with 

additional, prefunded liquidity to 

complete end–of-day settlement in the 

event of a Member default. By reducing 

NSCC’s liquidity risks, the proposal 

would promote its robust risk 

management. Given its important role in 

mitigating risks faced by its Members 

and the financial markets, a reduction in 

NSCC’s liquidity risk would also reduce 

systemic risk, and would promote the 

safety, soundness and stability in the 

broader financial system. Therefore, 

NSCC believes the proposal is 

consistent with Section 805(b) of the 

Clearing Supervision Act.17

NSCC also believes that the proposal 

is consistent with the requirements of 

the Act, and the rules and regulations 

thereunder applicable to a registered 

clearing agency. In particular, NSCC 

believes the proposal is consistent with 

Rule 17Ad–22(e)(7)(ii) under the Act.18

Rule 17Ad–22(e)(7)(ii) under the Act 

requires that a covered clearing agency 

hold qualifying liquid resources 

sufficient to meet the minimum 

liquidity resource requirement under 

Rule 17Ad–22(e)(7)(i) in each relevant 

currency for which the covered clearing 

agency has payment obligations owed to 

clearing members.19 Rule 17Ad– 

22(a)(14) under the Act defines 

‘‘qualifying liquidity resources,’’ in part, 

as cash held either at the central bank 

of issue or at creditworthy commercial 

banks.20

The proceeds of the Program are cash 

held at either the FRBNY or a bank 

counterparty that has been approved 

pursuant to the Clearing Agency 

Investment Policy, and, as such, are 

considered ‘‘qualifying liquid 

resources’’ under Rule 17Ad– 

22(a)(14).21 These proceeds are available 

for NSCC to draw as needed to complete 

end–of-day settlement in the event of 

the default of a Member, and, as such, 

are one of NSCC’s liquidity resources 

that it maintains in order to meet its 

settlement obligations under a wide 

range of foreseeable stress scenarios that 

includes, but is not limited to, the 

default of the affiliated family of 

Members that would generate the largest 

aggregate payment obligation for NSCC 

in extreme but plausible market 

conditions, in compliance with NSCC’s 

requirement under Rule 17Ad– 

22(e)(7)(i). The proposal to increase the 

authorized amount of Notes NSCC may 

issue under the Program would enable 

NSCC to increase the amount of 

qualifying liquid resources it holds for 

these purposes. Therefore, the proposal 

would enable NSCC to continue to meet 

its requirements under Rule 17Ad– 

22(e)(7)(ii) in the event its liquidity 

needs increase.22

III. Date of Effectiveness of the Advance 

Notice, and Timing for Commission 

Action 

The proposed change may be 

implemented if the Commission does 

not object to the proposed change 

within 60 days of the later of (i) The 

date that the proposed change was filed 

with the Commission or (ii) the date that 

any additional information requested by 

the Commission is received. The 

clearing agency shall not implement the 

proposed change if the Commission has 

any objection to the proposed change. 

The Commission may extend the 

period for review by an additional 60 

days if the proposed change raises novel 

or complex issues, subject to the 

Commission providing the clearing 

agency with prompt written notice of 

the extension. A proposed change may 

be implemented in less than 60 days 

from the date the advance notice is 

filed, or the date further information 

requested by the Commission is 

received, if the Commission notifies the 

clearing agency in writing that it does 

not object to the proposed change and 

authorizes the clearing agency to 

implement the proposed change on an 

earlier date, subject to any conditions 

imposed by the Commission. 

The clearing agency shall post notice 

on its website of proposed changes that 

are implemented. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the Advance Notice 

is consistent with the Clearing 

Supervision 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– 

NSCC–2017–807 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–NSCC–2017–807. 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 Advance Notice that 

are filed with the Commission, and all 

written communications relating to the 

Advance Notice 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 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Notices 179 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 61499 

(February 4, 2010), 75 FR 6738 (February 10, 2010) 

(SR–NYSEAmex–2010–04). This proposed rule 

change would further conform the rule books of the 

Exchange and FINRA. 

5See Securities Exchange Act Release No. 68650 

(January 14, 2013), 78 FR 4182 (January 18, 2013) 

(SR–FINRA–2013–001) and No. 73576 (November 

12, 2014), 79 FR 68731 (November 18, 2014) (SR– 

FINRA–2014–045). 

6 In addition to the Exchange, the other exchanges 

that entered into the 17d–2 Agreement were: The 

Boston Stock Exchange, Inc., the Chicago Board 

Options Exchange, Inc., the International Securities 

Exchange, LLC, FINRA, the NASDAQ Stock Market 

LLC, the New York Stock Exchange, LLC, NYSE 

Arca, Inc. and the Philadelphia Stock Exchange. 

7As FINRA Rule 2220 is the operative rule 

concerning options communications, for the sake of 

clarity and for ease of reference, the Exchange 

proposes to copy the text of the definition into new 

proposed Rule 991(a)(1)(A) in lieu of crossreferencing FINRA Rule 2210(a)(2). 

8FINRA’s definition excludes a member’s 

internal communications from this institutional 

category. In addition, given the distinction between 

institutional and retail investors, the Exchange 

believes that a cross-reference to FINRA Rule 

2210(a)(3) in proposed Rule 991(a)(1)(B) is 

appropriate. 

9As FINRA Rule 2220 is the operative rule 

concerning options communications, for the sake of 

clarity and for ease of reference, the Exchange 

proposes to copy the text of the definition into new 

proposed Rule 991(a)(1)(C) in lieu of crossreferencing FINRA Rule 2210(a)(5). 

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 NSCC and on DTCC’s website 

(http://dtcc.com/legal/sec-rulefilings.aspx). 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–NSCC– 

2017–807 and should be submitted on 

or before January 17, 2018. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2017–28221 Filed 12–29–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82402; File No. SR– 

NYSEAMER–2017–39] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 991 

December 26, 2017. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on December 

12, 2017, NYSE American LLC (the 

‘‘Exchange’’ or ‘‘NYSE American’’) 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 self-regulatory 

organization. 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 991, regarding options 

communications, to conform with the 

rules of the Financial Industry 

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

The proposed rule change is available 

on the Exchange’s website at 

www.nyse.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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

NYSE American Rule 991, regarding 

options communications, to conform 

with the rules of FINRA. Previously, the 

Exchange harmonized its then extant 

Rule 991 to FINRA Rule 2220.4 For the 

sake of consistency, and to further 

promote a more comprehensive and 

coordinated regulatory process for the 

review of communications, the 

Exchange now proposes to conform its 

rulebook to subsequent amendments by 

FINRA.5

Pursuant to Rule 17d–2 under the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), several exchanges, including the 

Exchange, entered into an agreement 

dated June 5, 2008 (the ‘‘17d–2 

Agreement’’) to allocate regulatory 

responsibility for common rules.6 In 

order to continue this successful 

regulatory approach, the Exchange 

proposes to further harmonize Rule 991 

(Options Communications) with the 

comparable FINRA rule, in furtherance 

of the 17d–2 Agreement and in order to 

continue to maintain substantial 

similarity with the relevant FINRA 

rules. 

Rule 991 sets forth the regulatory 

standards applicable to options 

communications including inter alia the 

definitions of diverse categories of 

communications, and the standards and 

attendant review and approval 

processes for those categories of 

communications. 

Specifically, in order to continue to 

ensure a uniform regulatory approach, 

and to reduce any potential risks or 

inefficiencies in rules, the Exchange 

proposes to: 

• Replace the definition of 

‘‘correspondence’’ in Rules 

991(a)(1)(C)(i) and (ii) with the 

substantially similar though more 

succinct definition of ‘‘correspondence’’ 

in FINRA Rule 2210(a)(2), that in turn 

is referenced in FINRA Rule 

2220(a)(1)(A); 7

• Replace the definition of 

‘‘institutional sales material’’ in Rule 

991(a)(1)(D) with the substantially 

similar though expanded definition of 

‘‘Institutional Communication’’ in 

FINRA Rule 2210(a)(3) concerning 

options; 8

• Add the definition of ‘‘Retail 

Communication’’ in FINRA Rule 

2210(a)(5), that in turn is referenced in 

FINRA Rule 2220(a)(1)(C), to Rule 

991(a)(1)(C); 9

• Delete the now inapplicable 

individual definitions of 

‘‘advertisement’’, ‘‘sales literature’’, 

‘‘correspondence’’, ‘‘institutional sales 

material’’, ‘‘public appearance’’, and 

‘‘independently prepared reprints’’, as 

contained in Rule 991(a)(1)(A), Rule 

991(a)(1)(B), Rule 991(a)(1)(C), Rule 

991(a)(1)(D), Rule 991(a)(1)(E), Rule 

991(a)(1)(F), respectively; 

• Replace the definition of ‘‘existing 

retail customer’’ in Rule 991(a)(2) with 

the definition of ‘‘retail investor’’ in 

FINRA Rule 2210(a)(6), that in turn is 


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