1644 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Notices 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 10 17 CFR 200.30–3(a)(12). 

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 

proposed rule change will apply in the 

same manner to all stop and stop-limit 

orders Trading Permit Holders submit to 

the Exchange and will help prevent 

potentially erroneous executions, which 

benefits all market participants. Because 

pursuant to the proposed rule change 

the System will reject stop and stoplimit orders it receives under certain 

conditions, the proposed rule change 

will only impact stop and stop-limit 

orders Trading Permit Holders submit to 

the Exchange, based on quotes on the 

Exchange, and thus will have no impact 

on intermarket 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 

The Exchange has designated this rule 

filing as non-controversial under 

Section 19(b)(3)(A) 8 of the Act and Rule 

19b–4(f)(6) 9 thereunder. Because the 

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 and Rule 19b– 

4(f)(6) thereunder. 

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 

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– 

C2–2017–033 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–C2–2017–033. 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–C2–2017–033 and should 

be submitted on or before February 2, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00408 Filed 1–11–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32965; File No. 812–14784] 

Harbor Funds and Harbor Capital 

Advisors, Inc. 

January 9, 2018. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

pursuant to: (a) Section 6(c) of the 

Investment Company Act of 1940 

(‘‘Act’’) granting an exemption from 

sections 18(f) and 21(b) of the Act; (b) 

section 12(d)(1)(J) of the Act granting an 

exemption from section 12(d)(1) of the 

Act; (c) sections 6(c) and 17(b) of the 

Act granting an exemption from sections 

17(a)(1), 17(a)(2) and 17(a)(3) of the Act; 

and (d) section 17(d) of the Act and rule 

17d–1 under the Act to permit certain 

joint arrangements and transactions. 

Applicants request an order that would 

permit certain registered open-end 

management investment companies to 

participate in a joint lending and 

borrowing facility. 

APPLICANTS: Harbor Funds, a Delaware 

statutory trust registered under the Act 

as an open-end management series 

investment company, and Harbor 

Capital Advisors, Inc. (the ‘‘Adviser’’), 

registered as an investment adviser 

under the Investment Advisers Act of 

1940. 

FILING DATES: The application was filed 

on June 13, 2017 and amended on 

November 15, 2017. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. 

Hearing requests should be received 

by the Commission by 5:30 p.m. on 

February 2, 2018 and should be 

accompanied by proof of service on the 

applicants, in the form of an affidavit, 

or, for lawyers, a certificate of service. 

Pursuant to Rule 0–5 under the Act, 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Notices 1645 

1Applicants request that the order apply to the 

applicants and to any existing or future registered 

open-end management investment company or 

series thereof for which the Adviser or any 

successor thereto or an investment adviser 

controlling, controlled by, or under common 

control with the Adviser or any successor thereto 

serves as investment adviser (each a ‘‘Fund’’ and 

collectively the ‘‘Funds’’ and each such investment 

adviser an ‘‘Adviser’’). For purposes of the 

requested order, ‘‘successor’’ is limited to any entity 

that results from a reorganization into another 

jurisdiction or a change in the type of a business 

organization. Certain of the Funds are money 

market funds that comply with Rule 2a–7 of the 

1940 Act (each a ‘‘Money Market Fund’’ and they 

are included in the term ‘‘Funds’’). Although 

Money Market Funds are applying for the requested 

relief, they will not participate as borrowers 

because such Funds rarely need to borrow cash to 

meet redemptions. All Funds that currently intend 

to rely on the requested order have been named as 

Applicants and any other Fund that relies on the 

requested order in the future will comply with the 

terms and conditions of the Application. 

2Any Fund, however, will be able to call a loan 

on one business day’s notice. 

3Under certain circumstances, a borrowing Fund 

will be required to pledge collateral to secure the 

loan. 

4Applicants state that the obligation to repay an 

interfund loan could be deemed to constitute a 

security for the purposes of sections 17(a)(1) and 

12(d)(1) of the Act. 

5Applicants state that any pledge of securities to 

secure an interfund loan could constitute a 

purchase of securities for purposes of section 

17(a)(2) of the Act. 

hearing requests should state the nature 

of the writer’s interest, any facts bearing 

upon the desirability of a hearing on the 

matter, the reason for the request, and 

the issues contested. Persons who wish 

to be notified of a hearing may request 

notification by writing to the 

Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090; 

Applicants: 111 South Wacker Drive, 

34th Floor, Chicago, IL 60606. 

FOR FURTHER INFORMATION CONTACT: 

Bruce R. MacNeil, Senior Counsel, at 

(202) 551–6817, or David J. Marcinkus, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file 

number, or an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Summary of the Application 

1. Applicants request an order that 

would permit the applicants to 

participate in an interfund lending 

facility where each Fund could lend 

money directly to and borrow money 

directly from other Funds to cover 

unanticipated cash shortfalls, such as 

unanticipated redemptions or trade 

fails.1 The Funds will not borrow under 

the facility for leverage purposes and 

the loans’ duration will be no more than 

7 days.2

2. Applicants anticipate that the 

proposed facility would provide a 

borrowing Fund with a source of 

liquidity at a rate lower than the bank 

borrowing rate at times when the cash 

position of the Fund is insufficient to 

meet temporary cash requirements. In 

addition, Funds making short-term cash 

loans directly to other Funds would 

earn interest at a rate higher than they 

otherwise could obtain from investing 

their cash in repurchase agreements or 

certain other short-term money market 

instruments. Thus, applicants assert that 

the facility would benefit both 

borrowing and lending Funds. 

3. Applicants agree that any order 

granting the requested relief will be 

subject to the terms and conditions 

stated in the application. Among others, 

the Adviser, through a designated 

committee, would administer the 

facility as a disinterested fiduciary as 

part of its duties under the investment 

management agreements with each 

Fund and would receive no additional 

fee as compensation for its services in 

connection with the administration of 

the facility. The facility would be 

subject to oversight and certain 

approvals by the Funds’ Board, 

including, among others, approval of the 

interest rate formula and of the method 

for allocating loans across Funds, as 

well as review of the process in place to 

evaluate the liquidity implications for 

the Funds. A Fund’s aggregate 

outstanding interfund loans will not 

exceed 15% of its net assets, and the 

Fund’s loans to any one Fund will not 

exceed 5% of the lending Fund’s net 

assets.3

4. Applicants assert that the facility 

does not raise the concerns underlying 

section 12(d)(1) of the Act given that the 

Funds are part of the same group of 

investment companies and there will be 

no duplicative costs or fees to the 

Funds.4 Applicants also assert that the 

proposed transactions do not raise the 

concerns underlying sections 17(a)(1), 

17(a)(3), 17(d) and 21(b) of the Act as 

the Funds would not engage in lending 

transactions that unfairly benefit 

insiders or are detrimental to the Funds. 

Applicants state that the facility will 

offer both reduced borrowing costs and 

enhanced returns on loaned funds to all 

participating Funds and each Fund 

would have an equal opportunity to 

borrow and lend on equal terms based 

on an interest rate formula that is 

objective and verifiable. With respect to 

the relief from section 17(a)(2) of the 

Act, applicants note that any collateral 

pledged to secure an interfund loan 

would be subject to the same conditions 

imposed by any other lender to a Fund 

that imposes conditions on the quality 

of or access to collateral for a borrowing 

(if the lender is another Fund) or the 

same or better conditions (in any other 

circumstance).5

5. Applicants also believe that the 

limited relief from section 18(f)(1) of the 

Act that is necessary to implement the 

facility (because the lending Funds are 

not banks) is appropriate in light of the 

conditions and safeguards described in 

the application and because the Funds 

would remain subject to the 

requirement of section 18(f)(1) that all 

borrowings of a Fund, including 

combined interfund loans and bank 

borrowings, have at least 300% asset 

coverage. 

6. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

Rule 17d–1(b) under the Act provides 

that in passing upon an application filed 

under the rule, the Commission will 

consider whether the participation of 

the registered investment company in a 

joint enterprise, joint arrangement or 

profit sharing plan on the basis 

proposed is consistent with the 

provisions, policies and purposes of the 

Act and the extent to which such 

participation is on a basis different from 

or less advantageous than that of the 

other participants. 


sradovich on DSK3GMQ082PROD with NOTICES
1646 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Notices 

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

2 17 CFR 240.19b–4. 

3See GEMX Schedule of Fees, Section III.C 

Regulatory Fees. 

4See Securities Exchange Act Release No. 71149 

(December 19, 2013), 78 FR 78447 (December 26, 

2013) (SR-Topaz-2013–16). 

5 In particular, the Exchange renamed Section IV, 

deleted Section IV.C, and added Sections IV.F–IV.I 

as part of a previous rule change to amend GEMX’s 

connectivity fees. See Securities Exchange Release 

No. 81902 (October 19, 2017), 82 FR 49453 (October 

25, 2017) (SR–GEMX–2017–48). 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(4) and (5). 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00431 Filed 1–11–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82460; File No. SR–GEMX– 

2017–62] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Market 

Makers’ Regulatory Fees 

January 8, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

26, 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, 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 the 

Exchange’s Schedule of Fees, as 

described further below. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on January 2, 2018. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaqgemx.cchwallstreet.com/, 

at the principal office of the Exchange, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the Exchange’s 

Schedule of Fees to (i) eliminate the 

annual regulatory fee currently assessed 

to Market Makers (i.e., Primary Market 

Makers and Competitive Market Makers) 

at Section III.C and (ii) make a number 

of non-substantive clean-up changes to 

update the Table of Contents. Each 

change is discussed further below. 

Eliminate Annual Regulatory Fee 

GEMX currently charges its members 

various non-transaction fees to trade on 

the Exchange and use its facilities, 

including a tiered annual regulatory fee. 

This fee is assessed to all Primary 

Market Makers (‘‘PMMs’’) and 

Competitive Market Makers (‘‘CMMs’’) 

to help defray the regulatory and 

administrative costs associated with a 

member’s use of the Exchange’s 

facilities. In particular, the regulatory 

fee is $1,000 per year for a PMM 

membership, and, for PMMs that are 

also CMMs, $250 per year for each CMM 

membership. For CMMs that are not 

also PMMs the regulatory fee is $500 per 

year for the first CMM membership, and 

$250 per year for each additional CMM 

membership.3 The Exchange does not 

charge a regulatory fee to Electronic 

Access Members (‘‘EAMs’’). 

The Exchange proposes to eliminate 

the annual regulatory fee and all related 

references from the Schedule of Fees 

because it has determined that this fee 

is outdated and no longer reflects the 

costs associated with supporting and 

regulating its members today. The 

annual regulatory fee was adopted in 

2013, and has not been amended since 

that time.4 And because GEMX charges 

its members various non-transaction 

fees outside of the annual regulatory fee 

to help defray such costs, as noted 

above, the Exchange believes that the 

proposed fee change will be a more 

accurate reflection of the administration 

and regulatory costs associated with a 

member’s use of the Exchange today. 

Update Table of Contents 

Currently, the Exchange’s Schedule of 

Fees contains a number of section 

headings that are not currently reflected 

in the Table of Contents. The Exchange 

added, eliminated, or renamed these 

headings as part of a previouslyapproved rule change, and inadvertently 

did not make the corresponding updates 

to the Table of Contents.5 Accordingly, 

the Exchange proposes to update the 

Table of Contents to make its Schedule 

of Fees easier to read. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,6 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,7 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

Eliminate Annual Regulatory Fee 

The Exchange believes that the 

proposed elimination of the annual 

regulatory fee and all related references 

from the Schedule of Fees is reasonable 

because the Exchange has determined 

that the annual regulatory fee is 

outdated and no longer reflects the costs 

associated with supporting and 

regulating its members. This fee has not 

been amended since its adoption in 

2013. Furthermore, GEMX charges its 

members various non-transaction fees 

outside of the annual regulatory fee to 

help defray such costs, as noted above. 

The Exchange therefore believes that the 

proposed fee change will be a more 

accurate reflection of the administration 

and regulatory costs associated with a 

member’s use of the Exchange today. 

The Exchange also believes that the 

proposed elimination of the annual 

regulatory fee is equitable and not 

unfairly discriminatory because the 

proposed change will apply equally to 

all similarly situated members. 

Update Table of Contents 

The Exchange believes that the cleanup changes to update the Table of 

Contents is reasonable, equitable and 

not unfairly discriminatory because 

these are non-substantive changes 


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