Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Notices 45325 

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. 81315 

(August 4, 2017), 82 FR 37479 (‘‘Notice’’). 

5See id. at 37480. A QCT is ‘‘a transaction 

consisting of two or more component orders, 

executed as agent or principal where: (1) At least 

one component order is in an NMS stock; (2) all 

components are effected with a product or price 

contingency that either has been agreed to by the 

respective counterparties or arranged for by a 

broker-dealer as principal or agent; (3) the 

execution of one component is contingent upon the 

execution of all other components at or near the 

same time; (4) the specific relationship between the 

component orders (e.g., the spread between the 

prices of the component orders) is determined at 

the time the contingent order is placed; (5) the 

component orders bear a derivative relationship to 

one another, represent different classes of shares of 

the same issuer, or involve the securities of 

participants in mergers or with intentions to merge 

Continued 

OSHRC’s proposed blanket routine 

use is published below. Twelve other 

blanket routine uses, which remain in 

effect, were last published at 71 FR 

19556, 19558–59 (Apr. 14, 2006), 73 FR 

45256, 45256–57 (Aug. 4, 2008), and 80 

FR 60182, 60182 (Oct. 5, 2015). 

Blanket Routine Uses 

(13) A record from an OSHRC system 

of records may be disclosed as a blanket 

routine use to another Federal agency or 

Federal entity, when OSHRC determines 

that information from this system of 

records is reasonably necessary to assist 

the recipient agency or entity in (1) 

responding to a suspected or confirmed 

breach or (2) preventing, minimizing, or 

remedying the risk of harm to 

individuals, the recipient agency or 

entity (including its information 

systems, programs, and operations), the 

Federal Government, or national 

security, resulting from a suspected or 

confirmed breach. 

Date: September 21, 2017. 

Nadine N. Mancini, 

General Counsel, Senior Agency Official for 

Privacy. 

[FR Doc. 2017–20755 Filed 9–27–17; 8:45 am] 

BILLING CODE 7600–01–P 

OFFICE OF PERSONNEL 

MANAGEMENT 

Submission for Review: Verification of 

Adult Student Enrollment Status, RI 

25–49 

AGENCY: Office of Personnel 

Management. 

ACTION: 30-Day notice and request for 

comments. 

SUMMARY: The Retirement Services, 

Office of Personnel Management (OPM) 

offers the general public and other 

federal agencies the opportunity to 

comment on a revised information 

collection request (ICR), Verification of 

Adult Student Enrollment Status, RI 25– 

49. 

DATES: Comments are encouraged and 

will be accepted until October 30, 2017. 

ADDRESSES: Interested persons are 

invited to submit written comments on 

the proposed information collection to 

the Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, 725 17th Street NW., 

Washington, DC 20503, Attention: Desk 

Officer for the Office of Personnel 

Management or sent via electronic mail 

to oira_submission@omb.eop.gov or 

faxed to (202) 395–6974. 

FOR FURTHER INFORMATION CONTACT: A 

copy of this ICR, with applicable 

supporting documentation, may be 

obtained by contacting the Retirement 

Services Publications Team, Office of 

Personnel Management, 1900 E Street 

NW., Room 3316–L, Washington, DC 

20415, Attention: Cyrus S. Benson, or 

sent via electronic mail to 

Cyrus.Benson@opm.gov or faxed to 

(202) 606–0910. 

SUPPLEMENTARY INFORMATION: As 

required by the Paperwork Reduction 

Act of 1995, (Pub. L. 104–13, 44 U.S.C. 

chapter 35) as amended by the ClingerCohen Act (Pub. L. 104–106), OPM is 

soliciting comments for this collection. 

The information collection (OMB No. 

3206–0215) was previously published in 

the Federal Register on May 5, 2017, at 

82 FR 21277, allowing for a 60-day 

public comment period. No comments 

were received for this collection. The 

purpose of this notice is to allow an 

additional 30 days for public comments. 

The Office of Management and Budget 

is particularly interested in comments 

that: 

1. Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility; 

2. Evaluate the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; 

3. Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

4. Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submissions 

of responses. 

Form RI 25–49 is used to verify that 

adult student annuitants are entitled to 

payment. The Office of Personnel 

Management must confirm that a fulltime enrollment has been maintained. 

Analysis 

Agency: Retirement Operations, 

Retirement Services, Office of Personnel 

Management. 

Title: Verification of Full-Time School 

Attendance. 

OMB Number: 3206–0215. 

Frequency: On occasion. 

Affected Public: Individual or 

Households. 

Number of Respondents: 10,000. 

Estimated Time per Respondent: 1 

hour. 

Total Burden Hours: 10,000 hours. 

U.S. Office of Personnel Management. 

Kathleen M. McGettigan, 

Acting Director. 

[FR Doc. 2017–20854 Filed 9–27–17; 8:45 am] 

BILLING CODE 6325–38–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81683; File No. SR–CHX– 

2017–12] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Order 

Approving a Proposed Rule Change 

Regarding Qualified Contingent Trades 

and Related Information Recording 

Obligations by Certain Participants 

September 22, 2017. 

I. Introduction 

On July 26, 2017, the Chicago Stock 

Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change regarding 

Qualified Contingent Trades (‘‘QCT(s)’’) 

and related recordkeeping obligations 

for certain Exchange participants. The 

proposed rule change was published for 

comment in the Federal Register on 

August 10, 2017.4 The Commission 

received no comments on the proposal. 

This order approves the proposed rule 

change. 

II. Description of the Proposal 

The Exchange permits its participants 

to submit to the Exchange cross orders 

marked with a QCT modifier 

(sometimes referred to as ‘‘QCT 

crosses’’) to effect transactions that 

comprise the NMS stock component of 

a QCT.5 QCT crosses are submitted to 

45326 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Notices 

that have been announced or since cancelled; and 

(6) the transaction is fully hedged (without regard 

to any prior existing position) as a result of the 

other components of the contingent trade. See id. 

at 37480; see also Securities Exchange Act Release 

No. 57620 (April 4, 2008), 73 FR 19271 (April 9, 

2008) (‘‘2008 QCT Exemptive Order’’). 

6 17 CFR 242.611(a). 

7See Securities Exchange Act Release No. 54389 

(August 31, 2006), 71 FR 52829 (September 7, 

2006); see also 2008 QCT Exemptive Order, supra 

note 5. 

8Article 1, Rule 1(n) defines an IB as a member 

of the Exchange that is registered as an IB pursuant 

to Article 17 of the Exchange’s rules and has 

satisfied all Exchange requirements to operate as an 

IB. For the sake of clarity, the Commission notes 

that, unless otherwise specified, references herein 

to ‘‘Article’’ and ‘‘Rule’’ are references to the 

Exchange’s rules. 

9See proposed Article 1, Rule 2(b)(2)(E). 

10See Article 1, Rule 2(b)(2). 

11See proposed Article 1, Rule 2(b)(2)(E). The 

Exchange also proposes to add the acronym ‘‘QCT’’ 

to Article 1, Rule 2(b)(2)(E) to make clear that the 

acronym refers to ‘‘Qualified Contingent Trade.’’ 

See id.; see also Notice, supra note 4, at 37481 n.25. 

12See Notice, supra note 4, at 37480 n.12 and 

37481. 

13See id. at 37480–81; see also Article 17, Rules 

3 and 5 (describing, among other things, Brokerplex 

and certain IB obligations). 

14See Notice, supra note 4, at 37480. The 

Exchange notes that, currently, the vast majority of 

such component transactions involve exchangetraded options. See Notice, supra note 4, at 37480 

n.17. 

15See id. at 37482. 

16See id. 

17See proposed Article 11, Rule 3(a)(4). Article 

11, Rule 3(a) requires covered Exchange 

participants to preserve a record, meeting the 

criteria of paragraph (b), of the information 

enumerated in Rule 3(a) for at least three years (or 

any longer period of time required by SEC Rule 

17a–4). 

18See proposed Article 11, Rule 3(b). The 

Exchange also proposes to add the word 

‘‘accurately’’ to the Rule 3(b) text so that the rule 

requires covered participants to accurately record 

the specified information in the designated 

Exchange system(s). See id. 

19See proposed Article 11, Rule 3(b)(27); see also 

proposed Article 17, Rule 7(c) (specifying the 

information regarding related component orders 

and trades to be entered into the BBOS). The 

Exchange also proposes to relocate the current rule 

text in Article 11, Rule 3(b)(27) to proposed Article 

11, Rule 3(b)(28). Correspondingly, the Exchange 

proposes to amend the cross references in 

Interpretations and Policies paragraph .06 of Article 

11, Rule 3 to reflect this relocation. 

20The Exchange also proposes to amend the title 

of Rule 3(a) to reflect that it requires the entry of 

orders and related information into an automated 

system. See proposed Article 17, Rule 3(a); see also 

Notice, supra note 4, at 37482. 

21See Notice, supra note 4, at 37482. 

22See proposed Article 17, Rule 7. 

23See proposed Article 17, Rule 7(a). 

the Exchange consistent with an 

exemption from Rule 611(a) of 

Regulation NMS 6 that the Commission 

granted in 2006 and modified in 2008 

(the ‘‘QCT Exemption’’).7 As described 

below, the Exchange proposes to amend 

its rules relating to QCTs to permit only 

Institutional Brokers (‘‘IB(s)’’) 8 to effect 

such transactions on the Exchange, to 

impose additional recordkeeping 

requirements relating to such 

transactions, and to make additional, 

clarifying changes to its rules. 

A. QCT Crosses May Only Be Submitted 

by IBs 

The Exchange proposes to amend 

Article 1, Rule 2(b)(2)(E) to provide that 

QCT crosses may be submitted to the 

Exchange only by registered IBs.9

Article 1, Rule 2(b)(2) sets forth the 

order execution modifiers that may be 

attributed to cross orders, and Article 1, 

Rule 2(b)(2)(E) defines the QCT cross 

order modifier.10 Under the proposal, 

this definition would be amended to 

state that only IBs may utilize the QCT 

cross order modifier.11 The Exchange 

notes that, currently, CHX rules permit 

any Exchange participant to submit QCT 

crosses, but in practice non-IB 

participants do not submit them.12 The 

Exchange also notes that its rules 

currently require only IBs to input all 

orders and related information into 

Brokerplex—an automated Exchange 

order and trade management system— 

and that this requirement facilitates the 

Exchange’s ability to gather information 

it considers to be crucial to its review 

of QCT crosses executed on the 

Exchange.13

B. Recordkeeping Requirements for 

Away Component Trades of QCT 

Crosses 

The CHX Broker Back Office System 

(‘‘BBOS’’) is an Exchange-maintained 

trade management system that, among 

other things, enables the Exchange to 

review information to identify the 

specific component transactions on 

away exchanges that are being used to 

hedge QCT crosses executed on the 

Exchange.14 Currently, the Exchange 

encourages, but does not require, IBs to 

input into BBOS certain information for 

away QCT component orders and trades 

related to QCT crosses executed on the 

Exchange.15 Moreover, Article 11, Rule 

3(a)(1)–(3), which sets forth 

recordkeeping obligations for certain 

Exchange participants, including IBs, 

does not currently impose 

recordkeeping obligations on Exchange 

participants regarding such away 

component orders and trades of QCT 

crosses.16

The Exchange has proposed several 

interrelated amendments to Article 11, 

Rule 3 to require IBs to maintain their 

own records of, and record with the 

Exchange, certain information regarding 

away QCT component orders and 

trades. Specifically, the Exchange 

proposes to adopt new Rule 3(a)(4), 

which would make subject to the Rule 

3(a) recordkeeping requirements every 

component order and trade, whether 

handled by the Exchange participant or 

not, related to a cross order marked QCT 

that is submitted by the Exchange 

participant and executed within the 

Exchange matching system.17

Relatedly, the Exchange proposes to 

modify Rule 3(b) to include a cross 

reference to proposed Rule 3(a)(4), and 

would thereby require that, subject to 

exceptions set out in interpretations to 

Rule 3, IBs accurately record in an 

electronic system designated by the 

Exchange certain details regarding the 

away component orders and executions 

identified in proposed Rule 3(a)(4).18

The Exchange proposes to set forth 

these details in new Rule 3(b)(27), 

which would provide that, with respect 

to any cross order marked QCT that is 

submitted by the Exchange participant 

and executed within the Exchange 

matching system, the date and time of 

receipt by the Exchange participant of 

the corresponding order from its 

customer and all information specified 

by the Exchange regarding any related 

component orders and trades executed 

within the matching system or away 

shall be entered into BBOS (as 

applicable), in a manner prescribed by 

the Exchange.19

In addition, the Exchange has 

proposed amendments to Article 17 that 

dovetail with its proposed changes to 

Article 11, Rule 3. The Exchange 

proposes to amend Article 17, Rule 3(a) 

to state that an IB must enter all orders 

it receives for execution and any other 

information required under Article 11 

into an automated system approved by 

the Exchange.20 The Exchange states 

that this proposed change is necessary 

to broaden the scope of Article 17, Rule 

3(a) beyond just orders received by the 

IB for execution to reflect that proposed 

Article 11, Rule 3(b)(27) may require the 

recording of information related to 

orders that the IB did not actually 

receive or otherwise handle.21

The Exchange also proposes to adopt 

new Article 17, Rule 7, which would 

codify the BBOS into the Exchange’s 

rules.22 Specifically, proposed Rule 7(a) 

would state that the BBOS is a trade 

management system developed and 

maintained by the Exchange that 

permits IBs to input certain information 

and to generate reports therefrom, and 

that it also is an automated system 

approved by the Exchange for the 

purposes of amended Article 17, Rule 

3(a).23 Proposed Rule 7(b) would state 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Notices 45327 

24See proposed Article 17, Rule 7(b). 

25See id. The Exchange states that it is not 

proposing to assess a fee for use of the BBOS in 

addition to the current fees related to costs incurred 

by the Exchange in creating any requested reports, 

which shall be rebilled to Exchange participants at 

cost. See Notice, supra note 4, at 37482 n.38. 

26See proposed Article 17, Rule 7(c). The 

Exchange notes that this required information 

would be identical to the current data fields 

available in the BBOS. See Notice, supra note 4, at 

37482 n.37. 

27See Article 17, Rule 3(c); see also Notice, supra 

note 4, at 37482. 

28See Notice, supra note 4, at 37482. 

29See proposed Article 17, Rule 3(c). 

30See id. 

31The Exchange also proposes to add the phrase 

‘‘by Certain Participants’’ to the title of the rule so 

that it reads ‘‘Records of Orders and Executions by 

Certain Participants.’’ See proposed Article 11, Rule 

3. The Exchange states that this change is meant to 

better distinguish Article 11, Rule 3 from Article 11, 

Rule 2, which requires all Exchange participants to 

comply with the requirements of SEC Rules 17a-3 

and 17a–4. See Notice, supra note 4, at 37481. 

32See proposed Article 11, Rule 3(a). 

33See proposed Article 11, Rule 3(e). 

34See Notice, supra note 4, at 37481. 

35See proposed Interpretation and Policy .01 to 

Article 11, Rule 3. 

36See Notice, supra note 4, at 37481. 

37See id. 

38See id. 

39See id. The Exchange also notes that the 

amendments would have no impact on a 

Participant’s recordkeeping obligations under 

Article 11, Rule 2, which requires, among other 

things, that Participants comply with the 

recordkeeping requirements of SEC Rule 17a–3. See 

id. at 37481–82, n.33. 

40See id. 

that users of the BBOS are responsible 

for entering all transactional, order and 

other information into the system as 

required by CHX Rules, in an accurate, 

timely and complete manner; the 

Exchange, as the operator of BBOS, 

retains information entered into BBOS 

on behalf of the user in conformity with 

applicable rules and regulations; and 

the Exchange will provide such 

information to IBs in a format 

designated by the Exchange to assist IBs 

in conducting research regarding their 

own trading activities, responding to 

requests for information from 

customers, regulatory authorities or by 

process of law, and for other legitimate 

business purposes.24 Further, proposed 

Rule 7(b) would state that the Exchange 

charges IBs the fees specified in its 

published Schedule of Fees and 

Assessments for the collection and 

retrieval of such information.25

Proposed Rule 7(c) would list the 

specific information regarding 

component orders and trades related to 

QCT crosses that IBs are required to 

enter into the BBOS, as applicable. 

Specifically, proposed Rule 7(c) would 

provide that for all orders and trades 

described under amended Article 11, 

Rule 3(b)(27), IBs must record the 

following information into the BBOS, as 

applicable: (1) QCT Type; (2) Related 

Exchange; (3) Print Time; (4) Expiration 

Year; (5) Expiration Month; (6) Price; (7) 

Contracts; (8) Strike Price; (9) Call/Put; 

(10) Volume; and (11) Short Sale 

Indicator.26

C. Proposed Clarification Regarding IB 

Trading Accounts 

Currently, Article 17, Rule 3(c) 

provides that each IB must maintain 

separate accounts for handling agency 

transactions, principal transactions, and 

transactions involving errors, and must 

enter transactions into the appropriate 

accounts.27 The Exchange states it is 

proposing to amend this rule to clarify 

that the required accounts relate to 

special recordkeeping accounts that 

must be maintained at the Exchange, 

which, the Exchange represents, is 

necessary for the Exchange to 

adequately surveil and examine the 

relevant IB trading activity, as well as to 

provide additional detail as to the types 

of transactions that must be recorded in 

the respective accounts.28 Accordingly, 

the Exchange has proposed to amend 

Article 17, Rule 3(c) to state that each 

IB must establish and maintain separate 

CHX recordkeeping accounts at the 

Exchange for the sole purpose of 

recording the following activity: (1) An 

agency recordkeeping account for 

agency transactions; (2) a principal 

recordkeeping account for principal and 

riskless principal transactions; and (3) 

an error recordkeeping account for 

transactions involving only bona fide 

errors.29 The proposed rule also would 

state that an IB must record each abovementioned transaction into the 

appropriate CHX recordkeeping 

account.30

D. Additional Proposed Rule 

Clarifications—Article 11, Rule 3 

The Exchange proposes various 

clarifying amendments to Article 11, 

Rule 3 regarding certain recordkeeping 

requirements concerning orders and 

executions by certain types of Exchange 

participants, including, but not limited 

to, IBs.31 Specifically, the Exchange 

proposes to amend Article 11, Rule 3(a) 

to state that the provisions of Rule 3 

only apply to the Exchange participants 

described in paragraph (e) of the rule— 

namely, registered IBs and registered 

market makers, as well as any Exchange 

participant for which the Exchange is 

the Designated Examining Authority.32

The Exchange also proposes to amend 

paragraph (e) to state that any other 

Exchange participant also is required to 

maintain the information specified in 

Rule 3 to the extent such information is 

required to be maintained pursuant to 

the Exchange Act and the rules 

thereunder or, as previously set forth in 

the pre-existing version of paragraph (e), 

pursuant to the rules of the other selfregulatory organizations of which they 

are members.33

In addition, the Exchange proposes to 

clarify that proprietary orders fall under 

the purview of Article 11, Rule 3.34 To 

accomplish this, the Exchange proposes 

to delete from paragraph .01 under the 

Interpretations and Policies of Article 

11, Rule 3 the sentence stating that a 

decision by a participant to buy or sell 

securities for his or her own account on 

the Exchange shall not constitute an 

order for which a record must be made 

under the rule.35 The Exchange notes 

that that sentence excluded from the 

scope of Article 11, Rule 3(a) the 

decision to purchase or sell a security 

on a proprietary basis, and not the 

proprietary order itself.36 The Exchange 

states, however, that it believes the 

sentence could be misconstrued to 

exclude all proprietary orders from the 

scope of Article 11, Rule 3.37 The 

Exchange also believes that current 

Article 11, Rule 3(a)(1)–(3) adequately 

describes the types of orders subject to 

current Article 11, Rule 3.38

Further, the Exchange proposes to 

amend paragraph .03 under the 

Interpretations and Policies of Article 

11, Rule 3. Currently, paragraph .03 

states that the rule shall not apply to 

orders sent or received through the 

matching system or through any other 

electronic system that the Exchange 

expressly recognizes as providing the 

required information in a format 

acceptable to the Exchange. The 

Exchange states that it believes the 

current provision could be 

misconstrued to exclude such orders 

from the scope of Article 11, Rule 3, 

which is not the Exchange’s intent.39

Accordingly, the Exchange proposes to 

amend paragraph .03 to state that a 

participant that sends or receives orders, 

cancellations and executions through 

the matching system or through any 

other electronic system that the 

Exchange expressly recognizes as 

providing the required information in a 

format acceptable to the Exchange is not 

required to maintain separate records of 

such orders, cancellations and 

executions.40

E. Additional Proposed Rule 

Clarifications—Cross Orders 

The Exchange has also proposed to 

adopt amendments to clarify its rules 

regarding the operation of cross orders 

and Cross With Size handling and to 

eliminate redundant language in those 

45328 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Notices 

41See Notice, supra note 4, at 37480–81. 42See proposed Article 1, Rule 2(a)(2). 43See Notice, supra note 4, at 37480–81. 

44See proposed Article 1, Rule 2(g)(1). The 

Exchange also proposes to remove from this rule, 

as well Article 1, Rule 2(a)(2), language that states 

that cross and Cross With Size orders will execute 

so long as it would not constitute a trade-through 

under Regulation NMS (including all applicable 

exceptions and exemptions). See id.; see also 

proposed Article 1, Rule 2(a)(2). The Exchange 

notes that it is proposing to remove this language 

because it is redundant. See Notice, supra note 4, 

at 37481. 

45See proposed Article 20, Rule 8(e)(1). 

46See Notice, supra note 4, at 37481. 

47See Notice, supra note 4, at 37482. 

48 15 U.S.C. 78f(b). 

49 In approving these proposed rule changes, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

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

50 15 U.S.C. 78f(b)(1). 

51 15 U.S.C. 78f(b)(5). 

52See Notice, supra note 4, at 37481, 37483. 

53See id. at 37483. 

54See id. 

55See id. at 37482. 

56See Notice, supra note 4, at 37483. 

rules.41 Specifically, the Exchange 

proposes to amend the definition of 

‘‘cross order’’ to state that a cross order 

may only execute within the Exchange’s 

matching system if it is priced better 

than the working price, as defined 

under Article 1, Rule 1(pp), of all resting 

orders on the CHX Book.42 The 

Exchange notes that the amended 

definition is intended to clarify that 

while the pricing requirement is a 

prerequisite for executing a cross order 

within the matching system, a cross 

order that does not meet the pricing 

requirement is still by definition a cross 

order for purposes of the Exchange’s 

rules.43 The Exchange also proposes to 

amend Article 1, Rule 2(g)(1), which 

defines and sets forth special order 

handling requirements for Cross With 

Size orders, to state that a cross order 

that meets the Cross With Size 

definition will execute if there are no 

resting orders on the CHX Book with a 

working price better than the cross 

order.44 In addition, the Exchange has 

proposed to amend Article 20, Rule 

8(e)(1), which specifies how certain 

order types will be executed in the 

matching system, to remove references 

to Cross With Size and to state that cross 

orders are to be handled pursuant to 

Article 1, Rule 2(a)(2) and Rule 2(g)(1).45

The Exchange states it is proposing to 

remove references to Cross With Size 

from Article 20, Rule 8(e)(1) because 

Cross With Size is a special handling for 

cross orders, and not itself an order type 

or order modifier.46

F. Operative Date 

The Exchange has proposed to 

provide notice to its participants of the 

operative date of the proposed change in 

the event that the proposed rule change 

is approved by the Commission.47

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of 

Section 6 of the Act 48 and the rules and 

regulations thereunder applicable to the 

Exchange.49 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(1) of the Act,50 which requires that 

an exchange be so organized and have 

the capacity to carry out the purposes of 

the Act and to comply, and to enforce 

compliance by its members and persons 

associated with its members, with the 

provisions of the Act, the rules and 

regulations thereunder, and the rules of 

the exchange; and Section 6(b)(5) of the 

Act,51 which requires, among other 

things, that the rules of an exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to 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, and 

not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission believes that the 

Exchange’s proposal to permit only 

registered IBs to submit QCT crosses to 

the Exchange is consistent with the Act. 

The Exchange has noted that, currently, 

while other types of Exchange 

participants are permitted to submit 

QCT crosses, only IBs do so in 

practice.52 As such, the Commission 

believes that this aspect of the proposal 

is designed to codify existing practice 

with respect to QCT crosses and not 

designed to alter the status quo with 

respect to the type of Exchange 

participant that submits them to the 

Exchange. In addition, the Exchange has 

represented that any Exchange 

participant that has satisfied the 

applicable requirements may register as 

an IB.53 Further, the Exchange has noted 

that IBs have experience in ensuring 

that QCT crosses are submitted to the 

Exchange matching system in a manner 

consistent with Exchange rules and the 

QCT Exemption, the Exchange’s 

surveillance and examination program 

is optimized with respect to the 

submission of QCT crosses by IBs in 

particular, and the Exchange believes 

that the most effective way for it to 

surveil QCT cross activity for 

compliance with Exchange rules and the 

QCT Exemption is to limit the 

submission of QCTs to IBs.54

Accordingly, the Commission believes 

that the Exchange’s proposal to amend 

Article 1, Rule 2(b)(2)(E) to reflect 

current practice on the Exchange and 

permit only IBs to submit QCT crosses 

is consistent with Section 6(b)(5) of the 

Act in that it is reasonably designed to 

help prevent fraudulent and 

manipulative acts and practices, and to 

protect investors and the public interest, 

and is not designed to permit unfair 

discrimination. The Commission also 

notes in this regard that it received no 

comments on the proposal. 

In addition, the Commission believes 

that the Exchange’s proposed rule 

amendments to require IBs to maintain 

records of, and record with the 

Exchange, appropriate information 

regarding QCT cross transactions, and in 

particular the away component orders 

and trades of such transactions, are 

consistent with the Act. As the 

Exchange noted, currently, its 

recordkeeping rules do not require the 

recording of information regarding the 

away component orders and trades 

related to QCT crosses submitted to the 

Exchange, and IBs instead are 

encouraged, but not required, to enter 

such information into the BBOS.55 In 

addition, the BBOS currently is not 

described in the Exchange’s rules. The 

Commission believes that the 

Exchange’s proposal to require reporting 

of relevant information regarding away 

component orders and trades related to 

QCT crosses and subject that 

information to the Exchange’s 

recordkeeping requirements in Article 

11, Rule 3 and Article 17, Rule 3, as 

well as the Exchange’s proposal to 

codify the BBOS in Article 17, Rule 7, 

will strengthen the Exchange’s 

recordkeeping requirements with 

respect to QCT crosses and should 

enhance the Exchange’s ability to 

monitor for compliance with relevant 

Exchange rules and the QCT 

Exemption.56 Moreover, the 

Commission does not believe that these 

additional recordkeeping obligations 

would be unduly burdensome to IBs, 

and in this regard again notes that it 

received no comments on the proposal. 

Accordingly, the Commission believes 

that the Exchange’s proposed 

amendments to Article 11, Rule 3 and 

Article 17, Rules 3 and 7 to require 

additional recordkeeping regarding QCT 

crosses is designed to support CHX’s 

regulatory oversight of QCT crosses and 

thereby should help protect investors 

and the public interest, consistent with 

Section 6(b)(5) of the Act. 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Notices 45329 

57 15 U.S.C. 78s(b)(2). 

58 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 80584 

(May 3, 2017), 82 FR 21573 (May 9, 2017) (SR– 

NYSEArca–2017–44) (notice of filing of proposed 

rule change to list and trade shares of the IQ 

Municipal Insured ETF; IQ Municipal Short 

Duration ETF; and IQ Municipal Intermediate ETF 

under NYSE Arca Equities Rule 8.600) (‘‘Prior 

Notice’’); 80885 (June 8, 2017), 82 FR 27302 (June 

14, 2017) (SR–NYSEArca–2017–44) (order 

approving proposed rule change to list and trade 

shares of the IQ Municipal Insured ETF, IQ 

Municipal Short Duration ETF, and IQ Municipal 

Intermediate ETF under NYSE Arca Equities Rule 

8.600) (Prior Order, and, together with the Prior 

Notice, the ‘‘Prior Release’’). All terms referenced 

but not defined herein are defined in the Prior 

Release. 

4A Managed Fund Share is a security that 

represents an interest in an investment company 

registered under the Investment Company Act of 

1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as 

an open-end investment company or similar entity 

that invests in a portfolio of securities selected by 

its investment adviser consistent with its 

investment objectives and policies. In contrast, an 

open-end investment company that issues 

Investment Company Units, listed and traded on 

the Exchange under NYSE Arca Equities Rule 5.2– 

E(j)(3), seeks to provide investment results that 

correspond generally to the price and yield 

performance of a specific foreign or domestic stock 

index, fixed income securities index or combination 

thereof. 

5The Exchange notes that the Commission has 

approved the listing and trading of other issues of 

Managed Fund Shares that have a duration range 

Continued 

Lastly, the Commission believes that 

the Exchange’s additional proposed 

amendments to clarify its rules 

regarding IB recordkeeping accounts 

(Article 17, Rule 3(c)), the 

recordkeeping requirements for certain 

Exchange participants (Article 11, Rule 

3), and the operation of the cross order 

type and Cross With Size handling 

(Article 1, Rule 2(a)(2), Article 1, Rule 

2(g)(1) and Article 20, Rule 8(e)) add 

transparency and remove any potential 

ambiguity in those rules and reduce the 

potential for confusion as to their 

meaning and intended application, 

which should help protect investors 

consistent with Section 6(b)(5) of the 

Act. In addition, the Commission 

believes that these proposed changes are 

reasonably designed to clarify the scope 

and meaning of those rules, which 

should help the Exchange assure 

compliance by Exchange participants 

with the Exchange’s rules, consistent 

with Section 6(b)(1) of the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 57 that the 

proposed rule change (SR–CHX–2017– 

12), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.58

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–20754 Filed 9–27–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81682; File No. SR– 

NYSEArca–2017–103] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Reflect Certain 

Changes Applicable to IQ Municipal 

Insured ETF, IQ Municipal Intermediate 

ETF, and IQ Municipal Short Duration 

ETF 

September 22, 2017. 

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 

September 13, 2017, NYSE Arca, Inc. 

(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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 (1) to reflect 

a change in the name of the IQ 

Municipal Insured ETF, IQ Municipal 

Intermediate ETF, and IQ Municipal 

Short Duration ETF (each a ‘‘Fund’’ and, 

collectively, the ‘‘Funds’’), and (2) to 

reflect a change in the dollar-weighted 

average duration to be maintained by 

the IQ Municipal Insured ETF and IQ 

Municipal Intermediate ETF. Shares of 

the Funds have been approved by the 

Securities and Exchange Commission 

(the ‘‘Commission’’) for listing and 

trading on the Exchange under NYSE 

Arca Rule 8.600–E. The proposed rule 

change is available on the Exchange’s 

Web site 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 Commission has approved a 

proposed rule change relating to listing 

and trading on the Exchange of shares 

(‘‘Shares’’) of the Funds under NYSE 

Arca Rule 8.600–E,3 which governs the 

listing and trading of Managed Fund 

Shares.4 The Shares will be offered by 

the IndexIQ Active ETF Trust (the 

‘‘Trust’’), which is registered with the 

Commission as an open-end 

management investment company. Each 

Fund is a series of the Trust. Shares of 

the Funds have been approved by the 

Commission for listing and trading on 

the Exchange under NYSE Arca Rule 

8.600–E. The Funds’ Shares have not 

commenced trading on the Exchange. 

On June 27, 2017, the name of the IQ 

Municipal Insured ETF was changed to 

IQ MacKay Shields Municipal Insured 

ETF, the name of the IQ Municipal 

Intermediate ETF was changed to IQ 

MacKay Shields Municipal Intermediate 

ETF, and the name of the IQ Municipal 

Short Duration ETF was changed to IQ 

MacKay Shields Municipal Short 

Duration ETF. This proposed rule 

change proposes to reflect these 

changes. 

The Prior Release stated that the IQ 

Municipal Insured ETF generally will 

maintain a dollar-weighted average 

duration within plus or minus two years 

of the dollar-weighted average duration 

of the S&P Municipal Bond Insured 

Index. The Fund proposes to change 

this representation to state that the Fund 

generally will maintain a dollarweighted average modified duration of 3 

to15 years. 

In addition, the Prior Release stated 

that the IQ Municipal Intermediate ETF 

generally will maintain a dollarweighted average duration within plus 

or minus two years of the dollarweighted average duration of the S&P 

Municipal Bond Intermediate Index. 

The Fund proposes to change this 

representation to state that the Fund 

generally will maintain a dollarweighted average modified duration of 

three to ten years.5