[Federal Register Volume 80, Number 130 (Wednesday, July 8, 2015)]
[Notices]
[Pages 39105-39107]
[FR Doc No: 2015-16406]

-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2015-0393; FRL-9929-24]

Registration Review Interim Decisions; Notice of Availability

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice announces the availability of EPA's interim
registration review decisions for the pesticides listed in the table in
Unit II of this notice. Registration review is EPA's periodic review of
pesticide registrations to ensure that each pesticide continues to
satisfy the statutory standard for registration, that is, that the
pesticide can perform its intended function without causing
unreasonable adverse effects on human health or the environment.
Through this program, EPA is ensuring that each pesticide's
registration is based on current scientific and other knowledge,
including its effects on human health and the environment. This
document also announces the Agency's closure of the registration review
docket diclofop-methyl. All pesticide products containing diclofop-
methyl have been cancelled.

FOR FURTHER INFORMATION CONTACT: For pesticide specific information,
contact the Chemical Review Manager identified in the table in Unit II.
for the pesticide of interest.
    For general information on the registration review program,
contact: Richard Dumas, Pesticide Re-Evaluation Division (7508P),
Office of Pesticide Programs, Environmental Protection Agency, 1200
Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone number:
(703) 308-8015; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    This action is directed to the public in general, and may be of
interest to a wide range of stakeholders including environmental, human
health, farm worker, and agricultural advocates; the chemical industry;
pesticide users; and members of the public interested in the sale,
distribution, or use of pesticides. Since others also may be
interested, the Agency has not attempted to describe all the specific
entities that may be affected by this action. If you have any questions
regarding the applicability of this action to a particular entity,
consult the Chemical Review Manager identified in the table in Unit II.
for the pesticide of interest.

B. How can I get copies of this document and other related information?

    The docket for this action, identified by docket identification
(ID) number EPA-HQ-OPP-2015-0393, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory
Public Docket (OPP Docket) in the Environmental Protection Agency
Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334,
1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the OPP
Docket is<PHONE_NUMBER>. Please review the visitor instructions and
additional information about the docket available at http://www.epa.gov/dockets.

II. What action is the agency taking?

    Pursuant to 40 CFR 155.58(c), this notice announces the
availability of EPA's interim registration review decisions for the
pesticides in the following table:

              Table--Registration Review Interim Decisions
------------------------------------------------------------------------
                                                        Chemical review
  Registration review case name                           manager and
             and No.                 Docket ID No.          contact
                                                          information
------------------------------------------------------------------------
Acetic acid and sodium            EPA-HQ-OPP-2008-00  Cathryn Britton,
 diacetate, 4001.                  16<EMAIL_ADDRESS>(703) 308-
                                                       0136.
Fosetyl-Al, 0646................  EPA-HQ-OPP-2006-03  Ricardo Jones,
                                   79<EMAIL_ADDRESS>(703) 347-
                                                       0493.
Picaridin, 7433.................  EPA-HQ-OPP-2014-03  Ricardo Jones,
                                   41<EMAIL_ADDRESS>(703) 347-
                                                       0493.
Sodium fluoride, 3132...........  EPA-HQ-OPP-2014-06  SanYvette
                                   55.                 Williams,
<EMAIL_ADDRESS>(703)
                                                       305-7702.
Yellow mustard seed/sulfonic      EPA-HQ-OPP-2014-07  Roy Johnson,
 acid salts, 7619/7618.            62<EMAIL_ADDRESS>(703) 347-
                                                       0492.
------------------------------------------------------------------------

    The registration review final decisions for these cases are
dependent on the assessments of listed species under the Endangered
Species Act (ESA), determinations on the potential for endocrine
disruption, and/or pollinator risk assessments.
    Acetic acid and sodium diacetate (Interim Decision). The
registration review docket for acetic acid and sodium diacetate opened
in March 2008. Acetic acid and sodium diacetate are two different
active ingredients; sodium diacetate is a salt of acetic acid. Acetic
acid is used as a preservative for post-harvest stored grains and hay
intended for livestock feed. It is also applied as a non-selective
herbicide for control of broadleaf weeds and grasses. Sodium diacetate
is a fungicide and bactericide registered to control molds and
bacteria. It is applied to hay to prevent spoilage and to silage as an
aid in fermentation. The Agency has determined that previous human
health assessments for acetic acid and sodium diacetate are sufficient
for registration review and no human health risks of concern have been
identified. The Agency completed a comprehensive ecological risk
assessment for the nonselective herbicide use of acetic acid, including
an endangered species assessment, and a qualitative ecological risk
assessment for sodium diacetate. The Agency has made a No Effect
determination for acetic acid used as a nonselective herbicide and all
currently registered uses of sodium diacetate for all non-target
organisms. EPA published the Acetic Acid and Sodium Diacetate Proposed
Interim Decision in December 2014. One comment was received from the
Center for Biological Diversity concurring with EPA's No Effect
determination. No risk mitigation measures for human health or
ecological effects are included in the interim decision.
    Fosetyl-Al (Interim Decision). Fosetyl-Al is a phosphonate
fungicide registered for use to control various oomycyete pathogens
that cause fungal diseases on numerous crops. Fosetyl-Al is registered
for use on agricultural crops including avocado, caneberries, citrus,
grape, stone fruit, strawberry, certain tree nuts, tobacco, and certain
vegetables. It is also registered for commercial use on ornamentals,
turf, and conifer nurseries. EPA conducted quantitative risk
assessments for both human health and ecological risk. The Agency also
completed a partial screening level endangered species assessment,
making a No Effects determination for listed species of fish, aquatic
invertebrates, aquatic plans, and monocot plants. No human health risks
of concern were identified. The ecological risk assessment indicated
potential risks to birds, mammals, terrestrial and aquatic plants, and
terrestrial invertebrates. In the Federal Register of December 24, 2014
(79 FR 77480) (FRL-9919-24), the Agency issued its Proposed Interim
Registration Review Decision for fosetyl-Al for public comment.
Fourteen comments were received, including comments on the Agency's
proposal to increase the Restricted Entry Interval, require additional
pollinator data and add pollinator advisory language to labels. The
Agency's Interim Decision modifies the application directions for
fosetyl-Al to mitigate ecological risks and updates labels to reflect
current Agency policy for worker protection. It does not require
additional pollinator data or pollinator advisory language on the
product labels.
    Picaridin (Interim Decision). Picaridin is a broad-spectrum insect
repellent registered for use against biting flies, chiggers, fleas,
mosquitoes, and ticks. Picaridin is labeled for use on human skin and
footwear. The Agency completed qualitative ecological and human health
risk assessments for picaridin, and found no risks of concern. The
Agency has made a No Effects determination under the Endangered Species
Assessment (ESA) for all listed species and No Modification of
designated critical habitat for such species. In the Federal Register
of December 24, 2014 (79 FR 77480) (FRL-9919-24), EPA issued the
Combined Work Plan and Proposed Interim Registration Review Decision,
indicating that no additional data would be needed for the picaridin
registration review. Two comments were received, neither of which
modified the proposed decision or work plan for picaridin. No risk
mitigation measures for human health or ecological effects are included
in the interim decision.
    Sodium fluoride (Interim Decision). Sodium fluoride is registered
for use as a wood preservative to protect the groundline portion of
existing wooden utility poles. It is formulated as an impregnated pole
wrap material. This use is not expected to result in direct or indirect
food or drinking water exposure. Occupational and residential exposure
is minimal by the dermal and inhalation routes, and the Agency has
determined that a human health risk assessment was not needed. Based on
the lack of potential exposure and toxic effects to fish, aquatic
invertebrates, and birds, the Agency has made a No Effect determination
for federally listed species and designated critical habitat.
    Yellow mustard seed/sulfonic acid salts (Interim Decision). Yellow
mustard seed and sulfonic acid salts are co-formulated as a rodenticide
registered for the control of ground squirrels in rangelands,
ornamental plantings, seed orchards and nurseries, golf courses, parks,
and rights-of-way. The product is delivered into burrows occupied by
these rodents through a modified hand-held spray wand with an
aspirating muzzle to facilitate foaming action. The Agency relied on
qualitative assessments conducted for yellow mustard seed/sulfonic acid
salts at the time of the initial registration, and the Agency did not
believe that updated or quantitative assessments were needed for
registration review. No human health risks of concern or risks of

concern to non-listed species have been identified. No risk mitigation
measures for human health or ecological effects are included in the
interim decision.
    Case Closure for Diclofop-methyl (PC Code: 110902, Case: 2160).
Diclofop-methyl is an herbicide which was labeled for use on wheat,
barley, and golf course turf. On October 23, 2014, the Agency received
a request for voluntary cancellation of diclofop-methyl from the
technical and end-use registrants; Bayer CropScience and Bayer
Environmental Science, respectively. EPA subsequently issued a Federal
Register notice announcing receipt of the request (FRL-9396-04), and
allowed a 30-day period for public comment on the request. No
substantive comments were received, and on June 10, 2015, EPA issued
the cancellation order for all remaining registrations of products
containing diclofop-methyl (FRL-9968-03), which sets out the existing
stocks policy for such products. With the cancellation of all remaining
diclofop-methyl products, the Agency is announcing the closure of the
registration review case for the active ingredient.
    Pursuant to 40 CFR 155.57, a registration review decision is the
Agency's determination whether a pesticide meets, or does not meet, the
standard for registration in FIFRA. EPA has considered the pesticides
listed in the table in this unit in light of the FIFRA standard for
registration. The Interim Decision documents for these pesticides in
the docket describe the Agency's rationale for issuing a registration
review interim decision for this pesticide.
    In addition to an interim registration review decision document,
the registration review docket for each of these pesticides may also
include other relevant documents related to the registration review of
the case. A proposed interim registration review decision was
previously posted to each docket and the public was invited to submit
any comments or new information relevant to the proposal.
    EPA has addressed the substantive comments and information received
during the 60-day comment period in the discussion for each pesticide
listed in this document. During the 60-day comment period, no public
comments were received for any of these cases that resulted in changes
in the Agency's interim decisions.
    Pursuant to 40 CFR 155.58(c), the registration review case docket
for each pesticide discussed in this notice will remain open until all
actions required in the interim decision have been completed.
    Background on the registration review program is provided at:
http://www2.epa.gov/pesticide-reevaluation. Links to earlier documents
related to the registration review of the pesticide cases identified in
this notice are provided in the Pesticide Chemical Search data base
accessible at: http://iaspub.epa.gov/apex/pesticides/f?p=chemicalsearch.

    Authority:  7 U.S.C. 136 et seq.

    Dated: June 26, 2015.
Richard P. Keigwin, Jr.,
Director, Pesticide Re-Evaluation Division, Office of Pesticide
Programs.
[FR Doc. 2015-16406 Filed 7-7-15; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 85, Number 187 (Friday, September 25, 2020)]
[Notices]
[Page 60452]
[FR Doc No: 2020-21202]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER20-2926-000]

Altamont Winds, LLC; Supplemental Notice that Initial Market-
Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced Altamont
Winds, LLC's application for market-based rate authority, with an
accompanying rate tariff, noting that such application includes a
request for blanket authorization, under 18 CFR part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is October 12, 2020.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically may mail similar pleadings to
the Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426. Hand delivered submissions in docketed
proceedings should be delivered to Health and Human Services, 12225
Wilkins Avenue, Rockville, Maryland 20852.
    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://ferc.gov) using the
eLibrary link. Enter the docket number excluding the last three digits
in the docket number field to access the document. At this time, the
Commission has suspended access to the Commission's Public Reference
Room, due to the proclamation declaring a National Emergency concerning
the Novel Coronavirus Disease (COVID-19), issued by the President on
March 13, 2020. For assistance, contact the Federal Energy Regulatory
Commission at<EMAIL_ADDRESS>or call toll-free, (886) 208-
3676 or TYY,<PHONE_NUMBER>.

    Dated: September 21, 2020.
Kimberly D. Bose,
Secretary.
[FR Doc. 2020-21202 Filed 9-24-20; 8:45 am]
BILLING CODE 6717-01-P


Linda Chappell/ RTP/ USEPA/ US 04/ 06/ 2005 09: 03 PM To Amy_ E._ Flynn@ omb. eop. gov, kbelton@ omb. eop. gov, Arthur_ G._ Fraas@ omb. eop. gov cc Lydia Wegman/ RTP/ USEPA/ US@ EPA, Ron Evans/ RTP/ USEPA/ US@ EPA, Al McGartland/ DC/ USEPA/ US@ EPA, Brian Heninger/ DC/ USEPA/ US@ EPA, Chris Dockins/ DC/ USEPA/ US@ EPA, William Nickerson/ DC/ USEPA/ US@ EPA, Mary Henigin/ DC/ USEPA/ US@ EPA, Kathy Kaufman/ RTP/ USEPA/ US@ EPA, Larry Sorrels/ RTP/ USEPA/ US@ EPA, Bryan Hubbell/ RTP/ USEPA/ US@ EPA Subject More BART RIA Chapters Hi Art, Amy and Keith, Attached you will find BART chapter 3, and Appendix A ( two parts). I will be sending another email with Appendices B, C, and D. Sorry for sending in separate chapters and emails, but I want to be sure you receive the files and it is not possible to create one file this evening. We still owe you chapter 10 of the RIA and several appendices. Note that chapter 3 and the appendices have not yet been edited or formatted. Also, we still have a few holes to fill in chapter 3 that are marked in yellow.

Art, I need to know if you'd like the BART analyses contained in CAIR appendix A to be included in an appendix for BART. We discussed this when we last spoke, but I was unsure as to whether you wanted this information included or not.

Please feel free to call me with questions or comments. Have a great evening, Linda


[Federal Register Volume 85, Number 15 (Thursday, January 23, 2020)]
[Notices]
[Pages 4023-4028]
[FR Doc No: 2020-01036]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87992; File No. SR-CboeBZX-2020-003]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To List and Trade Shares of the -1x
Short VIX Futures ETF, a Series of VS Trust, Under Rule 14.11(f)(4)
(Trust Issued Receipts)

January 16, 2020
    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 January 3, 2019, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing
with the Securities and Exchange Commission (``Commission'') a proposed
rule change to list and trade shares of the -1x Short VIX Futures ETF,
a series of VS Trust, under Rule 14.11(f)(4) (``Trust Issued
Receipts'').
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, 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 Exchange proposes to list and trade Shares of the -1x Short VIX
Futures ETF (the ``Fund'') under Rule 14.11(f)(4), which governs the
listing and trading of Trust Issued Receipts \3\ on the Exchange.\4\
---------------------------------------------------------------------------

    \3\ Rule 14.11(f)(4) applies to Trust Issued Receipts that
invest in ``Financial Instruments.'' The term ``Financial
Instruments,'' as defined in Rule 14.11(f)(4)(A)(iv), means any
combination of investments, including cash; securities; options on
securities and indices; futures contracts; options on futures
contracts; forward contracts; equity caps, collars and floors; and
swap agreements.
    \4\ The Commission approved BZX Rule 14.11(f)(4) in Securities
Exchange Act Release No. 68619 (January 10, 2013), 78 FR 3489
(January 16, 2013) (SR-BZX-2012-044).
---------------------------------------------------------------------------

    The Fund seeks to provide daily investment results (before fees and
expenses), as further described below, that correspond to the
performance of a benchmark that seeks to offer short exposure to market
volatility through publicly traded futures markets. The benchmark for
the Fund is the Short VIX Futures Index (the ``Index'' or ticker symbol
SHORTVOL).\5\ The Index measures the daily inverse (i.e., the opposite)
performance of a portfolio of first- and second-month futures contracts
on the Cboe Volatility Index (``VIX'').\6\
---------------------------------------------------------------------------

    \5\ The index is sponsored by Cboe Global Indexes (the ``Index
Sponsor''). The Index Sponsor is not a registered broker-dealer, but
is affiliated with a broker-dealer. The Index Sponsor has
implemented and will maintain a fire wall with respect to its
relevant personnel regarding access to information concerning the
composition and/or changes to the Index. In addition, the Index
Sponsor has implemented and will maintain procedures around the
relevant personnel that are designed to prevent the use and
dissemination of material, non-public information regarding the
Index.
    \6\ The VIX is an index designed to measure the implied
volatility of the S&P 500 over 30 days in the future. The VIX is
calculated based on the prices of certain put and call options on
the S&P 500. The VIX is reflective of the premium paid by investors
for certain options linked to the level of the S&P 500.

---------------------------------------------------------------------------

    The Fund will primarily invest in VIX futures contracts traded on
the Cboe Futures Exchange, Inc. (``CFE'') (hereinafter referred to as
``VIX Futures Contracts'') based on the Index to pursue its investment
objective. In the event accountability rules, price limits, position
limits, margin limits or other exposure limits are reached with respect
to VIX Futures Contracts, the Sponsor may cause the Fund to obtain
exposure to the Index through Over-the-Counter (OTC) swaps referencing
the Index or particular VIX Futures Contracts comprising the Index
(hereinafter referred to as ``VIX Swap Agreements''). The Fund may also
invest in VIX Swap Agreements if the market for a specific VIX Futures
Contract experiences emergencies (e.g., natural disaster, terrorist
attack or an act of God) or disruptions (e.g., a trading halt or a
flash crash) or in situations where the Sponsor deems it impractical or
inadvisable to buy or sell VIX Futures Contracts (such as during
periods of market volatility or illiquidity).
    The VIX Swap Agreements in which the Fund may invest may be cleared
or non-cleared. The Fund will collateralize its obligations with liquid
assets consistent with the 1940 Act and interpretations thereunder.
    The Fund will only enter into VIX Swap Agreements with
counterparties that the Sponsor reasonably believes are capable of
performing under the contract and will post as collateral as required
by the counterparty. The Fund will seek, where possible, to use
counterparties, as applicable, whose financial status is such that the
risk of default is reduced; however, the risk of losses resulting from
default is still possible. The Sponsor will evaluate the
creditworthiness of counterparties on a regular basis. In addition to
information provided by credit agencies, the Sponsor will review
approved counterparties using various factors, which may include the
counterparty's reputation, the Sponsor's past experience with the
counterparty and the price/market actions of debt of the counterparty.
    The Fund may use various techniques to minimize OTC counterparty
credit risk including entering into arrangements with its
counterparties whereby both sides exchange collateral on a mark-to-
market basis. Collateral posted by the Fund to a counterparty in
connection with uncleared VIX Swap Agreements is generally held for the
benefit of the counterparty in a segregated tri-party account at the
custodian to protect the counterparty against non-payment by the Fund.
In addition to VIX Swap Agreements, if the fund is unable to meet its
investment objective through investments in VIX Futures Contracts, the
Fund may also obtain exposure to the Index through listed VIX options
contracts traded on the Cboe Exchange, Inc. (``Cboe'') (hereinafter
referred to as ``VIX Options Contracts'').
    The Fund may also invest in Cash and Cash Equivalents \7\ that may
serve as collateral in the above referenced VIX Futures Contracts, VIX
Swap Agreements, and VIX Option Contracts (collectively referred to as
the ``VIX Derivative Products'').
---------------------------------------------------------------------------

    \7\ For purposes of this proposal, the term ``Cash and Cash
Equivalents'' shall have the definition provided in Exchange Rule
14.11(i)(4)(C)(iii), applicable to Managed Fund Shares.
---------------------------------------------------------------------------

    Volatility Shares LLC (the ``Sponsor''), a Delaware limited
liability company, serves as the Sponsor of VS Trust (the ``Trust'').
The Sponsor is a commodity pool operator.\8\ Tidal ETF Services LLC
serves as the administrator (the ``Administrator'') and U.S. Bank
National Association serves as custodian of the Fund and its Shares.
U.S. Bancorp Fund Services, LLC serves as the sub-administrator (the
``Sub-Administrator'') and transfer agent. Wilmington Trust Company, a
Delaware trust company, is the sole trustee of the Trust.
---------------------------------------------------------------------------

    \8\ The Fund has filed a draft registration statement on Form S-
1 under the Securities Act of 1933, dated December 6, 2019 (File No.
377-02945) (``Draft Registration Statement''). The description of
the Fund and the Shares contained herein are based on the
Registration Statement.
---------------------------------------------------------------------------

    If the Sponsor to the Trust issuing the Trust Issued Receipts is
affiliated with a broker-dealer, such Sponsor to the Trust shall erect
a ``fire wall'' between the Sponsor and the broker-dealer with respect
to access to information concerning the composition and/or changes to
such Trust portfolio. The Sponsor is not affiliated with a broker-
dealer. In the event that (a) the Sponsor becomes a broker-dealer or
newly affiliated with a broker-dealer, or (b) any new sponsor is a
broker-dealer or becomes affiliated with a broker-dealer, it will
implement a fire wall with respect to its relevant personnel or such
broker-dealer affiliate, as applicable, regarding access to information
concerning the composition and/or changes to the portfolio, and will be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio.
    If the Fund is successful in meeting its objective, its value
(before fees and expenses) on a given day should gain approximately as
much on a percentage basis as the level of the Index when it rises.
Conversely, its value (before fees and expenses) should lose
approximately as much on a percentage basis as the level of the Index
when it declines. The Fund primarily acquires short exposure through
VIX Futures Contracts, such that the Fund has exposure intended to
approximate the benchmark at the time of the net asset value (``NAV'')
calculation of the Fund. However, as discussed above, in the event that
the Fund is unable to meet its investment objective solely through the
investment of VIX Futures Contracts, it may invest in VIX Swap
Agreements or VIX Options Contracts. The Fund may also invest in Cash
or Cash Equivalents that may serve as collateral to the Fund's
investments in VIX Derivative Products.
    The Fund is not actively managed by traditional methods, which
typically involve effecting changes in the composition of a portfolio
on the basis of judgments relating to economic, financial and market
considerations with a view toward obtaining positive results under all
market conditions. Rather, the Fund seeks to remain fully invested at
all times in VIX Derivative Products (and Cash and Cash Equivalents as
collateral) \9\ that provide exposure to the Index consistent with its
investment objective without regard to market conditions, trends or
direction.
---------------------------------------------------------------------------

    \9\ Supra note 7.
---------------------------------------------------------------------------

    In seeking to achieve the Fund's investment objective, the Sponsor
uses a mathematical approach to investing. Using this approach, the
Sponsor determines the type, quantity and mix of investment positions
that the Sponsor believes in combination should produce daily returns
consistent with the Fund's objective. The Sponsor relies upon a pre-
determined model to generate orders that result in repositioning the
Fund's investments in accordance with its investment objective.
VIX Futures Contracts
    The Index is comprised of, and the value of the Fund will be based
on, VIX Futures Contracts. VIX Futures Contracts are measures of the
market's expectation of the level of VIX at certain points in the
future, and as such will behave differently than current, or spot, VIX,
as illustrated below.
    While the VIX represents a measure of the current expected
volatility of the S&P 500 over the next 30 days, the prices of VIX
Futures Contracts are based on the current expectation of what the
expected 30-day volatility will

be at a particular time in the future (on the expiration date). For
example, a VIX Futures Contract purchased in March that expires in May,
in effect, is a forward contract on what the level of the VIX, as a
measure of 30-day implied volatility of the S&P 500, will be on the May
expiration date. The forward volatility reading of the VIX may not
correlate directly to the current volatility reading of the VIX because
the implied volatility of the S&P 500 at a future expiration date may
be different from the current implied volatility of the S&P 500. As a
result, the Index and the Fund should be expected to perform very
differently from the inverse of the VIX over all periods of time. To
illustrate, on December 4, 2019, the VIX closed at a price of 14.8 and
the price of the February 2020 VIX Futures Contracts expiring on
February 19, 2020 was 18.125. In this example, the price of the VIX
represented the 30-day implied, or ``spot,'' volatility (the volatility
expected for the period from December 5, 2019 to January 5, 2020) of
the S&P 500 and the February VIX Futures Contracts represented forward
implied volatility (the volatility expected for the period from
February 19 to March 19, 2020) of the S&P 500.
Short VIX Futures Index
    The Index is designed to express the daily inverse performance of a
theoretical portfolio of first- and second-month VIX Futures Contracts
(the ``Index Components''), with the price of each VIX Futures Contract
reflecting the market's expectation of future volatility. The Index
seeks to reflect the returns that are potentially available from
holding an unleveraged short position in first- and second- month VIX
Futures Contracts. While the Index does not correspond to the inverse
of the VIX, as it seeks short exposure to VIX, the value of the Index,
and by extension the Fund, will generally rise as the VIX falls and
fall as the VIX rises. Further, as described above, because VIX Futures
Contracts correlate to future volatility readings of VIX, while the VIX
itself correlates to current volatility, the Index and the Fund may
perform significantly different from the inverse of the VIX.
    Unlike the Index, the VIX, which is not a benchmark for the Fund,
is calculated based on the prices of put and call options on the S&P
500, which are traded exclusively on Cboe.
    The Short VIX Futures Index employs rules for selecting the Index
Components and a formula to calculate a level for the Index from the
prices of these components. Specifically, the Index Components
represent the prices of the two near-term VIX futures months,
replicating a position that rolls the nearest month VIX Futures
Contract to the next month VIX Futures Contract on a daily basis in
equal fractional amounts. This results in a constant weighted average
maturity of approximately one month. The roll period usually begins on
the Wednesday falling 30 calendar days before the S&P 500 option
expiration for the following month (the ``Cboe VIX Monthly Futures
Settlement Date''), and runs to the Tuesday prior to the subsequent
month's Cboe VIX Monthly Futures Settlement Date.
Calculation of the Index
    The level of the Index will be published at least every 15 seconds
both in real time from 9:30 a.m. to 4:00 p.m. ET and at the close of
trading on each Business Day \10\ by Bloomberg and Reuters.
---------------------------------------------------------------------------

    \10\ A ``Business Day'' means any day other than a day when any
of BZX, Cboe, CFE or other exchange material to the valuation or
operation of the Fund, or the calculation of the VIX, options
contracts underlying the VIX, VIX Futures Contracts or the Index is
closed for regular trading.
---------------------------------------------------------------------------

    The Index Components comprising the Index represent the prices of
first- and second-month VIX Futures Contracts. The Index takes a daily
rolling short position in such VIX Futures Contracts and is intended to
reflect the returns that are potentially available through an
unleveraged investment in those contracts. The Index measures the
return from a rolling short position in the first- and second-month VIX
Futures Contracts. The Index rolls continuously throughout each month
from the first-month VIX Futures Contracts into the second-month VIX
Futures Contracts.
    The Index rolls on a daily basis. One of the effects of daily
rolling is to maintain a constant weighted average maturity for the
underlying VIX Futures Contracts. Unlike equities, which typically
entitle the holder to a continuing stake in a corporation, futures
contracts normally specify a certain date for the delivery of the
underlying asset or financial instrument or, in the case of futures
contracts relating to indices such as the VIX, a certain date for
payment in cash of an amount determined by the level of the underlying
index. The Index operates by buying back, on a daily basis, Index
Components with a nearby settlement date and selling Index Components
with a longer-dated settlement date. The roll for each contract occurs
on each Business Day according to a pre-determined schedule that has
the effect of keeping constant the weighted average maturity of the
relevant futures contracts. This process is known as ``rolling'' a
futures position, and the Index is a ``rolling index''. The constant
weighted average maturity for the VIX Futures Contracts underlying the
Index is approximately one month.
Purchases and Redemptions of Creation Units
    The Fund will create and redeem Shares from time to time only in
large blocks of a specified number of Shares or multiples thereof
(``Creation Units''). A Creation Unit is a block of at least 10,000
Shares. Except when aggregated in Creation Units, the Shares are not
redeemable securities.
    On any Business Day, an authorized participant may place an order
with the Sub-Administrator to create one or more Creation Units.\11\
The total cash payment required to create each Creation Unit is the NAV
of at least 10,000 Shares of the Fund on the purchase order date plus
the applicable transaction fee.
---------------------------------------------------------------------------

    \11\ Authorized participants have a cut-off time of 2:00 p.m. ET
to place creation and redemption orders.
---------------------------------------------------------------------------

    The procedures by which an authorized participant can redeem one or
more Creation Units mirror the procedures for the purchase of Creation
Units. On any Business Day, an authorized participant may place an
order with the Sub-Administrator to redeem one or more Creation Units.
The redemption proceeds from the Fund consist of the cash redemption
amount. The cash redemption amount is equal to the NAV of the number of
Creation Unit(s) of the Fund requested in the authorized participant's
redemption order as of the time of the calculation of a Fund's NAV on
the redemption order date, less transaction fees.
Availability of Information Regarding the Shares
    The NAV for the Fund's Shares will be calculated by the Sub-
Administrator once each Business Day and will be disseminated daily to
all market participants at the same time.\12\ Pricing information will
be available on the Fund's website including: (1) The prior Business
Day's reported NAV, the closing market price or the Bid/Ask Price,
daily trading volume, and a calculation of the premium and discount of
the closing market price or Bid/Ask Price against the NAV; and (2) data
in chart format displaying the

frequency distribution of discounts and premiums of the daily closing
price against the NAV, within appropriate ranges, for each of the four
previous calendar quarters.
---------------------------------------------------------------------------

    \12\ NAV means the total assets of the Fund including, but not
limited to, all cash and cash equivalents or other debt securities
less total liabilities of the Fund, consistently applied under the
accrual method of accounting. The Fund's NAV is calculated at 4:00
p.m. ET.
---------------------------------------------------------------------------

    The closing prices and settlement prices of the Index Components
(i.e., the first- and second-month VIX Futures Contracts) will also be
readily available from the websites of CFE (http://www.cfe.cboe.com),
automated quotation systems, published or other public sources, or on-
line information services such as Bloomberg or Reuters. Complete real-
time data for component VIX Futures Contracts underlying the Index is
available by subscription from Reuters and Bloomberg. Specifically, the
level of the Index will be published at least every 15 seconds both in
real time from 9:30 a.m. to 4:00 p.m. ET and at the close of trading on
each Business Day \13\ by Bloomberg and Reuters.
---------------------------------------------------------------------------

    \13\ A ``Business Day'' means any day other than a day when any
of BZX, Cboe, CFE or other exchange material to the valuation or
operation of the Fund, or the calculation of the VIX, options
contracts underlying the VIX, VIX Futures Contracts or the Index is
closed for regular trading.
---------------------------------------------------------------------------

    The CFE also provides delayed futures information on current and
past trading sessions and market news free of charge on its website.
The specific contract specifications of Index Components (i.e., first-
month and second-month VIX Futures Contracts) underlying the Index are
also available on such websites, as well as other financial
informational sources.
    Quotation and last-sale information regarding the Shares will be
disseminated through the facilities of the Consolidated Tape
Association (``CTA''). Information relating to VIX Futures Contracts
and VIX Options Contracts will be available from the exchange on which
such instruments are traded. Information relating to VIX Options
Contracts will also be available via the Options Price Reporting
Authority. Quotation information from brokers and dealers or pricing
services will be available for VIX Swap Agreements for which the Fund
may invest. Pricing information regarding each asset class in which the
Fund will invest is generally available through nationally recognized
data services providers through subscription agreements.
    In addition, the Fund's website at www.volatilityshares.com will
display the end of day closing Index level, and NAV per share for the
Fund. The Fund will provide website disclosure of portfolio holdings
daily and will include, as applicable, the notional value (in U.S.
dollars) of VIX Derivative Products, and characteristics of such
instruments, as well as Cash and Cash Equivalents held in the portfolio
of the Fund. This website disclosure of the portfolio composition of
the Fund will occur at the same time as the disclosure by the Fund of
the portfolio composition to authorized participants so that all market
participants are provided portfolio composition information at the same
time. The same portfolio information will be provided on the public
website as well as in electronic files provided to authorized
participants.
    In addition, in order to provide updated information relating to
the Fund for use by investors and market professionals, an updated
Intraday Indicative Value (``IIV'') will be calculated. The IIV is an
indicator of the value of the Fund's holdings, which includes the value
of the VIX Derivative Products (which, as stated above, includes VIX
Futures Contracts, VIX Swap Agreements, and VIX Options Contracts) and
Cash and Cash Equivalents less liabilities of the Fund at the time the
IIV is disseminated. The IIV is calculated and widely disseminated by
one or more major market data vendors every 15 seconds throughout
Regular Trading Hours.\14\
---------------------------------------------------------------------------

    \14\ As defined in Rule 1.5(w), the term ``Regular Trading
Hours'' means the time between 9:30 a.m. and 4:00 p.m. ET.
---------------------------------------------------------------------------

    In addition, the IIV is published on the Exchange's website and is
available through on-line information services such as Bloomberg and
Reuters.
    The IIV disseminated during Regular Trading Hours should not be
viewed as an actual real time update of the NAV, which is calculated
only once a day. The IIV also should not be viewed as a precise value
of the Shares.
    Additional information regarding the Fund and the Shares, including
investment strategies, risks, creation and redemption procedures, fees,
portfolio holdings, disclosure policies, distributions and taxes is
included in the Registration Statement.
Initial and Continued Listing
    The Shares of the Fund will conform to the initial and continued
listing criteria under BZX Rule 14.11(f)(4). The Exchange represents
that, for initial and continued listing, the Fund and the Trust must be
in compliance with Rule 10A-3 under the Act. A minimum of 100,000
Shares of the Fund will be outstanding at the commencement of trading
on the Exchange. The Exchange will obtain a representation from the
Sponsor of the Shares that the NAV per Share for the Fund will be
calculated daily and will be made available to all market participants
at the same time.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund. The Exchange will halt trading in
the Shares under the conditions specified in BZX Rule 11.18. Trading
may be halted because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable. These may
include: (1) The extent to which trading is not occurring in the
securities and/or the financial instruments composing the daily
disclosed portfolio of the Fund; or (2) whether other unusual
conditions or circumstances detrimental to the maintenance of a fair
and orderly market are present.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. The Exchange will
allow trading in the Shares from 8:00 a.m. until 8:00 p.m. ET and has
the appropriate rules to facilitate transactions in the Shares during
all trading sessions. As provided in BZX Rule 11.11(a), the minimum
price variation for quoting and entry of orders in securities traded on
the Exchange is $0.01, with the exception of securities that are priced
less than $1.00, for which the minimum price variation for order entry
is $0.0001.
Surveillance
    Trading of the Shares through the Exchange will be subject to the
Exchange's surveillance procedures for derivative products, including
Trust Issued Receipts. All of the VIX Futures Contracts and VIX Options
Contracts held by the Fund will trade on markets that are a member of
ISG or affiliated with a member of ISG or with which the Exchange has
in place a comprehensive surveillance sharing agreement.\15\ The
Exchange, FINRA, on behalf of the Exchange, or both will communicate
regarding trading in the Shares and the underlying listed instruments,
including listed derivatives held by the Fund, with the ISG, other
markets or entities who are members or affiliates of the ISG,

or with which the Exchange has entered into a comprehensive
surveillance sharing agreement. In addition, the Exchange or FINRA may
obtain information regarding trading in the Shares and the underlying
listed instruments, including listed derivatives, held by the Fund from
markets and other entities that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement.
All statements and representations made in this filing regarding the
description of the portfolio or reference assets, limitations on
portfolio holdings or reference assets, dissemination and availability
of reference asset, and IIVs, and the applicability of Exchange rules
specified in this filing shall constitute continued listing
requirements for the Fund. The issuer has represented to the Exchange
that it will advise the Exchange of any failure by the Fund or the
Shares to comply with the continued listing requirements, and, pursuant
to its obligations under Section 19(g)(1) of the Act, the Exchange will
surveil for compliance with the continued listing requirements. If the
Fund or the Shares are not in compliance with the applicable listing
requirements, the Exchange will commence delisting procedures under
Exchange Rule 14.12.
---------------------------------------------------------------------------

    \15\ For a list of the current members and affiliate members of
ISG, see www.isgportal.com. The Exchange notes that not all
components of the Fund's holdings may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

Information Circular
    Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (1) The procedures for purchases
and redemptions of Shares in Creation Units (and that Shares are not
individually redeemable); (2) BZX Rule 3.7, which imposes suitability
obligations on Exchange members with respect to recommending
transactions in the Shares to customers; (3) how information regarding
the IIV and the Fund's holdings is disseminated; (4) the risks involved
in trading the Shares during the Pre-Opening \16\ and After Hours
Trading Sessions \17\ when an updated IIV will not be calculated or
publicly disseminated; (5) the requirement that members deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; and (6) trading
information.
---------------------------------------------------------------------------

    \16\ The Pre-Opening Session is from 8:00 a.m. to 9:30 a.m. ET.
    \17\ The After Hours Trading Session is from 4:00 p.m. to 8:00
p.m. ET.
---------------------------------------------------------------------------

    In addition, the Information Circular will advise members, prior to
the commencement of trading, of the prospectus delivery requirements
applicable to the Fund. Members purchasing Shares from the Fund for
resale to investors will deliver a prospectus to such investors. The
Information Circular will also discuss any exemptive, no-action and
interpretive relief granted by the Commission from any rules under the
Act.
    In addition, the Information Circular will reference that the Fund
is subject to various fees and expenses described in the Registration
Statement. The Information Circular will also disclose the trading
hours of the Shares of the Fund and the applicable NAV calculation time
for the Shares. The Information Circular will disclose that information
about the Shares of the Fund will be publicly available on the Fund's
website.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section
6(b) of the Act \18\ in general and Section 6(b)(5) of the Act \19\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, 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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f.
    \19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Exchange Rule 14.11(f). The
Exchange believes that its surveillance procedures are adequate to
properly monitor the trading of the Shares on the Exchange during all
trading sessions and to deter and detect violations of Exchange rules
and the applicable federal securities laws. If the Sponsor to the Trust
issuing the Trust Issued Receipts is affiliated with a broker-dealer,
such Sponsor to the Trust shall erect a ``fire wall'' between the
Sponsor and the broker-dealer with respect to access to information
concerning the composition and/or changes to such Trust portfolio. The
Sponsor is not affiliated with a broker-dealer. In the event that (a)
the Sponsor becomes a broker-dealer or newly affiliated with a broker-
dealer, or (b) any new sponsor is a broker-dealer or becomes affiliated
with a broker-dealer, it will implement a fire wall with respect to its
relevant personnel or such broker-dealer affiliate, as applicable,
regarding access to information concerning the composition and/or
changes to the portfolio, and will be subject to procedures designed to
prevent the use and dissemination of material non-public information
regarding such portfolio. The Exchange may obtain information regarding
trading in the Shares and the underlying VIX Futures Contracts and VIX
Options Contracts via the ISG from other exchanges who are members or
affiliates of the ISG or with which the Exchange has entered into a
comprehensive surveillance sharing agreement.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV will be calculated daily and that the NAV and the
Fund's holdings will be made available to all market participants at
the same time. In addition, a large amount of information is publicly
available regarding the Fund and the Shares, thereby promoting market
transparency. Moreover, the IIV will be disseminated by one or more
major market data vendors at least every 15 seconds during Regular
Trading Hours. On each Business Day, before commencement of trading in
Shares during Regular Trading Hours, the Fund will disclose on its
website the holdings that will form the basis for the Fund's
calculation of NAV at the end of the Business Day. Pricing information
will be available on the Fund's website including: (1) The prior
Business Day's reported NAV, the closing market price or the Bid/Ask
Price, daily trading volume, and a calculation of the premium and
discount of the closing market price or Bid/Ask Price against the NAV;
and (2) data in chart format displaying the frequency distribution of
discounts and premiums of the daily closing price against the NAV,
within appropriate ranges, for each of the four previous calendar
quarters. Additionally, information regarding market price and trading
of the Shares will be continually available on a real-time basis
throughout the day on brokers' computer screens and other electronic
services, and quotation and last sale information for the Shares will

be available on the facilities of the CTA. The websites for the Fund
will include a form of the prospectus for the Fund and additional data
relating to NAV and other applicable quantitative information. Trading
in Shares of the Fund will be halted under the conditions specified in
Exchange Rule 11.18. Trading may also be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. Finally, trading in the Shares will
be subject to 14.11(f)(4)(C)(ii), which sets forth circumstances under
which Shares of the Fund may be halted. In addition, as noted above,
investors will have ready access to information regarding the Fund's
holdings, the IIV, and quotation and last sale information for the
Shares.
    Intraday price quotations on VIX Derivative Products held by the
Fund are available from major broker-dealer firms and from third-
parties, which may provide prices free with a time delay, or ``live''
with a paid fee. Major broker-dealer firms will also provide intraday
quotes on swaps of the type held by the Fund. Pricing information
related to exchange-listed instruments, including exchange-listed VIX
Futures Contracts and VIX Options Contracts, will be available directly
from the listing exchange. For VIX Futures Contracts and VIX Options
Contracts, such intraday information is available directly from CFE and
Cboe, respectively. Intraday price information is also available
through subscription services, such as Bloomberg and Thomson Reuters,
which can be accessed by authorized participants and other investors.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of exchange-traded product that will enhance
competition among market participants, to the benefit of investors and
the marketplace. As noted above, the Exchange has in place surveillance
procedures relating to trading in the Shares and may obtain information
via ISG from other exchanges that are members of ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement. In addition, as noted above, investors will have ready
access to information regarding the Fund's holdings, the IIV, and
quotation and last sale information for the Shares.
    For the above reasons, the Exchange believes that the proposed rule
change is consistent with the requirements of Section 6(b)(5) of the
Act.

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 purpose of the Act. The Exchange notes that the
proposed rule change, rather will facilitate the listing of an
additional exchange-traded product on the Exchange, which will enhance
competition among listing venues, to the benefit of issuers, investors,
and the marketplace more broadly.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule
change should be 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<EMAIL_ADDRESS>Please include
File Number SR-CboeBZX-2020-003 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeBZX-2020-003. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 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-CboeBZX-2020-003 and should be submitted
on or before February 12, 2020.
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-01036 Filed 1-22-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: December 6, 2006 (Volume 71, Number 234)]
[Notices]
[Page 70822-70824]
[DOCID:fr06de06-115]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54829; File No. SR-NSX-2006-13]

Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
and Amendment No. 1 Thereto To Implement a Fee Schedule Under NSX Rule
16.1(a) and 16.1(c) for Transactions Executed Through NSX BLADE

November 29, 2006.
    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 October 23, 2006, the National Stock Exchange, Inc. (``NSX'' 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 substantially prepared by the
Exchange. On November 17, 2006, NSX submitted Amendment No. 1 to the
proposed rule change. The Exchange has designated this proposal as one
establishing or changing a due, fee, or other charge applicable only to
a member imposed by the Exchange under Section 19(b)(3)(A)(ii) of the
Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change, as
amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to implement a fee schedule pursuant to the
newly approved Chapter XVI of the Exchange Rules. The Fee Schedule
would apply to executions through NSX's new trading system, NSX BLADE.
The fees for executions through the Exchange's current trading system,
National Securities Trading System (``NSTS''), during the phase-in
period of NSX BLADE are the fees contained in old Exchange Rule 11.10.
Below is the text of the proposed rule change, as amended. Proposed new
language is in italics.

NATIONAL STOCK EXCHANGE, INC. FEE SCHEDULE

For Executions via NSX BLADE\SM\ as of October, 2006

    The following reflects the Schedule of Fees (pursuant to Rule
16.1(a) and Rule 16.1(c)) for all transactions executed via the
National Stock Exchange System known as NSX BLADE\SM\ (the ``System''):
    1. Order Matching. Orders in Tape C securities that are matched in
the System will be subject to the following rebates and execution fees
(computed on a monthly basis):
    A. Rebate for adding liquidity (per share executed):

------------------------------------------------------------------------
                                                            Rebate for
                                                              Adding
       Average Daily Shares of Liquidity Provided         Liquidity (Per
                                                               Share
                                                             Executed)
------------------------------------------------------------------------
Greater than 30 million.................................         $0.0028
30 million or less......................................         $0.0027
------------------------------------------------------------------------

    B. Execution fee for removing liquidity: $0.0030 per share
executed.
    2. Order Routing. Orders that are routed through the System and
executed in another market center shall be charged $0.0040 per share
executed.
* * * * *

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, as
amended, 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
    In anticipation of the approval of the new trading rules,\5\ the
Exchange

recently amended its rules to add a Chapter XVI to set forth, in its
own chapter, rules relating to fees, dues, assessments, and the tape
rebate program. The rule change, SR-NSX-2006-10, was filed pursuant to
Section 19(b)(3)(A) of the Act,\6\ which rendered it effective upon
filing.\7\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54391 (August 31,
2006), 71 FR 52836 (September 7, 2006) (order approving File No. SR-
NSX-2006-08).
    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ See Securities Exchange Act Release No. 54194 (July 24,
2006), 71 FR 43258 (July 31, 2006) (notice of filing and immediate
effectiveness of File No. SR-NSX-2006-10). SR-NSX-2006-10 was
effective upon filing on July 13, 2006. NSX Rule 16.3 provides that
the new Chapter XVI would become effective upon written notice by
the Exchange to the ETP Holders. Notice was provided declaring
Chapter XVI effective on October 2 and 19, 2006 respecting ITS
transactions and transactions in NSX BLADE, respectively.
---------------------------------------------------------------------------

    As part of the instant rule change, the Exchange is filing a Fee
Schedule under NSX Rule 16.1(a) and 16.1(c) for executions through NSX
BLADE.\8\ This Fee Schedule provides for, in connection with NSX BLADE
transactions in Nasdaq-listed securities, an execution fee for removing
liquidity from NSX BLADE (i.e., charging ETP Holders for taking
liquidity against an order in the NSX BLADE System) of $0.0030 per
share executed on NSX BLADE and a rebate for adding liquidity in NSX
BLADE (i.e., providing a rebate to any ETP Holder that adds liquidity
to the NSX BLADE System). The rebate for adding liquidity would depend
upon the amount of liquidity added by the ETP Holder as set forth in
the Fee Schedule. If the ETP Holder provides 30 million shares or less
of added liquidity, the Exchange would provide a rebate of $0.0027 per
share for all shares of liquidity provided that were executed on NSX
BLADE. For those ETP Holders who provide, on an average daily basis,
liquidity in excess of 30 million shares, the Exchange would rebate
$0.0028 per share for all shares (including the first 30 million) of
liquidity provided that were executed on NSX BLADE. The Fee Schedule
also provides for an order routing fee of $0.0040 per share executed.
---------------------------------------------------------------------------

    \8\ As set forth in SR-NSX-2006-10, the Exchange proposed to
maintain a separate fee schedule that contains its current fees,
dues and other charges, instead of including all of its specific
fees, dues, and charges in the text of its rules, as it formerly did
prior to the adoption of Chapter XVI.
---------------------------------------------------------------------------

    While SR-NSX-2006-10 was effective upon filing, NSX Rule 16.3
allows the Exchange to delay the effectiveness of the Rule until it
gives written notice to its ETP Holders. This was done to allow the
Exchange to file its rules while awaiting the launch of NSX BLADE. It
is anticipated that NSX BLADE will be phased in gradually--first with a
small group of Nasdaq-listed securities over several weeks until all
Nasdaq-listed securities have been transitioned to the new system. Once
all Nasdaq-listed securities have been transitioned to NSX BLADE, the
Exchange will then transition all non-Nasdaq-listed securities.\9\ The
phase-in of NSX BLADE commenced on October 23, 2006 with the trading of
one security.\10\
---------------------------------------------------------------------------

    \9\ The NSX BLADE Fee Schedule will be amended to reflect fees
for executions for Tape A and B (non-NASDAQ ) securities prior to
the time those securities are transitioned to NSX BLADE.
    \10\ NSX plans to monitor this implementation and adjust the
schedule as needed to maintain an orderly transition.
---------------------------------------------------------------------------

    During this transitional period of phasing in various securities to
the NSX BLADE System, the Exchange will be operating both NSTS and the
NSX BLADE Systems. Accordingly, the Exchange will be operating under
two sets of rules during the phase-in period. All transactions in the
NSTS System will still operate under the rules pertaining to NSTS (old
NSX Rule 11.9 (National Securities Trading System) and old NSX Rule
11.10 (National Securities Trading System Fees)) while all transactions
in NSX BLADE will operate under the new trading rules approved in SR-
NSX-2006-08 and the new fee rules in Chapter XVI.\11\ When the phase-in
period has expired and NSTS is no longer operational, old NSX Rules
11.9 and 11.10 will be extinguished. The Exchange has issued a Notice
to ETP Holders to advise them of the different trading systems and
rules and fees applicable to each,\12\ and will issue a Notice advising
them of the new Fee Schedule and rule change.
---------------------------------------------------------------------------

    \11\ The Fee Schedule filed in SR-NSX-2006-12 is applicable to
any transaction through an ITS Plan, regardless of whether the
transaction was done through NSTS or NSX BLADE.
    \12\ Regulatory Circular 06-011 issued on October 19, 2006.
---------------------------------------------------------------------------

    Since NSX will first begin transitioning Nasdaq-listed securities,
the fees contained in the NSX BLADE Fee Schedule apply only to Nasdaq-
listed securities. Until transitioned to NSX BLADE, any transaction in
Nasdaq-listed securities and non-Nasdaq-listed securities through the
NSTS System will be charged the fees contained in old Exchange Rule
11.10.
    Pursuant to newly approved NSX Rule 16.1(c), the Exchange will
``provide ETP Holders with notice of all relevant dues, fees,
assessments and charges of the Exchange.'' ETP Holders using the
Exchange will be advised of these fees through the Exchange's Web site.
In addition, the ETP Holders will, simultaneous with the filing, be
notified through the issuance of a Regulatory Circular of the new NSX
BLADE Fee Schedule.
    NSX states the fees have been designed in this manner in order to
ensure that the Exchange can continue to fulfill its obligations under
Section 6(b) of the Act.\13\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is
consistent with Section 6(b) of the Act,\14\ in general, and furthers
the objectives of Section 6(b)(4) of the Act,\15\ in particular, in
that it is designed to provide for the equitable allocation of
reasonable dues, fees, and other charges. The Exchange also believes
that the proposed rule change, as amended, furthers the objectives of
Section 6(b)(1) of the Act \16\ in that it helps to assure that the
Exchange is so organized and has the capacity to be able to carry out
the purposes of the Act and to comply, and to enforce compliance by its
ETP Holders with the Act.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4).
    \16\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change, as
amended, will impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.

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, as amended.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing proposed rule change, as amended, has been designated
as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act \17\ and
Rule 19b-4(f)(2) \18\ thereunder, because it establishes or changes a
due, fee, or other charge applicable only to a member imposed by the
Exchange. Accordingly, the proposal will take effect upon filing with
the Commission. At any time within 60 days of the filing of such
proposed rule change the Commission may summarily abrogate 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.\19\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 17 CFR 240.19b-4(f)(2).
    \19\ 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-
day period within which the Commission may summarily abrogate the
proposal, the Commission considers the period to commence on
November 17, 2006, the date on which the Exchange submitted
Amendment No. 1.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NSX-2006-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NSX-2006-13. This
file number should be included on the subject line if e-mail 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 Web site (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 inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NSX-2006-13 and should be submitted on or before
December 27, 2006.
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
Nancy M. Morris,
Secretary.
[FR Doc. E6-20628 Filed 12-5-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 243 (Wednesday, December 19, 2018)]
[Notices]
[Pages 65186-65188]
[FR Doc No: 2018-27403]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84820; File No. SR-IEX-2018-23]

Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing of Proposed Rule Change To Modify the Resting Price of
Discretionary Peg Orders December 13, 2018.

    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 November 30, 2018, the Investors Exchange LLC (``IEX''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) under the Securities
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ IEX is
filing with the Commission a proposed rule change to modify the resting
price of Discretionary Peg orders to be equal to the less aggressive of
one (1) MPV \6\ less aggressive than the primary quote (i.e., the NBB
for buy orders and NBO for sell orders) or the order's limit price,
rather than the primary quote.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ See Rule 11.210.
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's
website at www.iextrading.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 the
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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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 this proposed rule filing is to modify the resting
price of Discretionary Peg orders to be equal to the less aggressive of
one (1) MPV \7\ less aggressive than the primary quote or the order's
limit price, rather than the primary quote. Currently, the Exchange
offers three types of pegged orders--primary peg, midpoint peg, and
Discretionary Peg--each of which are non-displayed orders that upon
entry into the System and while resting on the Order Book, are
automatically pegged to a reference price based on the national best
bid and offer (``NBBO'').
---------------------------------------------------------------------------

    \7\ See Rule 11.210.
---------------------------------------------------------------------------

    As set forth in Rule 11.190(b)(10), a Discretionary Peg order is a
pegged order that upon entry into the System, the price of the order is
automatically adjusted to be equal to the less aggressive of the
Midpoint Price \8\ or the order's limit price, if any. Furthermore,
when unexecuted shares of a Discretionary Peg order are posted to the
Order Book, the price of the order is automatically adjusted by the
System to be equal to and ranked at the primary quote or the order's
limit price, and is automatically adjusted by the System in response to
changes in the NBB (NBO) for buy (sell) orders up (down) to the order's
limit price, if any.
---------------------------------------------------------------------------

    \8\ See Rule 11.160(t).
---------------------------------------------------------------------------

    In order to meet the limit price of active orders on the Order
Book, a Discretionary Peg order will exercise the least amount of price
discretion necessary from the Discretionary Peg order's resting price
to its discretionary price (i.e., the less aggressive of the Midpoint
Price or the Discretionary Peg order's limit price, if any), except
during periods of quote instability as defined in Rule 11.190(g),
discussed further below. When exercising price discretion, a
Discretionary Peg order maintains time priority at its resting price
and is prioritized behind any non-displayed interest at the
discretionary price for the duration of that book processing action. If
multiple Discretionary Peg orders are exercising price discretion
during the same book processing action, they maintain their relative
time priority at the discretionary price. In the event the NBBO becomes
locked or crossed, Discretionary Peg orders resting on or posting to
the Order Book are priced one (1) MPV less aggressive than the locking
or crossing price.\9\
---------------------------------------------------------------------------

    \9\ See Rule 11.190(h)(3)(C)(ii) and (D)(ii).
---------------------------------------------------------------------------

    Pursuant to Rule 11.190(g), the Exchange utilizes real time
relative quoting activity of certain Protected Quotations \10\ and a
proprietary mathematical calculation (the ``quote instability
calculation'') to assess the probability of an imminent change to the
current Protected NBB to a lower price or Protected NBO to a higher
price for a particular security (``quote instability factor''). When
the quoting activity meets predefined criteria and the quote
instability factor calculated is greater than the Exchange's defined
quote instability threshold, the System treats the quote as unstable
and the crumbling quote indicator (``CQI'') is on at that price level
for two milliseconds,

or until the CQI triggers again. During all other times, the quote is
considered stable, and the CQI is off. The System independently
assesses the stability of the Protected NBB and Protected NBO for each
security.
---------------------------------------------------------------------------

    \10\ Pursuant to Rule 11.190(g), the Protected Quotations of the
New York Stock Exchange, Nasdaq Stock Market, NYSE Arca, Nasdaq BX,
Cboe BZX Exchange, Cboe BYX Exchange, Cboe EDGX Exchange, and Cboe
EDGA Exchange.
---------------------------------------------------------------------------

    When the CQI is on, Discretionary Peg orders do not exercise price
discretion to meet the limit price of an active (i.e., taking) order.
However, Discretionary Peg orders are eligible for execution at their
resting price (i.e., at the NBB (NBO) for buy (sell) orders) when the
CQI is on. Therefore, when IEX determines the quote to be unstable,
Discretionary Peg orders are protected from trading more aggressively
at a price that appears to be unstable, and thus imminently stale,
between the primary quote and the Midpoint Price. However,
Discretionary Peg orders remain susceptible to trading at the primary
quote under such circumstances. For example, based on a recent analysis
of data for May and June of 2018, the Exchange identified that 90% of
Discretionary Peg order executions trade within the NBBO when the CQI
is off, 88% of which execute at the Midpoint Price. However, of the
remaining 10% of Discretionary Peg order executions that occur at the
primary quote, 31% occur when the CQI is on.\11\ Said differently, 31%
of Discretionary Peg executions at the primary quote occur when IEX has
determined the primary quote to be in transition to a less aggressive
(more advantageous) price.
---------------------------------------------------------------------------

    \11\ The remaining 69% execute at the primary quote when the CQI
is off because the limit price of the active orders removing the
Discretionary Peg orders were priced at least as aggressive as the
primary quote.
---------------------------------------------------------------------------

    Therefore, in order to further protect resting Discretionary Peg
orders from execution at a stale price, the Exchange proposes to modify
the resting price of Discretionary Peg orders to be equal to the less
aggressive of one (1) MPV less aggressive than the primary quote or the
order's limit price, rather than the primary quote.
    As proposed, upon entry into the System, Discretionary Peg orders
will continue to be priced to the less aggressive of the Midpoint Price
or the orders limit price (i.e., Discretionary Peg orders will continue
to remove liquidity up to the Midpoint Price, subject to the order's
limit price). Similarly, after posting to the Order Book, Discretionary
Peg orders will continue to exercise the least amount of price
discretion up (down) to the less aggressive of the Midpoint Price or
the orders limit price, if any, to meet the limit price of active
orders on the Order Book when the CQI is off.\12\ Moreover,
Discretionary Peg orders will continue to be available for execution at
their resting price (i.e., the less aggressive of one (1) MPV less
aggressive than the primary quote or the orders limit price) when the
CQI is on. Furthermore, if the System determines the NBB (NBO) for a
particular security to be an unstable quote, it will restrict buy
(sell) Discretionary Peg orders in that security from exercising price
discretion to trade against interest at or above (below) the NBB (NBO).
The Exchange is not proposing to modify the handling of Discretionary
Peg orders resting on or posting to the Order Book in locked and
crossed markets. Thus, in the event the NBBO becomes locked or crossed,
Discretionary Peg orders resting on or posting to the Order Book will
continue to be priced one (1) MPV less aggressive than the locking or
crossing price.\13\
---------------------------------------------------------------------------

    \12\ The Exchange notes that the proposed resting price for
Discretionary Peg orders will be the same as the resting price of
Primary Peg orders pursuant to Rule 11.190(b)(8). Thus, as proposed,
both Discretionary Peg and Primary Peg orders will rest at the less
aggressive of one (1) MPV less aggressive than the primary quote or
the order's limit price in relative time priority. Furthermore, when
the CQI is off, Primary Peg orders are eligible to exercise
discretion up (down) to the NBB (NBO) for buy (sell) orders up
(down) to the order's limit price. Thus, as proposed, when
exercising discretion, Primary Peg and Discretionary Peg orders will
compete for execution with orders removing liquidity at the primary
quote based on relative time priority.
    \13\ See supra note 9.
---------------------------------------------------------------------------

    Lastly, the Exchange is also proposing to make conforming changes
to the description of the resting price of Discretionary Peg orders for
purposes of ranking and priority in the Regular Market Session Opening
Process for Non-IEX-Listed Securities, and IEX Auctions.\14\
---------------------------------------------------------------------------

    \14\ See proposed Rule 11.231(a)(1)(iii) and Rule
11.350(b)(1)(A)(i)(c), respectively.
---------------------------------------------------------------------------

2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) \15\ of the Act in general, and furthers the
objectives of Section 6(b)(5) of the Act \16\ in particular, in that it
is 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. Specifically, the Exchange believes the proposed rule
change is consistent with the protection of investors and the public
interest because it is designed to protect resting Discretionary Peg
orders from adverse selection by limiting execution at the primary
quote when the Exchange's probabilistic model identifies that the
primary quote appears to be moving adversely to them, thereby reducing
the potential to execute at an imminently stale price and enhancing the
overall execution experience of Discretionary Peg orders.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Exchange believes that such protection is
consistent with the protection of investors and the public interest
because it may incentivize the entry of additional resting
Discretionary Peg orders on the Exchange, thereby increasing the
overall liquidity profile on the Exchange to the benefit of all market
participants. Moreover, as noted in the Purpose section, resting
Discretionary Peg orders generally provide liquidity and opportunities
for price improvement to market participants removing liquidity on the
Exchange during periods of quote stability. By incentivizing the entry
of additional Discretionary Peg orders, the Exchange believes that the
proposed changes may enhance the overall execution experience for other
market participants removing liquidity on the Exchange during periods
of quote stability.
    Further, IEX believes that the proposal is consistent with
protection of investors and the public interest in that the
Discretionary Peg order type is designed to assist Members in obtaining
best execution for their customers (and proprietary orders) by
providing an opportunity to execute at the NBBO, but limiting
executions at the NBBO when the NBBO appears to be unstable, thereby
reducing the potential to execute at an imminently stale price.
    In addition, as noted in the Purpose section, the proposed resting
price for Discretionary Peg orders will be the same as the resting
price of Primary Peg orders pursuant to Rule 11.190(b)(8).\17\ Thus,
IEX does not believe that the proposed changes raise any new or novel
issues that have not already been considered by the Commission in
connection with existing order types offered by the Exchange.\18\
---------------------------------------------------------------------------

    \17\ As proposed, both Discretionary Peg and Primary Peg orders
will rest at the less aggressive of one (1) MPV less aggressive than
the primary quote or the orders limit price in relative time
priority.
    \18\ See Securities Exchange Act Release No. 80223 (March 13,
2017), 82 FR 14240 (March 17, 2017) (SR-IEX-2016-18).
---------------------------------------------------------------------------

    Finally, the Exchange believes that the conforming change to the
description of the resting price of Discretionary Peg orders for
purposes of ranking and priority in the Regular

Market Session Opening Process for Non-IEX-Listed Securities is
consistent with the protection of investors and the public interest
because it will make the Exchange's rules more accurate and complete,
and descriptive of the System's functionality.

B. Self-Regulatory Organization's Statement on Burden on Competition

    IEX does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. With regards to inter-market
competition, the proposed resting price for Discretionary Peg orders
will be the same as the resting price of Primary Peg orders pursuant to
Rule 11.190(b)(8), and thus the Exchange believes that no new inter-
market burdens are being imposed.\19\ Furthermore, the Exchange notes
that other markets are free to adopt similar rules for comparable order
types to the extent that the proposed changes pose a competitive threat
to their business. In this regard, the Exchange notes that NYSE
American LLC has adopted a rule copying an earlier iteration of the
Exchange's Discretionary Peg order type and quote stability
calculation.\20\ Accordingly, the Exchange also believes that the
proposed rule change will not result in any burden on inter-market
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------

    \19\ Id.
    \20\ See NYSE American Rule 7.31E(h)(3)(D).
---------------------------------------------------------------------------

    With regards to intra-market competition, the proposed change will
modify the resting price of all Discretionary Peg orders and will
therefore be applied equally to all Members using the Discretionary Peg
order type. Moreover, the Exchange does not believe that the proposed
change to the resting price of Discretionary Peg orders will result in
any burden on Members seeking to cross the spread and execute at the
far side quote (the NBO (NBB) for buy (sell) orders). To the contrary,
the proposed change would provide potential benefits to such Members.
As discussed above, the enhanced benefits and protections offered by
the Discretionary Peg order, as proposed, is intended in part to
incentivize additional resting Discretionary Peg orders to be entered
on the Exchange. Thus, Members seeking to cross the spread may be more
likely to obtain price improvement for their liquidity removing orders
to the extent such orders execute against a Discretionary Peg order
during times when the CQI is off.
    Moreover, as discussed in the Purpose and Statutory Basis sections,
resting Discretionary Peg orders generally provide liquidity and
opportunities for price improvement to market participants removing
liquidity on the Exchange during periods of quote stability. Thus, the
Exchange further believes that by enhancing the performance of
Discretionary Peg orders, and thereby incentivizing additional order
flow, the proposed changes may enhance the overall execution experience
for other market participants seeking to cross the spread and execute
at the far side quote during periods of quote stability, which is
consistent with the protection of investors and the public interest.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be 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<EMAIL_ADDRESS>Please include
File Number SR-IEX-2018-23 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-IEX-2018-23. This file
number should be included in 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 Section, 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 will also be available for inspection
and copying at the IEX's principal office and on its internet website
at www.iextrading.com. 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-IEX-2018-23
and should be submitted on or before January 9, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27403 Filed 12-18-18; 8:45 am]
 BILLING CODE 8011-01-P